More employees and higher costs every year

The New Zealand public service cost around $50-60 billion to run each year, and employs close to 450,000 people. Given the whole NZ budget is only around $100 billion, you’d think the average person would want to know why it costs half of what is collected in taxes to feed the other half back into the economy.

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Strangely, no one in the country is perturbed about the enormous size of the NZ govt, and they don’t give much of a damn that it costs so much to run.

In 2018, the average annual salary for a govt worker was $77,900, an increase of 3.3% from the previous year. Its probably about $80,000 today. Which means the wage bill for the 450,000 employees is around $36 billion.

Add on normal employment costs, rent, insurance, motor vehicles running costs and all the rest involved in running such a huge institution its easy to see why it costs us $50-60 billion all up. (They also spend about a $billion employing consultants and contractors.)

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How fortunate for the politicians and their allies, all the fat cats on their huge taxpayer salaries, that New Zealand taxpayers are so mild and malleable and unconcerned with being robbed and held to ransom by a legion of grifters.

Not to say all govt workers are grifters. Its more that the constraints of working in govt depts make it hard to be productive. So much time and money is lost or wasted because of ritualistic traditions or inefficient work practices. (The education sector employs the most but has about the worst results.)

Talk to any worker from the mainstream essential services. Police or nurses for example. We’re all grateful for their services, but after a few minutes of conversation they’ll be certain to be telling you of how impossible their job is, because of the way they’re forced to do things.

Its one of the reasons NZ’s productivity is so low, and that we’re in a rut there and can’t get out of it. As long as such a large sector of the workforce is employed by govt, real productivity will always be low.

There is going to be an end to this one day. Not because as Roger Douglas and his mates once decided, there was no alternative. Because its unlikely someone with the wisdom of those guys is ever going to show up again.

When the crunch comes next time it will just be because there really is no alternative, end of story.

2018 Public service Workforce Data (PDF)