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Cost-cutting? MFAT spends more on consultants, employs former staff

Statement by PSA
The Public Service Association says increased consultant spending and the awarding of contracts to former Ministry of Foreign Affairs and Trade staff send very mixed messages about public service cost-cutting.

Despite a fraught restructuring process which has seen about 80 positions cut, MFAT’s spending on consultants has risen with many former staff being awarded contracts worth tens of thousands of dollars.

MFAT select committee information shows it spent $8.4 million on external consultants and contractors in the 2011-12 financial year which was $1 million higher than the previous year and $1.5 million more than forecast.

“This makes an absolute mockery of the government’s austerity and efficiency drive and sends a very poor message to the entire public service,” says PSA National Secretary Brenda Pilott.

“The MFAT restructuring process has been incredibly difficult and the combination of redundancies and an exodus of disaffected staff has meant the loss of valuable expertise and specialist knowledge.”

“The irony is that the Ministry now has to contract that expertise back and at a much higher price. It’s a salutary lesson on what happens when you shed experienced people without thinking about the longer term implications,” she says.

“It must also be disheartening for current MFAT staff to watch millions of dollars going out the door to consultants, at a time when they’ve had their budgets cuts, seen colleagues made redundant and told to do more with less.”

Last month the Minister of Foreign Affairs and Trade Murray McCully told a select committee hearing that he was looking for cuts in MFAT’s consultants’ budget. Brenda Pilott says that may be his intention but clearly the reality is quite different.