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Key’s slippery promises on waste

Written By: - Date published: 3:27 pm, June 14th, 2008 - 50 comments
Categories: john key, national, slippery, tax - Tags:

National has staked it all on delivering bigger tax cuts than Labour. To remain credible, they need to deliver $20 a week on average more than Labour. That’s $3 billion a year. The operating surplus is gone, so where will the money come from?

John Key has been repeatedly referencing the fact that the government spends $60 billion a year, most of which he claims hasn’t been reviewed for a decade (untrue). He assures us there is waste in that $60 billion to fund his tax cuts.

Of course, any organisation has waste and a very large organisation faces dis-economies of scale, especially one that employs 250,000 people and does everything from registering dogs to undertaking combat operations. But to suggest that there is waste on the scale Key imagines and that he could cut that waste where Labour can’t is ridiculous. He hasn’t identified any significant examples of waste.

No Government has an interest in waste existing in the public service – every wasted dollar is one that could be spent on more outputs that the people are always demanding or tax cuts, which they also want. There are votes in cutting waste wherever possible; none in keeping it. In fact, our government is regarded internationally as one of the least wasteful in the world – foreign bureaucrats come to learn from us and academics study our model as one to be emulated in other countries. National wants us to think Key, a man with no experience in government, could magically find huge amounts of waste that Labour hasn’t, but it’s just more slipperiness and hollow promises.

The Government spends $60 billion a year but nearly half of that is just government transfer payments (superannuation, benefits, Working for Families, Kiwisaver). So, National needs to find $3 billion out of the remaining $30-odd billion, most of which is health, education and infrastructure. Could any government save 10% with by carefully cutting out waste without cutting services? No, to cut that much, National would have to use a cleaver, not a scalpel.

50 comments on “Key’s slippery promises on waste ”

  1. Either that or he’ll put us into debt with organisations such as the IMF.

  2. J 2

    I’d certainly say there is an issue with spending priorities. Why is the government spending $70 million on a new fitout for the national library when it starves the ambulance service of funds which requires $75 million over the next 8 years to operate effectively.

  3. Okay, we’re all agreed that the Nats want to cut taxes to the point where structural deficits make serious cuts to welfare, public education and health services unavoidable. So what’s new?

    More fool anybody who depends on or works in those areas and who votes anything other than Labour/Prog/Green.

  4. burt 4

    Steve P.

    In fact, our government is regarded internationally as one of the least wasteful in the world

    Do you have a link to back that up?

    Foreign bureaucrats come to learn from us? Oh really, foreign bureaucrats get junkets like our bureaucrats do, to study other bureaucrats and trade bureaucrat stories – and this isn’t a form of waste in it’s own right?

  5. burt 5

    J

    Why is the government spending $70 million on a new fitout for the national library when it starves the ambulance service of funds which requires $75 million over the next 8 years to operate effectively.

    Good ambulance services provide rapid passage to hospitals for sick patients, hospitals with patients already lining the halls waiting for hours to see a Dr don’t want more.

    Problem solved – build a monument!

  6. Anthony 6

    You guys will be surprised when the axe man cometh and cuts a swathe through the wasteful public sector.

    I’ve seen it first hand during a stint in a government department 4 years back – a piece of software that could’ve been done for 2 million privately, cost tax payers 42 million. Another application needed 5 fields changed on a particular GUI screen – this took 400k of tax payers money. Theres loads of room for Key to start.

    Anyone working in a government department job in IT or as a policy analyst should be preparing their CVs now – they will have to get back out in to the real world come November.

  7. T-Rex 7

    J

    I’ve worked in ambulance. The lack of adequate funding is pretty bad, but the politics internal to St John are also quite bad and probably aren’t helping the situation.

    I find it quite strange that we have a national police force, and a national fire department, but ambulance services are contracted out to a private charitable group.

