The ACT Party thinks its proposed public sector job cuts can be be done quickly and should not cause too much unemployment.
It thinks the fired public sector staffers could be absorbed into the rest of the workforce.
The Party is bent on cutting 15,000 state sector jobs to bring the public service back to 2017 levels.
"Over the last six years we have seen a 30% increase in the size of the public service," the party leader David Seymour says.
'We have equally seen a 30% increase in public spending after inflation and population growth. Yet there is widespread dissatisfaction with the quality of public services."
And he says the Ministry of Business Innovation and Employment (MBIE) has increased its workforce by 64% but small business owners have not seen any improvement at all.
This policy of cutting jobs has been repeatedly attacked by the trade union movement, especially the Public Service Association (PSA).
But Seymour is standing his ground, and argues the workplace cuts can be done quite quickly, without too much cost.
"There has got to be a process, first of all you have got to identify where efficiencies can be made and you have got to work through the proper processes," he says.
"A lot of people will be members of the PSA and their contracts give them a redundancy process, so you are looking at a six month to one year period.
"But let's be very clear, we are going to end government waste, to take pressure off inflation and interest rates so households can balance their budgets."
Seymour also rejects a suggestion that the laid off public sector staff will end up on the dole queue.
"If you look at New Zealand's labour market, every day 3000 people leave one job and enter another. So if you think about it, 15,000 people is actually a week of people leaving one job and going to another."
"So these people, I am sure, will find new jobs and there will be no impact on unemployment over six months to a year."
'Destructive and insulting'
But the PSA calls ACT's policies destructive and insulting approach to the public service.
"They will not simply impact thousands of workers and their families, they will end up hurting all New Zealanders," says its Assistant National Secretary, Alex Davies.
"It is just not possible to deliver the scale of cuts ACT would be demanding in government without impacting services."
Davies goes on to say New Zealand's public service is trusted and efficient by international measures.
"Public service workers are working hard to deliver services New Zealanders need across the country and doing the difficult work of tackling our challenges ahead from climate change and an ageing population.
"ACT's approach would make many Kiwis worse off today, and tomorrow."
An earlier submission from the PSA cited work by MBIE on green hydrogen in Southland, on new industries replacing fossil fuel in Taranaki and on the Rocket Lab business in Hawke's Bay.
It said these industries were assisted by the public sector, as was the events business, which produced successes like the women's football World Cup.
It conceded there had been hiring in the public sector since 2017 but that was done to address previous chronic under-investment.
"New Zealand has a trusted and efficient public sector that has grown in line with New Zealand’s population, got us through the pandemic, and is still on a per capita basis similar in size to Australia and the UK."
Meanwhile, ACT has backed up its policies on public sector staffing with an open letter to the heads of government departments telling them they are wasting public money.
It adds they should also not implement race based policies.
"If New Zealanders give ACT the privilege of being part of the next government, there will be real change in the public service," ACT says in its open letter.
"Government departments have made New Zealanders’ lives more expensive and divided them by race. They are tired of it, and so is ACT," the party says.
64 Comments
Same same.
6 months of disruption where it's announced that there will be cuts. Everyone stops working as they focus on deciding whether to stay or go. The cuts are then consulted on (more time where nobody does any work). Interviews for positions that remain (nobody works as they are preparing for interviews and know they'll be moving job anyway). The cuts are made (no work done as people who were doing the job leave). New people appointed (no work as they get inducted into new jobs and work out their new role and how to work with new manager). Another bunch of people leave who are disappointed in the new structure/role. Another round of recruitment and bedding in new staff. Finally the new structure and teams bed in, right in time for another restructure.
And in the process you lose a whole bunch of talented people who were good at their jobs who were committed to public service. They feel betrayed and so they leave, take redundancy (all paid by the taxpayer) become consultants and then charge taxpayers x3 times what it previously cost us to come back and do the same job.
Complete false economy. Seen this so many times it makes me sick. Complete waste of time, money and effort.
David is right and the PSA is wrong - sloth and sloppiness abound
and implementation will be a win all round
more workers for private sector = higher tax tax, lower immigration, lower public sector payroll
should be skilled staff so a productivity boost
and a public sector efficiency boost as well
and short term increase in the unemployment rate will keep reserve bank happy
I have long advocated for slashing the ridiculously bloated bureaucracy in Wellington.
But…. The reality is many won’t be able to find meaningful employment in the private sector. Firstly, there won’t be the opportunities. Secondly, many of them wouldn’t have the capability.
