Axe set to fall on staffing numbers at Health Ministry

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JOB LOSSES: The ministry is among those expected to suffer the deepest cuts, with reforms announced last year expected to slash at least 500 jobs over time.

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Health Ministry staff are expected to be told of job losses today as cuts are prepared across the state sector before another belt-tightening Budget.

The ministry is among those expected to suffer the deepest cuts, with reforms announced last year expected to slash at least 500 jobs over time and possibly more after the establishment of the new National Health Board. The board is now up and running, with former Treasury boss Murray Horn at its head.

A Health Ministry spokesman said departing Director-General of Health Stephen McKernan would brief staff in Wellington today on the impact of restructuring and the National Health Board on staff.

The move comes as Government agencies dig deeper for a fresh round of savings before the May 20 Budget.

Most were told last year not to expect an increase in funding during National's present term of government, meaning wage rises and other new costs had to be found from making savings elsewhere.

There have already been more than 1400 jobs cut, hitting Wellington the hardest, and more cuts have been signalled. They include defence, where Defence Minister Wayne Mapp is seeking $50 million in savings a year from "back office" functions, including training, and elsewhere in the health sector, where clerical and other jobs are due to go.

ACC is expected to announce next Monday the closure of branch offices in Blenheim and Thames, putting more than a dozen jobs at risk.

An interim "stocktake" report on the future of the corporation was handed to ACC Minister Nick Smith last month but he has asked for more detailed work to be done before a final report in June.

The review group, chaired by former Labour minister David Caygill, will report on the merits of introducing competition to the work account, which covers businesses and the self-employed.

Prime Minister John Key and ACT leader Rodney Hide indicated last year that more sweeping changes in ACC were possible, including opening other areas, such as the motor vehicle account, to private insurers.

The review will also look at the role of private and non-government sectors, including iwi, in accident management and compensation.

Senior ministers have privately conceded that temperatures will rise throughout the state sector later this year as the impact of the cuts is felt.

They include rumoured cuts of more than 100 jobs at the Education Ministry, as it seeks to save $25m over three years, and a similar number at TVNZ as it looks at ways to increase profit by up to $40m.

Executives from the state broadcaster are expected to outline options to staff over the next few weeks. They are also working on plans to separate the commercial and public broadcasting arms.

Mr Key has indicated a decision is likely soon on plans to merge several government agencies to save cash and trim staff.

These are believed to include the National Library and Archives, the Food Safety Authority and the Foundation of Research, Science and Technology.