Expenditure savings not likely to mean staff cuts

Press, 21 May 1986, Page 10

Expenditure savings not likely to mean staff cuts

By

MARTIN FREETH

in Wellington Large expenditure savings required of two Government departments seem unlikely to result in staff redundancies this year. However, officials in the Post Office and the Ministry of Defence are still working out exactly where they can save $lOO million and $5O million — the respective cuts required of them in the Government’s expenditure

reform programme. The Post Office will receive $lOO million less than it had sought in loans this year from the Government to pay for huge investment in new telecommunications equipment The Post Office plans capital spending of about $7OO million this year, of which only about $3OO million will now come from the Government Loans Account While the Post Office

could not say yesterday whether the programme would have to be cut by $lOO million, Treasury officials said this would not be necessary if the department made up the short-fall by selling assets, lifting its revenue from the public and achieving savings through generally improved efficiency. This is the last year for the Post Office before it is split into three corporations, in April, requiring no funding from the Government at all.

Defence has been marked for savings of $5O million in each of the next five years, but officials point out that from next year the whole basis of spending in this area will be changed anyway as a result of the Government’s present Defence Review. The Ministry’s assistant secretary (finance), Mr Alan Towhill, said just over half this year’s $5O million cut would come in capital expenditure. A recent Government decision to spend $2l million on new 105 mm field guns will not be affected, nor are the savings likely to be achieved by wiping proposals to buy new small arms for the Army or a tanker for the Navy. Mr Towhill said the Ministry would re-ex-amine a list of other capital items prepared for this year’s estimates. Savings would also be made on personnel, but only by lowering recruitment numbers into the forces this year, he said. General belt-tightening across a range of expenditure would achieve the remaining cuts, Mr Towhill said. New Zealand’s future level of defence spending is a key issue in the present policy review.