Public service watch: Ministry’s cost saving money shuffle

Friday, 24 May 2024

A money shuffle at the Ministry of Foreign Affairs will see Budget 2024 put almost $60 million into the renewal of New Zealand’s diplomatic post infrastructure in the Pacific.

Foreign Minister Winston Peters said MFAT had found $15m in savings per year “from back-office efficiencies and lower priority activities to play our part in turning around the country’s fiscal position, for a total of $60 million across the forecast period”.

Peters said the “balance struck in this year’s budget is between risk and opportunity and between back-office savings and front-line investment”.

“MFAT will also be benchmarking its diplomatic reach against countries we compare ourselves to, as New Zealand more effectively advances our economic and security interests internationally.”

Asked where the savings came from, a spokesperson from Peters’ office said the details would become apparent in the Budget document, to be released next Thursday, and that it was “a mix of non-departmental and departmental savings”.

“The latter includes reductions through reducing contractors and consultants.There is no impact on fulltime equivalent headcount.”

MFAT was originally given a 6.5% savings target. Peters was asked earlier this year by Labour’s foreign affairs spokesperson, Damien O’Connor, how he was going to handle the cut, if he wanted to expand New Zealand’s footprint.

Peters said, “How are we going to handle it? Of course we can always find economies, but we’ve got to start with firstly understanding that there’s some things you cannot sacrifice.

“What I’m talking about is anti-inflationary, because it’s not spent inside the New Zealand economy, it’s spent offshore.”

During her pre-Budget speech earlier this month, Finance Minister Nicola Willis said there were a few agencies which had not met their cost saving target.

“One example, the New Zealand Police, they were able to convince us that reaching their target would involve potentially making changes that would undermine the frontline service provision.

“We just weren't prepared to go through with that.

“But at the same time … there are other agencies who went above and beyond the target. There are some unders, there are some overs. Altogether, it adds up that we will deliver the savings.”

In Parliament on Friday, the Taxypayers’ Union erected box towers to show the scale of the relative public service cuts, which includes proposed job losses, to the size of the public service.

Meanwhile, in the Crown entity space, Climate Change Commission chair Rod Carr will retire later this year. Climate Change Minister Simon Watts said Carr told him he would be retiring at the end of his term, prior to the election.

“Dr Rod Carr has led the Climate Change Commission since its inception, and I want to acknowledge his service as Chair.”

Commissioners Catherine Leining and Professor James Renwick are also leaving at the end of their terms later this year.