Public sector restraint hasn't even started yet – English

Restraint on the public sector has not even started properly yet, Finance Minister Bill English told MPs today.

Appearing before Parliament’s finance and expenditure select committee, Mr English said government departments had been told before Christmas what sort of increase in their baseline budget they would get in the 2010 Budget.

That is earlier than usual: such moves are usually made early in the new year.

And most are getting a nil increase he told MPs, although “three or four are getting some extra.” He did not say which.

“Quite a few [government agencies] won’t’ get any increase the year after that either.”

The true restraint on public sector spending would not begin until the next financial year, he said – but it would not end then.

“It's as much about changing the culture as anything else,” he said. “People have become quite used to regular increases each year and just like the private sector they are having to learn that isn’t going to continue.

Turning to the wider economy, he said any recovery would be patchy and spasmodic.

“This won't be like the early 1990s where we came out of recession and pretty quickly had growth of 5-6%….we are seeing this patchiness within industries, where some are doing quite well and some are not, and also where some individual businesses are doing well within industries which are struggling.”

A global shock such as occurred in 2007-8 would “reverberate” for some years, he said.

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Thank goodness that further restraint investigations in the public sector has not been lost sight of.

The feeling after the past few weeks with National saying that it needed to get an equivelent recovery for the tax concessions has been that National and Act had succumbed to "re-arranging the deck chairs on the Titanic" to get the same tax take ...... rather than reducing the wast of money in Central and Local Government.

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... but actions speak louder than words. Someone let me know when they have reported sustained nil increases in ACTUAL total government expenditure, until then I'll take a pass on the rhetoric, thanks Bill.

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Years ago I was involved in publicity for the old Health Department. Towards the end of a financial year they had not spent all of their budget so they mounted a completely unnecessary advertising campaign on the basis that if they didn't use up their funds their new year's budget would be reduced.

That mentality still obtains in the public service, I'm sure, and the sooner English flushes it out the better.

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You're sure that mentality still exists in the public sevice based on the fact that years ago you observed it happen in 1 govt department?

So if you never saw a new computer after 1990 you would be sure that there had never been a change there too by 2010?

Or if you visited Sth Africa once and then never bothered to check again you still would be sure that apartheid regime was still operating.

I think the only mentaility that needs to be upgraded is yours my friend.

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Sorry Hartyboy, but I saw examples of the "spend it or lose it" mentality in the public service during the "naughties" (sic). Some of it was wise (upgrading worn out assets), some of it was frivolous. It's not entirely the public servants' fault, the budget cycle is long and tedious - effectively you have to forecast your capital expenditure two years in advance, an impossibility in these rapidly changing times! One thing is clear: NZ is not getting the timely public infrastructure investment that it needs, e.g. our ailing electricity transmission system - as Aucklanders know all too well!

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Well I've been busy sacking staff this week because no-one is spending.How about we cut government speniding by reducing supurfluos ,ineffective departments and quangos giving that money back to the people.

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hartyboy (gay name) is obviously gorging at the public sector trough and should actually be banned from reading or commenting on anything in the NBR.
Most private sector suppliers to the public sector know exactly what to do near the end of the financial year - get in there and grab the left-over funds. they understand the purchasing allowance of each officer and will break up products into segements to allow for that - i.e. a $ 25,000 item will be broken into three components and purchased individually so that the officer can buy it withouit having to go up a level for sign-off.
they make it very clear that they have to spend this money or the idiots that fund them reduce the budget next year.
The main problem is that none of these people realise it is our money and that they work for us.

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As one who has dealt with the mechanisims for public sector spending since the early 1970s the more the attempt ro micro manage the more the system is rorted,

Having also worked in industry for enlightened organisations where individuals were treated with respect and intelligence and performed in kind I know which approach works best,

the top 2 inches in the public sector needs to be changed but it needs enlightened thinking. Otherwise the Sir Humphreys will batten down the hatches and take up the drawbridge and little Johnny and Billy will be stranded on a sandbank.

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It's way past the time we need 'restraint', that merely means, at best, containment from it's continued growth (though I bet it still has an inflationary increase no matter despite that.)

Before this recession there were 1.75 million people working in the private sector paying tax from actual productive wealth creation having to support 1.75 million bureaucrats on the State payroll, beneficiaries and retirees. That's one for one, hence NZ having to borrow almost quarter of a billion dollars per week to pay for it all, with those same poor sap 1.75 million private sector workers now looking to have to pay for all that. Remembering every transfer from the private sector to the public represents the destruction of wealth (that was earned by others).

Note, that's 1.75 million people having to carry a population of 4.13 million.

We are way past the need for public sector 'restraint': the size of the public sector has to be slashed - it is simply already more than we will ever be able to afford, and without even touching on the philosophic issues concerning individual freedom. 1 public sector job in three gone would be a start. As would reducing the number of government departments; in NZ we have something like ove 65 government departments, in Switzerland with a bigger population they have just 7. Let's aim for that.

'Restraint'. No, that's not enough, not by at least half.

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