Evidence of huge government waste
Tuesday 18 September -
Wellington (18 September 2018): “Government is achieving poor outcomes for New Zealanders relative to the resources it is using.”
That is the key message in the report Fit for Purpose? Are Kiwis getting the government they pay for?, released today by The New Zealand Initiative.
“The smoking gun is the systemic lack of focus on value for money – that is productivity,” said Dr Bryce Wilkinson, author of the report and Senior Fellow at The New Zealand Initiative. “Productivity Commission reports have documented this deficiency.”
Perhaps one dollar in three of New Zealand general government spending is wasteful. That represents around 13% of GDP, or $20,000 per household annually.
Perhaps one dollar in six of school spending has been wasteful. By age 15, government will have spent more than $130,000 on the average pupil’s schooling. Yet about 17% will have failed to achieve basic numeracy and literacy. If that is not failure, what is?
In health, perhaps 2.5% less of GDP could be spent annually for the same health outcomes.
It is not so much that spending is being literally wasted. Rather the best performing countries are achieving much better outcomes relative to their spending.
The report also documents 20–30 areas of comparative weaknesses in our laws and regulations. For example, Australia rates much more highly than New Zealand for ease of enforcing contracts and for resolving insolvencies.
“These findings should concern people across the political spectrum” commented Dr Oliver Hartwich, Executive Director of The New Zealand Initiative. “Who would not want government to get the best possible outcomes for New Zealanders from what it is doing? On the evidence, government should be getting better outcomes from unchanged resources, or the same outcomes from fewer resources.”
About the author:
Bryce Wilkinson is a Senior Research Fellow with The New Zealand Initiative and Director of Capital Economics Limited. He is the author of many articles and reports relating to the performance of the State and how it might be improved.
A PDF of Fit for Purpose? Are Kiwis getting the government they pay for? and a report summary are available at the bottom of this media release.