Public service cuts ‘huge blow’ to regions - Labour MP

Monday, 25 May 2026

About 8700 jobs are set to be lost from the public service, saving the government about $2.4 billion over three years. (File photo)

About 8700 jobs are set to be lost from the public service over the next three years, and the impact will likely be felt beyond Wellington.

Ahead of Budget 2026, Finance Minister Nicola Willis announced the government’s plan to slash the public service workforce over the next three years.

About 8700 jobs would go, trimming the workforce by about 14% to 55,000 by 2029 — representing 1% of the country’s population.

The move was estimated to deliver $2.4 billion in savings.

The government had already ruled out job cuts that would impact teachers, doctors, nurses, other Health New Zealand staff, police or defence personnel.

Finance Minister Nicola Willis at her pre-Budget speech to Business North Harbour, on Auckland's North Shore, on May 19 where she announced the public service cuts. (File photo)

But the public service also included a range of other roles, such as case managers, prison officers, park rangers and social workers.

While the majority of public servants lived in Wellington (about 43%), workers in the regions could also be in the firing line.

One which could feel the brunt of the cuts was Manawatū-Whanganui.

As of the end of June 2025, 2357 people in the region were employed by the public service, which was about 3.8% of the total head count.

Labour MP for Palmerston North Tangi Utikere says the public service cuts will be a “huge blow” for his community. (File photo)

Tangi Utikere, Labour MP for Palmerston North, said the intention to cut public service numbers was a “huge blow” for public servants, their families and the economy in his constituency.

“Our local workforce has a significant cohort of employees from the public service, so these cuts will be felt directly within our community,” he said.

“At a time when the government has promised to make things better for people, these cuts are just another example of the government having its priorities wrong and are only going to make things worse, leaving families struggling, uncertain and unsupported.”

The number of public sector employees in other regions varied.

In Southland, 658 people were employed in full-time roles, while Nelson, Tasman and Marlborough had a combined total of 711 public service workers.

Taranaki Chamber of Commerce chief executive Arun Chaudhari says while it’s too early to tell the true impact of the cuts on the region, they will have some effect. (File photo)

In Taranaki, 462 were employed by the public service.

In the wake of the finance minister’s announcement, Taranaki Chamber of Commerce chief executive Arun Chaudhari said it was too soon to say what the direct impact would be for the region.

But he expected the ripple effects of the proposed public service job cuts would be felt in some way.

Chaudhari said the region had already faced widespread job loss in the private sector, specifically in the oil and gas industry.

While he said any job loss was “regrettable” it also provided a chance for both businesses and the government to redefine how they intended to meet their goals.

Along with cutting the public service headcount, a merger of departments had been signalled along with a greater use of AI.

The need for improved efficiency and productivity in the public service was flagged in the 2025 State of the Public Service report.

Within it, Public Service Commissioner Sir Brian Roche highlighted a series of issues, including the “fragmented and siloed” nature of the system, its slow uptake of technology and ongoing fiscal pressures.

Meanwhile, the full details of Budget 2026 would be revealed on May 28.