Finance Minister Nicola Willis has announced the billion-dollar public service savings target has been met, despite a few agencies not reaching their goals.
The Coalition Government directed public services to cut costs by between 6.5 and 7.5 percent to help reduce annual public service spending by $1.5 billion. It has resulted in over 4000 jobs being cut across the sector; this includes some vacant roles.
However, certain agencies were excluded from overall spending reductions by having their savings reinvested from the back office to the frontline. These agencies include the Ministry of Health, the Ministry of Education, Police, Oranga Tamariki and the Defence Force.
National said it is trying to restore "financial discipline" with its cuts to the public service after the number of staff ballooned under the previous Labour Government.
Since Labour came to power in 2017, the number of public servants has increased by roughly one-third, up just under 18,500 to a total of 65,699 full-time equivalent staff at the end of 2023.
During her first pre-Budget speech in Upper Hutt on Thursday, Willis confirmed the Government has met that savings target.
"It's taken a lot of work to get there. We set every government agency its own target and tasked chief executives with putting forward proposals they thought made sense and that could be delivered without compromising quality public services," Willis said.
"We then reviewed their proposals line by line. We said no to several of them. In other cases, agencies who went line by line through their programmes were able to uncover even greater opportunities for savings than we'd initially targeted.
"The end result is that our Budget will deliver durable savings from government departments, delivered through reductions in back office costs, less money for consultants, and decisions to stop go-nowhere policies and well-intended but ultimately lower-value programmes."
Willis thanked the public servants who made the savings work possible.
"I have been struck by the professionalism and integrity of the men and women who've gone about finding savings across their agencies. New Zealanders should know many of the people who serve you wholeheartedly share your impatience to see better results for the taxpayer dollar," she said.
Speaking to reporters after her speech, Willis said there are a "few agencies" that have not met their saving targets "for good reason". An example she gave was the NZ Police, which found reaching its savings goal would potentially make changes that would undermine its frontline service provision.
Whaikaha Ministry of Disabled People also did not reach its savings targets, Willis said.
"At the same time, there are other agencies that went above and beyond their target. So, what that means is there are some unders, there are some overs, all together it adds up. We will deliver the savings as promised," Willis said.
She would not go into more detail about what agencies did and did not reach their targets – as that will be revealed in Budget 2024 in three weeks' time.
