Inland Revenue has paid out more than $31 million to staff made redundant in the last four years.
Figures released by Labour yesterday show 539 staff have opted for a pay-out since 2008 as the Government continues to squeeze the public service.
During the same period, IRD has spent more than $125m on consultants and contractors. Labour's state services spokesman Chris Hipkins said the "massive redundancies" were taking a toll on frontline services, particularly an 0800 helpline where taxpayers have waited two-and-a-half hours "just to have their phone calls answered".
Last year more than one million clients hung up before their call was answered, and another 260,000 gave up after they were placed on hold.
But Revenue Minister Peter Dunne denied the two were linked, saying it was comparing "apples and pears." Restructuring has seen IRD shed more than 9500 jobs across the country since 2008. The figures reveal some regions, such as Invercargill, have seen their workforces slashed in half. Greymouth has lost almost two-thirds, and Rotorua and New Plymouth more than 40 per cent.
The statistics obtained by Mr Hipkins show IRD spent more than $59m on consultants and contractors in 2008. That dropped to $30.8m the following year, but rose again to $35m in 2010-11.
In 2009, 20.4 per cent of clients waited more than five minutes for their calls to be answered by the 0800 hotline. In 2010 it was 16 per cent, rising to 17.2 per cent last year. This year it has risen again slightly to 17.6 per cent.
Mr Hipkins said the call centre figures were "a disgrace". The level of redundancies was "clearly having an impact on their customer service record".
'The Government are always talking about productivity, well how does having people waiting for hours on end to speak to the IRD help with that? Millions of dollars are being lost every day as Kiwis sit around waiting for the IRD to pick up the phone."
Mr Dunne said the "two-hour wait was one extreme". The hotline experienced "huge volumes at certain times of the year," sometimes 25,000 a day. "Even if you had a half a per cent failure rate that's still a very big number.
"Where we've made changes, the commitment has been to retain frontline services."
- © Fairfax NZ News
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