Nats find no government waste

Written By: - Date published: 12:30 pm, October 12th, 2009 - 8 comments
Categories: public services, tax - Tags:

I missed this one a few weeks ago but it’s worth pointing out.

National spent $300,000 hiring half a dozen supposed business geniuses for $2,000 a day to find places to cut costs in the public sector. Called them ‘purchase advisers’.

They ought to be able to find heaps to cut eh? I mean, National was endlessly telling us about all this ‘government waste’. Key was promising us tax cuts funded by cuts to wasteful spending. Which means there must be a lot of it. The core public service only costs a few billion. A decent tax cut costs at least a billion.

So those purchase advisers must have found a high proportion of the spending was fat to cut eh? Nope.

One of them, Graham Scott, said “It wasn’t as if there was a whole lot of fat there I could advise them to get rid of.” He had the decency to not even charge the government. Unfortunately, the other five charged about $60K each, without finding any real fat.

If you’re not a right-wing ideologue, it will come as no surprise that there’s no fat. Our public service is one of the best run in the world. No-one has any interest in having lots of wasted spending – not the managers, not the CEOs, not the ministers. But National created the myth of government waste nonetheless. It had to if it was to convince people that they could have their cake and eat it – cut taxes, aka government revenue, without cutting the services like health and education everyone loves.

Of course it was a lie. There was no fat to cut. The real cost of the tax cuts will be worse health care and lower quality education. And did you even get a tax cut from National after all that? Me neither. No wonder Key and his purchase advisers are laughing all the way to the bank.

8 comments on “Nats find no government waste”

  1. HitchensFan 1

    I love how this item attracted virtually NO attention in the media…….

  2. Chris 2

    Where’s a Garner or Espiner or even a Young when you need them?

    Oh, that’s right, focusing on the Green’s ‘rort’ and Nanny McKey’s NY trip (recovered your breath yet Guyon? after all that breathless reporting)

  3. Lanthanide 3

    “And did you even get a tax cut from National after all that? Me neither. ”

    Actually I did, thanks.

    • Clarke 3.1

      Make the most of it – you’re unlikely to get another. The money is going to be spent paying Rio Tinto and Methanex and Solid Energy to raise their CO2 emissions instead.

      • Lanthanide 3.1.1

        I put it into kiwisaver, actually.

        I couldn’t really justify 4% of my salary, but lowering the minimum to 2%, and then giving me a tax cut that covered 1.6% of the 2% required made it worthwhile. Not everyone suffered from National’s taxcuts, you know. Add in 2% from my employer and another $1042 from the government and it was a no-brainer. Throw in Labour’s 2008 cut and I came out decently ahead cash in-hand and a substantial kiwisaver investment also.

        Of course they’re now saying they’re going to rise the ACC levies up to 2.5%, so a lot of that extra money will be going again.

  4. Scribe 4

    Once again a headline on The Standard that is ridiculously misleading. One quote from one of six advisers who looked at one department is extrapolated to apply to all consultants and all departments. What a joke.

    If the Government spent $300,000 and found $305,000 in savings, that’s money well spent. I think you’d find they’ve saved several million dollars, if not tens of millions of dollars, through this exercise.

    • Pascal's bookie 4.1

      Well we might find that, but the “Government has refused to say how much spending the consultants saved”, which would be bloody strange if it really was tens of millions of dollars. Or even several million.

    • felix 4.2

      There’s also an opportunity cost associated with tying up skills and resources in a wild goose chase.

      These are supposed to be smart people. We could have paid them to do something worthwhile.

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