How not to fire 8700 people

Friday, 22 May 2026

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OPINION: Nicola Willis is not the kind of politician who reflexively beats up on the public service.

As a Wellingtonian who heads up an agency stuffed with some very talented people, she will know many senior public servants, and may even call some of them friends. It is public servants who write her Budget for her, public servants who drafted the changes to pay equity legislation last year, public servants who present her with sober analysis of what her colleagues are pushing her to approve.

So it is surprising that Willis did such a poor job this week of telling these public servants that they all could lose their jobs.

In a speech to an Auckland business audience on Tuesday, Willis revealed that she would reduce the overall headcount in the core public service by 8700 roles by mid-2029. These reductions would come in part through fairly eye-watering cuts to the baseline operating allowances of each department (a cumulative 12% over three years, in an environment of sustained inflation), but also through greater use of AI and amalgamations of agencies. (I had a look at exactly which agencies and roles could be put under the knife here.)

There was immediate and understandable confusion. The press release accompanying the speech had specified that a list of agencies, including some very large ones, were exempt from the operating allowance cuts. Many - including the public service union - assumed this meant they would also be exempt from the job cuts but as Willis explained in a press conference this was not in fact the case, as she wanted them to trim jobs too. The union went away and predicted how the cuts would fall at the agencies left off, leading Willis to call them “hysterical” and “misleading”. Obviously the union should have got their facts right, but more clarity could also have been offered up front.

Willis had also failed to note that the Ministry of Foreign Affairs and Trade (Mfat) had been excluded from the first year of cuts, a fact only elucidated the next day in Question Time. Foreign Affairs Minister Winston Peters, long a protector of Mfat and also currently a necessary component of Willis remaining Finance Minister through 2029, said he wouldn’t allow the cuts to his agency at all.

And the plan to see far greater use of AI seems remarkably undercooked, with no money allocated directly for AI training or usage yet (it can get expensive!). I asked Public Service Minister Paul Goldsmith a list of questions about the AI plan, including whether he had set aside money for tokens, or indeed goals for token usage, something a lot of tech companies have rolled out to encourage employee AI use. His entire answer was: “These are details we will work through as we establish how this will be operationalised across the sector.”

Whenever challenged on what public servants might make of this, Willis noted there were many “smart cookies” in the system who wanted to work more efficiently. There probably are! But those same “smart cookies” would probably have also appreciated a straight explanation of what was happening to their roles, perhaps one delivered in Wellington. National might not see itself winning many voters within the public service these days, but that’s no reason not to treat the people whose lives and mortgages you are upending with some respect.

Do MPs really want fewer information professionals?

Which isn’t to say there is no case for some level of public sector reform, including some that might lower overall headcount. There was strong growth over the last Government in public servant numbers, and while many of them were front-line, many had the nebulous title of “information professionals” - indeed there are now 8700 of them across the public sector.

These jobs wrangling numbers and whatnot seem to be at some of the greatest risk from AI. But because of something called “Jevon’s Paradox” - which basically holds that making something more efficient to use just makes you use more of it - it’s not clear that these jobs will necessarily go. Someone will need to train the AI, wrangle it, and verify the figures it spits out, even if it is spitting out a level of data previously unimagined.

And politicians adore data. This Government in particular is obsessed with targets and dashboards and the like, but the last Government was very interested in them too, and Opposition MPs of all ilk are always looking for more data than agencies have the ability to provide at select committees. (Journalists and general civil society love data too.) So is it really realistic that these roles will be scarce in three years’ time?

There are of course other methods one could take to cut down on duplication, such as centralised ICT and HR, or combining a few small ministries. But getting all the way to 8700 will be an incredibly tall order - especially if you assume that the 640 or so new Corrections staffers the Government has added every year keep getting hired. Treasury’s boffins appear to have taken Willis’ word for it and allowed her to book these savings into the forecasts - in three years’ time we’ll know if they were right to.

Number of the week:

$24b- How much it would cost the Government to buy back BNZ according to some analysts, as NZ First pushed for this week. Winston Peters thinks it will be a lot cheaper.

Bye bye Bellamys

Bellamys, the ritzy restaurant inside Parliament, is closing to the public and will now operate only on sitting nights, seemingly with a cut-down menu. Parliamentary Services told The Post all of the venues in Parliament had to wash their own face and a public-facing Bellamys was not doing that. It will now be looked after by the same kitchen team as the rest of Parliament’s hospitality venues (a cafe, bar, and ad hoc service for all the events hosted in Parliament). The space will still be available on non-sitting nights for private functions.

Kudos of the week:

Labour’s Barbara Edmonds did that rare thing in Question Time and actually asked a question that elucidated new information - specifically, that Mfat had been spared the first round of cost-cutting. Bravo. Now if only she could tell us a bit more about what’s in her Future Fund.

Question-time psychodrama of the week

Just how many insults can you slip in for the last Government during an answer? Speaker Gerry Brownlee has been trying to crack down on this but David Seymour was having none of it as he acted for the prime minister on Wednesday afternoon, starting one answer to Chris Hipkins with “I’ll tell you what, if that member got artificial intelligence, it wouldn’t be replacing anything—” before the speaker rapidly cut him down.

Stretch of the week

Nicola Willis managed to lead both news bulletins on Thursday night with an unfortunate quote about people in state housing having “effectively won the Lotto”. Her point related to the Government’s plans today to cut support to people already in state housing and use the money to help other needy people in private rentals, but that got somewhat lost. She has now apologised and said it was the wrong metaphor.

Quote of the week

'I'd like to have 10 of my own, and then I can get on with the job” - Winston Peters explains how many ministries he needs.

Comings and goings

A few big appointments this week. NZTE head Peter Chrisp has been appointed as the new head of DOC. Raveen Jaduram is the new chair of the troubled FENZ. And former minister and deputy Labour leader Kelvin Davis has been appointed as a member of the Māori Education Ministerial Advisory Group.

The week ahead

The Budget is on Thursday. Before that, expect some pre-budget announcements over the weekend, another scene setting speech or two, and some more to shake out about how these public servant cuts might go.