Public service on the cuts, the jobs and the future
Monday, 29 January 2024
Job losses and hiring freezes are in full force as the public service scrambles to find savings to meet Finance Minister Nicola Willis’ deadline for cost-cutting plans.
Ministries and agencies have been given a number – either 6.5% or 7.5% – to slash ahead of the next Budget year. The Post went to each, asking what the cost cuts meant for staff.
Before Christmas, many had hit pause on recruitment. WorkSafe, StatsNZ and the Ministry of Business, Innovation and Employment (MBIE) were among those already looking at job cuts.
StatsNZ confirmed last week 29 job losses, which included two deputy chief executives. MBIE, a key agency in the cost cut proposal firing line during the election, offered voluntary redundancies last Tuesday.
Ministry for Ethnic Communities is gearing up for a change process in February, Tourism has a budget cut of $15 million from July 2026, Trade and Enterprise had a reduction of 10% of its global workforce – 71 roles.
Even organisations such as the Security Intelligence Service (NZSIS) and the GCSB are included in the saving expectations.
A Treasury spokesperson said if an agency’s staff numbers had increased by more than 50% since 2017, they were allocated the higher savings target of 7.5%.
Deputy Public Service Commissioner Heather Baggott sent a letter to chief executives on December 21 setting out the Government’s expectations.
Labour’s public service spokesperson Ayesha Verrall said the cuts, plus the wider government programme, were “very worrying for Wellington”.
“We have not only the economic impact of job losses, but the costs on households on Wellington, including the likely impact of cancellation of water reforms.”
Public Service Association assistant secretary Fleur Fitzsimons, who ran for Labour at the previous election, described the cuts as a “blunt tool”, with job losses in the public sector having a “devastating impact that will be felt for years to come”.
“We cannot lose the very public servants who can help respond to the challenges of climate change, an ageing population and our infrastructure crisis.”
Willis said the savings would fund the Government’s “policy commitments and critical cost pressures”.
She accused the previous government of massively increasing expenditure “without improving outcomes for New Zealanders”.
Some agencies, such as education, health and police, were expected to reinvest their savings into frontline services, Willis said.
ACT leader David Seymour said nearly every frontline service faced cost pressures. “To the extent that we can reduce that core public service and pay more for the people that directly engage with the citizens, that's got to be a good thing.”
Responses from agencies with 7.5% savings targets
Ministry for Disabled people: “There has been no job cuts or proposed job cuts.”
MBIE: Chief People Officer Jennifer Nathan said there a limited voluntary redundancy process for staff. “We do not have a target for the uptake of this process as it is voluntary. Where a stop work notice has been received, we are working through the implications of stop work notices with individual staff.”
Stats NZ: Chief Executive Mark Sowden said restructuring had resulted in 29 job losses. “There is a total of 46 roles being disestablished, however, there are 17 roles available where our people can be reassigned or enter a closed contestable recruitment process.”
Ministry of Transport: “Currently undertaking work to give effect to the Government’s expectations for reducing expenditure. No specific options or actions have been agreed on at this time.”
Ministry of Housing and Urban Development: “HUD is focused on having the right capability to deliver its priorities and it continues to carefully consider its vacancies and fill critical roles where needed.”
Ministry for Culture and Heritage: Chief executive Leauanae Laulu Mac Leauanae said two roles were reduced after an initial change proposal, and a second phase “may include further reshaping and resizing the Ministry to fit within our budget”.
Ministry for Pacific Peoples: “No decisions about organisational restructures or redundancies have been made, or whole-of-staff communications sent.”
Ministry for Primary Industries: “No communication has been sent to staff or voluntary redundancies offered.”
Ministry for the Environment: Structural changes in December reduced the number of senior management positions by 25%. “We are still working through an exercise to reset our priorities and budgets in line with the new Government’s work programme and savings targets.”
Ministry for Women: “Has not sent any communication or undertaken any programmes of work relating to redundancies.”
Ministry of Defence: “Has not issued any communications to staff about potential redundancies or organisational restructures, nor have any processes been initiated.”
Ministry of Education: The Post reported in mid-November MoE had paused the majority of recruitment, halting the hire of almost 160 jobs.
Education Secretary Iona Holsted also sent a message to staff last year and could not “rule out organisation changes in the future”.
Corporate leader Zoe Griffiths said there had been no job cuts in relation to the savings requirements.
Responses from agencies with 6.5% savings targets
Department of Conservation: DOC “has a programme of work in place to address cost pressures and identify where savings can be found, however no decisions have yet been made”, Acting Deputy Director-General Organisation Support Kevin Martin said.
