Ele Ludemann: Labour govt of waste

Waste was one of the defining characteristics of Labour’s six years in government.

Steven Joyce explains:

The Treasury’s Briefing to the Incoming Minister of Finance, released a week ago, is a fitting tribute to the previous government’s woeful management of the country’s books.

It is worth dwelling on some of the numbers contained in it. Total Crown expenditure grew from 36 to 41 per cent of our whole economy over the last six years, elbowing aside the private sector and Kiwi families. Expenditure in the year to June 2023 alone was 83 per cent higher than the same year six years ago. These are phenomenal increases, and they should be Grant Robertson’s political epitaph. Aside from the early Covid spending, never has so much been spent, yet so little achieved. . .

Spending so much more, adding so much debt is bad enough. Doing it with little if anything positive to show for it makes it so much worse.

As a small isolated economy prone to natural disasters, we need to keep our debt lower than most others, not the same or higher. Michael Cullen may have proudly “spent the lot” in his final budget but Grant Robertson went one better and depleted the piggy bank as well.

Cullen’s we’ve spent the lot left a big hole for the incoming government to fill in 2008. Robertson’s is worse because so much of the wasteful spending was borrowed money.

Despite all this extra spending, everywhere you look the performance of the public sector has gone backwards, and there are clues in the document as to why. As the Treasury coyly puts it we need to move from “a focus on defining performance purely in terms of expenditure and outputs to one that incorporates quality of delivery and results”. The voters were well ahead of them last October. . .

Mistaking more spending for better spending was one of Labour’s biggest fault, and one that at least some of the public service made too.

A quick glance across all the non-Treasury BIMs reveals a chorus of “cost pressures” and an urgent “need” for boosts in spending, not cuts. Some of those pressures will be real, and some of them will be borne out of a public sector which has become used to cashing cheques for whatever it thinks it needs rather than doing the hard job of getting better value for money from the money it’s already spending. The Cabinet’s job will be to work out what pressures are real and fund them while making up for those with a higher level of savings elsewhere, plus a major change in culture across the public sector. . .

The government has a huge challenge to sort out the wheat in the public service from the wasteful chaff.

It has made a start in getting rid of the several boondoggles including Auckland’s light rail project, the Lake Onslow Battery plan and publicly funded cultural reports.

It must find many more ways to cut costs while improving public services and addressing the infrastructure deficit.

The previous government’s wasteful spending was one of the big contributors to domestic inflation.

This government’s determination to stop the waste will play an important part in getting inflation back below its upper target and help with the cost of living crisis which is hurting so many.

Ele Ludemann is a North Otago farmer and journalist, who blogs HERE - where this article was sourced.