Fear and loathing: Wellington’s public service has been here before

Sunday, 17 March 2024

Once upon a time in the 80s stressed civil servants who faced losing their job were given lessons in how to write their CV and apply for new work. Anna Whyte talks to former government staffers who say the fear and loathing on the streets of Wellington in 2024 is reminiscent of days gone by.

Panicked, stressed, brushing up the CV; unsure if they will be employed in a few months, and not sure what else the job market holds.

That’s not just Wellington’s public service this week, it was Wellington more than 40 years ago when the public service, which had more than 66,000 workers in 1984, was slowly slashed to less than half of that by the end of the 90s.

“It's easy to talk about the headcount and to talk about the net numbers,” former MP Peter Dunne recalled this week. “It’s when you've got individuals facing up to you and saying, ‘here's what it means for me’, that’s when it hits home.

“That was particularly pronounced in Wellington.”

Dunne, the former United Future leader, was then a Labour MP for Ōhāriu which had a high proportion of state servants at the time. The impact of the cuts rippled through Wellington.

Members of the public, with a combination of anger, sadness and worry, would tell their stories “very directly and personally” to Dunne, who recalls their, “initial anger as to why this was happening, and then sadness that it happened to them. And then the more deep-seated worry about what it meant. Could they get another job in Wellington or would they be forced to go elsewhere?”

The only difference between now and then? The relative stability in recent years of the civil service.

“The perception seems to be,” said Dunne, “that the Government is making far more significant cuts that are being made at any point in recent years.”

While he’s sceptical whether that’s true, the running list of government departments eyeing job cuts gets longer., Hiring freezes are rampant and vacancies are being scrapped - and instant coffee is being brought in..

The current contraction was well signalled by the National-ACT-NZ First coalition, campaigning on claims the Labour government had created a “bloated bureaucracy”.

So far the coalition is largely fulfilling promises to slash the back room, amid reports of millions being spent on contractors and consultants, as well as extravagant farewell parties during a cost of living crisis, and heightened concerns around the size and pay packet of public servants.

But commitment to central government austerity is not new. Way back in 1909 the Dominion newspaper labelled the public service “out of all proportion” to the increase in the population. Again, in the 1970s, the public service had a reputation for being “large and ineffective”, Politics Professor Richard Shaw, researcher of the slash and burn merry-go-round, has previously written.

Significant reforms were launched in the 80s by the then Labour government, restructuring and dividing large departments - against the backdrop of a recession.

Many departments were turned into state-owned enterprises, while new laws took away the security of employment in the public service. The way departments were funded changed, moving from accounting for inputs, such as salaries, to outputs and what it produced.

“It’s a cyclical thing, and it will happen again in another decade or so’s time,” Dunne tells the Sunday Star-Times, recalling that now-familiar vernacular like, “back office”: “None of these phrases are new.”

Dunne says the public service was once a place where people had a job for life; simultaneously it kept people off the dole. It was “very traditional… where people entered and basically stayed.”

The reforms of the 80s were as “as much about cutting out that level of fat, if you like, as they were about making public service more efficient”.

One person who worked at the then-named Department of Education during its restructure remembers the uncertainty. Trust was low, workers were “beaten down” and stressed, with the perception of little in the way of job availability.

“People were scared for their jobs, especially if they had families and mortgages. What was happening in Wellington was happening countrywide, so there wasn’t the option to move.

“I didn't have a mortgage. I didn't have a family. So for those that did, I can only imagine how awful it was.”

Courses were offered to workers to help with applying for jobs, chaplains were brought in, and workers were taught how to get their CVs up to scratch. The support gave a glimmer of hope that staff would be OK, but reality set in when those who couldn’t find jobs found themselves on the benefit.

Sam Fisher, who started his first government job in the late 80s, and also was an advisor during the fifth Labour government, says much of the public discourse shifted from the 70s - to one of scarcity, which had an “incredible impact on the public service”. The public service changed unrecognisably again, from the 90s, when the contractor and consultant business was thriving, similar to recent times, when newly-created government divisions were in their infancy, and hiring consultants became the norm..

“The 90s was a lot looser. There were opportunities to try new things and do things. Now though, now that’s all prescribed pretty much… If you’ve got another way of doing something [then] you’re in the wrong place.”

While Fisher said cutting “dead wood” was healthy, he questions the wisdom of the perpetual cut-and-re-build cycle, particularly when it was new policies or works introduced by past governments that were in line for the chop by incoming governments. “The problem [is] it’s what you’ll lose, that you don’t realise you’re losing.”

