If public sector agencies are forced to pay KiwiSaver contributions directly out of their budgets, tens of millions of dollars will be cut from health and other essential services, says the PSA.

Public sector employer payments to the scheme presently come out of a centralised fund, but the government is reported to want agencies to pay these out of individual agency budgets. That would cost government agencies an estimated $85 million.

For DHBs alone this cost would be in the region of $20- 25 million.

“A loss of $25 million from already stretched DHB budgets will directly impact on health services for New Zealanders, says the public sector union’s National Secretary Brenda Pilott.

“Last year CTU economist Bill Rosenberg said the health sector needed an additional $555 million just to keep up with population growth and costs. That figure will undoubtedly increase for this year.

“John Key said today this isn’t a slash and burn budget but based on what we already know. The Government has already said $0.8 billion in new money will be cut from the budget so the hundreds of millions of dollars that the health and education sectors need just to stand still will be cut from other departmental budgets.

“Government departments are already struggling with tight budgets. You don’t get more for less as the Government keeps saying, you get less; less resource and less services, that’s the bottom line.

“The Government’s tax cuts which amount to some $14 billion over the next four years benefit the country’s high income earners most. When this year’s “zero” budget come out next week I will have those tax cuts in mind and thinking about the health, education and other services for the public where that money could have been better used,” says Brenda Pilott.

“Tax cuts for the rich won’t bring the growth the country so desperately needs. International evidence shows investing in public services is much more likely to do that.

“Perhaps the Government should take advice from the Sweden’s government before it follows the privatisation path recommended by the IMF. As Sunday Star Times business editor Rob O’Neil recently wrote, Sweden, where government spending accounts for 55 percent of GDP grew 7.3 percent in the December 2010 quarter and the World Economic Forum competitive index of the same year ranks it as the second most competitive nation,” says Brenda Pilott.

ENDS

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