Labour’s state sector plan sound

New research commissioned by the Public Service Association (PSA) supports Labour’s state sector plan to continue to rebuild strong public services.

The PSA today released a second paper by economist Peter Harris, The Role of the Government in a Modern Economy. It builds on research published in June which debunked the myth of the exploding public sector, and points out that within 10 years demographic changes will mean future governments have to spend more, not less, on public services.

PSA National Secretary Brenda Pilott said the research is bad news for those parties promoting tax cuts because it reveals they are unaffordable now, and will become increasingly so, unless access to core services are drastically cut back.

“New Zealand has been experiencing strong social and economic growth over the last six years. Investment to rebuild strong public services has strongly underpinned those results.

“Within ten years the baby boomers will start to retire (from 2011) putting pressure not only on pension payments, but also on other important services such as health which are highly correlated with age.

“Meeting those costs will require a secure tax base, backed by a strongly performing economy. As a nation we simply cannot afford to kill off continued economic growth in a tax cut-led inflationary spending splurge paid for by slashing public services.

“In stark contrast, Labour’s state sector policy released today is a sensible plan to keep rebuilding public services to meet the needs of New Zealanders.

“It meshes well with the commitments we sought from all political parties to properly resource public services, attract and retain quality staff, close the gender pay gap and work with staff on the front-line to improve the services all New Zealanders use.

“New Zealand’s public service is lean and efficient, smaller than in most other developed nations and employs less staff than a decade ago. We say any sensible government would want to keep improving the public services we all use, not slash them to fund tax cuts,” Brenda Pilott said.

ENDS

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