Dunne says the period of relative stability in the public service over the last 15-20 years is being challenged, but the irony was in the full-circle effect: ““You’ll see more use of contractors, possibly short-term, maybe even some of the people who have been made redundant will be rehired as contractors on a very short-term basis.”

PR practitioner Mark Unsworth agrees. In his dealings with the civil service, “there's room for getting the numbers down without any interference with frontline services at all” and he says there was a strong role for consultants to come in, especially when providing advice that wasn't in the public sector.

During its time in opposition, National accused the Government of “wasteful spending” on contractors and consultants, with millions spent on projects such on the scrapped RNZ-TVNZ merger, Three Waters and on light rail.

Wellington Central MP for the Green Party, Tamatha Paul, says the sentiment in her electorate and among her friends who worked at ministries was “a real feeling of fear”.

“A lot of people I know are looking at moving overseas, because they feel like their job is on the chopping block, particularly Māori workers in the public service.”

Victoria University public policy professor Jonathan Boston says the goal of finding 6.5% in cost savings would have “substantial flow-on effects” when inflation was still high. And while the cumulative effect could be a substantial reduction in the number of public service jobs in Wellington, it was also likely to have a disproportionate effect on young people seeking jobs in the public sector.

That could mean more students look to overseas jobs or positions in the private sector.

“There's obviously a risk there will be a cohort of of university graduates for whom job opportunities are going to be more restricted. It also means potentially higher rates of unemployment for for people in their early to mid 20s.

“What might be some of the wider effects for Wellington? If you are reducing overall employment in the city by many thousands, presumably that is going to have an impact on the property market. It will discourage people from moving to Wellington. It will encourage people to leave Wellington.”

Boston assumed there would be growth in employment in some areas, such as in Corrections and the Defence Force, which are both facing workforce shortages.

Public service workers told the Star-Times people were feeling tense, uneasy, anxious, stressed, tired, and morale was low. People were worried about what was next and how to pay the mortgage.

“I don’t think anyone feels safe in their job,” says one.

“

Another said, “Many people have lost motivation and [are] losing interest in their work. Why bother?”

Liz Mellish, deputy chair of the Federation of Māori Authorities and chair of Te Raukura, Te Wharewaka, said a significant portion of the public service did not live in Wellington.

“The biggest impact is on Wellington, but it won’t only be in Wellington.”

Many people would be going into a tougher job market across the country, she said, and might not be able to afford to live in bigger cities.

“The first effect is ordinary people will lose their jobs and that affects their KiwiSaver, their mortgage, and on the other side, those people that require services will get less.”

Mellish was concerned “much of the bread and butter, particularly in retail, and hospitality, comes through having the public service based in Wellington”.

Retail NZ CEO Carolyn Young said retailers would be heavily impacted, certainly in the Wellington region, with cuts in the public service having a “big flow-on effect into a wide range of different areas”.

“There's very few government departments that haven't had to make some cuts… That is a significant decline in consumers in the Wellington region.

“When you think of the the extension of government and how it reaches out to more than just the employees, there's a lot of people in businesses that provide services and information and resources … that will be indirectly impacted.”

For Wellington retailers, having already been through Covid, the Parliament protest and tough economic times, “it does feel like a lot”.

“There's a lot of uncertainty in the Wellington environment around how will all these cuts impact the wider Wellington space, especially coupled with the infrastructure issues that we've got.”

Asked if she had sought advice on the impact of public service reduction on the country, Finance Minister Nicola Willis said the Government’s intention was to ensure better delivery of frontline services.

“We've taken a very clear position that we think there's been too much growth in back-office roles, too much spending on consultants and contractors and low value programmes.

“I take advice, just about every day on what I can do to support our government to drive more value for the dollars we spend.”

If she had received any estimates on overall job cuts and its impact on unemployment, Willis said she expected across a number of agencies, there would be a reduction in back-office roles.

Meanwhile, Boston said New Zealand needed to ask itself, “what kind of public service do we want to run? … One that will be a place where really, really capable people aspire to work and make a contribution in the public interest, or not?

“And clearly the risk in any transition that we're in now, where you're cutting back, you're reducing the numbers of positions, you're presumably going to reduce the relative salaries of people because you're going to have a lid on salary growth… What are the medium to long-term risks of that?

“Particularly in a context where globally, we're faced with very significant fragility and instability, where we're faced with very significant risks of exogenous shocks, geopolitical shocks.”

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