6 Apr 2024

Wellington hospitality sector braces for 'triple-whammy' as public service shrinks

8:53 pm on 6 April 2024
National Party election campaign trail. At The Neighbourhood cafe in Lower Hutt on 12 September 2023.

Christopher Luxon and Chris Bishop at The Neighbourhood cafe in Lower Hutt on 12 September, 2023. Photo: RNZ / Samuel Rillstone

The hospitality sector in Wellington says it is looking at a challenging few months ahead, as hundreds of public service jobs are set to be cut.

Ministries and agencies are looking to axe jobs to meet the government's demand to trim budgets, and most of those will be in the capital.

Hospitality New Zealand chief executive Steve Armitage says Wellington bars and restaurants are already dealing with various pressures, including the cost-of-living crisis.

"In addition we're heading into winter months, which traditionally are quite a bit quieter, so the impacts of what we're hearing in terms of the cuts around, you know, ministries and government departments, are yet to be seen.

"And you throw in that employment uncertainty and effectively, we have a bit of a triple-whammy to deal with."

Finance Minister Nicola Willis has directed ministries and agencies to slash expenditure by either 6.5 percent or 7.5 percent to help reduce annual public service spending by $1.5 billion.

Armitage said his association has been getting fairly consistent reports from its Wellington members that trading is already down.

"The day-to-day trade is certainly expected to get a little bit tougher over the next few months. And hopefully, you know, businesses have been able to bank a little bit over the summer period in the way that they usually do to help tide them through the winter season."

As of now, at least 845 job losses have been signalled, according to figures made public by ministries and the Public Service Association.

Minister of Employment Louise Upston earlier this week said job losses in the public sector were "unfortunate", but the government had to ensure agencies were exercising restraint.

At the same time as cutting its workforce, the government was planning to bring back targets for the public service.

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