13 Nov 2010

Public sector productivity key, says working group

6:28 am on 13 November 2010

The head of the Government-appointed Savings Working Group says boosting public sector productivity is a key to tackling the country's poor savings levels.

Kerry McDonald says rising Government debt is placing the rest of the economy at risk and needs closer scrutiny.

He says the public sector needs to be pruned by 5 - 10%, but that could be avoided without ruining the Government's finances by boosting the sector's productivity.

Mr McDonald cites the recent Defence review's suggestions for cutting $400 million of spending as an example of how to decrease spending without sacrificing services.

The Savings Working Group will hand a draft report to the Government next month.