    St John want to remain independent of the state for no particularly good reason other than what essentially amounts to empire-retention. I do not think their internal management is very good, the funding model they are trying to work to does not help maintain focus as an ambulance organization.

    http://www.nzherald.co.nz/section/1/story.cfm?c_id=1&objectid=10470517

    Personally I think there is a lot to be said for the US model of combined fire/ambulance. Considering the amount of time the NZ fire service spends doing absolutely nothing at all…

    Anyway – as to your comparison – do you think the library should be upgraded? Personally, it’d be right near the bottom of my list of relative wastefulness. Libraries might not seem like much when you just give them a cursory consideration, but when you really think about it they act as a repository of the collective wisdom of our entire civilisation. Worth taking care of I reckon.

  8. T-Rex 8

    Also, Burt, I know you’re not happy with the way things are managed but you don’t do yourself or your argument any favours by being an irrational dickhead.

    Do you think a library is a waste of money? Where do you think John Key should get 3 billion dollars?

    Steve – I think it would be worth considering the obvious source of cash… screwing over 3rd world economies. Same way he got Merrill Lynch all their money. Smiling all the way…

  9. As a former Labour Party activist and now standing for RAM in Auckland Central on a platform that today ‘out-Labours’ Labour, I still cannot get my head around the fact that Labour is planning on borrowing for tax cuts.

    Labour is violating the principles it has historically so dearly held with regard to tax cuts. They’re breaking the Third Way rule that you need to balance budgets. They’re breaking the earnest promises we made all over the country during the 2005 election to not have fiscally irresponsible tax cuts.

    Of course, National is more fiscally irresponsible than Labour, but the fact is that Labour is trying to outbid National in the irresponsibility stakes with tax cuts … yet another sign that the party is forgetting who it’s supporters are, let alone what it is supposed to represent in New Zealand politics.

  10. Labour destroyed its traditional power base when Helen Klark called West Coasters “feral inbreds.” As the Labour Party originated in the region ,one can only assume that her factitious government is from the gallery of absurdity and a self destructing bunch of misfit losers.They represent soulless people who bow to ABSOLUTE corruption.
    Good riddance to bad karma Miss Klark!~!

  11. T-Rex 11

    Anthony,

    It pains me to say that I have absolutely no trouble believing your story.

    Incompetence and bad planning are everywhere though, the public sector has no monopoly on that!

    The difference is one of mandate. Private entity – deliver best result for shareholders. Public entity – deliver best results for public in general. From there it’s down to the skill and morality of the staff.

    I think it’s a good idea to spend heavily on public sector staff, because if there are good people about that’s definitely where you want them.

    What they REALLY need to do is stop hiring people like Christine Rankin, Mary Thompson, others who’s names escape me. When you look at the fnckups private sector groups frequently deliver I seriously doubt privatisation is the solution (and by “seriously doubt” I mean “has been proven time and again to be crap”) but it’d be really nice to get a few more Keith Turners in the mix.

  12. T-Rex 12

    Oliver – what money is Labour borrowing?

  13. RedLogix 13

    I’ve had with Peter Burns.(d4j). He’s been on the nz blog scene for some years now. He is perfectly at liberty to his peculiar views on life, but his posts never contribute anything constructive. I’ve never seen a reasoned and evidence backed argument from him, nor does he engage in meaningful debate.

    He’s been warned and banned from more than a few sites, but his behaviour doesn’t change much. He returns somewhat moderated for a few weeks, but soon enough it’s back to his usual waste of pixels dreck. He has proven over and again that he is incapable of learning, or even helping himself.

    Most experienced posters just mentally filter him out, which is what I normally do, but his septic presence damages every thread he participates in, and repells new readers who might otherwise participate.

    I personally vote for a permanent ban from the Standard.

  14. T-Rex 15

    I’d second you Red, except that permanent bans are pretty absolute. His behaviour isn’t that damaging. Serial rapists – sure – lock them up and throw away the key. But serial idiots who just post online? The cost/offence is almost zero, so it doesn’t matter that much if you give them periodic opportunity to do it again.

    Why not just 6 month bans, as necessary, ad infinitum?

    d4j – this doesn’t mean I’ve revised my position of total contempt for you. I’ve got sterile wipes with more intelligence on them than you display.

