Finance Minister Nicola Willis says the Government has not modelled the impact of planned public sector job cuts on benefit numbers, and that she's confident thousands of affected workers will find "exciting jobs within the private sector".
In a pre-Budget speech yesterday, Willis announced the core public service would be cut to around 55,000 staff by mid-2029 — down from the current 63,600 — a loss of roughly 8700 full-time roles.
The plan involved agency mergers, operating budget cuts over three years, and accelerated use of AI and digital tools, with Willis saying the overhaul would free up $2.4 billion for health, education, and infrastructure.
Reaction has been sharp on both sides — Labour's Chris Hipkins warning it simply was not possible to cut at this scale without hitting frontline services while ACT argued the cuts didn't go nearly far enough.
The Finance Minister says reductions will be gradual and spread across agencies as questions remain over impact. (Source: Breakfast)
Speaking to Breakfast on Wednesday, Willis said some of the reduction in staff numbers would not come from layoffs but from workers leaving and not being replaced.
"This isn't all people being given a 'don't come Monday'."
Willis framed the changes as modernisation aimed at reducing complexity and directing more resources to frontline services.
"The public service is there to serve New Zealanders. We have to make sure its modern setup is in a form that allows them to send the services they depend on. We can't keep the same structure we've had since the 80s and say 'that will work in 2036'."
She said the public sector needed to evolve to face "challenges that are different now than they were 30 years ago".
Asked what impact the changes could have on unemployment, Willis said there was no modelling completed and that the Government was relying on broader market trends.
"We live in a dynamic labour market," she said, adding many public servants were "smart, hardworking and qualified".
"There will be new opportunities. I have confidence that many of them will find exciting jobs in the private sector."
She also pushed back on suggestions there is a direct link between public sector cuts and rising benefit numbers in Wellington, though she did not rule out that some workers may be supported by the welfare system.
"I just don’t think that that is a logical way of looking at the data," she said.
"That period of high interest rates and an economic downturn has lifted unemployment levels."
Finance Minister reveals changes over the next three years will reduce around 8700 fulltime roles. (Source: 1News)
Frontline roles would remain essential despite the changes, she said.
"Social workers actually need to go and physically go and visit people and sit down with families who have suffered terrible circumstances. You need to have Corrections officers who actually lock the cell and are there protecting their fellow officers from prisoners. There are clearly going to be human beings continuing to do really important work on the frontline."
Willis said the changes would apply across the public sector, with all agencies affected expected to look for efficiencies.
That included Winston Peters' Ministry of Foreign Affairs and Trade and David Seymour's Ministry of Regulation, despite its political sensitivity within the coalition.
"My view is that the Ministry of Foreign Affairs does really important work...but at the same time it has a lot of people in the back office supporting those functions," she said.
"Just like any other government agency, it should be using new digital tools, looking at how it can be more efficient, more productive, more streamlined, and so I think that they should take part in these exercises."
Willis said political parties were likely to campaign on how government should be structured.
“The Prime Minister has said he’s open to all sorts of mergers,” she said.
“I suspect different parties will campaign on different arrangements in the election.”
The morning's headlines in 90 seconds, including an Ebola sufferer en route to Germany, and a unique solution to battling gas price hikes. (Source: 1News)
SHARE ME