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Home / New Zealand

Govt agencies could save $236m a year - Treasury

Audrey Young
By Audrey Young
Senior Political Correspondent·NZ Herald·
13 Apr, 2011 04:12 AM4 mins to read

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Photo / Mark Mitchell
Photo / Mark Mitchell

Photo / Mark Mitchell

Government departments and agencies could save $236 million a year in efficiencies on backroom administrative and support service, a Treasury report released today says.

The report measures for the first time the cost of administrative and support services and puts the total at $1.8 billion.

Finance Minister Bill English said the increased transparency in the report would result in change.

The spending levels across agencies vary widely, between 3 per cent and 36 per cent of total running costs.

The measuring exercise will become an annual exercise in the public sector.

Deputy Secretary Andrew Kibblewhite told reporters this morning that the exercise would help the Government's decision over possible mergers of departments.

He said the results would even make the Treasury reassess the efficiency of some of its own performance such as the costs of its property at No 1 The Terrace.

The cost per square metre of its property is $635.15 per square metre - the highest of all the agencies surveyed.

The lowest property cost was the Ministry of Social Development at $272.52 per square metre.

Of the 33 agencies that took part for the 2009 - 2010 period, they spent an average of 10 per cent on administrative and support services.

The first measurement exercise took place the year before and was much smaller - involving just 11 agencies.

But the report found that of the departments that took part in both, there was an overall reduction of $87 million between the two reporting periods.

The actual costs being measured - with savings if all agencies under the median efficiency measure were to improve to the median level:

* information and communication technology - $124 million

* property management - $43 million

* human resources - $33 million

* finance - 15 million

* corporate and executive services - $21 million

The report found that savings would be even higher - between $361 million and $425 million - if the agencies moved into the top performing quartile for efficiency in New Zealand or international benchmarks.

Outgoing Treasury secretary John Whitehead said the information in the report was key to transparency and driving sustainable performance improvement across the state sector.

"The frequently referenced Peter Drucker quote 'if you can't measure it, you can't manage it,' summarises the importance of benchmarking," Mr Whitehead said.

"It provides an evidence base for assessing current performance, setting targets, identifying and quantifying opportunities for improvement, and tracking changes in performance over time."

Cost of HR per employee
Foreign Affairs $6,385.00
Ministry for the Environment $5,292.00
Treasury $5,278.00
Transport $4,459.00
Defence Force $3,960.00
State Services Commission $3,943.00
Housing NZ $3,869.00
NZ Transport Agency $3,204.00
Building and Housing $3,060.00
Culture and Heritage $2,965.00
Te Puni Kokir $2,876.00
Land Information $2,652.00
NZQA $2,651.00
Tertiary Education Commission $2,452.00
NZ Trade and Enterprise $2,417.00
Fisheries $2,393.00
Statistics $2,363.00
ACC $2,353.00
Tourism $2,312.00
Labour $2,203.00
Economic Development $2,027.00
Conservation $1,984.00
Health $1,638.00
Police $1,593.00
NZ Fire $1,506.00
Agriculture and Forestry $1,458.00
Justice $1,442.00
Inland Revenue $1,404.00
Customs $1,401.00
Education $1,310.00
Internal Affairs $1,201.00
Social Development $1,021.00
Corrections $980.00

Absences per employee (days per year)
NZ Fire 10.68
Corrections 10.56
Te Puni Kokir 10.04
NZQA 9.78
Social Development 9.76
Inland Revenue 9.3
Housing NZ 8.33
Customs 7.93
Internal Affairs 7.76
Land Information 7.7
ACC 7.67
Conservation 7.46
Labour 7.1
NZ Transport Agency 7.08
Justice 6.94
Statistics 6.88
Police 6.79
Economic Development 6.46
Education 6.44
Culture and Heritage 6.25
Agriculture and Forestry 6.24
Health 6.12
Fisheries 6.09
Foreign Affairs 5.93
State Services Commission 5.65
Treasury 5.38
Building and Housing 5.3
Tertiary Education Commission 4.97
Transport 4.89
Ministry for the Environment 4.67
Tourism 4.53
Defence Force 3.78
NZ Trade and Enterprise 2.99


Property costs per square metre
Treasury 635.15
Fisheries 601.81
NZ Trade and Enterprise 576.01
Foreign Affairs 552.7
Ministry for the Environment 549.58
Tertiary Education Commission 548.68
NZ Fire 547.17
Housing NZ 514.83
Te Puni Kokir 506.88
Agriculture and Forestry 500.27
Transport 495.65
Labour 478.63
Justice 475.61
Tourism 473.53
NZQA 446.36
Building and Housing 429.33
State Services Commission 423.6
Internal Affairs 406.42
Economic Development 403.56
ACC 377.04
NZ Transport Agency 373.44
Education 352.46
Inland Revenue 352.21
Culture and Heritage 350.78
Defence Force 350.04
Conservation 346.92
Corrections 339.94
Land Information 329.16
Statistics 321.49
Health 320.86
Police 282.66
Customs 273.69
Social Development 272.52

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