Cabinet papers suggest more than 11,000 jobs may go to meet the Government’s 55,000-FTE cap
Government department heads in New Zealand have been instructed to prepare options for shrinking their workforces by 15%, The Post has reported.
The Public Service Commission (PSC) has given chief executives until mid-November to submit their proposals, according to The Post, placing the deadline in the middle of the election campaign, weeks before polling day.
The commission framed the exercise as groundwork for whichever government takes office after the vote, so it can weigh the options and their consequences if it decides to keep the existing headcount target.
Agency bosses were asked for broad, indicative scenarios showing how each department could take an equal and proportionate share of the reductions, The Post said.
The PSC said it was not asking agencies to make decisions yet, and that processes would need to be set up if the next government kept the target. The commission also declined to release its email to chief executives, saying the matter was still under consideration, according to The Post.
Return to historical norms
The request follows the Government's target, unveiled in May, to cap the core public service at 55,000 full-time equivalent (FTE) positions by mid-2029.
Finance Minister Nicola Willis announced the target in her pre-Budget speech, saying it would bring public servant numbers back to the historical norm of about one per cent of the population, HRD previously reported. Public service employees then accounted for about 1.2% of the population, a level Willis described as "unsustainable."
Based on the end-of-June workforce of 63,912 FTEs, reaching the cap would mean shedding 8,912 roles, or around 14%, The Post reported. Health New Zealand, the police and the Defence Force sit outside the target.
The Government has said the overhaul, including greater use of AI and digital tools, would deliver $2.4 billion in savings over four years. Willis said in May that reductions would come through natural attrition, removing duplication and streamlining back-office functions.
But Cabinet papers cited by The Post indicate the real figure could be higher. Roughly 2,400 new roles created through Budget spending decisions over two years would also have to be offset, pushing the number of existing positions to be cut beyond 11,000, The Post reported.
The same papers warned that efficiency gains from AI and digital technology could be slow to arrive, and that a tight cap might lead agencies to bring in more contractors and consultants.
Wellington would be particularly hard-hit. The capital is home to 41.2% of public servants, according to PSC figures cited by The Post, meaning about 3,700 jobs there could be at risk if reductions were spread proportionally across the country.
Public Service Minister Paul Goldsmith had been told about the request, a spokesperson said, according to The Post, adding that any decisions would be made by the incoming government.
New Zealand will hold its 2026 general election on 7 November.
