Budget 2011: Public service will feel the pinch in budget
The public service will feel the pinch in Thursday's budget, with chief executives given new savings targets.
The public service will feel the pinch in Thursday's budget, with chief executives given new savings targets.
Prime Minister John Key said yesterday the Government wasn't planning on merging departments or restructuring the public service.
"I think you will be surprised by how much we are looking to save overall from a couple of public sector initiatives," he told reporters at his post-cabinet press conference.
"We believe people who understand their own operations are in the best position to make financial trade offs and introduce innovation which genuinely improves public services."
An overall savings target will be set in the budget, and the targets for individual agencies will be set after it.
Mr Key said the number of government departments wouldn't change in the budget, but it would be a different story if National won a second term.
"We have a long-term programme of public sector reform we want to embark on," he said.
Mr Key was generally upbeat about the budget, saying it would forecast strong growth in wages and jobs over the next couple of years.
Wage growth would "well and truly" outstrip inflation, meaning people would earn more and keep more of it.
Mr Key indicated the books were going to balance sooner that might have been expected, given the extra cost of the Christchurch earthquake and having to look after collapsed finance companies.
If the situation had been left unchecked, Treasury would be forecasting a return to surplus in 2016/17 with debt peaking at 34 percent, he said.
"That's the starting point, You will have to wait to see whether we have done better than that, and by how much," he said.
"We've got a good, solid pathway back to surplus and a good pathway for controlling debt."
The Government is anxious to avoid an international credit rating downgrade and Mr Key indicated he expected the agencies would look favourably on the budget.
NZPA and NBR staff
Tue, 17 May 2011
Tue, 17 May 2011
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Budget 2011: Public service will feel the pinch in budget
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