PSA Media Release
Feb 2, 2011
For Immediate Use
Savings group aims at wrong target.
The Public Service Association (PSA) says a report from the Savings Working Group is wrong to target public debt when
the real obstacle to saving is New Zealand’s high level of private debt.
“The focus of the report on government debt as the problem is not the crucial issue. New Zealand’s high level of private
debt is,” says PSA National Secretary Brenda Pilott.
“New Zealand’s public debt remains at one of the lowest levels in the OECD. The emphasis of the recommendations is on
government savings but this will do little to solve New Zealand’s debt problem because it takes aim at the wrong target.
The group recommends performance improvement targets in public sector productivity of 2 percent for the next five years
and 1 percent thereafter but this will only lead to perverse outcomes says Brenda Pilott.
“The PSA has been advising on the need to improve productivity in New Zealand for years but that is not going to be
achieved by setting arbitrary targets without considering the wider picture. The group fails to put forward any plan on
how these targets will be measured.
“We’ve already seen the distortions performance targets bring in our hospitals where reclassifications help engineer
shorter waiting lists without improving health outcomes.
“Similarly, in the UK wheels were removed from trolleys in hospital accident and emergency departments so they could be
reclassified as beds and used to meet waiting time targets.
“These examples show what a crude measuring instrument targets really are,’’ says Brenda Pilott.
“On top of this, the group assumes that New Zealand’s private sector is where the lessons on productivity are to be
learned. This blind assumption couldn’t be further from the truth.
“A recent report from the New Zealand Institute shows that productivity in our private sector economy is 57 percent of
Australia’s. That’s a serious lag and shows that private business has productivity issues that need to be addressed.
“The government is not going to get to grips with the country’s productivity problems by setting targets for the public
sector and letting the private sector off lightly.
“What’s needed is a shift in culture that allows workers’ initiatives to flow to the top of organisations as indeed the
group acknowledges. Only then will we see real improvements to productivity,” says Brenda Pilott.
ENDS