The Wall Street share market collapse, a significant drop in New Zealand export receipts, and a new prime minister were all indicators of further hard times for the public service. Prime Minister George Forbes’ main concern was to balance the budget and to combat falling receipts by cutting spending.
For the public service this meant further staffing cuts. Temporary employees had to go. The Public Service Commissioner dismissed 117 permanent officers in 1930-31 and no new staff were appointed.
In February 1931 Forbes announced 10 per cent cuts to all public service salaries, to take effect on April 1. In response, nine state service organisations, including the PSA, set up a Central Committee of Combined Service Organisations (CSO). Led by PSA President Alfred Burgess, CSO delegates met with Forbes on February 18, reminding him that public servants had already borne the burden of the 1922 cuts and putting forward counterproposals. Regardless of these counterproposals, which were also supported by the Labour party, the government rushed the bill to cut salaries through under urgency.
Neither these retrenchments or salary cuts did anything to help the economic recession; export receipts fell a further 19 percent in 1930-31.
(Source: Bert Roth, Remedy for Present Evils: A history of the New Zealand Public Service Association from 1890, New Zealand Public Service Association, 1987)