Government departments will have to find a way to maintain services on flat or declining budgets, according to Finance Minister Bill English.
Mr English told Nine to Noon that public service heads need to change their ways after several years of big budget increases of 7% to 8% per year.
He said they cannot keep growing at that rate when economic growth is zero and they will have to be better or smarter in future.
The Public Service Association says this is a very bad trend. National secretary Richard Wagstaff says it is unrealistic to maintain services under a freeze, let alone a cut.