If unemployable graduates become common then school kids will be more selective in their choice of tertiary education. Kiwis studying at uni have 75% of the cost of their education paid for by tax-payers (for example apprentice builders, young shop assistants). Why guarantee their employment after graduation too?
Yes, maybe not a guarantee but perhaps there is a responsibility for older workers to give younger workers the same opportunities as has been afforded them and that includes in the developing of their skills (which for some roles takes years) instead of pulling the ladder up as your comment seems to suggest?
I *am* right. I have been right in the mix, and seen the vast waste on all sorts of unnecessary work programmes. Have you? I think you said you work for a consulting firm, so are you a benefactor of all the wastage (light rail?). The amount of money bring thrown at consultants is also obscene.
By your logic, even if it is waste (which is my view not yours) it’s worth doing to keep people employed. Frankly, that’s absurd and a very expensive work creation programme. And why should I and other taxpayers have to subsidise that?
I would much rather that huge amount of annual expenditure goes to paying all the extra frontline healthcare workers we desperately need.
Wellington will no longer be a low unemployment environment after 15,000 redundancies. Presumably people will move, and once that decision is made Australia will be the obvious destination.
My post was simply a response to the previous post suggesting it's best to make the young unemployed. They are far easier to set back and the effects last a long time.
As someone who has worked for the government before, probably 75% of the staff at any government agency are ex-lawyers and ex-consultants
They'll just got back to doing what they did before in the private sector
Most in the public sector rotate between those two options every couple years for a pay bump anyway
Looks like he want's to short-change us.
'but small business owners have not seen any improvement at all'.
Only because he's using a flawed metric - the end-game of his approach is a whole lot of digits - in bank computers, stock-exchange computers, servers, even in paper tokens and coins -
and no planet.
Dead people tend not to be wealthy - just sayin'. And we are past several of the Planetary Boundaries now.
Actually he is not using a flawed metric - if you have to give less of your time(money) to the govt you can spend more time (money) in your garden or with your kids -or just relax and use less energy - it becomes your choice
and you are right - business owners have seen BA improvement over the last 6 years of this Labour govt.
You mistake cause for causal.
If you have a wrt on your nose but haven't died yet, the removal of the wart won't kill you. Your association (Labour, improvement) assumes it will.
Get it?
No Government, several past, the present and any future - can alter the multiple crises comin our way, including the problem complexity has when the energy-underwrite is reduced.
https://www.goodreads.com/book/show/477.The_Collapse_of_Complex_Societi…
It's worth the download/read; an oldie but a goodie.
We will likely discard restrictions, curtailments, monitoring, as we descend into a scrabble to exist. Even national-level democracy is probably a luxury, where we're going. But we need to correctly identify the driver.
Governments past, current and future could alleviate those many crises by planning for a reduction in our population. If NZ had stabilised at say 2million then would we be importing coal and couldn't the money spent on building extra infrastructure have been saved (in my own suburb they have spent a fortune on converting a two-lane road to four-lanes and rebuilding the sewers and storm water)? With a smaller population we would need fewer universities and hospitals. NZ could be more resilient to floods and other natural disasters.
Of course they could, but they won't be prepared to pay 20k for their job and work 80hrs to be paid for 40hrs since they already have the equivalent of a huge annuity in the form of residence/citizenship of NZ. As for offering training, impossible! We all know you're either born with those sorts of skills or you aren't!
Private business owners will therefore still want immigration to shift their private operating costs onto the public as future welfare/health/education/super obligations.
Friends, net increase in private sector jobs in the Wellington Region averages 2,000 per year - topping out at 5,000 per year at the very peak of the economic cycle (e.g., 2004 & 2017). Those private sector jobs also rely heavily on demand from people earning public sector salaries, which make up about 40% of gross earnings in the Wellington Region.
You can spit feathers about the assumed inefficiency etc of public services, but do not doubt the macroeconomic impact on Wellington of a sudden cull of public servants.
Your source ? & its not just your Wellington red herring
Since Labour were appointed by Winstonin 2017:
"Over the last 5 years, the overall public sector workforce increased by 15.3% (with central government up 15.7% and local government up 12.5%). "
https://www.publicservice.govt.nz/research-and-data/workforce-data-publ….
Additional 15% is over 60000 more...
