Frontline public sector cuts to come

JOHN HARTEVELT
Last updated 13:59 03/04/2012
Apec
BILL ENGLISH: Frontline public sector inefficiencies need to be sorted out.

Relevant offers

Politics

Jacinda Ardern: ambitious simply to be 'good at her job' Rules on 1080 poison drops taken out of regional local govt hands Greens co-leader James Shaw pitches to Government stability in speech National MP Paul Foster-Bell to stand down at election Stacey Kirk: An expected steamroll - Mt Albert win gives Jacinda Ardern near unstoppable momentum Jonathan Milne: Is it time to take the keys from Police Commissioner Mike Bush? Pike River mum: What we wanted was simple then, and it is simple now School budgets have increased so why are so many principals struggling to make ends meet? Tracy Watkins: Andrew Little's morning after headache in Mt Albert Labour's Jacinda Ardern registers massive win in Mt Albert by-election

The Government is turning its savings drive on to front line public services, with Finance Minister Bill English promising inefficiencies "will have to be sorted out" in his next Budget.

English today confirmed comments by Prime Minister John Key that new spending in this year's Budget, set to be delivered on May 24, would be cut very close to zero, after it was only weeks earlier set at $800m.

"It's become clear that we can do better than that [$800m] so we're going to do better than that," English said.

"We have the choice of actually committing less than the $800m and then offsetting that with other savings."

Even after Treasury forecasts in February slashed the projected surplus in 2014/15 to about $300m, Key said the Government still intended to add $800m of new spending in this year's Budget. But he hauled that all the way in to "another zero budget this year or very close to it," in comments at the weekend.

English today said the lower spending allowance had arisen from the need to deal with a softer than expected tax take and the emergence of new opportunities for savings that had cropped up.

"I think everyone is aware the tax take has been a bit softer and that makes the [surplus] target harder to achieve. There are also other opportunities around saving that have become apparent and we'll take those," English said.

The Government's "general strategy" remained trying to move money on to front line services, but English signalled pressure would go on for savings there too.

"Where the front line is inefficient, of course, it will have to be sorted out," he said.

"We're not offering any guarantees … Just by way of example, if you can give the police mobile technology, then you could get more frontline hours with the same number of police - so it's more policing, safer public and we cut costs."

Last year's "Zero Budget" included cuts to the popular KiwiSaver and Working For Families schemes. Some of those changes kicked in on April 1 this year, with more still to take effect.

Asked if similar cuts were possible in this year's Budget, English today said: "You wouldn't be looking at big steps like that. We've got the system pretty focused on being more efficient and effective and that's starting to yield some benefits."

He would not rule anything in or out but added: "You wouldn't expect some major surprises."

"The Prime Minister has signalled that it's going to be a tight Budget. It'll be a tight Budget but a manageable one."

Ad Feedback

Labour leader David Shearer said another "zero budget" was "probably inevitable" because of sluggish economic growth, but it would not be good for the country.

"We've got lots of issues that we need to follow up on but at the moment we don't have any money because we don't have an economic plan that would take us forward," Shearer said.

"At the moment, the Government's lack of a plan to grow the economy has meant that we're going to have another zero budget, that services are going to suffer as a result and New Zealand will go backwards in the OECD."

It was "a bit unrealistic" for Labour to have its own alternative economic plan only three months after the election, he said.

- The Dominion Post

Comments

Special offers
Opinion poll

Where do you stand on political coat-tail riding?

If it gets marginalised voices into Parliament, I'm for it.

I'm against it - if you don't get the votes, you shouldn't be there.

It's just part of the political game.

Vote Result

Related story: Voters reject riding on the coat-tails

Featured Promotions

Sponsored Content