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Bureaucracy Gets Thumbs Down from NZ Businesseses

Media Release
14 February 2006

Social Policy And Welfare Bureaucracy Gets Big Thumbs Down from NZ Businesses

Medium-sized New Zealand businesses are very clear about one thing: They say the country has far too many bureaucrats, particularly in welfare and social areas, according to the latest Grant Thornton International Business Owners Survey.

But New Zealand Trade and Enterprise officials can breathe more easily than others. Only 31.7% of the New Zealand businesses polled considered them to be among the most over-abundant bureaucrats.

Those employed carrying out social policies and welfare services were deemed to be the big offenders in terms of having too many bureaucrats. In the case of social policies, 81% agreed that they were the bugbear and in welfare the figure was 77.8%. Next came environment (61%), health (59.5%) and education (52.4%). [See table below.]

Question: In which of the following areas do you feel New Zealand has too many bureaucrats?

|----------------------------------------+----------------------------------------|
| Area | Percentage saying yes |
|----------------------------------------+----------------------------------------|
|Social Policies | 81.0% |
|----------------------------------------+----------------------------------------|
|Welfare | 77.8% |
|----------------------------------------+----------------------------------------|
|Environment | 61.0% |
|----------------------------------------+----------------------------------------|
|Health | 59.5% |
|----------------------------------------+----------------------------------------|
|Education | 52.4% |
|----------------------------------------+----------------------------------------|
|Trade & Enterprise | 31.7% |
|----------------------------------------+----------------------------------------|

Overall, 84% agreed with the statement that New Zealand has too many bureaucrats. A further 12% disagreed, with the balance undecided or not having an opinion.

"We thought it was worth asking businesses the New Zealand-specific questions about whether they thought the country was over-populated with bureaucrats, and in which particular areas of Government this was happening. These issues have some topicality as people look at the state of the economy and claims that Government spending is pushing up inflation," said Grant Thornton New Zealand chairman Peter Sherwin. "After all, Government spending has increased by 35% in six years.

"Clearly, from our survey, the medium-sized business sector is saying enough is enough.

"What the Government is doing by growing the bureaucracy so much is not contributing to getting New Zealand into the top income levels of the OECD. It can also be said that the number of bureaucrats is adding to the negativity about the economy," said Mr Sherwin.

"The reactions to the prompt about social policies were probably in line with other indications that many New Zealanders, particularly those in business, feel the country has become both too politically correct and over-regulated. The strong reaction against welfare bureaucracy was probably also indicative of built-up annoyance and perceptions about the number of people given welfare payments of various types.

"While 15% of the working-age population remains on a benefit, many employers are struggling to find staff.

"Conversely, business owners believe that the Trade and Enterprise area is seen to have a positive influence over the economy, adding value to the business community."

Mr Sherwin said that with core Crown operating expenses already at a high of 30.6% of GDP and projected to go up to 32.4% in 2009-2010, the danger signs for the future of the New Zealand economy were flashing red.

"All the time that this bureaucratic spend-up is going on, the economic burden falls more and more on the people who are the heart of the economy; the small and medium-sized businesses that make up more than 90% of companies in New Zealand. It is time for Government to listen to the private-sector employers.

"One would have to think that Government politicians would be advised to take heed of this sort of evidence. National has already given notice of its intention to tackle the burgeoning bureaucracy and says it has a mission to crack down on welfare dependency."

ENDS

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