AUCKLAND: New Zealand expects significant savings from an overhaul of its public service, which will eliminate about 8,700 jobs, merge some government departments and extend the use of artificial intelligence (AI).
Over the next four years these initiatives will deliver savings of NZ$2.4bil, Finance Minister Nicola Willis said yesterday in Auckland.
The government will use projected savings to help finance new spending measures due to be unveiled in next week’s budget.
Last week, Willis confirmed the government has allocated itself just NZ$2.1bil for initiatives with the rest needing to come from savings or new revenue streams.
Since coming to power in 2023, the centre-right government has trimmed costs and reprioritised existing spending in order to afford any initiatives.
That has included reviews of back-office systems and reducing the use of consultants by government departments.
But with an up-coming election schedule for November, Willis has identified the need to do more as weak economic growth curbs revenue and forces her to eke out further savings to avoid a budget blowout.
“We’ve fixed up the basics, but so much more is needed to achieve the modern, efficient and productive public services Kiwis expect,” she said.
“In too many parts, the back-office of government still looks like an eighties relic, run on old-fashioned systems, with slow bureaucratic processes that are too often about box-ticking rather than improving outcomes.”
The government has set three key goals and set a sinking lid on government agencies’ operating budgets in order to guarantee progress, Willis said.
The budget reduces most agencies’ operating budgets by 2% in the coming year, followed by a further 5% in each of the following two years.
It plans to restore public sector staffing to around 1% of the population by 2029 from 1.2% now, she said. — Bloomberg
