Should We Mourn Public Sector Job Losses?

Or is the clutching at real pearls a good sign for the rest of the country

I'm from Wellington. In some ways I'm too from Wellington. 

In my immediate family of four people, three of us have spent a collective eighty years as public servants. Because of this I understand and relate to the anxiety being felt by people who are losing their jobs due to the new-ish government’s reductions in sector spending.  

Feeling bad for someone losing what could be their family's sole source of income is a human reaction, empathy in such a situation is natural. This doesn't mean the job cuts aren’t justifiable or necessary, but the knee jerk emotive response to such a situation is to hope no one loses their job unless they want to.   

So are public sector job cuts, the firing of people, something we should mourn as a nation? In my opinion, no. 

Why? Because we have a comically bloated and cynical public sector that intentionally created new roles in the build-up to the last election so that, when job cuts were inevitably demanded, they could con the public by making cuts to jobs that didn’t exist a year ago. 

These cuts are a return to equilibrium after a sustained period of unsustainable growth.

Figures released by the Public Service Commission show that thirty one of the thirty eight government department’s increased their head count in 2023 - this is after it was clear who the likely incoming government would be, and that said incoming government was campaigning on cutting jobs. 

Not included in these figures as many have been around for years now, but arguably more damaging to the public’s just in the public service is the staggering amount of roles - often entire teams of a dozen or more people - that exist due to a later abandoned strategy or just to keep talent within the organisation even if there’s no work for said talent to do.  

Two different but informative examples of this are the proposed scrapping of the Suicide Prevention Office I covered in a post last week, and the cutting (or lack thereof) of roles directly involved in now-scrapped reform programmes. 

As I mentioned previously, the Suicide Prevention Office has lacked from its founding the scope and funding to achieve its goals. People I have talked to who are close to the situation have told me virtually none of their goals were realistic with the funding proposed, with anywhere from one to two extra zeros would have been needed in their budget from day one.  

This is one example of a common public service error - the over-aim, under-support. This can occur when an ambitious business case is picked up by leadership and immediately actioned before its fully-costed or before the required budget is green lit.  In some cases they are founded with a significantly lower budget than required under the hope that they can achieve ‘something’ eventually that might justify the costs. 

These failures can go under the media’s radar because they are not massive financial failures like Auckland Light Rail or a big infrastructure project thousands of people will see in-person. 

These aren’t failures of an underfunded public service but it is understandable that from the outside they may seem that way. The people responsible for the SPO knew from day one they would not get the funding required, and they went ahead with it anyway in the hope that something is better than nothing. 

The issue here is opportunity cost. This is money and expensive manpower that could have gone elsewhere, or that could have been saved for a rainy day - like when a new government is looking for fiscal prudence. 

The goals of the SPO were noble, the staff were highly qualified and expensive experts in their fields, if it was designed to work and supported to do so maybe it would have proven fruitful. But it wasn’t designed to work, and it didn’t achieve what it was intended to.  

This is a common mistake, most government department’s have at least one SPO - a project team for just another folly, pursued at pace, to give the appearance of ‘doing something’.  

When teams like this get disestablished, it might hurt the people who in the short term lose their jobs, but overall it is to the benefit of the country as this is taxpayer funding that can be re-prioritised to something more realistic and achievable. 

Think of a proposal for several Auckland harbour bridges and a tunnel, that then gets re-scoped to be just one bridge - a better outcome than shooting for the moon only to burn up after lift off.

More overt in its pointlessness is the amount of staff in the public sector working on projects scrapped entirely. 

From Radio NZ:

DIA said that as of mid-October, 427 staff were working on the old 3 Waters plan but that number stood at 60 on Thursday - most on fixed term contracts - with the majority to finish up at the end of the month and the last few done in June.

Prior to mid-October it was clear that these roles would no longer have any purpose under a new government. A new government that was very open in its intention to not continue with the publicly-unpopular water service reforms of the previous government, and these jobs existed exclusively to continue these reforms. 

Yes, these are still human beings losing their jobs, and that is particularly hard during high inflation, but these are taxpayer funded jobs without a purpose. Redundant, but still paying out. 

Paying people to show up to a, likely lavish, office and just sit there doing nothing benefits no one. If that sounds like a ludicrous scenario, a right wing fantasy that would never actually happen, you’re clearly not a current or former public servant. 

This is an unfair comparison, but one could unfavourably compare these roles - and ones for Auckland Light Rail, KiwiBuild, etc etc - to a ‘no-work job’.  

For those not familiar with The Sopranos, a no-work job is a paid position for which no work is expected, but for which attendance at the job site is required. It is, in the context of a business, a form of fraud where multiple people are paid salaries but not expected to work. 

These jobs exist as a form of ‘kickback’ or ‘skimming from the top’ and are given to family or organised crime associates as payment for some other illegal service - often as part of a union or protection scam. Upon auditing or inspection, personnel assigned to a no-work job may be falsely justified to the controllers as waiting for work tasks or not being needed "right now". 

It is too harsh to call public servants who, due to a change of government and not the quality of their own work, scammers. They aren’t. 

What they are is unwitting beneficiaries of disorganised and wasteful public sector leadership that has made their role a no-work job. These are hundreds of people getting highly paid for redundant work, who are likely to be made redundant eventually, but whose jobs exist to later be cut. 

It’s not fraud, but it is systematic of an unrestrained public service that sees itself as above the politicians and the public it is meant to serve. Budgets are designed to be blown out, EFT caps are ripe to be worked around, and half-baked schemes are fully indulged if they have an important enough name. 

The reality is that the public service has grown massively in the past six years. Even with the coalition government’s proposed budget cuts, and the job losses that will stem from them, the size of the public sector will still be larger than it was prior to the Ardern government. 

With that in mind, and when factoring in that the country is doing worse than it was according to most metrics, who benefits from a large, but futile public service? Already one fifth of all employed New Zealanders are public servants! 

To some people that growth is not a negative. There are people to whom any public sector job loss is an outrage, even if it is justified or inevitable, as the path to full adult employment is via an expanded public service that essentially IS the economy.  

The challenge for them is that New Zealand cannot afford and does not seem to want an economy based on an oversized government. Nations like that tend either to collapse or rely on things like oil extraction to stay afloat. 

What we have here is a series of job cuts that will barely move our public service headcount back to 2019 levels, a large number of jobs that maybe shouldn't have existed in the first place, and a discourse that is focused on mourning instead of the need for a more sustainable public service. 

Wellington will suffer due to these cuts, but Wellington is also an unsustainable one-industry town that feeds off the rest of the nation like a tick. 

Growing up in central Wellington, amongst public servants, I was raised around wealth that is only matched nationally by the most moneyed suburbs of Auckland. While not everyone has made millions, even lower level public servants can be making double the average wage and living lives of true comfort. 

While businesses were suffering during COVID and people were losing their jobs, every Wellington public servant I knew was insulated from the realities of a bad economy. I was a public servant at the time and I received a health pay raise. 

So should we mourn public sector job losses? We should have sympathy for the people going through them, but no more than we would for someone who lost their well paid job at a business run into the ground by bad leadership and poor choices. 

Their plight is sad, but does not deserve the over-the-top response it is receiving. These cuts, and its inevitable knock-on effects on Wellington in the short term, are for the greater good.