New Zealand's public sector has a large role to play in the recovery of the economy from recession and Finance Minister Bill English made it clear yesterday that hard work already started needed to continue.
Mr English said in his Budget speech that the 2009 Budget significantly increased operating funding and capital investment for public services.
"However, the public sector must consider how it will adapt to tighter budgets and smaller or no increases in the future."
Public sector chief executives were already identifying how to deliver services more efficiently.
Considered decisions now would avoid harsher decisions later, he said.
Line-by-line departmental reviews had freed up $2 billion over the next four years that would be put back into Government priorities such as boosting front-line services.
A combined $454 million had been identified in the remainder of this financial year and 2009-10, with more than $500 million by 2012-13.
That money would be used for priorities such as more police, more probation officers and training more doctors and nurses.
The $500 million represented less than 1% of total Government spending of $65 billion and was on top of the $1.45 billion increase in operating spending announced in the Budget, Mr English said.
One of National's election commitments was to slow the rate of Government spending increases and focus on front-line public services.
"We want better, smarter public services with little or no extra funding. This is the first step in an ongoing process to ensure Government spending is effective and goes on the right things."
Savings had been put back into new policy priorities in education, social development, overseas development assistance and the Ministry of Foreign Affairs and Trade.
The reviews had started the process of improving the quality of Government spending, he said.
"The real gains will come from making sure that there's a continual focus on innovating and finding better ways of delivering public services right across Government."