Total public service in Wellington is around 90,000 - up 16,000 since 2017 (mid-2022 figures). Private sector jobs increased by 12,000 in the same period. The data is in Stats NZ Table LED015AA. Note that it lags a bit because it is based on actual tax returns, payroll info etc.
The Act attack will focus on Wellington so I think it is fair enough to focus on those numbers.
Whenever a govt organisation is forced to shed staff it cuts the remote employees. In the UK the BBC always cut its foreign service which was easily its most significant dept. If they squeeze the dept of conservation it will be rangers in distant locations who go while office workers in Wellington will remain. Usually the god leave and the poor hang in. I liked the way ACT simply aimed to eliminate entire departments - that solves my previous objections and it helps impose responsibility where it belongs instead of dividing it.
We have been through this before, remember when the railways, the Post Office, the ministry of works, and probably some other departments, were privatised,
Retiring was a popular option for anyone over 50, and I know a few who did, and then worked seasonal work in tourism or horticulture. Going into self employment was also popular, or some were mopped up the local bodies, who at that time were expanding.
If the government chops jobs, some of those jobs will be shifted to local bodies, and then we still pay, pity act can't have influence on our council rates?
Anyone who works in central Wellington , particularly in their own business , knows there are too many public servants who have been earning too much for doing too little for too long .
And while cutting the use of.consultants , and rather instead employees doing the job themselves and what they were hired to do , the public sector should take the knife to the use of recruitment firms .They already possess the people to do the hiring themselves . Recruitment has grown at the same exponential rate as the real estate industry, based on inflated fees, and offers a similar level of service.
I bet it doesnt happen and the same slugs will be there next year,gliding on,maybe some reshuffling and window dressing,a few new logos perhaps but the headcount probably wont change.they will probably work out taking 15000 salaries out of the city economy will start a recession.
Nobody has yet pointed out the obvious:
If exponential growth was forever possible, we would be able to support an infinite number of anybodys doing anything(s). And we could all get infinitely rich.
This competition-call - because that is all it is, a demand for a wealth-transfer - signals that there are not unlimited opportunities. Ask what that graph looks like?
And I'll tell you it's the right-hand-side of a bell-curve; a Gaussian curve, whatever. Exponentially hastening downward. The problem isn't this little yin-yang tiff; it's how we all survive the trajectory.
And that tells us this fellow, unfortunately, is not an answer.
Very happy with my two ticks for ACT, thank you.
By far the most liberal, progressive and logical party on offer. Free speech, free market economics, end of life choice, no-woke, charter schools, prioritisation of mental health. And as a refreshing point of difference, they won’t afford you rights and responsibilities according to when you ancestors arrived here.
Free market economics on a finite planet is crass ignorance.
Oh - that fits.
And the Limits to Growth are hitting us globally, in multiple ways, simultaneously. Few seem to be able to think in such terms, and certainly not those you laud.
https://www.youtube.com/watch?v=kbg8nHuNggU
Bother to watch, and see if you still have the priorities you have, when you're through.
of course they will because a lot of them will be employed back on higher pay as contractors, same slight of hand that was used by JK and many private companies to hoodwink people that do not look to closely at the detail . look our full time employee head count is down but our contactor costs are up quite a bit
MBIE: I sit on the local mental health group. Couple of years ago government got concerned about 'wellbeing'.
So this area got $2.5million and I guess $100 million nationally. Entirely stupid. Too many civil servants with too much money (borrowed) looking for a problem. $100 million? Really.
One thing they planned was to give old people a Christmas hamper (you could not make this up). I asked 'do I get to receive a hamper - or - will I be delivering them?'
Annoyed silence.
I fully support those MBIE staff going out the door onto the Wellington Street. They only invent work to do. Taking the money to do so from the mouths of hungry NZers.
It seems entirely believable. Money has been allocated by the politicians in an attempt to solve some of many problems we face, and that money is then converted into teams of people without time limits or targets attached.
The cost of attempting something interesting in that team is potential failure, having to admit failure which might travel up the chain and reach the minister, which isn't a good look. Better to take on a grand restructuring, or consult and churn on a big impossible idea while never expecting to reach it.
The new government have promised a fair few changes that requires lots of people to make happen, if you want it done quickly.
For example, trying to stop beneficiaries from buying alcohol and tobacco. Regarding that - look out for one person with a trolley buying a lot of groceries, and another buying lots of smokes and alcohol, and then the two meeting up in the carpark to redistribute the purchases.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.