TONY RYALL interviewed by GUYON ESPINER
GUYON Thank you, Minister, for joining us. We appreciate your time. As you heard in that intro there, 2000 people have been cut from the state sector. You promised a cap, not a cut. Why have you broken the promise?
TONY RYALL - State Services Minister
Well, we haven't broken our promise at all.
GUYON But you did promise a cap, though, didn't you?
MR RYALL Well, yes, a cap is a maximum, and what we've been doing over the last two years is we've been moving resources from back office administrative functions into improving front-line services and extra front-line staff. So whereas you've seen a lot of departments within the administrative cap reducing their numbers - 2000 over an 18-month period - you've also seen increases in staff in a number of what we call the non-administrative areas.
GUYON But 2000 people gone - tell me the good thing.
MR RYALL We've had almost 500 extra jobs being created in public safety, police, prison service, social workers and WINZ.
GUYON But 2000 net gone, though.
MR RYALL Yes.
GUYON Tell me the good bit about sacking 2000 people in a recession.
MR RYALL Well, it's enabled us to free up resources which are able to be spent elsewhere in the public service. So let me give you an example: in the Health Ministry last year, we cancelled 200 or so vacant positions, which freed up a significant amount of money, which was able to be spent by district health boards in providing services for patients.
GUYON $5 million?
MR RYALL No, that's this year is $5 million. Last year it was in the vicinity of $20 million. So this is a perfect example of where freeing up administrative functions allows you to fund better front-line services.
GUYON Well, how much money have you saved, Minister? Because when you look at some Official Information Act documents released to Radio New Zealand this week, it showed that in most of the ministries, the wage bill was actually going up, despite having fewer numbers of people. How much money have you saved with this exercise?
MR RYALL Well, we would estimate that if you look at the trend that we inherited& Remember, the public service grew by 50% within a nine-year period under the previous government, so that was hugely unsustainable levels of growth in the public service. And because we've stopped that growth, we've got it trending down, we estimate we've probably saved around $170 million of cost that we would have incurred if that level of growth had continued. Now, that's being able to be spent elsewhere or saved, and that's what we want to do.
GUYON And you talk about that going into the front line, but is it not the case that some of these cuts are affecting the front line? Because the cuts include things like border-security staff. I mean, they have a vital role in ensuring that pests, which could be hugely damaging to the economy, are kept out of the country.
MR RYALL Yes, but this is where you've got to look at what's efficient and what's effective. Those bio-security staff who lost their jobs were people who were inspecting Japanese imported vehicles. Now, if the number of Japanese imported vehicles plummets because of the recession, then you don't need those people inspecting cars that aren't coming across the wharf. So those jobs were removed. Now, look, that's an example of how those&
GUYON So you can guarantee that our bio-security has not suffered at all because of those cuts?
MR RYALL That's a complete message of assurance that we're getting from those agencies, because if you've not got the Japanese cars coming across the port, you don't need the staff. It's just not efficient.
GUYON So what say the Japanese cars come back? You take them on again, do you?
MR RYALL Well, this would be sensible, wouldn't it, to make sure we maintain our bio-security. What the government wants to do is make sure that you as a taxpayer are getting maximum value for your investment in public services. We had unprecedented huge growth under the previous government. We've capped that, and we've got the resources going on the important stuff that you want - more doctors, more nurses, more police, more prison officers.
GUYON We'll talk about the doctors and nurses in a second. One of your targets was to cut the amount of public-relations staff, yet it doesn't seem that that applies to ministers. You've got the Department of Internal Affairs with 54 communications staff. That'd make it one of the largest newsrooms in the country. Do you need 54 spin doctors?
MR RYALL Well, there is a lot of good news coming out of the Beehive, of course, because the government's making a lot of progress, but if you look at the cap that we've put on public-relations staff within government departments, they are coming down.
GUYON Do you need 54, Minister? Do you need 54?
MR RYALL Well, I don't have 54.
GUYON Does Department of Internal Affairs and the government need 54 people in public relations?
MR RYALL Well, I think you'll find that overall we have fewer public-relations people working in the state sector. We wanted to cut the growth that had happened at unprecedented levels&
GUYON Just more for the ministers?
MR RYALL Well, I don't think you'll find that overall there is a significant increase. What we are doing is making sure that overall in the public service, we have got those numbers coming down, and they're continuing to come down. It's because the public wants their money spent on important front-line services. You can't have this level of growth in the public service that we saw under the previous government during a recession. Everything's tightening up. People in the public services realise that, and that's why we are putting the cap on, numbers are coming down, resources moving to the services that you want.
GUYON And let's talk about that in your own portfolio. Something like 200 jobs will go in the Ministry of Health. Were there really just 200 people sitting around doing nothing that you could fire?
MR RYALL Well, it's a question of prioritising and making sure that you've got your resources going into the very important areas. And in the Ministry of Health, there's a combination of cancelling vacancies and also removing some jobs as we focus on fewer more important things. And that money that we are saving is able to go in to do more operations, more services for people, and that's what the government's delivered in the last two years.
