Three Untapped Areas For Government Cost Reduction

Analysis of Australian and United States implementation for government services and the health sector may validate these "low hanging fruits." The areas identified for potential significant cost reduction include Health, Defence, and public services.
The Beehive
The Beehive
WELLINGTON, New Zealand - July 10, 2024 - PRLog -- Trend analysis from government data obtained over the past 18 months, including through several Official Information Act (OIA) requests, has identified three unique areas for substantial government cost reduction.

Analysis of Australian and United States policies and implementation for both government services and the health sector may validate these "low hanging fruits." The areas identified for potential significant cost reduction appear to also improve overall outcomes for Health, Defence and public service operations.

Through an Official Information Act (OIA) request, Trend Analysis obtained details regarding the successful use of the Penumbra Lightning Flash at Auckland hospital.

Further investment in Penumbra Lightning Flash and Inari tools used in hospitals both in Australia and the United States have contributed to reduced operating theatre volumes and patient recovery timeframes, by shifting procedures to the Interventional Radiology teams.  Moreover, at Auckland Hospital the Penumbra Lightning Flash tool has proven its value, having been used for pulmonary thrombectomy (clot removal from arteries) and cardiothoracic surgeries.  In other hospitals these procedures require invasive surgeries with longer recovery times.

By investing in several additional Penumbra Lightning Flash or Inari tools for other hospitals and investing in the Interventional Radiology staff, the government can potentially improve health outcomes while substantially reducing the costs associated with operating theatre procedures.

The current cabinet is working on the new Defence Capability Plan, to be release in September 2024.  The planning phase will initiate funding requirements for the Finance Minister amidst declining retention in the NZDF and in conjunction with changing requirements for defence to counteract new threats.  Moreover, it will help to create improvements in coordination and interoperability with the Australian Defence Forces.

The NZDF may be a potential recipient of such grants that allow the transfer of excess military equipment directly from the Defence Security Cooperation Agency at significant cost savings.

By applying directly to the DSCA for specific types of equipment grants, the NZDF may have the potential to reduce overall acquisition and modernization costs, while also releasing additional funds to address personnel and staffing requirements.

In New Zealand the ratio of management to staff averages 1 manager to 4 employees (1:4).  New Zealand government organisations, compared with other governments such as those in Canberra (1:6) and Washington (1:10), retain among the highest manager to staff ratios.

In May 2024, the Finance Minister Hon Nicolas Willis had requested that ministries and agencies cut expenditures by 6.5 - 7.5 percent as a method for reducing annual public service spending.

Trend Analysis shows that such high level cuts have little impact with regard to the hierarchical structures of many organisations, and nearly zero impact to existing management roles.

Trend Analysis identified the potential for substantially greater longevity for reducing annual public service spending if the restructuring of department hierarchies to help flatten structures (higher staff to manager ratios) is integral to any expenditure cuts.

Andrea Cordingly
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