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By Katie Scotcher of RNZ
The Government is being accused of quietly expanding the reach of its public service cuts to pay for promised tax breaks.
The policy proposed an annual reduction in back-office expenditure by an average of 6.5 per cent — on top of Labour’s $500 million in annual public sector savings.
National identified two dozen agencies that could spend less, including the transport, conservation and justice ministries.
Now, Finance Minister Nicola Willis’ office has confirmed she asked “all departments” to identify savings in December, not only those listed in National’s election policy.
“Departments have been asked to identify savings options of either 6.5 or 7.5 per cent depending on how much their fulltime equivalent staff numbers (FTE) have increased since 2017,” it said in a statement.
Labour public services spokeswoman Ayesha Verrall said National had expanded the public service cuts it campaigned on.
Labour public services spokeswoman Ayesha Verrall says it's "a broken election promise". Photo / Mark Mitchell
“Nicola Willis made reckless commitments about tax cuts which she couldn’t afford, and now she’s sneaking in larger cuts than she signalled before the election. This is a broken election promise.”
Willis said the policy was consistent with National’s pre-election commitment to restore discipline to government spending.
“We were very up front about our commitment to get a reduction in consulting and contracting spend across government; to move resources out of bureaucracy and into the front line.
“An inclusion of those [all] agencies in this exercise is entirely consistent with those promises we made to New Zealanders.”
National has promised frontline services will not be affected by the cuts, but Public Service Association national secretary Duane Leo said this was not possible.
“6.5 or 7.5 per cent is going beyond the removal of contractors and efficiencies; it’s basically going to cut to the bone in terms of services and staff.”
Public sector bosses will present their savings plans — including potential risks — to the Government soon, before ministers and Cabinet decide whether to accept their proposals.
Willis is looking to slash annual public service spending by $1.5 billion.
The bulk of that will come from a reduction in consultant costs and savings announced by the previous government.
The remaining $600m will be made up of further cuts.
Exactly where these savings are made will be revealed in May’s Budget.
Some government departments are already making changes.
The Ministry of Business, Innovation and Employment has confirmed it had offered its staff voluntary redundancy this month, having signalled the process last year.
