Will the Empire strike back?

March 7th, 2012 at 9:00 am by David Farrar

Andrea Vance at Stuff reports:

Bureaucrats are biting back, with plans under way to march against any further cuts.

Beleaguered public servants are anxiously awaiting Prime Minister John Key’s plans for the state sector, expected to be announced in a keynote address next week.

If the reform involves further privatisation and job cuts – more than 2500 jobs have been slashed in the past three years – it is likely protest marches and rallies will follow.

Public Service Association national secretary Brenda Pilott said the “mood has changed” among public servants, who were now talking about action and taking to social media.

A march would have echoes of mass protests in 1988 against the State Sector Act, which reshaped the public service, she said. “Public servants are starting to bite back – finally – after three years of cuts.

“People have been a bit resigned but now patience is wearing out. The mood has changed. People are now talking about opposing further cuts.

It is a tough time for the . They are one of the more rational unions, in my experience. And having a shrinking state sector is hard for those impacted.

But I think it is worth stressing the fiscal environment we are in. The deficit has been running at around $10b a year. That is several times larger than the cost of the entire civil service. There is a path back to surplus over the next three years, but it is a fragile one.

One just has to look at the UK, Ireland, Greece etc to see what will happen to the public sector if there is not an end to deficits and growing debt.

Of course the Government could scrap high cost programmes such as Working for Families, subsidized childcare or interest free student loans, to reduce the deficit. But I suspect the PSA and its members would not be too keen on that either.

Some of course will advocate that we try and tax our way back to surplus. Apart from the fact that increased taxes will lessen economic growth, I’d point out that overall tax revenues are basically on the track announced by Labour in its 2008 budget. The tax changes since then have over a four year period been broadly fiscally neutral. National actually cancelled two stages of its planned tax cuts due to the deficit, so it has been quite balanced – both canceling tax cuts and reducing spending.

Also we have to allow for efficiency gains from technology. If a new computer system for IRD means it needs 1,500 fewer jobs, then that is something that will be good to do – even it is tough on those affected.

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36 Responses to “Will the Empire strike back?”

  1. tvb (4,494 comments) says:

    We will NOT be in a fiscal surplus in 2014 and we never were. That as a goal to get us through the election but it was based on a very optimistic revenue track and reduced spending and growth figures that were very very optimistic. We are in for hard times with no end in sight. Young people should basically leave NZ and not ruin their lives in a country that will eventually go bankrupt.

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  2. Mighty_Kites (85 comments) says:

    Much like National’s claim that it would save $1 billion by cutting public service jobs, yet cutting over two thousand jobs has only saved $20 million and you’re already into cutting frontline positions. Ha! So very very funny

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  3. Danyl Mclauchlan (1,070 comments) says:

    The tax changes since then have over a four year period been broadly fiscally neutral.

    English was on Morning Report today. Not even he pretends to believe this any more. The new talking point is that they will (hopefully) become fiscally neutral in a few years.

    [DPF: No he said that over the full period they are fiscally neutral. Just like Labour’s 2011 tax plans were not fiscally neutral until some years in]

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  4. davidp (3,587 comments) says:

    Labour seems to have gone in to bat on behalf of diplomats with two questions asked at Question Time a couple of days ago. They really are the party of special interests. The number of diplomats earning $500k in salary and allowances overseas is tiny, but Labour REALLY wants their votes.

    Which has been a pattern over the last few years. Robertson spent a lot of time campaigning not to merge the archives and National Library in to DIA. The putative reason was that this would compromise the independence of the chief archivist. Labour probably ended up winning the archivist vote, but lost the rest of the country in the process.

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  5. krazykiwi (9,186 comments) says:

    One just has to look at the UK, Ireland, Greece etc to see what will happen to the public sector if there is not an end to deficits and growing debt.

    Greece is the slow train wreck here, but Spain, Portugal and Italy are rolling along right behind.

    Those that believe government spending can exceed income indefinitely are possibly drawn from the welfare hamock generation, having no understanding of the need to produce at least enough to sustain consumption.

    As we’ve seen, the result in Greece has been a loss of economic sovereignty as vote-buying state profligacy resuts in bailout countries rightly demanding direct influence on Greek state budgets.

    If NZers want our economic policy set by foreign entities, then doing nothing with state sector spending is a good place to start, and we can jump on the tracks right behind the Euro-PIIGS.

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  6. berend (1,715 comments) says:

    DPF: Of course the Government could scrap high cost programmes such as Working for Families, subsidized childcare or interest free student loans, to reduce the deficit.

    And of course National doesn’t do that.

    Instead it walks down the path of more deficits. John Key has been doing smoke and mirrors. And this country has been ill-served.

