Public sector cuts ignite election fight
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What public sector cuts were announced by the government?
Hi, I'm Amanda Gillies and today on The Detail, the future of our so-called bloated and tech-phobic public service. This week the government announced it's taking an axe to it with nearly 9,000 jobs set to go. The government wants to slash public service jobs by about 14% over the next three years. In a shake-up it says it will deliver $2.4 billion of savings.
Nicola Willis is setting a target to get the public service back down to 1% of the general population. That brings the total down to 55,000 and amounts to 8,700 jobs gone across the country.
Public service is not a make-work function. It's not here just to maintain jobs and maintain a position of how it was always run since 1995 in the same way. We have to constantly evolve the public service to make sure it's on point and it's delivering for New Zealanders.
It all comes down to three goals outlined by the Finance Minister.
First, we've got too many ministries and departments. Depending how you count it, there's around 42. In a country like Finland, it's more like 12. So we need to amalgamate agencies. Number two, we need to join the digitisation and AI revolution.
How will the public service cuts affect employment in New Zealand?
Our government needs to get into 2026 and prepare for 2036. And too many of our systems are old-fashioned. And number three, Actually, public servant numbers got so out of whack under Labour, they leapt from about 1% of the working population to 1.2%. We want to bring it back down to 1%, so we're going to set a target for that reduction to be achieved by 2029.
The ACT Party is elated, saying it's long overdue.
The ACT Party certainly would have done this faster and harder, but we're very happy with where we get to, which is 1% of the population in the public service. We think we can live with that.
But opposition parties are furious. The Labour Party says plans by the government to reduce public sector jobs will affect people's livelihoods and the services they use.
These are real people with homes and mortgages and families that are going to lose their jobs. That's fewer people out in the community spending money. The private sector will feel the impact of this just as much as the public sector will. It seems as though the government's approach is kind of government GPT, as opposed to, again, dealing with the issues that New Zealanders are actually facing here.
So, to make sense of it all, today I chat with Newsroom Pro's managing editor, Jonathan Milne, who was at Nationals' announcement.
What are the three goals outlined by the Finance Minister?
He explains why Willis came out swinging.
Nicola Willis, by her own measure, didn't achieve the public service cuts that she wanted to in 2024. By her own metrics, that was probably a bit of a fail. So this time around, she's having a second go. And she does believe that this is an election winner.
Just how significant are these proposed cuts? And I want to also know where they sort of sit historically in our public sector.
OK, well, what you've seen over many years is that traditionally Labour will bulk up the public sector, as you'd expect, because, you know, Labour is a social democratic party that believes in bigger government and providing more government services. National, by contrast, will tend to outsource public services and shrink the core. What that means is that sometimes you'll have... layoffs or attrition from the core government departments while they rely more on consultants. What this national government has done a little bit different, or quite a lot different, is they've not just focused on shrinking the core government departments, the actual sort of employees on staff, they've also cut the consultants and contractors back.
And that, I suspect, has probably been the biggest contributor to departments making their 6% to 7% cuts to their baselines in 2024. Not actual staff cuts, but cutting back on the contractors and consultants. The government has, to their credit, done that far more successfully than I think anyone really expected.
How do opposition parties react to the proposed public sector cuts?
What hasn't been so successful for them, if you regard layoffs as a success, what hasn't worked for them so well has been reducing the headcount of the core public service.
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Chapters
8 chapters
1
What public sector cuts were announced by the government?
0:03–1:20
2
How will the public service cuts affect employment in New Zealand?
1:20–2:36
3
What are the three goals outlined by the Finance Minister?
2:36–4:03
4
How do opposition parties react to the proposed public sector cuts?
4:03–5:27
5
What historical context is provided regarding public sector employment trends?
5:27–6:41
6
Who will be most impacted by the job cuts in the public sector?
6:41–7:38
7
What are the implications of these cuts for frontline services?
7:38–8:29
8
What is the expected financial impact of the cuts on the government's budget?
8:29–22:09