Won’t the government just waste our money?

"We can’t trust government not to waste our money"


This argument is raised regularly and the first way to respond is to point out all the useful and important things that public expenditure is used for. In 2020/21 we spent around 91% of our tax revenue on health, education and social security. There are also plenty of examples of positive public expenditure, such as the food in schools programme, that you can refer.

This argument is often based on misunderstandings. For example, when some people look at the annual 2020/21 spend of $44bn on social security they often assume that the bulk of this is going on the unemployed or other groups that they may hold negative views about, but the biggest single item of expenditure in this vote is NZ Superannuation at $15.5bn, which we are just about all entitled to receive once we reach age 65. 

People also sometimes point to things such as individual projects or programmes that they don’t like as an example of wasteful expenditure. Projects or reforms can be costly but they are usually one-off items rather than ongoing costs, and because someone disagrees with a particular project or programme does not necessarily mean that it is a waste of public money. Waste may occur, but it is important to have full and accurate information rather than relay on generalisations.

No one likes waste and there is indisputably some waste in government. Waste can be found in almost all organisations, but unlike most other organisations public sector entities are subject to review by bodies such as the Auditor-General and the Ombudsman. They are also accountable to their Ministers and parliament, who are in turn accountable to the public and subject to election every three years. Waste in private sector or not-for-profit organisations is less likely to be drawn to the public’s attention.

Another argument is that we are wasting money on an increase in public servants and the use of consultants and contractors. The Public Service consists mainly of government departments such as Inland Revenue, MSD and Corrections – it does not include other public sector agencies such as those that deliver education or health services. 

Public servants do essential work to support our communities as well as providing advice to the Government and administering large complex systems like our education system. The public service also deliver many services directly including benefits, conservation programmes and prisons. Around 40% of staff in the public service are in public facing roles and 55% work outside of Wellington in the regions.

It is true that there has been a growth in both public service numbers and the use of consultants and contractors over recent years, although the numbers of both have declined slightly off their peak numbers in 2021. Both the growth and the falling off reflect in part a number of one-off projects and events such as  the national Covid-19 vaccination rollout and government reform programmes. While it is important to reduce the reliance on external contractors and consultant, this will require building both the capacity and capability of the Public Service, rather than a reduction in the numbers of public servants.