Will the Empire strike back?

Andrea Vance at Stuff reports:

Bureaucrats are biting back, with plans under way to march against any further state sector cuts.

Beleaguered public servants are anxiously awaiting Prime Minister John Key’s plans for the state sector, expected to be announced in a keynote address next week.

If the reform involves further privatisation and job cuts – more than 2500 jobs have been slashed in the past three years – it is likely protest marches and rallies will follow.

Public Service Association national secretary Brenda Pilott said the “mood has changed” among public servants, who were now talking about action and taking to social media.

A march would have echoes of mass protests in 1988 against the State Sector Act, which reshaped the public service, she said. “Public servants are starting to bite back – finally – after three years of cuts.

“People have been a bit resigned but now patience is wearing out. The mood has changed. People are now talking about opposing further cuts.

It is a tough time for the PSA. They are one of the more rational unions, in my experience. And having a shrinking state sector is hard for those impacted.

But I think it is worth stressing the fiscal environment we are in. The deficit has been running at around $10b a year. That is several times larger than the cost of the entire civil service. There is a path back to surplus over the next three years, but it is a fragile one.

One just has to look at the UK, Ireland, Greece etc to see what will happen to the public sector if there is not an end to deficits and growing debt.

Of course the Government could scrap high cost programmes such as Working for Families, subsidized childcare or interest free student loans, to reduce the deficit. But I suspect the PSA and its members would not be too keen on that either.

Some of course will advocate that we try and tax our way back to surplus. Apart from the fact that increased taxes will lessen economic growth, I’d point out that overall tax revenues are basically on the track announced by Labour in its 2008 budget. The tax changes since then have over a four year period been broadly fiscally neutral. National actually cancelled two stages of its planned tax cuts due to the deficit, so it has been quite balanced – both canceling tax cuts and reducing spending.

Also we have to allow for efficiency gains from technology. If a new computer system for IRD means it needs 1,500 fewer jobs, then that is something that will be good to do – even it is tough on those affected.