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  7. berend (1,715 comments) says:

    +Danyl Mclauchlan

    It was borrowing for tax cuts. We can have a tax cut without having to cut spending!!

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  8. peterwn (3,298 comments) says:

    The problem the PSA has is ‘who cares?’ It is all very well marching down Lambton Quay, but the only people who may be impressed are the Labour Party (dependent on their votes) other bureaucrats and their families. I doubt that others (except rank and file staffs of banks, etc) could care less. Just ask the Tramways Union and the union covering Eastbourne bus drivers (when the local council owned it). There was a public backlash against their strikes and they basically failed.

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  9. mikenmild (11,662 comments) says:

    That’s good kk, but there are limited savings from cutting the public service. If we really want the government to get back into the black then serious changes would need to be contemplated. Might I suggest interest-free student loans, Working for Families and superannuation? Funnily enough though, the government isn’t going there. It’ll have a bit of fun instead chopping a few more public servants and slashing Police operational funding, but does anyone expect much fiscal impact from that?

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  10. wreck1080 (3,956 comments) says:

    Ummm, from what I’ve heard is that government is still much bigger than when Helen Clark started increasing numbers.

    Why can’t they look at delta between the 2000 government and the 2012 government — see where the increase in jobs occurred and prune that back.

    The MMP horsetrading has something to do with the increase in numbers I’d expect. Ministries were created out of thin air.

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  11. YesWeDid (1,050 comments) says:

    ‘The problem the PSA has is ‘who cares?’’

    It’s not just the PSA, it will soon be the police and we already have the wharfies and freezing workers involved in strike action, later this year the teachers will be looking for increases and it will go on and go.

    Let’s see what 12 months of industrial unrest leading the news bulletins does to Nationals poll ratings.

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  12. Brian Smaller (4,024 comments) says:

    Get rid of payroll protection for union dues. How fucking hard is that? Make them collect their own money.

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  13. mikenmild (11,662 comments) says:

    wreck
    It’s not so much organisational change as increased budgets that swelled the numbers. There is any manner of structural reforms that could be done, but restructuring tends to be expensive and relatively ineffective in improving performance.

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  14. Auberon (873 comments) says:

    If the PSA is so concerned for the financial wellbeing of its members then perhaps it should sell the giant waterfront holiday house it owns in Whitianga and pay a special one-off dividend to all of them.

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  15. krazykiwi (9,186 comments) says:

    That’s good kk, but there are limited savings from cutting the public service

    Why? Healthcare spending went from $7b in 1999 to $14b 2009. Spending increased, but arguably essential, valuable services didn’t. We can reverse the rot.

    Here is a list of commision[ers], councils, departments that you and I pay for… and which I’d like to put in front of a taxpayer jury. Some should be gone completely. Others should have some of their functions transferred before they’re stopped. Others require serious makeovers. I’m not holding my breath.

    1. Broadcasting Commission
    2. Charities Commission
    3. Children’s Commissioner
    4. Earthquake Commission
    5. Electricity Commission
    6. Families Commission
    7. New Zealand Fire Service Commission
    8. Health Sponsorship Council
    9. Human Rights Commission
    10. KiwiRail Holdings Limited (yes, a fire sale required)
    11. Local Government Commission
    12. Te Taura Whiri i Te Reo Māori (Māori Language Commission)
    13. Maori Television
    14. Mental Health Commission
    15. Ministry for Culture and Heritage
    16. Ministry of Social Development (Keep, but rename ‘Ministry of Essential Welfare’ and re-task accordingly)
    17. Ministry of Māori Development
    18. Ministry of Women’s Affairs
    19. Ministry of Youth Development
    20. Ministry of Pacific Island Affairs
    21. National Advisory Council on the Employment of Women
    22. New Zealand Game Bird Habitat Trust Board
    23. New Zealand Fish and Game Council
    24. New Zealand Quality College
    25. Drug Free Sport New Zealand
    26. New Zealand Teachers Council
    27. New Zealand Walking Access Commission
    28. Ngai Tahu Ancillary Claims Trust
    29. New Zealand Artificial Limb Board
    30. New Zealand Film Commission
    31. Office of Ethnic Affairs
    32. Plant Variety Rights Office
    33. Public Sector Training Organisation
    34. Real Estate Agents Authority
    35. Registrar of Unions
    36. Removal Review Authority
    37. Retirement Commissioner
    38. Social Workers Registration Board
    39. Sport and Recreation New Zealand
    40. Standards Council
    41. Standards New Zealand
    42. Tertiary Education Commission
    43. Te Puni Kokiri
    44. Radio New Zealand Limited
    45. The Bioethics Council
    46. Transport Accident Investigation Commission
    47. Valuers Registration Board
    48. Walking Access
    49. War Pension Services

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  16. KH (695 comments) says:

    In my experience of the health sector, including the PSA specifically, when it came to a choice between staff interests or service delivery – staff interest prevailed every time.
    So when we get the propaganda about patient interests, that we get when changes need to be made, see it for the self serving staff crap that it is.

