June 23, 2024 • 19 mins
Thousands of jobs have gone, millions of dollars have been spent on redundancy payouts – and it’s not over yet as the public sector continues to tighten its belt.
Budget 2024 set targets for $1.5 billion worth of cost-savings, with estimates for $1b in further savings over numerous financial years.
But as the axe falls, there are questions over whether the cuts will hit the front-line – something the Government’s promised will stay intact.
Today on The Front Page, Newstalk ZB reporter Azaria Howell joins us for an update on whether changes have stayed in the back room – and how many more jobs are at risk.
Follow The Front Page on iHeartRadio, Apple Podcasts, Spotify or wherever you get your podcasts.
You can read more about this and other stories in the New Zealand Herald, online at nzherald.co.nz, or tune in to news bulletins across the NZME network.
Host: Chelsea Daniels
Sound Engineer: Paddy Fox
Producer: Ethan Sills
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:05):
Kyoda.
Speaker 2 (00:06):
I'm Chelsea Daniels and this is the Front Page, a
daily podcast presented by the New Zealand Herald. Thousands of
jobs have gone, millions of dollars have been spent on
redundancy payouts, and it's not over yet. As the public
sector continues to tighten its belt. Budget twenty twenty four
(00:30):
sets a target for one point five billion dollars worth of.
Speaker 1 (00:34):
Cost savings, with estimates for.
Speaker 2 (00:36):
One billion dollars in further savings over numerous financial years.
But as the axe falls, there are questions over whether
the cuts will hit the front line, something the government's
promised will stay intact. Today on the front page, Newstalk
ZB reporter Azariah Howell joins us for an update on
(00:58):
whether changes have stayed in the back room and how
many more jobs are at risk. Azariah, what did Budget
twenty twenty four reveal about the extent of public service
cuts so far?
Speaker 3 (01:14):
Yeah?
Speaker 4 (01:14):
So.
Speaker 5 (01:14):
It was Nikola Willis's first budget as Finance Minister and
a lot of these agencies had been essentially counting down
to this day where cost savings could be revealed. The
government had previously signaled before the budget was released that
it was one for the front line. Now that word
has been used back and forth in terms of the
(01:35):
public sector and the public service agencies have been chasing
down these cost savings. They've got these targets of six
point five to seven point five percent and all would
be revealed May thirtieth on that big budget day.
Speaker 3 (01:50):
Now, before budget Day, there were.
Speaker 5 (01:51):
Thousands of rolls on the line proposals, but the budget
really confirmed what had been ticked off and what had
been missed, what agencies did, how many jobs were on
the line, and things like that. So departments were essentially
asked to identify savings options and these were essentially prioritized
to be on low value programs or programs that don't
(02:14):
align to the government's policy objectives and also what it
deems back office functions. Now, contractors and consultants have also
been on the line quite a bit, and it has
been a bit of a controversy recently as some agencies
have had to hire contractors and consultants to deliver their
job cut proposals, which has been a bit of a
(02:36):
tricky one. I suppose the government had a target of
finding one point five billion dollars worth of savings, so
quite a chunk of cash there across the public sector,
and it's something that was achieved according to the budget.
So if we crunched the numbers, some of the agencies
went above their targets, some of them fell short.
Speaker 3 (02:57):
Keeping in mind these were on.
Speaker 5 (02:58):
Average targets, there's not really a penalty if you were
to miss it. However, some agencies have further savings. Now.
A few days before the budget, I revealed an internal
document that stated that some agencies were expecting and I
quote three to five years of financial sustainability. Now that
(03:19):
has come true as of the budget. It estimates a
further one billion dollars in quote further savings and revenue measures.
Speaker 3 (03:27):
Is to be needed per year.