  15. T-Rex 16

    d4j – Well yes, you would, and then when it happens you’ll go “LIARBORE IS SO CORRUPT ITZ NOT FARE I AM COOL AND DEY WONT LET ME ON THEY SIGHT KLARK NAZIS VELOCIRAPTORS ALIENS CONSPIRACY”.

    Hell – you’re such a fan of personal responsibility, don’t let me stand in your way. Why don’t you just ban yourself you retard – stop coming here!

  16. andy 17

    Redlogix

    Use firefox and greasemonkey (add on)..has great features…

    D4J

    West coast of nz has 0.6% of our population or 32K people out of 4.2 + million. Not even a full electorate, just trying to put your brain fart in context. I think Mangere will be higher on Labours list of electorates they can win.

  17. I am so pleased you all appreciate my valuable contributions to rational debate.

  18. Lew 19

    I say we just let his statements speak for themselves.

    L

  19. T-Rex 20

    You got a link for that “feral inbred” comment JusticeBoy? It’s not that I don’t trust you, it just seems a little unlike clark to apply the term to all west coasters.

    I want a link to the actual quote, in context, not a reference to other times you’ve used the phrase.

    And no, I don’t appreciate your contributions, because they’re not valuable. I note from your profile that you’re a “dad” and “victim of a miscarriage of justice”. I accept that there are issues with the underlying assumptions the family court uses (Maxina King being a timely illustration of the flaws in the ‘mother is best’ logic). In your PARTICULAR case however I’d probably support any law that prevented you getting near children ever again, lest you infect them with your totally deluded view of the world and tireless anger against everything living on it.

  20. T-Rex 21

    Lew – Where by “speak” you mean ‘rant’ I assume.

  21. Quoth the Raven 22

    Anyone working in a government department job in IT or as a policy analyst should be preparing their CVs now – they will have to get back out in to the real world come November.

    Wait a minute. National said they won’t be firing anyone. They’ll let natural attrition take care of it. I think most people can see that the idea that national is going to magically cut billions of dollars of waste from the public sector is absurd. Civil servants will only have to prepare their CVs if they were planning on leaving anyway, unless Key reneges on his promise.

    Considering the amount of time the NZ fire service spends doing absolutely nothing at all

    Would that include all those volunteers, who have other jobs?

  22. T-rex 23

    Would that include all those volunteers, who have other jobs?

    Some of the paid fulltime staff have other jobs!

    I’m not saying the fire service are slackers at all – I’m just going from conversations I’ve had with fire service paid staff who join, get bored, get jaded, don’t have enough to do etc. Given that pretty much EVERY incident you’d send a fire crew to would (even if only in the interests of prudence) have ambulance crew in attendance as well I can’t think of any reason not to amalgamate the two and just train them in multiple roles. Especially since many of the ambulance crew I know are fire/rescue trained and (in many cases) active volunteers.

  23. erikter 24

    The Children’s Commission, the Ministry for Women’s Affairs, the Ministry for Pacific Island Affairs are three good examples of institutions that could disappear altogether and nobody would ever notice.

    That would result in savings of many millions of dollars and would be highly beneficial to New Zealand.

  24. Felix 25

    Wait a minute. National said they won’t be firing anyone

    Which shows just how well Mr Key’s dogwhistling is working.

    No-one takes him at his word on anything, his opponents and supporters alike are reading between the lines of everything he says.

  25. Felix 26

    erikter you could add the ACT party to that list if you like.

  26. erikter 27

    Ah, and the useless quango, the office of the Race Relations Conciliator should be dismantled as well.

  27. T-Rex 28

    That would result in savings of many millions of dollars and would be highly beneficial to New Zealand.or at least those segments of NZ that aren’t women, children, or pacific islanders. Hell, none of them ever pay tax anyway, and who can honestly say it ISN’T about time women, children, and pacific islanders stopped their freeloading carefree lifestyle

    I do wonder how much doubling up of effort goes on between the various institutions though.

