Public sector cuts 'a necessity', says English

A reduction in the number of government agencies will create better value for money, less duplication and improved co-ordination across the state sector, according to Finance Minister Bill English. Photo / Doug Sherring

A union has accused Government of "double talk" over its plans for widespread state sector reforms after the November general election.

Finance minister Bill English and State Sector minister Tony Ryall today announced proposals to shut down five crown entities and three tribunals, combine two government agencies and merge back office administrative services across three major state agencies.

A working group would also be established to identify more reforms aimed at getting "value for money" from the public sector in future.

Public Service Association (PSA) national secretary Richard Wagstaff said the changes were a continuation of a 'death by a thousand cuts' strategy which has seen about 2000 state sector jobs lost since National took office.

He said Government assurances the the working group review would not be about cutting jobs or costs was "double talk".

"Despite assurances that the reviews are not being undertaken to reduce staff or save money it is clear... that while they do not anticipate service losses they do think jobs will be lost

"This is double talk from the Government - more job losses will inevitably impact on services. Agencies are already looking at how they can find the $1 billion the Government is clawing back from public services."

Mr Wagstaff called for PSA members to be fully involved in any further reforms.

The public sector changes announced today would see a single health promotion agency set up to take over the functions of the Alcohol Advisory Council of New Zealand (ALAC), the Health Sponsorship Council and the Ministry of Health.

Arts, culture and heritage agencies would be reformed - with "greater collaboration" urged between organisations such the Film Commission and Film New Zealand and censors including the Broadcasting Standards Authority (BSA) and the Press Council.

Ministers also called for investigation into merging back office services across the State Services Commission, the Department of the Prime Minister and Cabinet and Treasury.

Mr English said the mergers and other structural moves were part of a wide suite of changes aimed at cutting waste in the public sector.

New Zealand has 39 government departments, over 150 Crown entities and more than 200 other agencies, he said.

"We want government administration to be as efficient and well organised as it can be. At present the costs of running government are too high and there is too much duplication and waste.

"We have a wide-ranging programme of reform as we seek to improve frontline public services within tight financial constraints.

"Structural changes are only a small part of that programme and will go ahead only where they make sense."

Meanwhile, a working group has been set up to look at more reforms to the state sector.

Mr Ryall said the new group would be made up of eight people with expertise across central government, local government, business and the non-government sector.

"There is a pressing need to improve the quality and direction of our public services. The world has changed a lot in the last 20 years and the state sector needs to reflect that.

"The group's members will bring a clear focus on value-for-money, innovation, high-quality service provision and effective change management."

The advisory group will be supported by officials from the three central agencies of government.

Mr English expected the outline changes could save from 10 to 15 per cent in the back office administrative costs of the entities involved. It was another step in a wider programme of changes to peg back public sector spending.

Such change was "not really a choice - it's a necessity".

Mr Ryall said the changes would inevitably result in job losses, although the extent was not yet known.

"We expect there will be fewer positions available, especially as they bring together administrative functions.

"We know from previous experience that it does mean jobs go, and money is freed up."

"Due diligence" would be done on all the changes and if it was shown there was little value in them or insurmountable obstacles they would be reconsidered.

He said plans to set up a new agency to take on the work of three separate health promotion agencies could free up between $4 million and $5 million.

"We are quite confident we will get savings. Some are small, so there may not be much savings, but we are confident it will be more efficient."

The changes were aimed at reducing waste and duplication.

"The goal is to simplify and integrate to free up resources to go elsewhere in the public sector. It is also to provide something more efficient that will provide services to those who need it."

The government has capped public sector jobs and Mr Ryall said that at last count, a couple of thousand jobs had gone.

However, there were more front line workers, including doctors, police and nurses.