Controlling the cost of government

Like most organizations, the cost of labour (payroll) tends to make up the bulk of government spending so any attempts to look at cost control will turn to either cutting the number of public sector workers (and by that I am talking about all public sector workers – education, health care, not just public administration), freezing or cutting wages or a combination of both.

Some people will say that the Lord government was making up for the lean years under McKenna but there is no denying that public sector wages rose dramatically under Premier Lord.

There are some potential ways to control costs – looking at other governments and the private sector for answers.  Beyond the draconian 25% cut that some people have tossed about in the media.

Several U.S. states have moved to either a four day work week or they have rotating days off (without pay).  Check out Utah here.

Many goverments – most in the U.S. – have moved to a defined contribution plan to at least curb the growth in non-wage costs.  The NB public sector union has been very much against this approach but it is the way things are going.

I happen to be a big fan of the public service and of the importance of doing work for the community and the public at large.  I think there is sometimes too much bashing of the public service. 

The truth is we need a highly competent and equally important engaged civil service if we are to pull out of the chronic rut we are in.  So in the short term government needs to do what it needs to do to manage costs but in the longer run, I’d like to see far more effort on engaging the workers in the public sector to be part of the solution.   If we want to turn the ship around, we will need the public sector to be a major player in the process.

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3 Responses to Controlling the cost of government

  1. richard says:

    “defined benefit”

    I think you mean ‘defined contribution’ plan. I don’t agree with this approach. In fact, we’d all be better off if the private sector reverted to defined benefit plans. The problem is that defined contribution plans just transfer the liability to the public sector. That’s because most pensions are inadequate, and when events like the past couple of years occur and defined contribution plans provide low pension payments, pensioners end up getting more supplements from public prgrams. Defined contribution plans are in some ways subsidies to the employer.

    I’d agree that job-sharing or shorter work-weeks are a better way to go.

    You are correct that the public service needs to be involved in the process; unions tend to be reactive, however. Its their job to protect benefits short-term; it might be hard for them to sell short-term pain for long-term gain.

  2. Anonymous says:

    Collette, who earns a salary in the $203,600 to $239,600 bracket, oversees an agency that administers more than $400 million in federal funds for the Atlantic region. ACOA has about 780 employees working in its 29 offices in the region and one in Ottawa.

    781 Employees, 30 Offices,? To hand out 400 million to Government supporters? It takes a long time to learn to laugh at these things in NB but each day now is usually a riot.lol

  3. Don Dennison says:

    Right on. Competitiveness and productivity are key, and NB needs a competitive public service. Quality public services are intrinsically linked to economic success.

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