Public Service Minister, Paul Goldsmith, says a fundamental overhaul of the public service will help to improve services, lift productivity and deliver better value for money.
The overhaul will reduce the number of government departments, increase the use of AI and other digital tools, and deliver significant savings, said the Minister.
“Between 2017 and 2023, the size of the public service expanded from approximately 47,000 people to more than 65,000. That growth rate was nearly three times faster than the overall labour force, while back-office and support functions grew significantly faster than frontline service delivery roles,” said Mr Goldsmith.
“Some of that growth was necessary during the Covid pandemic, but over the long-term New Zealand cannot sustain administrative growth outpacing the productive economy.
“This overhaul is about ensuring more resources reach frontline services and fewer are tied up in duplication and administration.”
Historically, core public service numbers have been equivalent to about 1% of the population. Between 2017 and 2023 those numbers ballooned out to about 1.2% of the population.
As part of the overhaul programme, the Government says it will restore public service numbers to the historic norm by mid 2029 – an in-principle target of about 55,000 public servants.
“Reductions will be achieved progressively over several years through digitisation, mergers, simplification of systems and processes and natural attrition,” said Mr Goldsmith.
As part of the plan, the Government is putting a sinking lid on agencies’ operating budgets to drive progress on three key goals, said Finance Minister, Nicola Willis.
“Those goals are streamlining the number of government agencies and entities, digitising customer-facing and back-office government functions, and restoring public service numbers to historic norms,” said Ms Willis.
“Over the next four years these initiatives will deliver savings of $2.4 billion which will be re-deployed to deliver more health services, lift educational outcomes, build infrastructure and strengthen the defence force and police.
“New Zealanders expect public services that are responsive, effective and easy to use, but too often people and businesses are still navigating fragmented systems, duplication and outdated processes.
“A more connected and digitally enabled public service will improve services, reduce duplication, and deliver better value for taxpayers.”
Mr Goldsmith said the changes will apply to the core public service only, and won’t include police, defence personnel, teachers, doctors, nurse or other Health New Zealand staff.
“This is about ensuring the public service is modern, focused, productive and financially sustainable over the long-term, with a core focus on frontline delivery,” he said.
“Progress will be monitored regularly, with agencies expected to demonstrate improvements in productivity, delivery and value for money.”
“Every dollar saved through fixing duplication and inefficiency is a dollar that can be redirected toward improving productivity, supporting growth, and improving New Zealand’s long-term economic resilience,” Ms Willis says.
The Public Service Association was quick to slam the plan, saying it would decimate services New Zealanders rely on around the country.
“[Nicola] Willis talks about using digitisation and AI as a justification for sacking thousands of workers. AI will not fill the gap. Just ask the experts. We need an AI strategy that maximises the benefits and prevents negative impacts for workers and the public. Linking AI to an arbitrary headcount target does exactly the opposite – it turns technology into a threat rather than a tool,” said PSA National Secretary, Duane Leo.
“Department mergers are a recipe for more chaos. Every restructure costs money, drives experienced people out the door, and grinds critical work to a halt for years.
“New Zealanders deserve to know before the election, not after – which services will be cut? Which communities will be worse off? If the Government is so confident this is the right path, it should tell voters exactly what it means for them. Show us the evidence,” he said.