  28. erikter 29

    Felix, you seem to forget that with our taxes we’re paying for the ineffective, useless organisations I mentioned.

    ACT is a political party which will only win Epsom. By the way, they are also useless.

  29. Felix 30

    OUR taxes paying for those worthless bludging women, children and Islanders, eh erikter?

    And race relations, when has that ever been a problem in this country?

  30. D4J is the blogsphere equivalent of didymo. If you’re unfortunate enough to get him you’ll find he’s parasitic and often tricky to get rid of as he goes around spewing crap and lowering the intelligence of any debate considerably. You guys are far more tolerant than I’ll ever be 😉 !

  31. Quoth the Raven 32

    D4J – I’m with ya man. It’s all a lesbian conspiracy. Helen Clarke is an alien from the planet Lesbos. She has a space ship under the beehive. The media doesn’t report it because they’re run by a secret Jewish cabal who are colluding with the aliens. Or maybe I’ve just been reading too much Wishhart.

  32. Raven – just for you over at kiwiblog deary.

    “Now over too “slippery’ John’s team in reply’

    Chris, the word “slippery’ is more an appropriate label attached to the shameful Prime Minister Helen Klark. After reading ‘Absolute Power’ I have no doubts the red team are that ” slippery’ they can’t be tackled and the game must be aborted due to slimy conditions, then the whole area nuked clean.

  33. andy 34

    D4J

    What did you think of ‘The Hollow Men’, since its sunday book review D4J stylz?

  34. I don’t think D4J has the mental capacity to read a grown ups book like The Hollow Men.

  35. As Hollow as its author.

  36. andy 37

    D4J;

    Did you read it before dismissing it?

    thought so! Your world view is not too far away from Wisharts IMO. Must say I am still waiting for Mr Wisharts book to bring down Ms Clark, will the ‘accusations’ stick any time soon?

    Conversely, like him or not Hager at least scored the scalp of Mr Brash! Mr Wishart only seems well adept at shooting himself in the foot. Before you get all huffy and puffy about Benson Pope, where is he and what is he still doing that Mr Brash is not!

  37. QoT 38

    I hate to further derail this thread, but can anyone actually explain the hilarious tendency of crazed rightwing Internet personalities to spell the PM’s name “Klark”? I mean, seriously, “Liarbore” is at least obvious if a little giggle-inducing.

  38. I think the technical term is a “Marx ad-reductum” (correct me if I’m wrong).

  39. randal 40

    juvenile slur. the optimism of the ignorati. say some thing often enough etc. Just the whingeing of the sharp people and the fast crowd who think that they are actually going to get a GO…hahashaha

  40. Are you:

    1. sure that there is no waste, or
    2. hoping that their is no waste, or
    3. sure that there is waste but hoping that National won’t find it?

    Some would claim that the mere existence of the public service implies waste.

    There is a pretty compelling theory on this based around the three levels of care:

    1. spending your own money on yourself (very careful, worried about the quantum and also the value)

    2. spending your own money on others (pretty careful, worried about the quantum but not too worried about the value)

    3. spending other people’s money on others (how many zeroes in a million?)

  41. T-Rex 42

    Optimist – Did you steal that straight from PJ O’Rourke?

    I’d agree, except for the fact that you need (and by “you” I mean “a properly functioning society”) access to healthcare, and the problems are pretty much the same with private enterprise.

    Your theory relies on the availability of good information. Corporations have proven repeatedly that they’re just as bad as anyone when it comes to screwing their clients. How the hell are you going to tell when you’re getting value of money for your health dollars any more than you do now?

  42. Lew 43

    The Optimist: I anticipate you’ve heard of `diminishing returns’, the idea that, as you approach infinity the gain you receive from a given action tends toward zero?