Speaker 5 (03:29):
Now that's through to the twenty twenty seven to twenty
eight financial year, so we'll have a lot more May
thirtieth or whenever the next budget day is to see
what else happens. Some agencies are seeing savings be reinvested
or retained to support the frontline. One of those is
the Department of Corrections. It was given a savings target
(03:50):
of six point five percent, essentially meaning one hundred and
eight point six million, and it found one hundred and
ten point five million of savings, which is all going
back into the department for its front line. Now, a
lot of other agencies had found multiple million dollars worth
of savings. Some agencies, including the GCSB, exempt from cuts
(04:13):
but had actually found savings instead. And another thing that
we're looking at beyond the budget. This is quite an
interesting part of it, is that agencies have to look
beyond May thirtieth, and some of these have to find
more cuts and more savings. Ministry for the Environment, for instance,
has to find forty four point four million dollars worth
(04:35):
of further savings. Big ones at the Ministry of Business,
Innovation and Employment mb which is deemed a mega ministry
by some now it was given a savings target of
seven point five percent, meaning roughly two hundred and thirty
three million, and it's signaling two hundred and fifty four
million in further savings, so that's actually higher than what
(04:57):
it had cut at that point as of the budget,
which confirmed what was on the line.
Speaker 3 (05:01):
Now.
Speaker 5 (05:02):
Essentially what we're seeing is some reprioritization those agencies that
are deemed front line. I suppose the Ministry of Health
also reprioritizing savings. OTTO Otamadiki also putting those savings back
into supporting the front line. Now there are other proposals
that also somewhat align with the budget and the public sector.
(05:23):
There's this talk about five hundred new police officers as well,
which we'll be keeping an eye on.
Speaker 2 (05:29):
In all, how many jobs have been cut or thereabouts
thus far?
Speaker 5 (05:33):
Yeah, so the tallly is around four thousand dish. I
mean some of these proposals, some of these confirmed, and
some of the tallies are roles that have been essentially
cut because government work programs have been cut from the
new government, so things such as people working in three
waters are no longer having those roles. But in terms
(05:56):
of the cost savings there, we're definitely in the thousands.
And it seems like we're not off the hook yet
in terms of what's on the line.
Speaker 4 (06:06):
So we're told these cuts would only be to back
office roles, and yet we're seeing that there's hiring freeze
in public hospitals, that costs have been cut out of
school lunches, that disability services have been rolled back, and
more than four thousand people have lost their jobs, half
of them in Wellington.
Speaker 2 (06:26):
Why was the Foreign Affairs Ministry exempt from the cats.
Speaker 5 (06:30):
Yeah, so this was a really interesting one, a good
scoop from The Herald's deputy political editor there. So the
Foreign Minister Winston Peters, essentially gave m FAT a savings
target of one percent. Now, going back to what we
were talking about before, other agencies had a saving target
of six point five to seven point five percent, but
(06:52):
the Ministry of Foreign Affairs only had to find one. Essentially,
it was in line to contribute thirty five point one
one million dollars to the savings, but Winston Peter's office,
who is the Minister of Foreign Affairs, he confirmed the
cuts were scrapped and they were looking at smaller cuts. Now,
this is quite an interesting one.
Speaker 3 (07:13):
Obviously.
Speaker 5 (07:14):
The Ministry of Foreign Affairs and Trades budget in terms
of the budget books, is being described by Peters as balanced.
He's calling it a modest cut as well. So that
is quite an interesting one in terms of what's been
exempt from the cutting exercise as well.
Speaker 3 (07:32):
Previously noted the GCSB was also.
Speaker 5 (07:35):
Exempt from cuts, but it had actually, according to the
budget documents, found seven point six million dollars worth of savings.
So those savings are still being found even by agencies
that didn't have to do them.
Speaker 1 (07:58):
Health Ministry staff have been firing back at.
Speaker 2 (08:01):
The idea of a pay freeze. You've seen some internal
documents from the ministry. Hey, what's the situation there.
Speaker 5 (08:07):
Yeah, so this is another interesting one. Now, these agencies
have put forward a lot of different proposals in terms
of how they actually meet these savings targets, and the
Ministry of Health, which has quite a lot of employees,
has put forward a proposal. At the time, it was
a proposal to not apply pay increases for people above
(08:28):
a sort of met range salary and that would propose
to start this year. Now, workers were opposing the plans
in the feedback which has been revealed from documents leaked
from the Ministry of Health, and essentially the feedback was,
I suppose so dire that it prompted a change of
heart from the ministry itself. The feedback, which can be
(08:52):
revealed in those documents, workers were saying it created feelings
of being undervalued, potentially marginalized. To others said it was demoralizing,
some calling it tone deaf. With the current economic environment,
obviously a lot of struggles in the economy right now,
the cost of living still a major topic for a
(09:13):
lot of people.
Speaker 3 (09:14):
It was also suggested.
