The big cost of small government | The Jackal

12 Sep 2014

The big cost of small government

You may recall that back in 2008 and 2011, the National party made a pledge for a smaller government. Echoing the tea party, this pledge was in part made to give the impression that they were concerned about the costs involved in running a government but also to placate the Act party whom National was wanting to form a government with.

This election the Act party is once again campaigning for a smaller government, seemingly oblivious to the fact that it has utterly failed to provide better services or reduce costs.

Yesterday, the NZ Herald reported:

Government departments which have spent millions in laying off staff are responsible for nearly $1 billion in consultants' fees.

Figures provided by the Labour Party showed ten agencies have spent $910.5 million on contractors since 2008 while also spending $114.1 million on redundancies.

The restructuring of the Inland Revenue Department (IRD) had seen departing staff collect $31.3 million in redundancy payments before contractors were hired at a cost of $125 million.

The number of core public service staff declined by 2958 between December 2008 and June 2012, so it's little wonder that the government appears to be dysfunctional. Not only are staff thin on the ground and therefore unable to meet the required workload, when the government actually gets around to contracting out it costs more and doesn't provide very good results either.

Once again the right wing parties haven't done the research to see if their policy ideas are workable or financially beneficial to us taxpayers. National and Act have simply campaigned on what they think is a good idea, but what is in reality an ineffective and wasteful policy initiative that will end up costing New Zealand dearly.