Public service given deadlines for cost cut plan

Wednesday, 14 February 2024

Public service organisations have been given a series of deadlines to come up with plans to cut costs ahead of Budget Day, with proposals going back and forth with the Government.

Public services have been going through their books line by line, looking at how to meet the Government’s 6.5 or 7.5% cost saving target, with hiring freezes and job cut proposals in full force.

It comes after Prime Minister Christopher Luxon pulled almost 50 of the top public service bosses into a meeting on Monday evening, wanting them to “hear directly from me what, was in my head”, with the public service cuts a part of the meeting.

Asked if he received push back on the cost savings, Luxon said, “no, not at all”.

Luxon said it did not coincide with the cost-cut plan deadline, instead he had always planned to have the meeting.

“There's a series of deadlines and milestones where they're actually submitting draft proposals. We then digest all of that … we look at them individually, we go back and ask them different questions of the ministers and the CEs as a result, and then we'll all be aggregated and put into the Budget in May.

“It's the stuff that needs to happen on a daily basis.”

Finance Minister Nicola Willis said they were going through an “iterative process with public agencies. They’re putting forward proposals, ministers are examining those, we’re going back and forth and you will see final decisions on Budget Day”.

Asked if the deadline for the proposal was in February, Willis said it was ongoing and part of the Budget process.

The meeting was with 48 leaders from the public service leadership team, which is headed by the Public Service Commissioner, and is made up by all Public Service department secretaries and chief executives, and the leaders of organisations such as Waka Kotahi, Ministry for Ethnic Communities and the Police can attend by invite.

“I've always done it in my past life … bringing everybody together so they hear it straight from me,” Luxon said. “I want to talk about the ‘why’ of our government, the ‘what’ and the ‘how’.

Contact Anna Whyte: anna.whyte@stuff.co.nz or @AnnaCwhyte

“We had a bunch of discussions about a whole bunch of topics, but it was more about giving them a sense of where our government is going so that they as the leaders of those large agencies can actually make sure they focus on delivering what the New Zealand people want them to do.”

He said the leaders could ask him about the cost saving targets and talent development at the meeting.

Labour leader Chris Hipkins expected “whilst we might politically disagree with what the government are doing, that the public service will act professionally and implement the policies of the current government”.

Hipkins said they made progress on the consultant and contractor spend until the Covid response.

“I do think we should be aiming for a decrease in consultant and contractor spend, but the approach of the current government to effectively cut funding for staffing will probably result in more consultants and contractors being employed because their work still needs to be done.”