Speaker 5 (09:15):
That people on higher incomes and bigger salaries could essentially
go without, and it was also ideas around the Health
Ministry were floated around working fewer hours on the same
pay and then adding more leave. They also looked at
the idea of freezing vacancies.
Speaker 3 (09:34):
But essentially this idea.
Speaker 5 (09:36):
Of a pay freeze was opposed so much by these
staff in these documents that the agency had to do
a U turn. Now all of these agencies have to
do consultation on the cuts. They have to speak with
their staff about what's going on. It is part of
their agreements. And in terms of this, there was a
(09:58):
really significant amount of feedback. So the Ministry changed its
mind from that pay freeze proposal and it instead made
it so that people in sort of lower to mid
range salary bans would get a one off payment and
then people on those higher salary bans, as we say,
could go without.
Speaker 3 (10:18):
Well, they are going without. Now.
Speaker 5 (10:20):
These increases, these pay rises will take place after talks
with staff in September. The payments themselves will be made
in October and backdated to July. Now July is a
pretty significant date in terms of the public sector. We'd
been talking before about May thirtieth budget day, but now
July the first is the big one that we're all
(10:43):
looking to as well. In the Ministry of Health, it's
been a pretty controversial one with changes to the Suicide
Prevention Office, a back and forth between the Ministry of
Mental Health Matt do you see there the agency as
well as looking at leasing further flaw space on its
offices in Central Wellington. So that's an idea being floated
(11:04):
by some other agencies as well, including the Health Ministry.
And a quote from this document as well, which is
quite interesting and not something that all of the agencies
have said, is and I quote, we're not expecting to
need to make further personnel reductions based on the current
fiscal settings. So that implies that what we've got on
(11:24):
the table now at the Ministry of Health, in terms
of those roughly one hundred and thirty four job cuts,
I believe might be the end of it. Now that
may not be the case for everyone.
Speaker 2 (11:35):
With all these jobs comes redundancy payouts, hey, and they're
starting to rise already in the tens of millions.
Speaker 6 (11:44):
So I think one of the questions that people are
going to be asking themselves in the public sector and
among ministers, is how much would the government want to
spend on redundancy payouts? Most people don't think that's a
very good use of public month.
Speaker 2 (11:59):
What is the suit situation with having to pay for
staff being laid off at the moment.
Speaker 5 (12:03):
Yeah, So those numbers are just coming out. Obviously, these
proposals had been on the line for some time. Some
of these agencies are working to different schedules, different time frames,
so these redundancy payouts are only just really being known now.
And what we're seeing is a few of those have
been revealed. One of them, notably MEGA Ministry, the Ministry
(12:26):
of Business, Innovation and Employment and its total cost of
staff redundancies was more than eight million dollars as of
May thirtieth, so that was when that budget was unveiled.
The Economic Development ministimilusly revealed the numbers to Labour's EI
Shaviril and a written parliamentary question which is publicly available
(12:47):
to view. I took a look at it and found
some other numbers as well. The redundancies at the New
Zealand Customs Service totaling two point six million, nearly two
point seven. In terms of those numbers. There, Customs planning
on concluding its change process soon, a lot of agencies
looking to that first of July. Now, some people may
(13:08):
assume custom savings would be reinvested. I suppose gives a
similar vibe as police and corrections. Custom savings will not
be reinvested to the front line, which is an interesting
take there. And now Customs redundancy cost is estimated to
be around two point nine million dollars in total. So yeah,
(13:30):
nearly three million dollars from Customs, about eight million from
MB so we're looking in the double digits just for
two of these.
Speaker 3 (13:38):
We've also got some.
Speaker 5 (13:39):
Numbers from the Ministry for the Environment as well. The
Ministry for the Environment in the millions as well. In
terms of those payouts so far one point five million,
but that's as of May thirtieth.
Speaker 3 (13:53):
It's changed.
Speaker 5 (13:54):
Proposals still ongoing. Voluntary redundancy open for quite some time now.
