$800 million in cuts will strike savage blow to public services

The Government’s intention to cut $800 million in new spending from this year’s Budget will further strain public services already under massive pressure due to the Canterbury earthquake and will cost the country socially and economically, says the PSA.

The Prime Minister said in a weekend television interview that most of the $800 million in new spending had been tagged for health and education. Spending in those areas will now come from cuts to other portfolios. In other words, other departments and public services will suffer large cuts.

“The government is choosing to squeeze departments and services that have already been shaved to the bone, rather than considering other options like imposing a levy and further borrowing to help fund the Canterbury rebuild,” says the public sector union’s National Secretary Richard Wagstaff.

“Last year’s tax cuts, which were meant to foster economic growth, cost the country several billion dollars and produced no measurable economic benefit. All they fostered was more inequality. The rich gained the most and the poor and mid-income earners the least. Those same members of society will lose out again from these budget cuts because they are the people who need and use public services the most.

“The government complains about its deficit yet it is pushing ahead with corporate tax cuts on April 1st.

“This government is leading the recession with its blunt cuts to public services. Decades of evidence from around the world shows that societies that prosper and grow are those that invest in public services, especially in health and education.

“Last year, CTU economist Bill Rosenberg estimated the Health sector alone needed an additional $555 million just to stand still. This year that estimate could be even higher.

“So not only is the government slashing departments and services that are already struggling with tight budgets, when it comes to health and education $800 million doesn’t go near what these areas actually need.

“Investment in public services is what boosts economies. This government is doing the opposite and is in danger of pushing New Zealand further into recession by cutting spending and jobs.

“There are other and better options available to the government to fund the earthquake recovery effort including a mixture of borrowing and taxes.

“PSA members are consistently reporting exceedingly high workloads across departments. Many of our members are working longer hours to cope. Further cuts will only make matters worse for public sector workers.

“The government has made its priorities clear. Tax cuts for companies and the rich. Service cuts and unsustainable workloads for the rest of us,” says Richard Wagstaff.

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