The growing bureaucracy

John Key’s speech on the bureaucracy yesterday is here.  Some key points:

• Labour has had education bureaucrats grow in number by 40% compared to 12% growth of teacher numbers
•  Central Health bureaucrats up 51% while medical professionals up 28%
• MSD policy staff have increased 109% while MSD service staff only 23%
• Overall an increase in bureaucrats by 37%, and 1 in 50 employees in NZ is now a bureaucrat
• Salary costs for policy departments have increased 142%
• Government Administration has been the fastest growing sector of the economy

Key also made these pledges:

• No reduction in front-line staff. The numbers of doctors, nurses, teachers, social workers, police and other front-line staff will grow.
• In the first term of a National government no growth in the size of the core bureaucracy.
• $500 million estimated savings over three years

John Armstrong comments:

The freeze, however, is archetypal Key. It will strike a chord outside Wellington. But it is a moderate policy, rather than a radical initiative, and consequently much more difficult for Labour to criticise.

It left Labour torn between wanting to say the policy was too weak to be effective yet strong enough to force cutbacks in services.

He also comments on the PM’s bizarre attempts to suggest National will not hold costs, because Christine Rankin is rumoured to be seeking a candidacy:

The Prime Minister’s response was to raise the spectre of Rankin past followed by mention of Rankin present.

She noted Rankin was a National Party member and hinted the Auckland regional councillor might even be in the running to make it on to National’s candidate list. …

Yesterday’s attempted haymaker from Clark was so off target it risked knocking her out instead.

I hope National will keep a focus on the state sector.  Personally I would push for them to be more adventurous – not in terms of the number of public servants, but in the area of structural reform.  A recent remuneration survey not only discovered public sector CEOs are paid more than private sector ones, but that there are around 210 of them.

I would be keen to see what sort of savings one could make with a rationalisation so there are not 210 CEOs, 210 payroll systems, 210 IT systems, 210 HR systems. I’m not proposing that the functions performed by those agencies be dispensed with, but that amalgamations could result in not just cost savings, but enhanced performance. I’ll blog more one day in detail on this.