We are as open till August sixteenth. So in terms
of these payouts at the Environment Ministry, one point five
million dollars as of May thirtieth. Will it be more,
We'll have to wait and see. But staff have until
August to apply for voluntary redundancy, so it definitely could
(14:17):
be more. Now this is just three agencies of many
many more so in terms of these redundancy payouts, we'll
have to wait and see, but it does look as
if it's going to be in the tens of millions,
if not more than that, in terms of the payouts
to these staff. Now, it's also interesting the payouts to
(14:37):
the Ministry of Business, Innovation and Employment don't actually include
sort of everything. So it doesn't include the final fortnightly
payment and you'll leave. It doesn't include time and lou
or any other payments that people might be entitled to,
so it's just straight redundancy. So I guess in terms
(14:58):
of the payments to staff have been laid off, probably
more than that. At the Ministry of Business, Innovation and Employment.
Speaker 2 (15:05):
Last week was scrutiny week at Parliament. Nicola Willis has
confirmed the government intends to have performance based pay rises
for public service CEOs. The latest advice to I've received
is that public service leaders on average receive a pay
at a rate of around fifty to sixty percent of
(15:26):
their private sector counterpart. The policy has been called a
bit tone deaf by labor as it comes as obviously
thousands of public servants are being laid off.
Speaker 1 (15:37):
What do people you've spoken to think about it?
Speaker 5 (15:40):
Yeah, so it's a bit of a controversial one. I mean,
people on the political left are sort of slamming the proposals,
essentially suggesting that it's not really fair with all of
these people being laid off, I mean, why should those
at the top on the highest salaries be getting an increase.
But the Finance Minister and Public Service Minister to Nichola
(16:00):
Willis is essentially selling it by saying that this will
get results. It's also worth noting I suppose that some
agencies and some people at the top have been under
a remuneration freeze, not having any increases in their pay
for quite some time as well. But yeah, in terms
(16:21):
of performance is quite an interesting topic.
Speaker 3 (16:24):
There. Kind of reminds me as well.
Speaker 5 (16:26):
During the election, people were talking about performance pay for teachers,
would that bring better results? Obviously a lot of back
and forth about whether or not that's actually a good policy.
Niicola Willis saying it it likely won't come into force
for the next twelve months or so, so it might
come into force once the public sector has kind of
(16:47):
cooled down a bit in terms of all of these
ongoing job cuts, and it's maybe in a I guess
a more chilled out state.
Speaker 3 (16:55):
We'll have to wait and see for that.
Speaker 1 (16:56):
And Asarah, finally, you're based in Wellington.
Speaker 2 (16:59):
What sort of impact all these job cuts having on
the city itself.
Speaker 5 (17:03):
Yeah, it's actually really interesting to see. I suppose how
much of an impact this is having. Seems to be
a lot of what people are talking about now. I
live nearby Central Wellington and I've been walking around places
like the Terrace Lampton Key, and I overhear people having
conversations about these cuts, and I try not to listen in,
(17:23):
but yeah, I mean I overhear people having chats about
what's going on. A lot of people in Wellington also
know people who are public servants, know people who might
be impacted.
Speaker 3 (17:33):
By this as well.
Speaker 5 (17:34):
Now, a number of house price reports have said this
has an impact on housing. It's also apparently having an
impact on retail spending. We've heard some recent news that
there are quite a few empty storefronts around sort of
Willis Street, Lampton Key, Central Wellington. I mean this is
prime retail area. This is places where people want to go,
(17:57):
want to spend money, and want to set up shop apparently,
but it seems like that's not as much of the
case anymore. It seems like there's a reduction in spending
in terms of those nice to haves. We'll just have
to wait and see. In terms of the total impact,
obviously a lot more as still going on now. Agencies
are looking at implementing a lot of their change proposals
(18:20):
and plans as of the first of July, the start
of the political financial year, So in terms of the
total impact we might see more sepen as of July first,
In terms of the impact to retail spending, house prices,
and I guess just the overall mood of Wellington, which
you could argue has perhaps fallen. I mean, there's been
(18:40):
issues of water, there's been issues of quake, strengthening buildings,
a quite expensive budget, so yeah, there's quite a lot
going on in the city. And in terms of the
retail sector obviously hasn't been under a good period for
quite some time, so I can't imagine this will be
helping it. Essentially, the government and the Finance Minister are
(19:03):
trying to put in a sort of vibe of fiscal
scrutiny and this responsible spending across the sector that will
go on for multiple years in terms of getting those
results for people.
Speaker 1 (19:15):
Thanks for joining us Azariah. That's it for this episode
of the Front Page.
