The Government has unveiled a sweeping overhaul of the public service aimed at cutting bureaucracy, reducing staff numbers and trimming what ministers describe as years of unchecked growth across Wellington agencies ahead of the 2026 election.
Finance Minister Nicola Willis and Public Service Minister Paul Goldsmith announced the reforms on Monday, saying the shake-up would streamline departments, expand the use of artificial intelligence and digital systems, and return public service staffing levels closer to historic norms.
The Government says the programme will save $2.4 billion over four years, with the money redirected into frontline services including healthcare, education, infrastructure, police and defence.
“We will be tracking progress towards a numerical target of no more than 55,000 full-time equivalent public service employees by July 2029. That’s 8700 fewer than were employed in December last year,” Willis told RNZ.
The announcement signals a major political line heading into next year’s election, with ministers arguing the public sector has become bloated and overly focused on administration rather than delivery.
Paul Goldsmith said the size of the public service had grown from around 47,000 workers in 2017 to more than 65,000 by 2023 — growth he said far outpaced the wider labour force.
“New Zealanders expect a public service that grows smarter, not simply larger,” Goldsmith said.
He said back-office and support functions had expanded significantly faster than frontline roles, creating duplication and inefficiency across government.
Under the plan, core public service numbers would gradually be reduced to about 55,000 staff by 2029 through agency mergers, digitisation, system simplification and natural attrition.
Ministers stressed the cuts would not apply to teachers, nurses, doctors, police or defence personnel.
Nicola Willis said parts of the public sector remained locked in outdated systems while households and businesses were increasingly embracing AI and automation.
“That is not acceptable or sustainable,” she said.
The Government says agencies will face tighter operating budgets and will be expected to demonstrate measurable improvements in productivity and service delivery.
