WELLINGTON (Reuters) - New Zealand’s Ministry of Education announced on Wednesday it planned to cut about 12% of its workforce as widespread layoffs are announced in the public sector in an effort to reduce spending and curtail debt.
The conservative coalition government, elected in October, has asked ministries and departments such as health, conservation and business to make savings of between 6.5% and 7.5% as it attempts to reduce spending on public services by around NZ$1.5 billion ($885.90 million).
At the same time government-owned entities such as research institute Callaghan Innovation are cutting staff numbers to offset falling revenue
Education chief executive Iona Holsted said in an email to staff on Wednesday that to meet the savings required by the government it proposed cutting 565 fulltime equivalent jobs at the Ministry of Education. She said 225 are currently vacant.
“We will need to reduce our work in some areas and remove as much duplication as we can across our functions,” Holsted said.
More than 2,000 public service or government entity roles have been earmarked to go and further proposed layoffs are expected.
Under New Zealand law a proposed restructure or redundancies must be consulted on before a final decision can be announced.
The government says that the public sector, which has grown by nearly 20% since the start of the COVID-19 pandemic, is inefficient but has promised frontline staff such as police and teachers will not be impacted.
Supporters of the public service argue a larger public service is needed to meet the demands of a growing population and previous under-spending.
The government's request to reduce operating costs is part of wider cuts being made as the government struggles with falling tax revenue, increased debt and fulfilling costly elections promises including reducing personal income tax.
New Zealand’s Finance Minister Nicola Willis last month said that it was very unlikely that government accounts would move into surplus by 2026-27 and even reaching a surplus the following year is not a given.
($1 = 1.6932 New Zealand dollars)
(Reporting by Lucy Craymer; Editing by Michael Perry)