Speaker 2 (19:24):
You can read more about today's stories and extensive news
coverage at nzed Herald dot co dot nz. The Front
Page is produced by Ethan Siles with sound engineer Patty Fox.
Speaker 1 (19:35):
I'm Chelsea Daniels.
Speaker 2 (19:37):
Subscribe to the Front Page on iHeartRadio or wherever you
get your podcasts, and tune in tomorrow for another look
behind the headlines.
Kyoda.
Speaker 2 (00:06):
I'm Chelsea Daniels and this is the Front Page, a
daily podcast presented by the New Zealand Herald. Thousands of
jobs have gone, millions of dollars have been spent on
redundancy payouts, and it's not over yet. As the public
sector continues to tighten its belt. Budget twenty twenty four
(00:30):
sets a target for one point five billion dollars worth of.
Speaker 1 (00:34):
Cost savings, with estimates for.
Speaker 2 (00:36):
One billion dollars in further savings over numerous financial years.
But as the axe falls, there are questions over whether
the cuts will hit the front line, something the government's
promised will stay intact. Today on the front page, Newstalk
ZB reporter Azariah Howell joins us for an update on
(00:58):
whether changes have stayed in the back room and how
many more jobs are at risk. Azariah, what did Budget
twenty twenty four reveal about the extent of public service
cuts so far?
Speaker 3 (01:14):
Yeah?
Speaker 4 (01:14):
So.
Speaker 5 (01:14):
It was Nikola Willis's first budget as Finance Minister and
a lot of these agencies had been essentially counting down
to this day where cost savings could be revealed. The
government had previously signaled before the budget was released that
it was one for the front line. Now that word
has been used back and forth in terms of the
(01:35):
public sector and the public service agencies have been chasing
down these cost savings. They've got these targets of six
point five to seven point five percent and all would
be revealed May thirtieth on that big budget day.
Speaker 3 (01:50):
Now, before budget Day, there were.
Speaker 5 (01:51):
Thousands of rolls on the line proposals, but the budget
really confirmed what had been ticked off and what had
been missed, what agencies did, how many jobs were on
the line, and things like that. So departments were essentially
asked to identify savings options and these were essentially prioritized
to be on low value programs or programs that don't
(02:14):
align to the government's policy objectives and also what it
deems back office functions. Now, contractors and consultants have also
been on the line quite a bit, and it has
been a bit of a controversy recently as some agencies
have had to hire contractors and consultants to deliver their
job cut proposals, which has been a bit of a
(02:36):
tricky one. I suppose the government had a target of
finding one point five billion dollars worth of savings, so
quite a chunk of cash there across the public sector,
and it's something that was achieved according to the budget.
So if we crunched the numbers, some of the agencies
went above their targets, some of them fell short.
Speaker 3 (02:57):
Keeping in mind these were on.
Speaker 5 (02:58):
Average targets, there's not really a penalty if you were
to miss it. However, some agencies have further savings. Now.
A few days before the budget, I revealed an internal
document that stated that some agencies were expecting and I
quote three to five years of financial sustainability. Now that
(03:19):
has come true as of the budget. It estimates a
further one billion dollars in quote further savings and revenue measures.
Speaker 3 (03:27):
Is to be needed per year.
Speaker 5 (03:29):
Now that's through to the twenty twenty seven to twenty
eight financial year, so we'll have a lot more May
thirtieth or whenever the next budget day is to see
what else happens. Some agencies are seeing savings be reinvested
or retained to support the frontline. One of those is
the Department of Corrections. It was given a savings target
(03:50):
of six point five percent, essentially meaning one hundred and
eight point six million, and it found one hundred and
ten point five million of savings, which is all going
back into the department for its front line. Now, a
lot of other agencies had found multiple million dollars worth
of savings. Some agencies, including the GCSB, exempt from cuts
(04:13):
but had actually found savings instead. And another thing that
we're looking at beyond the budget. This is quite an
interesting part of it, is that agencies have to look
beyond May thirtieth, and some of these have to find
more cuts and more savings. Ministry for the Environment, for instance,
has to find forty four point four million dollars worth
(04:35):
of further savings. Big ones at the Ministry of Business,
Innovation and Employment mb which is deemed a mega ministry
by some now it was given a savings target of
seven point five percent, meaning roughly two hundred and thirty
three million, and it's signaling two hundred and fifty four
million in further savings, so that's actually higher than what
(04:57):
it had cut at that point as of the budget,
which confirmed what was on the line.
