The media luvvies are all exercised about the pending job losses in the state sector. It’s a shame that they weren’t similarly exercised about job losses in the private sector as a result of ill-considered Labour Government actions, like the oil and gas exploration ban.
Liam Hehir helpfully provides that context:
When I posted about the job losses on X (formerly Twitter) someone asked what evidence I had to suggest all the jobs were pointless, when I had made no such claim. But since he asked, far be it for me to leave his question unanswered:
Meanwhile, Thomas Coughlan has been a good little friend of the PSA and ran an article in the NZ Herald trying to explain how it will be terrible for Wellington with all these job losses.
Government departments have announced plans to reduce headcounts by more than 3000 staff in a bid to find $1.5 billion worth of savings each year.
The savings are comprised of cuts to certain “backroom” spending of 2 per cent, ordered by Labour before it left office last year, and 6.5 or 7.5 per cent ordered by National, as well as cuts to consultant spending.
The cuts are the big story in the public service, and in its home base, Wellington. With announcements about redundancies coming every day, it can be difficult to grasp the size of the cuts in the context of total Crown spending – and what slashing that many public sector employees will do to the economy, in particular the economy of Wellington.
NZ Herald
Presumably, it never occurred to him to look up the population of Wellington before the jobs were available and check what it is now. Almost assuredly the population is somewhat static, meaning those people left other cushy jobs in the Wellington region to take up their new jobs and presumably may well go back to doing similar work.
He has, however, looked at the GDP contribution of Wellington, and it is pretty much what I have suggested re: population.
Just 13,400 people are employed by the core public service in Auckland, compared with 28,700 in Wellington. That means about half of the public service is based in the city. Again, it is probably fair to say that the stereotypical public servant, an analyst or policy specialist at Treasury, MBIE or Ministry of Foreign Affairs and Trade, is overwhelmingly likely to be based in Wellington. The data is skewed by agencies like Corrections that need teams closer to the communities they serve, but who still qualify as the public service.
What happens when 3000 of these people, largely Wellingtonians, lose their jobs at once? We have not had cuts like that for some time. The Key-English Government opted for a sinking lid policy, reducing headcount over time. This Government is wielding the axe much more immediately.
Economic consultancy Infometrics publishes data about regional economies. Their data splits out Wellington City, where most ministries are based, and the wider Wellington Region, where many of the public servants who work there actually live.
The region’s GDP was $50.1b last year up from $44.1b in 2018. The region grew more slowly than the national economy during Labour’s first term, but much faster in Labour’s second. Over the last six years the region’s growth has averaged that of the country at large.
NZ Herald
Here, Thomas makes the mistake that almost every swamp dweller from Wellington makes, thinking that the rest of the country cares about Wellington.
We don’t. Most of the productive sector believes Wellington sucks the life out of anything, but especially business. Anything coming out of Wellington is generally an impost on business.
Olsen said there would be a considerable impact on employment in the city.
“For Wellington City that sort of workforce reduction, assuming that it is concentrated in Wellington City … would represent over a per cent of total employment being lost in the city, that is no small amount going all at once,” Olsen said.
“There are real consequences coming through here for the wider city, for others and other businesses across the Wellington economy. These cutbacks will have a more concentrated effect in Wellington than will be felt more broadly,” he said.
NZ Herald
Almost universally the rest of the country is pleased to see the bureaucrats get their beans, especially after the awfulness of lockdowns we endured while these cosseted bureaucrats sat at home on full pay and entitlements. Not for them the indignity of wage subsidies, declining or non-existent revenue and an uncaring and intransigent state sector.
Most of us are hoping the cuts are deeper and broader than what has been signalled so far, and if an earthquake were to destroy the city we’d probably cheer that too. It may sound callous but that is the level of animus that exists, particularly in Auckland, for the plight of the state sector.
Finally, we get some employment stats near the end of the article.
The city added 6726 jobs in 2023. About two-thirds of the jobs added in the Wellington region were added in Wellington City. Since 2018, about 20,000 jobs have been added in the city. There were 185,900 filled jobs in the city in 2023, equating to most of the 322,600 jobs in the wider region.
If most of the 3000 people who lose their jobs (or whose vacancies go unfilled) came from the Wellington region, it would probably have a noticeable but not catastrophic impact on the city.
If all of the redundancies were in Wellington City, it would mean a loss of about 1.6 per cent of the workforce there.
NZ Herald
You see the extent of the profligacy of the Ardern/Hipkins regime. They significantly expanded the state sector and for no discernible increase in services offered; in fact in most areas we went backwards despite the huge numbers of jobs added.
In business, such behaviours would see the board removing you from your position as CEO. The board would then realign the workforce to be profitable and/or productive.
Sadly, Labour’s position is that every state sector position is sacred and should be protected. They expect the rest of those who fund it to suck it up.
We won’t, and aren’t, and that is why we are actually very chipper, celebratory actually, at seeing the state sector get their beans.
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