Key Notes No.28

People are feeling the pinch from higher interest rates and increased living costs. They are tightening their belts, and making hard decisions about where they should spend and where they should show restraint.

Things should be no different in the state sector.

It's time to stop the growth in bureaucracy, focus public spending on front-line services that make a real difference in people's lives, cut out the low-quality spending that goes on in the state sector, and let Kiwis keep a little more of their own money.

I'm not talking about the police, doctors, nurses or social workers here. I'm talking about the core bureaucracy that provides advice and other services to the government.

Too much bureaucracy is a drag on the economy. It uses resources which could be used for front-line services or which needn't be raised in tax in the first place. It affects the productivity of our public services by throttling them with paperwork and navel-gazing exercises. It employs talented people who could be working in more productive parts of the economy. It imposes real costs on the country through excessive regulations and compliance costs.

So it's important that the bureaucracy be as lean as possible.

LABOUR'S BUREAUCRACY BINGE

Under Labour, the bureaucracy has grown out of proportion to the parts of the state sector that serve the public.

Since 2000, the number of teachers in state primary and secondary schools has grown by 12%, while the number of education bureaucrats has grown by 40%. In the same period, the number of nurses and doctors employed in district health boards has grown by 28%, while staff numbers in the Ministry of Health have gone up by 51%.

Since 2000, the fastest growing sector in our economy has been government administration.
The total number of bureaucrats has grown from 26,200 to 36,000. 1 in 50 workers in New Zealand is now a bureaucrat.

Meanwhile, labour costs for bureaucrats have grown faster than labour costs in the private sector.

And it's not at all clear how much value has been added by this huge increase in bureaucracy.

Since 2000, for example, the Government has released almost 250 strategy papers. More often than not, these are glossy but meaningless documents that state the obvious and give little or no guidance about what needs to happen. Every one of them requires a long and drawn-out process involving huge amounts of time and resources.

WHY HAS THIS HAPPENED?

Labour's Ministers have wanted to look busy, and have mistakenly equated activity with results. They have long believed that issues are best resolved by getting an army of people to think about them and to produce more regulations.

The Labour Government has hired bureaucrats to do political work, as revealed by events in the Ministry for the Environment. The Government has been awash with taxpayers' money and has considered itself a spender of tax revenue rather than a steward of public money.

WHAT NATIONAL WILL DO

First, let's be clear what National won't do. We will not reduce the number of front-line staff. Under National, the number of doctors, nurses, teachers, social workers, police and other front-line staff will grow.

We will not radically restructure the state sector. We will not treat it as a political extension of the governing party.

What we will do is halt the runaway growth in bureaucracy. We have enough bureaucrats already, and the priority for resources in the state sector should be the delivery of front-line services.

We will grow overall government spending at a more measured rate than Labour. We want to see a greater proportion of government spending on services like healthcare and education, and a smaller proportion on government administration.

My commitment to New Zealanders is this - in the first term of a National Government, we will not grow the size of the core bureaucracy. We will make do with the resource we have, and work to get more value out of it.

I will be making it clear to every member of my Government that I do not want to see any growth in the overall number of bureaucrats in their agencies, and I will measure their success as a minister in no small part by their ability to achieve this.

FOCUSING ON THE FRONT LINE

When it comes to bureaucracy, Labour has spent eight years doing the same with more. It's time we started doing more with the same.

It's time to focus public spending on front-line services that make a real difference to people's lives, rather than paper-shuffling and report-writing that does not

Under National, the bureaucracy will never be the fastest growing sector in the economy.

We will cap the number of bureaucrats. We will direct government spending towards the delivery of front-line services. And we will bring back some much-needed discipline into how your tax dollars are spent.