Govt to axe non-essential services

MARTIN KAY
Last updated 14:07 29/03/2011

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The squeeze on public spending will mean service cuts, Finance Minister Bill English has warned in a speech that has mapped out years of austerity measures.

English said the Government's decision to rein in new spending in this year's Budget would mean some services that were ''nice-to-have'' but not essential would be axed.

He also made clear that the Government intended to continue the tight grip on public finances after the state coffers returned to a ''meaningful surplus'' in 2015/16 as it looked to repay mounting debt and resume payments into the superannuation fund.

''That means public spending restraint is no temporary aberration. It is effectively permanent,'' English told the Institute of Public Administration this morning.

The Government had intended to spend $1.1 billion more in this year's Budget, but reduced that to $800 million at the end of last year and zero earlier this month.

Although spending on health and education is still expected to rise by around $800m, the cash will have to be found from cuts in other areas.

English said the Government was committed to funding essential services, but the spending restraints meant cuts elsewhere were inevitable.

''Something has to give, and that has to be lower-value activities the Government is currently funding.

''This is not a time we can afford to indulge in a whole lot of nice-to-haves, even though, for sections of the population, they feel the loss of those services or funding streams. The alternative is that nice-to-haves come at the expense of necessities and at the expense of fairness to people with more need.''

He said plans were also afoot to reduce the size of the public sector, including merging more agencies or departments as outlined in Prime Minister John Key's opening address to Parliament in February.

The Government has already folded Archives New Zealand and the National Library into the Internal Affairs Department, set up a new Science and Innovation Ministry to merge two previous entities and merged the Agriculture and Forestry Ministry, the Fisheries Ministry and Food Safety into one department.

Labour state services spokeswoman Ruth Dyson said English's speech signalled ''continual indiscriminate cuts'' and reductions in frontline services and jobs.

''While National continues to try and claim they are cutting backroom functions to fund frontline services, the reality is they are simply cutting services in order to cover for their failure to get the economy growing.

''Mr English's speech lacks vision, clarity or any real information and is the same old story of cuts and fewer services. The reality is National have had two years to build the better public services it has been talking about, but so far has failed miserably.''

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She said Labour supported more efficient public services, but not at the expense of ''wholesale cuts'' to services which she claimed were ideologically driven.

- © Fairfax NZ News

196 comments
Cynic   #196   09:55 am Mar 30 2011

The politicians are the ones who drive the demand for low value services and back office functions! They get pet projects funded that best advice says are not value for money, but they keep them anyway. And they demand reports, updates, and briefings over and over from multiple parts of the public service. The public servants would be much more efficient and effective if they didn't have to respond to the unreasonable day to day demands of Ministers who ask for information they never read or use (and then ask for it again at a later date).

Jeremy+   #195   08:16 am Mar 30 2011

The first place to cut non essential services is to half the number of politicians, for a country this size we have at least double of what is required. We could save more than enough by doing that as each member has all their staff along for the ride as well.

Kruger   #194   01:22 am Mar 30 2011

This time under the convenient excuse for CUTS is due to the costs for Christchurch Earthquake, because the government (and previous governments) has squandered most of the money that was supposed to be set aside for Earthquake Commission (EQC). Just like the huge hole left for ACC after Labor left office. If they tinker and mess with superannuation that will cause another hole.

Public & Private partnerships only benefits the private sector as contracts are long-term and they charge whatever they like, look at UK and see how much money is owing by taxpayers in P&P deals (schools, hospitals, prisons, etc) they can't get out of.

Has everybody forgot lessons from the depression and 1930s? Cutting government spending prolonged it, damaged the economy and increased the suffering of the poor, hence welfare system was introduced. Slashing welfare spending or imposing expiratory date of eligibility will further reduce their discretionary spending, making them reliant on a food bank doesn't stimulate the economy and increases likelihood they'll commit crime as they can't make ends meet. It costs more to keep somebody behind bars then to give livable benefit. Another fact people tend to forget is that those on sickness and invalids benefits are less likely to be employed by the private sector, discrimination is rife because most employers don't want to take the responsibly or invest in the infrastructure and time to accommodate them e.g. wheel chair access, fewer working hours, dealing with a crisis (panic attacks, epilepsy, health impairment, etc), time off due to sickness, etc. The only solution is if they are capable is employment in public sector if we want to lower the numbers.

The sad truth is once the cuts are introduced will the opposition parties who are now complaining reverse them? No. Did the last Labor government reinstate those cuts back to their former levels?

Carl   #193   01:13 am Mar 30 2011

There is more to this story then cuts and thinning the fat... watch and listen there is more to come and it isnt going to be good. By the way if anyone out their still believes what any politian says im afraid your not as smart as you think you are.

Murray from Blenhiem   #192   11:24 pm Mar 29 2011

Hey! That worldwide catch phrase "austerity measures" has finally come to NZ!

“Austerity” is one of those Orwellian terms that has been injected into our political discourse because it is a nice-sounding word for a very painful reality. “Austerity” implies discipline, self-restraint, even nobility. “Austerity” is prudent. “Austerity” is modest. “Austerity” is a virtue. It is an end in itself.

I hear that our government MP's aren't taking a "haircut" when it comes to pay and privilege.

My hope is that New Zealanders are vigilant to what is about to happen here. And I really hope that we have the guts and the passion- like the Greeks and Spanish to stand up to the hypocrisy.

When the rich leverage their wealth and political power to impose austerity measures on the middle class while their incomes continue to soar, that’s a huge problem.. That’s how aristocracies form.

Apparently Rich Teacher 101   #191   11:16 pm Mar 29 2011

Does that mean that the Government will be sending back their new fleet of Ministerial Cars and will be issuing Mountain Bikes instead? Seems fair - also reduces cost to healthcare (increased fitness) and has no ongoing costs (petrol), its good for the soul and good for the mind, and no parking charges. I understand you can get Tandem Bikes for those that need a Body Guard with them. Seems the most obvious cut to budget expenditure to me. Seems being an educator is a good thing.

Amy Wilson   #190   11:06 pm Mar 29 2011

Axe the Mp's pay package it's a long time over due.Put your money where your mouth is instead of taking from the poor and disadvantaged you greedy politicians.Hurt your own pockets for once.

LW   #189   09:57 pm Mar 29 2011

Increase tax on booze and fags, no wage increase for MPs, tighten up on the top earning companies who have been dodging tax for years, stop govt funding for private education providers, no WFF for high income earners...there are plenty of options that will still allow for New Zealand to protect the vulnerable in society. It's the rich who are the biggest spongers!

B   #188   09:46 pm Mar 29 2011

Why start with the "nice-to-have"s when there is such a wide choice of "nasty-to-have"s that could go first? Perks for MPs, too many MPs, overpaid Treasury imbeciles who can't do their sums, too many people in prison for too long, National Standards for primary schools; all could be reduced for net benefit before they even think about other cuts.

bob   #187   09:15 pm Mar 29 2011

"He also made clear that the Government intended to continue the tight grip on public finances after the state "

Cool so we should expect MP'S won't be globe trotting so much with their partners, or ordering such flash new expensive cars.. Oh wait its cut backs for the sheep, I mean public not for themselves! Watch for another double digit pay rise for themselves (from an "independant" body of course).. the current system does not work, we need something completely new.


Show 137-186 of 196 comments
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