NEWSLETTER: Key Notes No. 28

30 Comments
12 March 2008
NEWSLETTER: Key Notes No. 28

Today, in a speech to the National Press Club in Wellington, I outlined how National will stop the growth in government bureaucracy and focus spending on front-line services. For the full text of my speech click here.

FOCUSING ON THE FRONT LINE

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.

John Key MP
Leader of the National Party

For an associated video, click here.

To download a copy of the speech as a printable PDF, click here.

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#1 - Lyn Hume 2008-03-12 21:11 - (Reply)

Could you please make it clear if you are talking about cutting back on bureaucrats in local as well as national governance levels?

#1.1 - David Hill 2008-03-12 22:49 - (Reply)

I have had a guts full of Government Bureaucrats dreaming up regulations for local bodies which have to increase property rates to pay for them. I feel we are the most regulated country on earth. Communism could not be worse.

#2 - susan jones 2008-03-12 21:47 - (Reply)

last time i emailed john key i never got a reply - this time i have this to say: ok - my first letter to the government hasn't got thru - but PLEASE, PLEASE LISTEN - you are sending people on a tax funded jollie while you refuse to fund Herceptin for more than 9 weeks - a drug required for early stages of breast cancer - why not? International Doll Designer, Jan Mclean of Dunedin is donating her limited edition dolls to fund Carolyn of Oxford's thereapy - why do the Government continue to ignore the plight of those with breast cancer and other terminal diseases - turn a blind eye and send outgoing politicians on a fist class travel to europe and south africa - i will email each party to get a response! thanks, from a taxpayer!

#3 - susan jones 2008-03-12 21:59 - (Reply)

an open letter to the government stop this trip - and think about New Zealanders who are in poverty, the health system, those struggling, interest rates, food bills, schooling expenses, high taxes etc your MP's should not be allowed to have this trip on taxpayer funds. That goes for all parties involved - Labour, National and NZ First parties - stop this madness - we struggle along, making ends meet, meeting rising power costs, hoping our kids can be fed, get a good education - use your own monies - you make enough, more than anyone else, you always give yourselves huge pay rises plus expenses and probably in the ballpark figure of $200-$300 thousand dollars pa being average wages- most of us don't know how that feels, earning if we are lucky between $15 and $40,000 pa - use your own money - leave our taxes for our peoples and stop being selfish. This abuse of the taxpayer needs to stop. If you had a heart - cancel the trip and put the money hack where it is needed.

#4 - neil burgess 2008-03-12 22:56 - (Reply)

The low level of police is a crime in it's self. We at times have only one officer out during the day with one manning the watch house and Senior Serg. for back up. Don't believe me,ask around. It's a disgrace,dangerous and somewhere ahead is going to really matter to some poor soul, hopefully not me. Great for the criminals but!

#5 - Gloria McAlesse 2008-03-12 23:24 - (Reply)

Helen Clarke just said that over 50% of the growth in the state sector was in front-line services. Hopefully we hear the examples given in the speech above in the news as a counterattack. With regards to the TEC, it seems to have done a good job in reforming the teritary education funding model. However, I believe Universities funding should be increased in order to transform our economy through higher education. Raising the entry standards for Degrees and higher quals and abolishing the course fees for subject areas where there is a skills shortage is a possible way of retaining skilled professionals.

#6 - David Orchard 2008-03-13 06:36 - (Reply)

Great starting idea, but just a cap is not enough, some of these bureaucrats, earning $100,000+ salaries, are actually HARMING NZ's progress, especially in the Ministry of Education, where they constantly add to the paperwork teachers and principals must read through and fill out. Constant curriculum changes and ERO visitations, and compliance issues make education less a journey of learning and more a field of document landmines with each requirement capable of blowing up your progress. And, while I am writing, what about local body governments being allowed to raise rates without limit, ie Rodney District Council's plan, I, like you, own a bach at Omaha, and yet another rise of 18-26% is scandalous.

#7 - Vicki Turnbull 2008-03-13 07:05 - (Reply)

It would be great also if you didnt agree to waste our tax money on unnecessary overseas junkets for members of parliament who wont even be standing at the next election. I think you should realise that your comments on this will alienate many people who were your supporters. As for Brian Connelly's behaviour on TV - amazingly bad behaviour when the media were asking him a legitimate question -how else is the public to find out what is happening if journalists dont ask the questions. He is our representative paid by us.

#8 - Ann Bennett 2008-03-13 07:49 - (Reply)

As your local physio in Kumeu, you say no more bureaucrats etc,, my concern is your proposed changes to workers ACC cover using private insurers. Like last time national did this! this created massive bureaucratic nightmare, business dropped majorly, consumers suffered huge waits for approvals, insurers tried to dodge accepting cover, hency paying and basically everyone suffered (except maybe the private insurers), I see your proposal of returning to this system as increasing bureaucrats! why not use the current ACC bureaucrats when we finally have a system that although underpays physiotherapists massively (refer review of 2007) does work and stays within one system which is easier to administer. thanks Ann

#9 - Kem Price 2008-03-13 08:09 - (Reply)

Your letter stated: Bureaucracy "imposes real costs on the country through excessive regulations and compliance costs". True, and I look for change, but isn't reversal going to prove difficult. The current government, in line with global trends, has established an ingrained culture of over-excessive compliance to trivia, and compliance that circumvents personal responsibility - that is just liability avoidance. This culture is entrenched from government through to local councils. A momentum is building where we add new laws to solve minority issues. How is this going to change in reality?

