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Labour losing control over public sector spending

Gerry Brownlee MP
National Party State Services spokesman
John Key MP
National Party Finance spokesman
20 April 2006

Labour losing control over public sector spending

Labour has only itself to blame for throwing petrol all over the bureaucracy and fuelling the very public sector spending it is now reviewing, say National State Services spokesman Gerry Brownlee and Finance spokesman John Key.

They are commenting on Official Information Act papers about the Government's so-called razor gang review of expenditure.

Mr Brownlee says the explosive growth in the public service – up from 30,000 in 2000 to 40,325 in 2005 according to November 2005 official paper – indicates the Government’s lost control of its spending.

"But Labour has only itself to blame. Taxpayers should be extremely concerned, because this growth has been fuelled by the Government.

"The evidence that spending is out of control is everywhere. We’ve seen controversies over the quality of tertiary spending, the Corrections budget blowout, and the Housing NZ budget blowouts.

"It’s hard to believe Labour is serious about curbing spending when Treasury's concerns about it in the briefing to the new Government were dismissed by Finance Minister Michael Cullen as an 'ideological burp'.

"The latest papers again show how concerned Treasury is with the effectiveness of public sector spending - but Labour should be looking at itself with its loose purse strings," says Mr Brownlee.

Mr Key says Labour has played fast and loose with the taxpayer's chequebook over the last six years, and the bureaucrats have been sent a clear signal by the Minister of Finance's office that there's plenty of cash to burn.

"Now, in an effort to be seen to be doing something it has started its razor gang reviews. But it's all smoke and mirrors.

"They can't just sit back and expect this razor gang will yield success. Treasury's concerns in the new papers about the reviews include the danger that they will go the way of ones in the past: 'Previous experience of value for money reviews has shown that at best they lead to performance gains in the short term, and there is little evidence of any sustained gains over the longer term.'

"The papers also say that: 'Reviews in critical performance areas are likely to require at least six months" meaning they will only start feeding into Budget 2007 - not this year's Budget.

"The private sector wouldn't be sitting around waiting for years to start addressing efficiency issues. The message that needs to be sent to the Government is that taxpayers deserve better," says Mr Key.


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