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  17. vto (1,131 comments) says:

    “Of course the Government could scrap high cost programmes such as Working for Families, subsidized childcare or interest free student loans..” let me just finish that off for you Farrar, so that it makes objective sense … “or the tax cuts for the rich”.

    So selective, so subjective, so partisan, so unthinking.

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  18. mikenmild (11,662 comments) says:

    Interesting list kk. We could have a discussion about each one. My point really was that if we have an agreed set of functions being carried out now, then there will be relatively few gains to be made from restructuring the organisations that deliver those functions at present. If you are removing functions, fine. For example, if you wish to cease registration of valuers or real estate agents, by all means abolish those bodies – you do realise they are funded by levies on those occupations though. In some of the other cases, boards or commissions actually reside in larger oprganisations anyway.
    We could be talking at cross purposes. You want to abolish functions, which I don’t think is the same as some organisational changes.

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  19. krazykiwi (9,186 comments) says:

    So selective, so subjective, so partisan, so unthinking

    It’s none of thing things vto, but I prefer any of them over the left’s continuous, spiteful and envious hatred of anyone who has worked hard to provide for themselves and their families.

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  20. UpandComer (537 comments) says:

    It’s pretty annoying how the tax cuts for the rich meme gets vomited up all the time. I think two thirds of people paying 17 cents or so on the dollar in tax is actually pretty darn good. And I hope we get lots of industrial action, lets see how people respond to it.

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  21. RRM (10,001 comments) says:

    I saw a PSA march against public service cuts a couple of years ago. It wasn’t very impressive.

    Whole lot of average to Office-Hot girls in their expensive corporate wardrobes, lots of chanting, lots of exquisitely-painted placards, complaining about how that nasty National Gummint were about to do… something. They weren’t quite brave enough to block Lambton Quay for themselves, they had a police car running ahead of them with its disco lights on to do that. Pretty soft.

    Try again, Brenda. You’ll need to actually go on strike and rock the boat a bit, if you want to be taken seriously…

    (The danger to you of course is that if you go on strike and nobody notices, then it will only illustrate how bloated and unproductive the public service really is.)

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  22. backster (2,184 comments) says:

    Surely the most obvious cutbacks Government Departments could make would be dispensing with their Maori Departments Kaumatuas, Haka parties and the like with which most of them have become infested, and which add nothing to productivity or efficiency.

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  23. mikenmild (11,662 comments) says:

    backster
    Maybe they could save a bit on cafe supplies or toilet paper as well.

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  24. Griff (8,159 comments) says:

    Shit paper,food and someones grand ma.
    Which one do you need mm?
    A government department should not have to employ a grandmother or father so that one race, that make up 15% of the population,can have the warm fuzziness.

    I also note that the bro have a disproportional amount of stations on KKs list

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  25. tom hunter (5,078 comments) says:

    It’ll have a bit of fun instead chopping a few more public servants and slashing Police operational funding, but does anyone expect much fiscal impact from that?

    I don’t. Still, it’s exactly the sort of small-ball I expected from this government. The truly “small-c-conservative” approach that does not rock the boat, is not radical, that will nibble away at bloat for a few years until Key and English are turfed from power and a fabulous new Labour-Green government wipe out the gains in a year.

    Here is a list of …

    I’ve written before about being part of a UMR focus group in 2002. It was good fun and the obvious topic was tax and what we were willing to pay for. It’s quite funny to recall that even leading up to that triumphant left-wing victory there must have been concerns inside Labour about excessive taxation.

    Anyway, as part of the discussion we were presented with a list of government departments that our taxes paid for. For a discussion to be focused on tax it may not have been the best approach. Even the lefties were shocked as we studied a list that amounted to four A4 pages of two columns each. I found it funny, in that even I was amazed at the incredible behemoth that is our modern government and naturally my first reaction was to ask whether we could not at least cut the list in half before talking about taxing rich pricks.

    Might I suggest interest-free student loans, Working for Families and superannuation? Funnily enough though, the government isn’t going there.

    Funnily enough that’s because they expect that left-wingers like you would hit the media and the streets screaming about the dreadful lack of compassion and typically conservative lack of foresight from a Scrooge-like government.

    You could perhaps promise not to do that and …. okay, I have to stop laughing now.

    The fact is that Labour set these things up in such a way that they could not be changed drastically. Get people dependent on the government and your job is done. I’ve seen many leftists laughing at this aspect, just daring any right-wing government to tackle these and commit electoral suicide.

