PRESS RELEASE: Independent Candidate for Epsom Penny Bright:
"How many billion$ of public monies could be saved by 'CUTTING OUT THE CONTRACTORS'?
3 November 2011
Where’s National’s ‘corporate welfare’ reform?
Which of the maor political parties are pushing for ‘corporate welfare’ reform and shrinking the long-term dependency of
the private sector on our public monies?
Where is the 'devilish detail' at both local and central government level - which shows EXACTLY where our public rates
and taxes are being spent on private sector consultants and contractors?
Why aren't the names of the consultant(s)/ contrators(s) - the scope, term and value of these contracts, published in
Council or central government Annual Reports - so this information on the spending of OUR public monies is available for
public scrutiny?
Where are the publicly-available 'Registers of Interests' for those local government elected representatives, and staff
responsible for property and procurement, in order to help guard against possible 'conflicts of interest' between those
who 'give' the contracts and those who 'get' the contracts?
Where's the 'transparency'?
Given that New Zealand is 'perceived' to be the least corrupt country in the world - along with Denmark and Singapore,
according to Transparency International's 2010 'Corruption Perception Index - shouldn't we arguably be the most
transparent?
Going back a step - where are the New Zealand 'cost-benefit' analyses which prove that the old 'Rogernomic$ mantra -
public is bad - private (contracting) is good' can be substantiated by FACTS and EVIDENCE?
At last - someone - somewhere has actually done some substantial research - which proves the opposite.
That 'contracting out' services that were once provided 'in-house' is actually TWICE as expensive.
“USA Project On Government Oversight (POGO)[1] decided to take on the task of doing what others have not—comparing total
annual compensation for federal and private sector employees with federal contractor billing rates in order to determine
whether the current costs of federal service contracting serves the public interest.
Executive Summary
Based on the current public debate regarding the salary comparisons of federal and private sector employees, the Project
On Government Oversight (POGO)[1] decided to take on the task of doing what others have not—comparing total annual
compensation for federal and private sector employees with federal contractor billing rates in order to determine
whether the current costs of federal service contracting serves the public interest.
The current debate over pay differentials largely relies on the theory that the government pays private sector
compensation rates when it outsources services. This report proves otherwise: in fact, it shows that the government
actually pays service contractors at rates far exceeding the cost of employing federal employees to perform comparable
functions.
POGO’s study analyzed the total compensation paid to federal and private sector employees, and annual billing rates for
contractor employees across 35 occupational classifications covering over 550 service activities. Our findings were
shocking—POGO estimates the government pays billions more annually in taxpayer dollars to hire contractors than it would
to hire federal employees to perform comparable services. Specifically, POGO’s study shows that the federal government
approves service contract billing rates—deemed fair and reasonable—that pay contractors 1.83 times more than the
government pays federal employees in total compensation, and more than 2 times the total compensation paid in the
private sector for comparable services. ”
The implications of this both nationally and internationally are HUGE.
If NZ central government figures are comparable with those of USA Federal Government – could the current NZ $82 billion
central government spend be sliced in half by $40 billion ‘CUTTING OUT THE CONTRACTORS’?
Which political parties / candidates are focussing on the SPENDING of public monies, rather than debt and borrowing?
If central and local govt departments /SOEs / CCOs / Crown Research Institutes are all defined as ‘PUBLIC- BENEFIT
ENTITIES’ as defined under NZ Equivalents to International Financial Reporting Standards (“NZ IFRS”) – then their
primary objective is to provide services and facilities for the community as a social benefit rather than make a
financial return.
So – how come so many services that USED to be provided ‘in-house’ are now contracted out to the private sector – whose
primary objective is most certainly to ‘make a financial return’?
What magic is this that transforms public (ratepayer and taxpayer) monies into private profit?
WHERE IS THE NZ EQUIVALENT OF ‘POGO’ the USA ‘Project On Government Oversight ‘ which has just completed first-ever
research which proves that private contractors cost twice as much as ‘in-house’ providers of Federal Government
services?
HOW MUCH MONEY could be saved in NZ at central and local government by cutting out all the private ‘piggies in the
middle’ with their greedy snouts in our public troughs?
Why aren’t the statutory ‘third party’ Public Watchdogs, as well as other major political parties demanding this
accountability?
How much public money at central and local government level could be saved by ‘CUTTING OUT THE CONTRACTORS’?
Who else is even asking this question?
ENDS