GUYON Is it really not the case, though, that some of the administrative workload is going to have to be done at the front-line now?
MR RYALL No, because the government is making decisions to actually remove a lot of that. So for example, the amount of paperwork and administration that district health boards have to report to Wellington we've cut by a quarter to a third, so there's less of that paperwork happening. Out in hospital wards, for example, nurses are taking responsibility for the way their work is organised and the way they manage their wards, and in some parts of the country, nurses have doubled the amount of time that they are spending with patients. Now, that's not administrative work. That's spending time with patients, so we're making quite a lot of progress.
GUYON Well, you look at what the medical specialists said in their conference back in 2008, and they looked at key reasons why these highly valued people were leaving the profession. One of the reasons was, and I quote, 'a lack of administrative support'. Tell me why taking these people out of the so-called backroom is not going to make that worse.
MR RYALL Well, I'd look at the comparator here. Under the previous government, the number of management and administration staff in the health sector went from 8000 to 10,500, and they're complaining about it in 2008.
GUYON Yeah, and it's going to be worse now, because you're cutting those people.
MR RYALL We are& Well, look the public want the money spent on more operations and more services, more doctors and more nurses, and that is what we are delivering. And I make no apology for putting a cap on administration. It has grown too much under the previous government. We were elected to stop the growth in administration and bureaucracy in health, and that is what we are doing. We have the numbers coming down, and we have more doctors, more nurses, more operations, more services coming from it. And, yes, there will be further reductions in the health sector&
GUYON To what extent?
MR RYALL &because the money must go into services.
GUYON To what extent? More than 200 will go from the Ministry of Health?
MR RYALL Well, over the period of two and a half years, we're expecting the number of positions in the Ministry of Health to go from about 1675 down to 1290, and we're expecting to see further saving throughout the health sector in terms of DHBs' administrative staff, so numbers will continue to fall.
GUYON Let's talk about DHBs - a collective debt between the 21 of them of about $150 million. Are they wasting their money and mismanaging it, or are they underfunded?
MR RYALL Well, we've put more money into district health boards this year, and we've put more money in last year, so they are getting a generous increase. But, look, things are tight, and we're going form a period where, under the previous government, they were sort of getting a billion dollars a year extra to much tighter economic times. But the important thing is not how much extra money they're getting - it's what extra services you are getting as a taxpayer, and we are delivering record levels of elective surgery, speeding up emergency departments, getting cancer patients treated faster, getting more kids immunised. We are getting better value for your dollar in health.
GUYON But there are big, big pressures in these DHBs. We'll look at a local example - Manuwatu, MidCentral Health. They want to take $100,000 out of diabetes programmes, which the providers say will be critical. I mean, this is an example of your funding cuts actually making a difference at the front line and taking services off people.
MR RYALL Well, if you look at the specific programme which the health board there is considering, that's in many ways a duplication of services that are already being provided in the community. The government's putting huge amounts of money into primary care, which is helping with the diabetes prevention and management. It's one of our six key health targets.
GUYON Yeah, it's one of your key targets, and so why are you forcing them to take money out of it?
MR RYALL Well, because if services are being duplicated, we want to make sure that people get the best service and that money is going to be freed up if it's going to be duplicated. It just doesn't make sense.
GUYON So people were simply wasting the money doing things twice?
MR RYALL Well, they weren't doing it efficiently and as effectively for patients as they could. This is a decision that the district health board's making. I think it makes a lot of sense to go through and look at your service and say, 'Where are we doubling up, and where could money be better spent for patients?' Just because you've spent it that way in the past doesn't mean you need to keep doing it.
GUYON Another local example - Wellington, Capital & Coast District Health Board. The chief executive, Ken Whelan, resigned in August, basically saying that he could not cut any more without undermining patient services. Now, you were reported the next day, and the headline was 'Carry On Cutting Says Ryall'. Is that accurate?
MR RYALL Look, the Wellington district health board has had well over $200 million of extra funding of different categories in the last two years from this government, so they got more money this year, they got more money last year. In the end, though, we've inherited a very large gap in Wellington, and we're filling it up.
GUYON I don't want to talk about inheritance and the past. I'm talking about the fact that a well-respected chief executive resigned from the Capital & Coast health board saying he couldn't cut any more without undermining patient services.
MR RYALL Well, actually, what he said was, 'It may be time for some fresh eyes to find those opportunities.' The fact is, we've put more money&
GUYON This is important. So simply it would just take someone a bit more creative to find some more money to take out. Is that what you're saying?
MR RYALL Look, I talk to people at Wellington Hospital, and I think that the doctors and the nurses and the staff will tell you there are more opportunities to make sure that money is moved out of administrative, low-value programmes into improved front-line services.
GUYON So 'Carry On Cutting' - that's true, that headline, isn't it?
MR RYALL There's no cut to the budget at Wellington Hospital. The funding at Capital & Coast DHB has gone up last year, and it's gone up this year.