Department of the Prime Minister and Cabinet: “We have not made job cuts, do not currently have proposals for job cuts, and have not offered voluntary redundancies to staff.”
Education Review Office: No job cuts or voluntary redundancies offered.
Inland Revenue: No job cuts, or proposed job cuts and no voluntary redundancies.
Ministry of Justice: “The Ministry is not currently consulting on any proposals to reduce roles, nor have voluntary redundancies been offered to staff.”
Police: “Has not sent any communications to staff as a whole regarding redundancies or organisational restructures.“
Corrections: A spokesperson said final decisions on organisational changes organisational were made in August last year and they would be moving to the new structure in April.
Land Information New Zealand: No offer of voluntary redundancies to staff or proposals to disestablish roles or change our structure as part of the savings.
Ministry of Foreign Affairs and Trade: “The Ministry is working with the Minister of Foreign Affairs on the Budget 2024 process.”
Ministry of Health: Ongoing organisational restructure from Health NZ.
Te Puni Kōkiri (Māori wellbeing and development): - “We have not sent any all-kaimahi communications about potential redundancies or organisational restructures. Te Puni Kōkiri is not currently implementing any formal change processes.”
Ministry of Social Development: No redundancies and no plans “at this stage” for voluntary redundancies. More than 1000 fixed term roles were created during Covid, which will end over the next two years as funding finishes.
Oranga Tamariki - Ministry for Children: “No organisation-wide communication regarding redundancies or restructures.”
Treasury: “We do not currently have any redundancies planned, nor have voluntary redundancies been offered to staff.”
Department of Internal Affairs: “It’s too early to talk about redundancies and restructures, and voluntary redundancies are not currently being offered to staff.”
The Defence Force, Executive Board for the Elimination of Family Violence and Sexual Violence, Parliamentary Counsel Office, Parliamentary Service, Office of the Clerk and Te Arawhiti – Office for Māori Crown Relations are also included in the 6.5% savings band.
Other organisational responses, not included in Treasury’s list of cost savings:
Te Tari Mātāwaka | Ministry for Ethnic Communities: “We are not able to comment on redundancies as we have not yet commenced any restructuring or change process and therefore no decisions have yet been made. However we can confirm that we advised all staff yesterday that we will be commencing a change/consultation process in February.”
Toi Hau Tāngata | Social Wellbeing Agency: “No plans have been finalised at this stage nor have we communicated to staff on any 2024/25 budget requirements yet.”
Toka Tū Ake | Earthquake Commission: Chief Executive Tina Mitchell: “Toka Tū Ake EQC has not implemented any job cuts or voluntary redundancies. Like many organisations, we continue to review our operating budgets to ensure we're delivering best value for levy payers and New Zealand.”
Manaakitanga Aotearoa | Tourism New Zealand: “Tourism New Zealand’s confirmed budget reduction of $15 million will begin in July 2026. Impacts on staffing levels have not been considered at this time.”
Te Taurapa Tūhono | New Zealand Trade and Enterprise: “In September 2023, NZTE announced a series of proposed changes to meet the changing needs of our export customers and to fit within a new, lower budget from July 1, 2024. These changes included a reduction of 71 roles, or approximately 10% of NZTE’s global workforce.”
Waka Kotahi | New Zealand Transport Agency: “NZ Transport Agency Waka Kotahi is working closely with our monitoring agency, the Ministry of Transport, to give effect to the Government’s expectations and directions for reducing our expenditure. We are providing regular internal communications to our staff about the potential impact on our work programmes and staffing levels. Voluntary redundancies have not been offered to staff.”
Kāinga Ora: “Since its establishment in late 2019, Kāinga Ora has continued to undergo change and introduce new programmes and systems to help drive increased productivity, enhance efficiency while reducing costs.
“The work to identify potential savings as directed by the Government, while maintaining the delivery of our core functions and services, is a continuation of the approach we’ve had under way for some time.”
Tertiary Education Commission: TEC Chief Executive Tim Fowler said they are working with the Ministry of Education “around the contribution we will make to the savings target”.
ACC: ACC Deputy Chief Executive, People and Culture, Michael Frampton, said they are “committed to operating efficiently and effectively, while continuing to make a positive difference for New Zealanders”. “We’re constantly reviewing opportunities to ensure we deliver on that commitment.”
Aroturuki Tamariki - the Independent Children’s Monitor: “There has been no communication with staff on potential redundancies or restructures and there have been no job cuts. We are however holding two vacancies.”
Ministry of Defence: “The Ministry of Defence has not issued any communications to staff about potential redundancies or organisational restructures, nor have any processes been initiated.”