3. CRAIG FOSS (National—Tukituki) Link to this
to the Minister of Finance
How is the Government making progress with its plan to deliver better front-line public services and ensure better value for money for taxpayers?
Hon BILL ENGLISH (Minister of Finance) Link to this
The Government is making good progress, starting with a Public Service where, under the last Government, spending was out of control and value for money was not a focus, at all. Since then, we have put the Government’s finances back in order, we have capped the number of State sector bureaucrats, and we have demanded that Government agencies provide more services for less to the public. As part of this process we have over the last two Budgets reallocated $4 billion over a 4-year period from low-cost and ineffective services to higher priorities and more effective front-line services.
What are the latest steps he has taken to ensure that spending by Government agencies is prudent and contributing to the Government’s priorities?
There is a very wide range of initiatives, because there is so much to be done, but today the Minister of State Services, Tony Ryall, the Hon Rodney Hide, and I announced a review of spending on policy advice across Government departments and agencies. Between 2002 and 2009, total Government spending on all policy advice jumped by more than 70 percent, from $510 million to $880 million. This growth in policy advice was even faster than the rapid growth in other Government spending during that period. We suspect that some in-depth investigation is needed to ensure that we are getting value for money.
Hon David Cunliffe Link to this
Is slashing policy advice the latest in his so-called step change steps for building the recovery that include other great enterprises such as liberalising overseas investment, building a cycleway to nowhere, mining national parks, and catching up with Australia; if so, just how much does he think it will add to economic growth?
I think the public would regard it as not just responsible but required for this Government to look at the $880 million worth of policy advice that built up under a Government that they regarded as reckless and out of touch and thought should be thrown out of office. That is why we are looking at it.
We have announced the review of spending on policy advice because we are mounting an effort right across Government to ensure that we are getting value for money. That effort has included substantial reviews of health, education, accident compensation, and housing. Policy is an area that, as yet, has not had the scrutiny of this Government applied to it, and it is time that we did that, because the previous Government built up the spending on policy to $880 million.
Grant RobertsonCan the Minister confirm that the figure he just used of $880 million came from a search of Budget appropriation data with the word “policy” or “policies” in the title field; is that an indication of the rigour of this review?
Well, our even asking the question is much more rigorous than anything that ever happened under the previous Government. One of the reasons the public rejected Labour is that Labour believes that every dollar of someone else’s money spent on anything is value for money. Well, that is wrong.
In the 5 years ended 2009 public sector spending jumped by 50 percent—I repeat, 50 percent—or twice the rate of the increase in Government revenue. In the 9 years ended 2008 the number of people working in the Public Service grew by 50 percent—I repeat, 50 percent—or more than 15,000 people. That growth was almost twice the number of police officers across the country, and was equivalent to three times the total number of people in the New Zealand Army. This Government has decided that kind of growth cannot continue, and we will apply tight scrutiny to all spending.
I seek leave to table the terms of reference for the review, which confirm that the Budget increase data was gained by searching on the terms “policy” and—
Mr SPEAKER