#10 - James Findlay 2008-03-13 08:10 - (Reply)

The main area that the National Party needs to concentrate on is to rid our justice system of corruption from the police, crown prosecutors and the judges. Justice must become a search for truth and not a game of barristers challanging each other with the accused as a victim of the their game. There are many examples, including me. Jim Findlay (Hamilton East)

#11 - Liz Alexander 2008-03-13 08:14 - (Reply)

I am a long time National voter and will certainly not be changing that stance at this election. However I was very disturbed by Matt Connell's responses to Chris Fafoi on One News last evening. Matt and all politicans are paid from the public purse and as a small business owner I wanted to know if I and my fellow taxpayers were paying for Matt's wife to have a "holiday" as well. Why would he not answer that question but instead try to belittle the interviewer and the TV station he works for. All that evasiveness is very disturbing. However, as I said, you're the guys for me and I know some voters who will never vote Labour again no matter what they promise so if your MPs keep saying positive things, and don't evade issues, you are in!!

#12 - paul 2008-03-13 08:18 - (Reply)

"We have enough bureaucrats already" NO. We have too many bureaucrats and we should cut them back.

#12.1 - Denise baker 2008-03-13 16:27 - (Reply)

WINZ. Enlarging. Have you noticed more and more staff and buildings are growing in this area. More on the sickness benefit. E.G. Kaitaia. Landlord is kicking out the tennants of one building so WINZ can enlarge. They already take half the block. More government money to pay all these people. Why do they not show us how many on the sickness benefit. They say the unemployment has come down??? Yes it has they have moved them to the UEB

#12.1.1 - John Smith 2008-04-06 08:50 - (Reply)

Yet another example of WINZ bureaucrats lining their pockets is the criminal practice of loading a bus full of beneficiaries and dumping them on the door step of a fruit pack house, collect their bonus for getting them off the benefit, only to repeat it next week, as last weeks bus load have walked of the job. This is a classic case of seat polisher lining their pockets. This is bureaucratic abuse of a private business. It is not enough that they must fill out an endless list of forms for each employee taken on, they then must fill out an endless list to inform the seat polishers that they are no longer employed. Meanwhile the seat polisher must be laughing it off in the South of France or similar.

#13 - Paul Gruschow 2008-03-13 08:43 - (Reply)

You are on the right track in freezing new govt. employees. There is clear evidence that the demand for those employees is pushing up costs for many businesses already struggling to find qualified staff.

#14 - Kate Taylor 2008-03-13 09:26 - (Reply)

What will a National Government put into R&D in the primary sector if it scraps the current Government's proposed fund? And why wasn't this issue important enough to include in your newsletter?

#15 - Martin Chappell 2008-03-13 09:37 - (Reply)

I think it was unfortunate that you did not comment on the tax payer junkets that are occuring at present and I cannot see why we should pay for retiring MPS to swan around the World at the tax payers expense. Even more annoying is that they used to have to go by business class, when that was abolished, then they should have moved back to premier economy, but I note they now travel business class, which in effect is first class. Why can't they use their points and save our money. We are a poor country and cannot afford this extravagence. You personally had the opportunity to gain a lot more mileage by denouncing such practices, but I note you closed ranks. It is time that the taxpayers had some say in this area and I always admired Rodney Hide for wanting to clean up these rorts.

#16 - John Terpstra 2008-03-13 09:45 - (Reply)

Hi - excellent agenda to pursue and one that if done will preserve the nation a little longer from collapse. I heartily endorse all of the comments and thank you for them - they encourage me. I have long believed that labour has boasted of low unemployment - but only because they have created unnecessary bureaucracy. Well done.

#16.1 - Nathan McCluskey 2008-03-13 12:17 - (Reply)

The degree of bureaucracy necessary is a sliding scale and without sound research (rather than simple statistics) it is difficult to know (as admitted by John Key) how much value, if any, is being added by additional bureaucratic personnel. In the absence of such research, the desire for more or less bureaucracy is an ideological battle. As for John Terpstra - in 1999 New Zealand's unemployment rate was 6.8 (119, 000) and is now half the rate, 3.4 (77,000). This cannot be accounted for by an increase of 10,000 'unnecessary' bureaucrats since 1999. Such an analysis is not only simplistic, it's inaccurate. Do the math!

#17 - heli said:
2008-03-13 10:28 - (Reply)

I work front line with the reports, books and digital resources, with the education and business sectors as a reference librarian. Worse than teachers, nurses, police, etc our pay rates are at a historic low and we need more recognition in the form of pay increases. Local government is underpaying its library staff and historically has underpaid them. I am well educated with a BA(hons) and five years experience. This is where the problem lies with local government underresourcing those responsible for making a difference in the knowledge economy, understand this is a very front line positon. Its not a case of two many staff but underresourced and very hard working staff.

