Finance Minister Nicola Willis has announced a major public sector cost-cutting programme that aims to save NZ$2.4 billion over the next four years by reducing staffing costs and increasing the use of artificial intelligence across government departments.
Speaking during a pre-Budget address in Auckland on Tuesday, Willis said the Government planned to shrink the core public service workforce and return it to what she described as “the historic norm,” Stuff has reported.
“Between 2017 and 2023 those numbers ballooned out to about 1.2% of the population. As part of the programme, the Government will restore public service numbers to the historic norm by mid 2029. That will be an in-principle target of about 55,000 public servants,” she said, as quoted by Stuff.
The public service currently employs around 65,000 workers, meaning approximately 10,000 positions could be cut across 25 departments, alongside an ongoing merger involving the ministries responsible for housing, transport and the environment.
The restructuring will create a new mega ministry known as the Ministry of Cities, Environment, Regions and Transport, or “M Cert”. Future minister Chris Bishop said the merged agency was expected to reduce spending and staffing costs over the coming years, Stuff has reported.
However, Willis confirmed that 13 departments and parliamentary agencies would be exempt from the cuts and staffing targets. These include major public sector employers such as the New Zealand Defence Force, New Zealand Police, Corrections, the Ministry of Health and the Ministry of Justice.
The wider state sector, including Te Whatu Ora and schools, will also remain outside the programme.
Among the agencies facing scrutiny are the Ministry of Social Development, Inland Revenue, Customs, the Department of Conservation and the Ministry of Business, Innovation and Employment. Several smaller agencies, including the Ministry for Women, the Ministry for Ethnic Communities and the Cancer Control Agency, are also included in the Government’s cost-saving plans, as reported by Stuff.
The Social Investment Agency recorded the largest workforce increase over the past year, growing by 70% to 86 staff, while the Ministry for Regulation expanded by 15%. Meanwhile, the Department of the Prime Minister and Cabinet saw one of the sharpest declines, with staffing falling by 19%, Stuff reported.
The new housing, transport and environment ministry will begin with a combined workforce of about 1,270 staff across the three merged departments.
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