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Multi-million dollar bills price of public sector cuts

7 August 2013

Multi-million dollar redundancy and contractor bills price of public sector cuts

The Public Service Association says large redundancy and contractor bills are the price being paid for public sector cuts and restructuring.

The New Zealand First leader has released information showing that MBIE has spent $3.7 million in redundancies and $23.5 million on contractors between July 2012 and May 2013.

The MBIE merger has led to major restructuring and change which is still on-going.

“MBIE was directed to save millions of dollars on administration and policy functions within its first year which resulted in redundancies and the loss of valuable staff and experience,” says PSA National Secretary Richard Wagstaff.

“It’s ironic that millions of dollars have been spent on redundancies and then even more on contracting expertise back in to fill the gaps. For a department focussed on business it doesn’t make sound business sense.”

Last year’s Human Resource Capability Survey of government departments by the State Services Commission showed an almost six-fold increase in total redundancy payments over the past five years. In the year to June redundancy payments totalled almost $39 million compared to just $7.7 million five years ago.

Richard Wagstaff says it sends some very mixed messages on government cost-cutting and the public service staffing cap.

“The public service has taken some big hits through departmental budget cuts and constant restructuring in the past few years. It’s difficult to match up the government’s rhetoric on the need for efficiency and cost savings in the public sector, when tangible benefits are hard to see.”


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