Speaker 3 (05:01):
Now.
Speaker 5 (05:02):
Essentially what we're seeing is some reprioritization those agencies that
are deemed front line. I suppose the Ministry of Health
also reprioritizing savings. OTTO Otamadiki also putting those savings back
into supporting the front line. Now there are other proposals
that also somewhat align with the budget and the public sector.
(05:23):
There's this talk about five hundred new police officers as well,
which we'll be keeping an eye on.
Speaker 2 (05:29):
In all, how many jobs have been cut or thereabouts
thus far?
Speaker 5 (05:33):
Yeah, so the tallly is around four thousand dish. I
mean some of these proposals, some of these confirmed, and
some of the tallies are roles that have been essentially
cut because government work programs have been cut from the
new government, so things such as people working in three
waters are no longer having those roles. But in terms
(05:56):
of the cost savings there, we're definitely in the thousands.
And it seems like we're not off the hook yet
in terms of what's on the line.
Speaker 4 (06:06):
So we're told these cuts would only be to back
office roles, and yet we're seeing that there's hiring freeze
in public hospitals, that costs have been cut out of
school lunches, that disability services have been rolled back, and
more than four thousand people have lost their jobs, half
of them in Wellington.
Speaker 2 (06:26):
Why was the Foreign Affairs Ministry exempt from the cats.
Speaker 5 (06:30):
Yeah, so this was a really interesting one, a good
scoop from The Herald's deputy political editor there. So the
Foreign Minister Winston Peters, essentially gave m FAT a savings
target of one percent. Now, going back to what we
were talking about before, other agencies had a saving target
of six point five to seven point five percent, but
(06:52):
the Ministry of Foreign Affairs only had to find one. Essentially,
it was in line to contribute thirty five point one
one million dollars to the savings, but Winston Peter's office,
who is the Minister of Foreign Affairs, he confirmed the
cuts were scrapped and they were looking at smaller cuts. Now,
this is quite an interesting one.
Speaker 3 (07:13):
Obviously.
Speaker 5 (07:14):
The Ministry of Foreign Affairs and Trades budget in terms
of the budget books, is being described by Peters as balanced.
He's calling it a modest cut as well. So that
is quite an interesting one in terms of what's been
exempt from the cutting exercise as well.
Speaker 3 (07:32):
Previously noted the GCSB was also.
Speaker 5 (07:35):
Exempt from cuts, but it had actually, according to the
budget documents, found seven point six million dollars worth of savings.
So those savings are still being found even by agencies
that didn't have to do them.
Speaker 1 (07:58):
Health Ministry staff have been firing back at.
Speaker 2 (08:01):
The idea of a pay freeze. You've seen some internal
documents from the ministry. Hey, what's the situation there.
Speaker 5 (08:07):
Yeah, so this is another interesting one. Now, these agencies
have put forward a lot of different proposals in terms
of how they actually meet these savings targets, and the
Ministry of Health, which has quite a lot of employees,
has put forward a proposal. At the time, it was
a proposal to not apply pay increases for people above
(08:28):
a sort of met range salary and that would propose
to start this year. Now, workers were opposing the plans
in the feedback which has been revealed from documents leaked
from the Ministry of Health, and essentially the feedback was,
I suppose so dire that it prompted a change of
heart from the ministry itself. The feedback, which can be
(08:52):
revealed in those documents, workers were saying it created feelings
of being undervalued, potentially marginalized. To others said it was demoralizing,
some calling it tone deaf. With the current economic environment,
obviously a lot of struggles in the economy right now,
the cost of living still a major topic for a
(09:13):
lot of people.
Speaker 3 (09:14):
It was also suggested.
Speaker 5 (09:15):
That people on higher incomes and bigger salaries could essentially
go without, and it was also ideas around the Health
Ministry were floated around working fewer hours on the same
pay and then adding more leave. They also looked at
the idea of freezing vacancies.
Speaker 3 (09:34):
But essentially this idea.
