Fraser Newman: Shortchanged by painful job cuts

There is a problem in Rotorua with public sector job cuts.

Since National came to office in 2008 the government has axed  around 65 fulltime jobs in Rotorua. Together they represented over $3 million a year in lost income to the city. Almost all of these jobs, covering Inland Revenue, Work and Income, Housing New Zealand and the Ministry of Justice, were based in the CBD. These are just the job cuts that were easy to find. Together they represented a major blow to the local economy and a kick in the guts for local business.

In 2010, when first putting Inland Revenue jobs in Rotorua on the table, Revenue Minister Peter Dunne said: I can assure the people of Rotorua that no face-to-face services that they get today will be reduced.'' Two years later this has been shown to be an empty promise. You would be forgiven for thinking the central government has somehow abandoned Rotorua.

Government spending can affect the size of an economy. Simply put, axing jobs and slashing budgets makes the economy smaller. These job cuts in Rotorua are not just statistics. They hurt the real economy. Government employees spend their incomes in Rotorua. When they lose their jobs, the income stops coming in. Some are now on benefits, some will have found new jobs elsewhere and others may have joined the 3979 people from the Bay of Plenty who moved to Australia in the year to September. These job losses are very worrying.

Most worrying of all is how Rotorua has been disproportionately affected by this. In recent plans by Inland Revenue to cut 191 jobs nationwide, 44 of those were planned for Rotorua. While Rotorua has suffered about 4 per cent of public sector job cuts nationwide, the population is only about 1.4 per cent of the total population of New Zealand.

Rotorua is paying a heavy price for all this. After all, the job cuts are needed to pay for the National tax cuts, which according to the Public Service Association have cost over $5 billion, of which half has gone to only  10 per cent of

New Zealanders and even fewer in Rotorua. The government also claims the cuts are needed to drive efficiency, though the 70,000 unanswered callers to Inland Revenue at the end of the last financial year may disagree.

Government departments are instead being stretched to the limit and people are worried about their jobs. It looks

more like blind ideology and economic mismanagement.

Government services once formed a vital backbone to the Rotorua economy. They were never major money earners but with the rest of the local economy relying on international markets, the government jobs offered local businesses some level of stability. More to the point, government jobs anchored the CBD and a vibrant CBD supported tourism and provided a welcoming environment for visitors. This is now a thing of the past.

So if Rotorua feels slightly shortchanged by this all, the feeling is understandable.

Fraser Newman is the manager of McLeods Booksellers in Rotorua.