    As the saying goes, it’s a bug, not a feature, and like Greece and much of the rest of the Western world, only bankruptcy will force change – which is why I shall be voting Labour in 2014.

    But what the hell! We’ve got exactly what I predicted in 2008:

    … what is National going to do should it win this November beyond babysitting the institutions of Labour and the Left. Nursing those things along, tiring all the time and steadily losing votes simply by being in Government and getting blamed for the insanities of those self-same institutions. Until the day comes, one or two election cycles down the road, when a revitalised Labour gets back into power and gets to push forward some more. Ratchet Socialism at its best.

    Well done Bill English – clap….. clap….clap.

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  26. mikenmild (11,662 comments) says:

    Griff
    My point is that any spending on kaumatua is likely to be a miniscule part of an agency’s budget. Either we are talking about saving money, or talking about things that annoy you (or kk). The two things will not always overlap completely. To take an extreme example – let’s say government agencies were instructed not to engage kaumatua. Would this save even $1million per year? I’m sure you would say that whatever it saved would be worthwhile. I’m not sure that I wouldn’t disagree entirely, but such a move would be purely symbolic and would not really have anything to do with cost cutting as such.

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  27. mikenmild (11,662 comments) says:

    tom hunter
    Spot on.

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  28. tom hunter (5,078 comments) says:

    Your side has got my vote in 2014 mike, so are you celebrating out of sheer partisan perversity?

    I ask because unless things change radically none of this is going to end well for anybody. I’ll merely vote for the left in order to speed the process along; I don’t like lingering deaths. Besides, since I think all these left-wing institutions are going to burn to the ground anyway I’d prefer they pour on the petrol themselves – the match having already been lit.

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  29. mikenmild (11,662 comments) says:

    I’m not celebrating. I’d prefer to see governments that have the courage of their convictions; but I don”t really expect that to happen.

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  30. Monty (980 comments) says:

    The left are so very quick to try and blame the current National Government for the massive deficits. The reality is that this government has not actually introduced any substantial new spending in the past three years.

    National is cautiously trying to undo the damage left by the Clark / Kullen years. Massive increases in spending across the board. Massive surpluses as a result of over taxing the working classes. The 2008 PREFU had endless deficits. National have a hell of a job trying to balance the expectations of the country against the reality of the spending committments of Labour.

    I say tough to the public sector. Tough that you dont produce anything, dont earn anything and are a bunch of whining socialists living off the back of the productive sector. If you don’t like it try and find work in the real world and see what happens then. (or the real world value on your limited skill set.)

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  31. vto (1,131 comments) says:

    The high quality of debate on here really astounds.. Here is a good example by Monty in explaining the public sector.

    “Tough that you dont produce anything, ………. living off the back of the productive sector.”

    Tell me how any manufacturing and exporting business would get their goods to ports etc without public sector transport providing, say, roads for instance.

    Dumbarse.

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  32. krazykiwi (9,186 comments) says:

    vto – mankind has been producing stuff, transporting and trading it for tens of thousands of years. Asphalt, vehicle registration and road user charges are somewhat more recent. The point that you were, I think trying to make – other than scoffing at the qualify of debate of others – is that some of the government’s activities could be regarded as productive. Of course which ones is less easy to assess, because there is a very indirect relationship between the money they remove from my pocket in the form of tax, and where it ultimately spent in pursuit of productivity.

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  33. mikenmild (11,662 comments) says:

    kk
    Well, it was amusing to read Monty’s love letter to the Key Government, but does anyone really think that not introducing any new spending is such a wonderful achievement?
    The points you make are valid, but there is absolutely no sign that the present government will do anythng more than tinker with a few public service structures and choke off a bit of new spending. Other than that, it’s steady as she goes and nothing to scare the horses (if you’ll forgive such a clumsy mixed metaphor).

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  34. DJP6-25 (1,389 comments) says:

    Nooooo! Keep things exactly as they are. Your grandchildren can get a second job to pay the extra tax. No worries.

    cheers

    David Prosser

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  35. tom hunter (5,078 comments) says:

    And your side mm? What are they going to do when they regain power? Rhetorical question for me but I really do wonder what you think they’ll do that’s different on the spending side?

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  36. mikenmild (11,662 comments) says:

    tom
    I wouldn’t describe them as my side, but I’m generally more likely to support a status quo in respect of public sector restructuring. I’ve seen a lot of it and it doesn’t seem to be the best way to skin the cat. Seeing I could never see the poiint of WFF or the student loans nonsense, I’m not likely to support any other grandiose programmes. There are always things to be done and changes to be made, but ‘Rome wasn’t built in a day’, as we civil serevants love to observe.

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