Government aims to bring back the number of full-time public servants to historical norms
The New Zealand government has announced that it will lay off 8,700 workers by mid-2029 in a "fundamental overhaul" of the public service that will see the country save a massive $2.4 billion.
Finance Minister Nicola Willis announced on Tuesday the major layoffs in her pre-Budget speech, saying the government has a target of no more than 55,000 full-time public service employees by July 2029.
"That's 8,700 fewer than were employed in December last year," Willis told an audience of business leaders.
The layoffs will not apply to the core public service and will not include teachers, nurses, doctors, police, or people employed by crown entities, according to the minister.
The reductions will be achieved through natural attrition, stopping duplication, streamlining back-office functions, accelerating uptake of digital tech, and requiring a quarterly report from government agencies on their progress towards the targets.
"What will the result be? A modern, high-performing public service that is more connected, productive, and efficient," Willis said.
'Unsustainable' public service numbers
The layoffs come as New Zealand's number of public servants has become "unsustainable" following a hiring spree during the previous Labour government, according to Willis.
Historically, employees in New Zealand's public service equated to only about one per cent of the population.
But the previous Labour government removed the cap on the number of people employed in government administration, leading to around a 46% surge in the number of workers and service support roles in the public sector.
As a result, public service employees now account for approximately 1.2% of New Zealand's total population.
"That is unsustainable. It is unaffordable and it is out of step with international trends," Willis said.
"Our government has therefore set a goal to get our core public servant numbers back to the historic norm at one per cent of the population."
'Deep, destructive' cuts
The Public Service Association (PSA) slammed the reductions, saying it will result in nearly one in four workers at agencies losing their jobs.
With 10 agencies exempted from the cuts, the PSA said this means 23.4% of jobs in the remaining agencies that employ over 36,000 full-time equivalent workers will be laid off.
"The government's headline number hid the real story of how deep and destructive these cuts will be," said Duane Leo, national secretary of the PSA, in a statement.
"People see it for what it is, the government swinging a wrecking ball through the agencies that keep them safe at work, protect our borders, build our roads, collect our taxes, protect our precious native forests and birds and respond to emergencies."
The PSA said it will hold a midday rally against the cuts on Sunday at the Te Papa forecourt.
"New Zealanders should not trust this government's promise that the exempted agencies are safe. When they find they can't kick 8,700 bodies out the door without services falling over, what happens next? They widen the net. Oranga Tamariki could be next. Corrections could be next," Leo said.
Major government savings ahead
The massive job cuts are part of what the government is calling a "fundamental overhaul" of the public service to improve its services.
The overhaul will also reduce the number of government departments, increase the use of AI and other digital tools, as well as deliver significant savings.
"Over the next four years, these initiatives will deliver savings of $2.4 billion which will be re-deployed to deliver more health services, lift educational outcomes, build infrastructure, and strengthen the defence force and police," Willis said in a statement.
According to the minister, New Zealand suffers from fragmented systems, duplication, and outdated processes in the wake of rising expectations from Kiwis on public services.
"A more connected and digitally enabled public service will improve services, reduce duplication, and deliver better value for taxpayers," she added.