Speaker 5 (09:36):
Of a pay freeze was opposed so much by these
staff in these documents that the agency had to do
a U turn. Now all of these agencies have to
do consultation on the cuts. They have to speak with
their staff about what's going on. It is part of
their agreements. And in terms of this, there was a
(09:58):
really significant amount of feedback. So the Ministry changed its
mind from that pay freeze proposal and it instead made
it so that people in sort of lower to mid
range salary bans would get a one off payment and
then people on those higher salary bans, as we say,
could go without.
Speaker 3 (10:18):
Well, they are going without. Now.
Speaker 5 (10:20):
These increases, these pay rises will take place after talks
with staff in September. The payments themselves will be made
in October and backdated to July. Now July is a
pretty significant date in terms of the public sector. We'd
been talking before about May thirtieth budget day, but now
July the first is the big one that we're all
(10:43):
looking to as well. In the Ministry of Health, it's
been a pretty controversial one with changes to the Suicide
Prevention Office, a back and forth between the Ministry of
Mental Health Matt do you see there the agency as
well as looking at leasing further flaw space on its
offices in Central Wellington. So that's an idea being floated
(11:04):
by some other agencies as well, including the Health Ministry.
And a quote from this document as well, which is
quite interesting and not something that all of the agencies
have said, is and I quote, we're not expecting to
need to make further personnel reductions based on the current
fiscal settings. So that implies that what we've got on
(11:24):
the table now at the Ministry of Health, in terms
of those roughly one hundred and thirty four job cuts,
I believe might be the end of it. Now that
may not be the case for everyone.
Speaker 2 (11:35):
With all these jobs comes redundancy payouts, hey, and they're
starting to rise already in the tens of millions.
Speaker 6 (11:44):
So I think one of the questions that people are
going to be asking themselves in the public sector and
among ministers, is how much would the government want to
spend on redundancy payouts? Most people don't think that's a
very good use of public month.
Speaker 2 (11:59):
What is the suit situation with having to pay for
staff being laid off at the moment.
Speaker 5 (12:03):
Yeah, So those numbers are just coming out. Obviously, these
proposals had been on the line for some time. Some
of these agencies are working to different schedules, different time frames,
so these redundancy payouts are only just really being known now.
And what we're seeing is a few of those have
been revealed. One of them, notably MEGA Ministry, the Ministry
(12:26):
of Business, Innovation and Employment and its total cost of
staff redundancies was more than eight million dollars as of
May thirtieth, so that was when that budget was unveiled.
The Economic Development ministimilusly revealed the numbers to Labour's EI
Shaviril and a written parliamentary question which is publicly available
(12:47):
to view. I took a look at it and found
some other numbers as well. The redundancies at the New
Zealand Customs Service totaling two point six million, nearly two
point seven. In terms of those numbers. There, Customs planning
on concluding its change process soon, a lot of agencies
looking to that first of July. Now, some people may
(13:08):
assume custom savings would be reinvested. I suppose gives a
similar vibe as police and corrections. Custom savings will not
be reinvested to the front line, which is an interesting
take there. And now Customs redundancy cost is estimated to
be around two point nine million dollars in total. So yeah,
(13:30):
nearly three million dollars from Customs, about eight million from
MB so we're looking in the double digits just for
two of these.
Speaker 3 (13:38):
We've also got some.
Speaker 5 (13:39):
Numbers from the Ministry for the Environment as well. The
Ministry for the Environment in the millions as well. In
terms of those payouts so far one point five million,
but that's as of May thirtieth.
Speaker 3 (13:53):
It's changed.
Speaker 5 (13:54):
Proposals still ongoing. Voluntary redundancy open for quite some time now.
We are as open till August sixteenth. So in terms
of these payouts at the Environment Ministry, one point five
million dollars as of May thirtieth. Will it be more,
We'll have to wait and see. But staff have until
August to apply for voluntary redundancy, so it definitely could
(14:17):
be more. Now this is just three agencies of many
many more so in terms of these redundancy payouts, we'll
have to wait and see, but it does look as
if it's going to be in the tens of millions,
if not more than that, in terms of the payouts
to these staff. Now, it's also interesting the payouts to
(14:37):
the Ministry of Business, Innovation and Employment don't actually include
sort of everything. So it doesn't include the final fortnightly
payment and you'll leave. It doesn't include time and lou
or any other payments that people might be entitled to,
so it's just straight redundancy. So I guess in terms
(14:58):
of the payments to staff have been laid off, probably
more than that. At the Ministry of Business, Innovation and Employment.
