Christopher Luxon says PM Chris Hipkins wrong about business advisory council hiring consultants

Christopher Luxon has hit out at the Prime Minister saying the working group he was chairman of did not hire consultants, something Chris Hipkins says did happen. 

Consultancy spending has been a hot topic recently, but both National and Labour agree a reduction in spending on external staff by government agencies and ministries is needed. 

Luxon was questioned about his time as chairman of the Prime Minister’s Business Advisory Council in 2018 at Question Time on Tuesday. 

Prime Minister Chris Hipkins said the businesses advisory council paid for consultants when Luxon was chairman. 

"For example, I'm aware the chair of the Prime Minister's Business Advisory Council spent money employing consultants to write the one substantive report the council managed to come up with," Hipkins said at Question Time on Tuesday. 

But Luxon told AM on Wednesday Hipkins had got his facts wrong.

"It was a group of 12 CEOs and we put our own thoughts together on paper and actually presented them to the Government," Luxon told AM co-host Melissa Chan-Green.

When questioned about the businesses advisory council on AM, Luxon said the working group didn't cost anything.

"It was a working group that doesn't cost anything, that was the key thing and part of my frustration was working with the Government that actually struggled to get things done," Luxon said. 

Labour spent more than $1 billion on public service contracts last year, a number Luxon wants to cut by 25 percent. 

"What we're talking about here is a Government that has let consultants and contractors go out to $1.7 billion and that's on top of actually having hired an extra 14,000 more public servants," Luxon said. 

"So you end up in this crazy situation where you have like 200 communications people inside the Ministry of Health but you also then go off and hire PR firms to actually communicate those messages. That's a lot of wasteful spending." 

Luxon said there will still be a need for consultants but there needs to be a reduction in Labour's "wasteful spending". 

"There will be a need for external review and external provocation and challenge and there'll still be a need for some consultants," Luxon said. 

"What we're saying is what Chris Hipkins was saying back in 2018, he said I promise to reduce consultants from where it sits in 2018, well every year over the last six years, it's actually increased."

Luxon told AM there is a consultancy culture in Wellington that needs to change. 

"There's a culture here in Wellington where you're a public servant, you then become a contractor, you get twice the rate to do the job that you were doing as a public servant," he said. 

"We have a lot of reviews, we have a lot of task forces and working groups ... and all we're saying is, look, we still need consultants, will still need some external reviews from time to time, but we don't need to keep increasing the consultancy spend, we want that work done by the core public service, which has also increased over this period of time."

Watch the full interview with Christopher Luxon in the video above.