Govt looks to slice 10pc from spending: ACT

A junior minister has said the Government's razor gang wants to slice 10 percent from ministerial and departmental budgets, though she retracted this after Finance Minister Bill English said there was no specific target.

It is well known that as part of the current budget round ministers are reviewing all spending, but no figure has been placed on what ministers hope to achieve.

ACT MP and minister outside Cabinet Heather Roy named the savings target in an email newsletter.

"In a response to current economic circumstances, all Government ministers and departments are conducting a line-by-line review of expenditure to identify where savings – of around 10 percent – can be made."

Ms Roy is the minister of consumers affairs and holds the associate minister role in the portfolios of defence and education.

When asked by NZPA to clarify whether the 10 percent target was across all portfolios or just those held by Ms Roy, her spokesman initially declined to answer and referred all queries to Mr English.

Mr English's spokesman said there was no percentage target for savings set by the finance minister.

`There is no blanket, across the board figure applied at the high end level," the spokesman said.

"It could be that different ministers have different expectations in their areas of what is possible."

The review was just looking to see what savings were possible, he said.

A spokesman for Mrs Roy called NZPA later and said the 10 percent figure was just an example and not indicative of a blanket instruction.

The newsletter had been written by one of Mrs Roy's staff and had not made that point clear, he said

"But having said that. . .she thinks it (10 percent) is a good threshold and she will be looking into that more closely for her ministry."

Labour's state services spokesman Grant Robertson said he had heard rumours of directions to cut staff.

"In the last week I have hear that the Tertiary Education Commission has been told to slash staff by 50 percent and the Ministry of Social Development by 10 percent," Mr Robertson said.

The National Library has said around 30 positions could be lost in its organisation.

ACT has campaigned on the reduction of Government spending, but Ms Roy expressed some doubts about the approach being taken.

While the review was "prudent" and less controversial than wholesale change it could still cause harm.

"Surgery must be followed by planned post-operative care and rehabilitation – my concern is that, in the absence of any clearly articulated end-state, we might well see a successful operation but a dead patient," Ms Roy said in her newsletter.

"What are the principles being applied to this exercise? Certainly they are not self-evident. While smaller departments may not easily find 10 percent, some others could probably save much more."

Ms Roy called for a fundamental review of what the core functions of the state were and how they were provided.

The last National government in the early 1990s launched an infamous razor gang as it faced up to larger than expected budget deficits.

During this election campaign Prime Minister John Key said during the campaign a "Cabinet Expenditure Control Committee" would be set up, which all departmental chief executives would have to report to after reviewing their spending.

"Based on the information it receives, the committee will be able to initiate in-depth spending reviews of particular areas of government administration to ensure the best value for taxpayers and users of public services."

National said it would also cap the number of public servants.

Since taking office National is facing up to a deteriorating economy which is reducing the tax take and increasing debt.

During the campaign Mr Key indicated government communications staff could be the first to feel the axe.

He said the numbers of such staff had swelled from 238 six years ago to 505 in July this year.

Figures released on Friday showed that the incoming government had fewer ministerial staff than Labour, but was paying them more.

It also showed a decrease in the number of press secretaries, but an increase on those earning more than $120,000.

- NZPA