Nearly 9000 public sector jobs to go, government agencies to merge, Nicola Willis announces

New Zealand’s government will slash around 8,700 public sector jobs—14% of the current workforce—by mid-2029, aiming to reduce the total number of full-time equivalent employees from over 63,000 to 55,000. Finance Minister Nicola Willis outlined the plan in a pre-Budget speech on Tuesday, citing outdated systems and inefficiencies that hinder service delivery. The reforms focus on merging government departments, increasing AI and digital tool adoption, and capping agency budgets for four years to drive productivity gains. Willis stated that current back-office processes resemble ‘an eighties relic,’ with slow bureaucratic systems prioritizing paperwork over outcomes. Savings of $2.4 billion will be redirected to healthcare, education, infrastructure, and defense forces. Public Service Minister Paul Goldsmith clarified the cuts will exclude teachers, doctors, nurses, police, and defense personnel, targeting only core public service roles. Progress will be monitored through improved delivery, efficiency, and value for money metrics. Prime Minister Christopher Luxon supported the changes, noting opportunities to leverage technology for better taxpayer value. He cited Singapore and Malaysia as examples of countries successfully integrating AI into public services, while criticizing New Zealand’s fragmented systems and duplicated functions. The government will assess mergers on a case-by-case basis, focusing on eliminating redundant IT and administrative services. Willis emphasized the need for public services to meet modern expectations, warning that current inefficiencies risk failing New Zealanders by 2036.