Razor gang's 10pc target

Public sector heads have been asked to identify cost savings of up to 10 per cent in preparation for the May Budget, documents obtained by The Dominion Post show.

The Government has denied having an overall target for cuts from its current "line-by-line" review, and the advice to public sector chiefs stops short of saying cuts of that magnitude will be made.

But a paper issued under the Official Information Act, offering "guidance for carrying out the reviews", makes it clear savings of that size some of which will be switched to other areas are under consideration. In the paper, attached to a letter from Finance Minister Bill English late last year, chief executives were told: "Using your detailed knowledge of both the department and sector ... can you identify the spending that delivers the lowest value for money, say, the bottom 5 per cent and 10 per cent."

Consumer Affairs Minister Heather Roy suggested last month that cuts of 10 per cent were on the table.

Her office later retracted the figure and said it was aspirational.

Finance Minister Bill English rejected suggestions at the time of an edict to trim budgets by 10 per cent and said no across-the-board figure had been applied.

The paper said chief executives should look at whether a programme was in the public interest and was still relevant "given changing needs, priorities and governments".

A panel convened by Treasury secretary John Whitehead and including private sector consultant Brian Roche would advise ministers on the reviews. Its other members are State Services Commissioner Iain Rennie and chief executives Maarten Wevers, of the Department of Prime Minister and Cabinet; Murray Sherwin, Agriculture and Forestry; Peter Hughes, Social Development; Stephen McKernan, Health; Katrina Bach, Building and Housing; Belinda Clark, Justice; and Geoff Dangerfield, Transport.

The line-by-line reviews will be followed by "in-depth" reviews, according to the guidance paper.

Together they are "part of a long game, not just a quick hunt for savings".

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