15 Feb 2012

Govt eyeing multi-nationals to take state sector work

6:02 am on 15 February 2012

The Prime Minister says it is quite possible Google and other multi-national corporations could end up with New Zealand Government contracts to carry out work currently done by the public sector.

John Key has signalled another wave of restructuring, with more mergers of government departments and further redundancies likely.


Mr Key says there will be more sharing of resources and an increase in the use of technology including smartphones and the internet to contact government departments.

On Tuesday, he said the American-based Google may well end with some contracts.

"We've had some people up there talking to them; I had some discussions when I was there and they showed us some technology we thought was pretty cool. There is definitely in terms of their cloud technology the capacity to use that.

"They're just one of a number of large, both multinational and New Zealand, companies that could play a role."

Mr Key says he is aware that not all people have access to smartphones and the internet.

"Not everybody can use technology just the same way not everybody uses internet banking and some still prefer to take cash out of their account by going to the teller. But for a lot of people, that's a way of again shortening those queues."

In its first term, the National-led Government cut at least 2500 jobs from the public service.

In this next phase, Mr Key says some existing jobs will be eliminated, but jobs will be created with the introduction of new technology.

Just a cost-cutting exercise, says Labour

The Labour Party says the idea of closing down regional offices and replacing them with call centres operated out of Mumbai would be abhorrent to many New Zealanders.

Leader David Shearer says arbitrary cost-cutting won't make the public service any more efficient.

"It's about cutting numbers, it's about selling assets and putting that up as some sort of a plan to grow the economy. I think most New Zealanders will see right through it."

Labour says constantly reorganising the public service will not improve services or reduce costs.


State services spokesperson Chris Hipkins believes the sector can be made more efficient, but says the Government seems more focused on saving money than creating a better public service.

"Constantly reorganising the public service doesn't make it more efficient - actually, the opposite applies - you constantly spend money on restructuring ... What we've got to focus on is how do we make them better."

Mr Hipkins told Radio New Zealand's Morning Report programme on Tuesday technology can be expensive upfront and costly to run if there is high demand for it, and using smartphones to access government departments may not be ideal for everyone.

"Some of the highest users of public services are the people who are least likely to be able to use smartphone technology - they're not going to have the money.

"Or in the case of older New Zealanders, while many are very tech-savvy these days, a significant number aren't - and we need to keep that in mind."

The Green Party says new technology could certainly be of use, but warns against using it as a replacement for physical offices and the opportunity to talk to staff directly.

Greens ICT spokesperson Gareth Hughes is cautiously supportive of the use of new technology, but says it must be carefully applied.

The Public Service Association says the Government is not coming up with a coherent plan for the public service and is making cuts for the sake of it.

The union's national secretary, Brenda Pilott, says there is no more fat left in the system and public sector cuts are starting to take their toll.

The PSA believes the Government should hold off restructuring the sector until inquiries into the Pike River mine disaster and the Canterbury earthquakes are completed.