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Capping

29/03/2009

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Homepaddock has a post on a totally unscientific Herald poll  on whether the Key government should enforce a public service cap in a recession.

The Herald asked if public sector jobs should be capped when unemployment is rising?

The response, albeit unscientific, was conclusive: A total of 2867 people voted and 2234, 78% of them said yes with just 633 (22%) saying no.

Now there seems to be an amount of comment in the ether about this issue. It is perhaps worth reminding ourselves of some pertinent points.

Adam posted –Growth of the Government Machine – last July, on some information regarding the growth of the public sector under ‘Super Helen – the GLNZ” – shortly to be canonised by Colin James amongst others. For ease of reference key elements from the July post have been included in this post.

Adam has split the graphic, which was in the HoS for Sunday July 20, 2008, but not online at the time, into two parts for easier display.

Herald on Sunday, 20 July 2008, Public Sector Jobs graphic

Herald on Sunday, 20 July 2008, Public Sector Jobs graphic

Herald on Sunday, jobs graphic part 2

Herald on Sunday, jobs graphic part 2

The graphs revealed some interesting information, not least the huge growth in bureaucracy and wage growth.

As Adam noted in the original post:

From that perspective it may be the case from a viewer’s perspective that at the start point the service delivery was poor – the run down public sector argument – but has the improvement, if any, in service delivery matched the multiple in terms of head count?

If not, why not?

Given that there appears from the data to be a situation where public sector TCP is matching/exceeding private sector TCP should we not be expecting a higher level of performance/delivery?

Is it desirable for example that such a large percentage of the workforce be employed by the state? Is this an appropriate use of scarce resource – talent?

Regrettably there is little debate around those issues. Few seem to be focusing on whether taxpayers get value for money. Instead we get nonsensical comments from the likes of Matt McCarten about gangster capitalism and John Key’s rich mates benefiting. Hardly rational.

Then in response to a John Armstrong column at the beginning of March Adam in –Value not bloat looked at some other aspects of the public service, commenting:-

Key is focused on delivering value for money. Something which was lost over the last 9 years. In Adam’s view there is much that could be done to improve service delivery and enhance the front end., whilst at the same time cutting out waste. Adam would not be the only one seeing NZ as having a bloated bureaucracy with excessive red-tape.

Adam noted Armstrong ‘s conclusions:-

All the time, English is tightening the fiscal clamp on departments as his revenue projections worsen.

His message to chief executives this week was particularly blunt. Their budgets faced permanent restraint, yet he expected them to provide more and better services with the same number or fewer people and the same or less funding.

National suspects that after a decade of plenty when the number of core public servants jumped from 29,000 to nearly 44,000, there is plenty of slack in the system. It knows that it will be obliged to give some backing to chief executives when things get sticky politically for them.

But if there was ever a time to apply the blowtorch to the bureaucracy it is now. With widespread job losses anticipated in the private sector, not much notice is going to be taken of squealing by the public sector.

Then later in that post Adam commented, perhaps presciently:-

Armstrong hits the nail on the head. There will be little sympathy for what many regard as a cosseted public sector and bloated bureaucracy, when jobs are being lost in the parts of the economy that actually pay for the state.

That comment explains the Herald poll result Adam believes.

However, we have yet to see people cotton on to the other aspect of the equation, viz:-

Expect recriminations as well when the public starts to realise just how spendthrift the ancien regime was. Perhaps the economic crisis will force people to face some realities about just what the state can actually achieve.

Though one or two incipient shoots have been spotted.

Additionally it is high time that the state should be subject to value for money assessment, in many areas.

This is long overdue. Perhaps Key’s ‘hug a polar bear’ comment should be seen as a harbinger of action in that regard.

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