GUYON Well, they've $50 million in deficit, aren't they?
MR RYALL And we inherited a deficit well in excess of that, so we are slowly closing the gap there, and the District Health Board has to make sure that it's spending its money on its best services.
GUYON And more money can come out of the DHB?
MR RYALL I'm sure that they can move their resources around to improve services. Wellington Hospital, for example, under the new government, has done more elective surgery than it's ever done before. Remember they did about a decade of where the numbers didn't improve. They're seeing more cancer patients. They're making sure their emergency department works faster. A lot is being achieved at Wellington Hospital.
GUYON Last few minutes that I've got I want to spend on what you called the fundamental challenge in health, and that is the workforce. We have the highest reliance on foreign doctors of any developed country. Some 40% of our doctors are from overseas. Is that acceptable to you?
MR RYALL Well, we value those people making a contribution to the New Zealand health service, but we would want to keep more of our doctors here in New Zealand. At the same time as being one of the world's biggest exporters of doctors, we're also one of the biggest importers.
GUYON And is that a problem?
MR RYALL Well, I think we should do a lot better, so the government has introduced a voluntary bonding scheme, which encourages our young doctors, nurses, midwives to stay in the country for up to five years. We write off their student loan. We're bringing in much more career planning, so we say to the young doctors, for example, 'Here's what we want to do to help you get your training and your skills up to speed. We'll look at how we can help you when you need to go overseas and bring you back and keep in touch with you.' So we're doing quite a lot. Now, for example, the tax cuts that happened on the 1st of October for the average senior doctor will put $7000 a year into their pockets.
GUYON So that was the answer, was it? The tax cuts?
MR RYALL No, no, the answer I said to you before was we've got a strong focus on retention, recruitment and making sure that we're keeping people here.
GUYON OK, well, let's look at your voluntary bonding scheme. 115 doctors signed up for that. It was oversubscribed. 115 - it's very popular. You got 200 extra places over the next five years, so that's good. But you're 638 specialists short according to the medical specialists. What are you going to do about that?
MR RYALL Well, we have more specialists working in our hospitals today than we had two years ago. We have a very strong focus on providing a focus on the stuff that pushes doctors away from our health service. So for example, we're reducing the levels of administration and bureaucracy.
GUYON Are you really?
MR RYALL We're providing more opportunities for leadership, more opportunities for research and making sure they're a better place to work.
GUYON Well, let's just get some facts on the table here, though. Per capita, we are 28 out or 28 countries - we're bottom ranked for the amount of specialists we have per 1000 people. We have 0.8, compared to a developed-country average of 1.8. We're below Turkey.
MR RYALL Yeah, but, look, that ignores the way that our health service works. We've got a very strong focus on primary care in New Zealand. Some health services have a much stronger focus on their secondary hospitals.
GUYON Does that not worry you that we're at the bottom of the developed world in terms of the number of specialists - radiologists, surgeons.
MR RYALL I don't think that's a valid comparison, but if you're asking me&
GUYON Why not? Why isn't it valid?
MR RYALL &do we have a workforce crisis in New Zealand because we need to retain more of our hospital specialists, I say, yes, we do. It's our number-one priority. That is why we've put a huge effort into making sure that we can improve those factors which push people out of our health service - more opportunities for research, more opportunities for teaching, more opportunities for leadership, making sure that we value these people and recognise that through the tax cuts.
GUYON 'It's our number-one priority.' You're spending $17.5 million on the voluntary bonding scheme out of $13.5 billion in the health budget. Is it really your number-one priority?
MR RYALL That's for our new doctors that are coming in through the health service. We have made a huge change in the health service in terms of valuing the contribution that our senior medical staff are making. We're creating more opportunities for them to take leadership and responsibly for the way the run their services. We're giving them much more opportunities for research and teaching.
GUYON What about&?
MR RYALL We are not going to be able to offer the same salaries as they do in Mt Isa overnight. As a country, we simply can't afford that at this time, but with a strong focus on economic growth and getting New Zealand moving again, we're going to have a much better opportunity to be more competitive.
GUYON Can the DHBs afford to take these people on? Because the medical specialists are saying that, despite having, for example, 60 surgeons short in the category of general surgery, only one DHB in February of this year was advertising for them, and they claim it's because they can't afford to take them on.
MR RYALL Well, we've got more doctors working in our hospital system today than we had two years ago. We've got more front-line doctors. We've got more front-line nurses. We've got fewer vacancies than we had two years ago. We're making quite a lot of progress in this area, and New Zealanders should be very pleased with the resources moving from the back office to provide more doctors, more nurses, more operations. We're providing more hospital services than people thought was possible a few years ago. More operations, more kids getting immunised, more people getting their cancer treatment, and it has meant a strong focus on value for money, and it's our doctors and nurses who've played a big role in that.
GUYON And there we'll have to leave it, but thank you very much for joining us. We appreciate your time.