Thursday, 10 July 2008

NZ Government wasting billions in poor spending

No Minister has picked up on a new report into the poor quality of spending by the New Zealand Government.

ANZ economist Cameron Bagrie says the Government has built a "Rolls-Royce" public sector, and needs to rethink its spending. He's calling for Treasury to set indicators and benchmarks to monitor Government spending in the future.

Bagrie's report reveals Government staff numbers had grown to 42,000 by last year (up from 30,000 in 1998), with most spending going into "back-office" departmental expenses, rather than frontline services...
"Do we really need 41 government departments and 65 crown entities, not to mention the 21 district health boards and nine crown research institutes, for a population of four million?...

We appear to be attempting to run a Rolls-Royce-style framework when a Toyota will suffice. It seems resources are getting tied up in approval and monitoring as opposed to getting the job done."
The report notes that keeping back-office spending within the same range as frontline spending would have freed up an extra $1 billion for other activities (including presumably increased tax cuts).

Not PC has also linked back to a 2007 report by Phil Rennie at the Centre for Independent Studies, which argued the Government has very little to show for the extra $20 billion dollars it now spends every year (almost enough to abolish income tax altogether).

* Stuff: Trade in Rolls for a Toyota state told

* NBR: Study suggests govt spending too much in non-productive areas

* No Minister: Trade your Rolls in for a Toyota! Liarbour told!

* Not PC: Too many chiefs, not enough Indians

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