#18 - Paul Reiher 2008-03-13 12:07 - (Reply)

I agree that govt bureacracy has gone mad. Promising to hold expenditure at current levels (which you say is too high) is a copout. These unproductive costs must be reduced and funds redirected to the frontline.

#19 - dad4justice said:
2008-03-13 16:16 - (Reply)

I am so pleased that National has seen the damage inflicted by the huge handbrake, which is the bureaucratic inertia that pushes and maintains people sympathetic to Labour in many unfit and meaningless positions. The pitfalls of big bureaucracy are detrimental to the well being of society. Behind the scenes office niche pen pushers are not as effective as front line coalface service workers tackling an increasingly problematic society. In the kiwi hierarchically structured administrations, people tend to be promoted up to their level of incompetence. Most commissions and quangos are pointless and filled to the brim with Labour cronies. A classic example is the sad indictment, which is our dysfunctional justice system characterized by pious liberal judges who are oblivious to common sense, which sees many victims of injustice tossed aside worthless as non-identities who are struggling for survival.

#20 - John Fisher said:
2008-03-13 16:24 - (Reply)

The same comments should be put to local government also. The resource management act needs to go along with all consultants. For example I was looking to go into vegetable production for export and was offered a very cheap block of land near Twizel and wrote to the McKenzie District Council who then referred me to their consultant in Timaru. The consultant could not answer the question as to whether one could grow a carrot or an onion at Twizel. I was living in the north at that time and as the information was not available the project was canned.http://johnkey.co.nz/index.php?/plugin/captcha_c664e95236ce41453d73088a6cb1a946

#21 - John Buckley 2008-03-13 19:14 - (Reply)

The repetative nature of this newsletter would imply that there appears to be a lack of substance. Whilst there are possibly too many in the government service at some levels, lets have facts and info on where exactly these excesses are.

#22 - david Blackman 2008-03-13 20:14 - (Reply)

Not continuing to increase the levels of bureaucrats is admirable, but what guarantees do we have that if this is done that the numbers of consultants won't subsequently increase? Given that this species often earn more than double what the people they replace earn we could very well be worse off!

#23 - Heiko Mueller-Cajar 2008-03-13 20:52 - (Reply)

Excellent to see National addressing the problem of New Zealand bureaucracy going mad! I used to be board member for the local high school - and it was amazing to observe how much effort the bureaucrats in MoE put in to make life for teachers, principle and board more and more difficult by adding additional rules and tasks (no value for our kids, just reporting and compliance) instead of helping them to get the best outcomes for our children. Please keep this subject high in your priority list - and I hope National still remembers it when they win this election!

#24 - Stuart Goudie 2008-03-14 09:26 - (Reply)

John -Further to my e-mail to you re sending retiring politicians on junket trips -I feel your support is nothing but a slap in the face for folk who are looking to you to bring about a change in politicians arrogance toward the tax payer.We have seen the likes of Dover Samuel laughing about tax payers fury over these "trips for the boys" and then we see [snip: gratuitous insult - Admin] Nandos Tandos being sent on his swan song trip as well!! Frankly John if the 2 National MPS being sent on their little tax payer funded jaunt had any form of decency,knowing that they are now being classified in the same category as Nandos Tandos they would cancell their trips. John you had an opportunity to gain a great deal of respect by refusing to let your MP'S go and to be absolutely blunt about it you "stuffed up" C'mon John don't let your supporter's down at this stage.

#25 - Bruce Byers 2008-03-14 15:04 - (Reply)

Haveing been a small business operator for the last 55 years I have seen the amount of ridiculous red tape increase at an alarming rate from central govt. as well as local too many officials sitting in there offices trying to justify their positions by dreaming up all sorts of regulations etc. also we work 6 days per week to make a reasonable living and pay our taxes and I do not think these retiring MPs should have an o/seas trip at our the taxpayers expense and if you Mr. Key think it is O/K then I am very disappointed..

#26 - Bruce McMillan 2008-03-18 09:49 - (Reply)

John, The misallocation of precious taxpayers funds gains a new dimension when you look at the future cost of all those infrastructure projects that were deferred and never got started. When the nation finally faces up to the crtical needs in transport we will find that the cement required will cost 3 or 4 times, the steel far more than double and the consultant engineers ten times the cost of just 15 years ago. This cabal that believes that cars will just go away if they can only choke the funding for roads for long enough are very dangerous. We need upgrades everywhere, yes rail where it can be efficient, yes roads and most certainly bridges. There are literally hundreds of bridges, both road and rail that are presently marginal for their current use. Those who live within walking distance of Lambton Quay cannot see the point of transmission gully. They should talk to people who run business's on the Kapiti Coast or Levin. We have had the debate but when it finally comes time for action you watch the cost per cubic metre of shifting dirt or laying Asphalt. A moon shot would be cheaper. Poor infrastructure impacts the movers and shakers who create employment and generate taxable profits. The idea that we can have the nation we want by taking in each others laundry or publishing a study is a concept that I hoped was old history. Not so it seems.

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