Budget 2026: Labour says women paid for last Budget, public servants will pay for this one
Tuesday, 19 May 2026
Labour’s public service spokesperson says women paid for the last Budget via pay equity changes and this time public servants and their families will pay the price.
Finance Minister Nicola Willis will use a pre-Budget speech today to launch a new wave of public service reform, including slashing the number of Government agencies, driving public servant headcount down and leaning heavily into digitisation and AI adoption, The Post understands.
It’s understood Willis has set a target to drive the public sector workforce down to 1% relative to the New Zealand population. Under the previous Labour Government it grew from a historical average of about 1% to 1.2%
The main union for public servants, the Public Service Association, said in a statement that based on Stats NZ population projections of 5.5 million, up to 10,000 public servants would lose their jobs in a workforce of roughly 55,000.
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Labour Party public service spokesperson Camilla Belich said it sounded like more job cuts were on their way.
“I think it seems like last Budget women paid for Nicola Willis's Budget, and this time public servants and their families are going to be paying for the Government's Budget.”
In that statement she was referring to the pay equity changes introduced as part of Budget 2025.
Belich said the way the finance minister was planning to go about the job cuts was not normal.
“What we're seeing is the Minister of Finance coming in and choosing a figure and saying we are going to, no matter what the impact on New Zealand is, cut public services to that amount.”
Prime Minister Christopher Luxon said the public service had been organised the same way for the last 30 to 40 years.
“It's right and appropriate to take a good look at that and say, could we better organise? The second thing is that there's an opportunity to really leverage technology, all with the primary goal of being able to deliver more effective public services and be much more efficient with taxpayers' dollars.”
Luxon said from his perspective coming outside of politics, no-one had asked the question “why do we have 16 ministers interfacing with an organisation like MBIE? (Ministry of Business, Innovation and Employment)”.
“There's some generally good, legitimate questions that we've got to work through over the long term, but with a view and a vision of actually making sure we deliver better customer service, or better service to the public of New Zealand.”
When senior cabinet minister Chris Bishop was asked by media whether he thought public service cuts would go down well in Wellington electorates, he said Wellingtonians and Hutt Valley residents want a fit for purpose public sector.
“I think most people know that we don't have that at the moment, and the public service is not just there as a job creation scheme for the country, it's there about delivering services, or is there for delivering quality services to New Zealanders.”
Bishop said he valued the role that the public service plays, and was privileged every day to work with extremely high-performing public servants.
Earlier this year Bishop announced announced the new Ministry for Cities, Environment, Regions and Transport (MCERT) which was set to merge a number of ministries.
He said legislation was going through on that today, with the “stand up date” being July 1.