In January, while pondering possible cuts at the Ministry of Foreign Affairs and Trade, Murray McCully said he would not approve anything that would risk New Zealand's important relationships. There were, however, "some sensible economies that can be made". Such is virtually always the case and it is surely so in his ministry. But the steps subsequently announced hardly pass Mr McCully's test. Quite simply, they go so deep that, if implemented, they would certainly undermine the effectiveness and efficiency of the diplomatic service.
The proposed changes outlined by Mfat chief executive John Allen would cull 169 ministry staff in New Zealand and overseas, as well as 136 locally engaged staff. That would mean the loss of 21 per cent of the ministry's staff. As well, some overseas pay perks would be cut, embassies in Warsaw and Stockholm closed, and an outsourced consular hotline would become a first point of contact for New Zealanders in trouble overseas. These cuts, estimated to save $20 million to $25 million, are not the end of the matter. Redundancies in the human resources, information technology and property management areas are expected to reduce the ministry's spending by a further $15 million.
Several reasons have been advanced to explain the severity of the cuts, which takes the squeeze on the public service to a whole new level. One is that Mfat was fortunate to avoid the cutbacks endured by other departments over the past few years. Indeed, under the previous government, it gained substantial additional spending. On that basis, it has some catching up to do. Another reason, says Mr Allen, is that the ministry will be transformed into a flexible organisation with improved expertise.
Neither explanation holds much water. The closure of the embassies in Stockholm and Warsaw is reasonable, given New Zealand's focus away from Europe. But if the ministry had escaped previous cuts, this was surely an acknowledgment of its importance, not least in a era notable for the forging of free trade agreements. Equally, it is difficult to see how the ministry's level of expertise will improve. The opposite is more likely.
Alarmingly, the trade union representing 600 ministry staff found that nearly three-quarters of respondents working overseas were considering resigning or returning to New Zealand before the proposed changes took effect. Many diplomats were doubtless particularly perturbed by the prospect of going into a "surge pool" at the completion of fixed-term overseas postings - and into eventual redundancy if no suitable further assignment cropped up. This when their morale had already been damaged by Mr McCully's plan to open many ambassadorial appointments to the private sector.
