The government is moving to stop the public service's over-reliance on expensive consultants and contractors, which it says will save the taxpayer millions of dollars a year.
Photo: RNZ / Rebekah Parsons-King
State Services Minister Chris Hipkins said there had been a contracting blow-out by government departments ever since the previous government put a limit on the number of full time staff.
The cap was introduced shortly after National came into power in 2008 following the global financial crisis and what the party called an unnecessary overspend on public sector staff by Helen Clark's Labour government.
In six years National said it watched the number increase by 38 percent, or more that 12,000 full time positions.
It initially set the cap at 39,000 full time staff.
But Mr Hipkins said all that did was lead to a massive increase in paying the more-expensive consultants and contractors to do the same jobs.
"We know that's more than doubled since the cap on public servants was introduced. It's blown out to well over $550 million," he said.
"That's clearly not sustainable and we want to make sure the public service is building and keeping the capacity it needs to do the job that the public of New Zealand expect of it."
According to answers given to Select Committee from 29 public service departments last year, $546m was spent on consultancy and contracting to June 2017.
For those same agencies, the increase since 2008-09 was $272m - a rise of 99 percent.
The Public Service Association backs the move.
National secretary Glenn Barclay said they have always opposed the cap, calling it an arbitrary approach that bore no relationship to what was happening on the ground.
"It put in place essentially perverse incentives for government agencies to try and work around this artificial limit and it drove an increase in the use of consultants... so yeah we welcome it."
Mr Hipkins is promising it won't result in a blow-out of public sector staff numbers, because the government still controls public service budgets.
"Ultimately the government still controls the number of public servants who can be employed by the fact that we control the budget that the government departments have.
"What we will be saying to them is we want them to spend the money to get the best value possible, as at the moment they're forced to use more expensive options."