    The question isn’t whether there is waste or not, it’s whether it’s significant enough to merit chasing. The thing about merit in this case is that it’s a sliding scale between thoroughness and gain, in terms of net benefit. That is (presuming total production in the public services remains the same, ie. no noticeable cuts) the more time spent working through and cutting waste, the more it costs you in, for instance only, consultant fees. There’s a race condition which (depending on the relationship between wasteful excess and consultant fees) means some waste will always remain. If, say, an organisation has 15% waste, you might only actually be able to cut 5% before encountering diminishing returns.

    The policy, and whether one believes it will pay off or not, is as you point out a gamble between how much waste you can cut, and how quickly diminshing returns will kick in. You point out that there is inevitably waste, but the point is that all those factors which apparently cause this waste will remain in force after the waste-cutting, and therefore many of the allegedly wasteful behaviours and cultures will be very heavily entrenched, which translates in my model into `taking lots of consultant-hours to fix’.

    So while I agree there probably is waste, I disagree that it can realistically be reduced in any significant way before diminishing returns is encountered. The battle for Mr Key is in convincing the electorate that it can be.

    Prace your bets!

    L

  43. Ari 44

    Keep in mind John Key has essentially set a ridiculously ambitious target: Reduce government spending by 5% through cutting “waste” without active reductions in the public service staff and with basic commitment to all of Labour’s key socioeconomic policies like Kiwisaver and WFF.

    Even if he completely axed the crucial ministries that Erikter is complaining about, (setting gender equality and race relations back by decades in the process) I doubt he’d get his 3 billion dollars from that. He’d need to axe a lot more than our embassy in Sweden to make up the difference, too.

    While I have no problem with reducing waste, I do have a problem with reducing it at the cost of improving society and maintaining our social services. New Zealand’s strength has always been in its quality of living, which National simply doesn’t seem to understand or value. If Labour get their heads out of their behinds and actually start saying this, they might have a chance this election.

    An extra twenty dollars a week isn’t worth cutting off our ties with friendly nations, making our government less representative for people that aren’t white men, making our “justice” system even more punitive, and generally catering to hardline social conservatives.

  44. burt 45

    Ari

    Keep in mind John Key has essentially set a ridiculously ambitious target: Reduce government spending by 5%

    Expecting employers to increase payroll costs by 4% over 3 years (KiwiSaver) finding that money somewhere, without reducing services or staff levels , was an entirely reasonable expectation across a predominately small business marketplace. But cutting 5% ‘waste’ in large govt bureaucracies is impossible without staff cuts or reduction in services?

    Please, keep talking.

  45. r0b 46

    Expecting employers to increase payroll costs by 4% over 3 years (KiwiSaver)

    The costs to the employer are substantially less than 4% because (1) not all their staff join KS and (2) there is a substantial government contribution to this cost.

    Please, keep talking.

    Please, start listening.

  46. KK 47

    This has been a great lively post. We’ve had D4J making some real stimulating points. Then we’ve had Erikter and Anthony outlining the need to get rid of “useless organisations” – race relations, children’s commission, Women’s Affairs and Pacific Island Affairs.

    Sure, there’s govt waste, and as has been made clear, there’s waste across any sector – private or public. And in this current economic climate, it’s the big business that are profiting the most (- the extra consumer costs- I mean where’s all the money going now? certainly not to the govt coffers). Isn’t that a similar ‘waste’ of consumers money.

    Also, I’d hate to look at what institutions such as the European Union and UN spend each year. But clearly, a lot has been achieved internationally- as has the social and economic wellbeing of many NZers (yes, children, women, pacifika among them)

    Do these people not understand what the purpose of a state is? Perhaps a move to Somalia would fulfill their concerns? There’s not much of children’s commission, Women’s Affairs and Pacific Island Affairs over there.

  47. Ari 48

    Adding to Rob’s point- if a business’ only costs are wages, I’d be quite impressed. Usually workers need some sort of tool or support to do their job. 😉 An increase of 4% to part of the payroll is very different from cutting 5% of total costs without a significant reduction of services, especially as Key is trying to have his cake and eat it too by borrowing to increase spending as well decreasing revenue.

    Most businesses would simply look for a way to increase revenue rather than cut costs.

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