Sir Lockwood Smith: Former Associate Finance Minister on cuts to consultancy spending in the public service

A former associate finance minister believes public sector job cuts are needed to grow the economy. 

Latest Public Service Commission data shows the core workforce reduced by four percent in the year to December 2024.  

The Tertiary Education Commission, Archives New Zealand, and Department of Corrections yesterday earmarked further cuts. 

But former Minister Sir Lockwood Smith told Andrew Dickens the sector has got productivity problems. 

He says there's so much unproductive work going on by well-meaning good people, who lack focus on what's needed to deliver an effective workforce. 

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Episode Transcript

Speaker 1 (00:00):
The government's ahead of schedule with public service job cuts.
So their goal was to cut four hundred million dollars
in spending on consultants and contractors over two years, but
Judith Colin says they're actually on track to count eight
hundred million in the same time frame. Double it, and
she was so happy. Yes, that's always a bit disturbing
when you see Judith's smile. So Lockwood Smith was the

(00:20):
Associate Minister of Finance and he joins us, Now, good
morning to you Lockwood Morning Andrew. This needed to be done,
didn't it.

Speaker 2 (00:31):
Yeah, you know you wways feel sympathy for those whose
jobs are at risk. Candry, Let's be pretty clear about that.
It's not a non easy thing for people. But the
massive increase in the public sector in New Zealand has
been eyewatering. I mean I served on a after I
finished his High Commissioner in the UK, I was asked
to serve on a commission reviewing the UK public sector

(00:52):
and in one of our western countries, Who've got this
problem of a massive growth in the what people loosely
call the bureaucracy that's standing in the way of our
economic performance and creating sustainable jobs across the economy.

Speaker 1 (01:06):
Why has it been a global phenomenon. I mean, we
see Elon Musk and does getting stuck into the United States,
Rachel Reeves, the Labor Chance of the Exchequer has said
she's going to cut fifteen percent of public servants. Why
did all countries go down this track?

Speaker 2 (01:23):
To give you feel Andrew for just the ridiculous increase.
You know, when I was Minister of Education, admittedly that
was a long time ago, I ran the entire tertiary system,
including industry training, with thirteen officials. Today four hundred do
that job, and they just get in the way of
the providers. You know, these providers out there working hard

(01:44):
to try and deliver education, have to handle all the
bureaucratic requirements of that huge staff increase. When I became Speaker,
I reduced the pudges of the Speaker's office by fifty percent.
Reduced by fifty percent. And I think most people to
say the Speaker's office probably ran you know, at least
as well, if not better. So look at that.

Speaker 1 (02:05):
So can I just ask one last question. She's done
well eight hundred million so far. Is there more that
she can cut?

Speaker 2 (02:12):
Well, I'm not in a position about to comment on
that all and I wouldn't recommend what's you know exactly
what's happening in the US right now, but we do
have to make sure. We've got a real problem with
productivity in this country. And you can partly see why,
you know, you've got so much unproductive work going on,
if you like, by well meaning, you know, good people

(02:33):
in the public sector, but just lack of focus on
what's really needed to deliver an effective public sector. And
as I say, we're seeing it not just New Zealand
but in other countries as well.

Speaker 1 (02:45):
So loud I thank you so much for your time
for getting up early for us. Today's a luckwood Smith,
alies and gentlemen, former Speaker and Associate Minister of Finance.

Speaker 2 (02:54):
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