Expert warns Government’s public sector cuts and AI plans could create ‘economic shock’, ‘biased’ policy

New Zealand’s Finance Minister Nicola Willis unveiled plans to slash 8,700 public sector jobs by mid-2029, streamline government departments, and expand AI and digital tools to deliver cost savings. The overhaul, announced this week, aims to modernize public services but has drawn criticism from AI expert Dr Elham Bahmanteymouri, a senior lecturer at the University of Auckland. Bahmanteymouri warned the government’s approach lacks transparency, risking economic instability and job insecurity. She argued the cuts could push unemployment higher and create uncertainty, despite potential productivity gains from AI. Bahmanteymouri emphasized the lack of detail in the government’s plan, calling it a source of ‘panic or discomfort’ for workers. She questioned the logic of prioritizing GDP growth over job security, noting that AI cannot replace human oversight and may introduce biases in policymaking. The expert also raised concerns about data privacy and integrity, given the public sector’s reliance on historical data for AI-driven decisions. Willis’ office confirmed the government uses Microsoft Copilot for tasks like report writing, acknowledging the tool’s limitations. Bahmanteymouri, who has studied AI since 2019, cautioned that integrating AI into public services will face significant challenges, including technical hurdles and ethical risks. She described much of the discussion around AI adoption as ‘rhetoric rather than realistic,’ stressing the need for careful implementation. The debate highlights tensions between efficiency-driven reforms and the human costs of automation. While AI may streamline bureaucratic processes, critics argue its use in policy could perpetuate past errors or compromise fairness. Bahmanteymouri urged clearer communication and safeguards to mitigate unintended consequences, as the government moves forward with its digital transformation.