Speaker 2 (15:05):
Last week was scrutiny week at Parliament. Nicola Willis has
confirmed the government intends to have performance based pay rises
for public service CEOs. The latest advice to I've received
is that public service leaders on average receive a pay
at a rate of around fifty to sixty percent of
(15:26):
their private sector counterpart. The policy has been called a
bit tone deaf by labor as it comes as obviously
thousands of public servants are being laid off.
Speaker 1 (15:37):
What do people you've spoken to think about it?
Speaker 5 (15:40):
Yeah, so it's a bit of a controversial one. I mean,
people on the political left are sort of slamming the proposals,
essentially suggesting that it's not really fair with all of
these people being laid off, I mean, why should those
at the top on the highest salaries be getting an increase.
But the Finance Minister and Public Service Minister to Nichola
(16:00):
Willis is essentially selling it by saying that this will
get results. It's also worth noting I suppose that some
agencies and some people at the top have been under
a remuneration freeze, not having any increases in their pay
for quite some time as well. But yeah, in terms
(16:21):
of performance is quite an interesting topic.
Speaker 3 (16:24):
There. Kind of reminds me as well.
Speaker 5 (16:26):
During the election, people were talking about performance pay for teachers,
would that bring better results? Obviously a lot of back
and forth about whether or not that's actually a good policy.
Niicola Willis saying it it likely won't come into force
for the next twelve months or so, so it might
come into force once the public sector has kind of
(16:47):
cooled down a bit in terms of all of these
ongoing job cuts, and it's maybe in a I guess
a more chilled out state.
Speaker 3 (16:55):
We'll have to wait and see for that.
Speaker 1 (16:56):
And Asarah, finally, you're based in Wellington.
Speaker 2 (16:59):
What sort of impact all these job cuts having on
the city itself.
Speaker 5 (17:03):
Yeah, it's actually really interesting to see. I suppose how
much of an impact this is having. Seems to be
a lot of what people are talking about now. I
live nearby Central Wellington and I've been walking around places
like the Terrace Lampton Key, and I overhear people having
conversations about these cuts, and I try not to listen in,
(17:23):
but yeah, I mean I overhear people having chats about
what's going on. A lot of people in Wellington also
know people who are public servants, know people who might
be impacted.
Speaker 3 (17:33):
By this as well.
Speaker 5 (17:34):
Now, a number of house price reports have said this
has an impact on housing. It's also apparently having an
impact on retail spending. We've heard some recent news that
there are quite a few empty storefronts around sort of
Willis Street, Lampton Key, Central Wellington. I mean this is
prime retail area. This is places where people want to go,
(17:57):
want to spend money, and want to set up shop apparently,
but it seems like that's not as much of the
case anymore. It seems like there's a reduction in spending
in terms of those nice to haves. We'll just have
to wait and see. In terms of the total impact,
obviously a lot more as still going on now. Agencies
are looking at implementing a lot of their change proposals
(18:20):
and plans as of the first of July, the start
of the political financial year, So in terms of the
total impact we might see more sepen as of July first,
In terms of the impact to retail spending, house prices,
and I guess just the overall mood of Wellington, which
you could argue has perhaps fallen. I mean, there's been
(18:40):
issues of water, there's been issues of quake, strengthening buildings,
a quite expensive budget, so yeah, there's quite a lot
going on in the city. And in terms of the
retail sector obviously hasn't been under a good period for
quite some time, so I can't imagine this will be
helping it. Essentially, the government and the Finance Minister are
(19:03):
trying to put in a sort of vibe of fiscal
scrutiny and this responsible spending across the sector that will
go on for multiple years in terms of getting those
results for people.
Speaker 1 (19:15):
Thanks for joining us Azariah. That's it for this episode
of the Front Page.
Speaker 2 (19:24):
You can read more about today's stories and extensive news
coverage at nzed Herald dot co dot nz. The Front
Page is produced by Ethan Siles with sound engineer Patty Fox.
Speaker 1 (19:35):
I'm Chelsea Daniels.
Speaker 2 (19:37):
Subscribe to the Front Page on iHeartRadio or wherever you
get your podcasts, and tune in tomorrow for another look
behind the headlines.
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