26 September 2023

NEW ZEALAND: Agencies told to slash contractor use

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New Zealand’s Government is requiring Departments to find permanent savings including by cutting back on contractors, Minister for Finance, Grant Robertson says.

He said there would also be cuts in future Budget allocations, some current programs would be trimmed and under-spends would be taken back into consolidated revenue.

Mr Robertson (pictured) said the measures were necessary in the face of a deteriorating global economy and tax revenues failing to meet Treasury’s forecasts.

“The Government’s published accounts for the 11 months to the end of May show that tax revenue is more than $NZ2 billion ($A1.84 billion) behind where Treasury had forecast it to be at the Budget,” Mr Robertson said.

“Since May we have seen further deterioration in the global economy, particularly in China. This will continue to have a direct impact on the New Zealand economy, and it is important that the Government responds to meet our balanced and responsible fiscal goals.”

He said the Government was committing to getting contractor and consultant spending to below 11 per cent of Public Service workforce spending.

“This will save about $NZ165 million ($A152 million) per year, representing an 18 per cent reduction on current spend,” the Minister said.

“Public sector Agencies are being required to trim one or two per cent off their existing baselines. They have been directed to do this while protecting front-line services.”

He said a balanced approach was needed to protect the public services that New Zealanders relied on “while making sure we cut our cloth and have a sustainable financial base to take forward”.

Wellington, 29 August 2023

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