You talked to wrong libertarians then, or didn't listen very carefully. Spending less money on government functions is a consequence of less government, but far from being the goal of it. The goal of it is to lessen government intrusion in private lives and transaction costs for private persons caused by it. If the government does not regulate how your health insurance policy must look like, and leaves it to a contact between two private parties, you do not need a huge law that meticulously describes what such contract must cover and what the sides must do in order to be allowed to enter into a contract. If, however, the government wants to have a say in it, creation of such a law is inevitable.

Not having certain laws trivially prevent abuse of such laws - if there's no law prohibiting possession of certain plant, cops can not extort somebody in possession of such plant, can not hide such plant in somebody's vehicle in order to incriminate them, can not force one to perform illegal acts threatening that otherwise they'd be found guilty in possession of such plant, can not seize one's home, vehicle or money because they suspected him in possessing a prohibited plant. This made possible only by existence of the law that makes certain behavior a crime. If less behaviors are made a crime or deemed worthy of government intervention, less complex laws will be needed and less abuse of these laws will be possible - you can only abuse a law that gives you a power over somebody, but you can not abuse law that does not exist.