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Concern doubles over ballooning Govt. spending

Thursday, February 17th, 2005

Concern doubles over ballooning Govt. spending

Finance Minister Dr Cullen's acknowledged concern over Government's ballooning $3 billion more in spending each year should be matched by concern over the rapid expansion of his Government's administration, says the Employers & Manufacturers Association (Northern).

"Government administration has been growing nearly twice as fast the economy overall," said Alasdair Thompson, EMA's chief executive.

"For the quarter ended September 2004 Government administration expanded 8.7% compared to the same quarter the year before, though the economy overall expanded by just 4.6%.

"Dr Cullen has noted this rate of acceleration is not sustainable, particularly as the Budget Policy Statement projects our rate of economic growth to contract this year back to a range of 2.4-3.1%.

"The rapid Government expansion is diverting resources into regulation and compliance rather than into areas that can improve our quality of life. As well, many more skilled people are being drafted into the Public Service to administer the new laws and regulations.

"From 2000 to 2004 the Government added $620 million to its wage bill for administration. The Public Service pay bill last year was a whopping 32% higher than in 2000.

"No Government in decades has enjoyed better economic fortune.
Surely its time for Government to get serious about delivering a business environment that will attract greater investment in order to sustain the nation's prosperity."

ENDS

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