Treasury costs

December 5th, 2012 at 1:00 pm by David Farrar

Andrea Vance at Stuff reports:

’s spending on consultants is set to log a 1000 per cent increase over five years, figures reveal.

The Government’s economic adviser is meant to play a leading role in delivering cost savings as part of the Government’s Better Public Services policy.

But figures uncovered by Labour MP reveal its spending on contractors has soared since National took office.

Treasury shelled out $1.968 million on consultants in the 2007-08 year. It is expected to spend $21.927m in 2012-13 – up $19.959m, or 1014 per cent, which Mr Hipkins says is “gob-smacking”.

Sounds appalling, but wait there is a catch.

In this financial year $17m will be paid to consultants on the state-owned assets sale programme.

In other words a non business as normal expense. An expense related to a $5b sales programme. Comparing that to other years is classic apples and oranges.

What I focus on is the overall cost of Treasury. I’m not too fussed about how they split their spending between staff and consultants. You inevitably need both. What is more important is their overall level of “business as normal” expenditure. The Vote Finance Analysis says:

Baselines decrease by nearly $15 million in 2012/13 in comparison to the previous year due to:
• lower forecasted expenditure for the implementation of the mixed ownership model by $15 million
• removal of one off 2011/12 funded initiatives including Better Services for Less – Pipeline Funding of $3 million and and for work associated with accountability and funding arrangements to implement an
investment approach to the benefit system of $1 million
• reduction in funding of $2 million for the management and administration of Crown Guarantee Schemes, and
• a $2 million reduction for efficiency savings and the removal the Government subsidy for KiwiSaver and SSRSS employer contributions.

These baseline decreases are offset by:
• an increase of $5 million, attributable to the shared services for finance, human resources, information management and information technology being supplied to the Department of the Prime Minister and
Cabinet (DPMC) and the State Services Commission (SSC), and
• a transfer of efficiency savings of $1.500 million from 2011/12 to 2012/13 for banking tender and business improvements projects.

So not quite the out of control monster portrayed by Chippie.


3 Responses to “Treasury costs”

  1. sparky (235 comments) says:

    I see Chris Hipkins, has his nose into the Treasury Costs. It wouldn’t take much to make him gobsmacked, it is a pity he didn’t keep his gob shut. The left always make a mountain out of a molehill. Thanks David, you bring it in to prospective.

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  2. Martin Gibson (255 comments) says:

    This is likely to be the start of extensive efforts by the left to discredit Treasury because they are likely to be against the massive tax-and-spend policies we can look forward to if the Green-Labour coalition ever makes it to power. Now is the time to establish an independent body to cost the lolly scramble of nation-killing promises we can look forward to in the lead up to the next election.

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  3. Nigel Kearney (1,994 comments) says:

    Using consultants instead of permanent staff means they are less likely to be union members. That is the real tragedy here.

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