27 May 2024

Ahead of Budget, Nicola Willis refuses to rule out further public sector cuts

5:53 pm on 27 May 2024
Incoming Prime Minister Christopher Luxon and National deputy leader Nicola Willis speaking to reporters at Parliament.

Prime Minister Christopher Luxon and Finance Minister Nicola Willis. Photo: RNZ / Samuel Rillstone

Finance Minister Nicola Willis has refused to rule out further changes to the public sector.

Willis and Prime Minister Christopher Luxon were speaking after the usual Monday Cabinet meeting, and highlighted the coalition's first Budget being revealed on Thursday.

She said ministers had gone "line by line" through their departments, and been able to find about 240 individual savings initiatives for inclusion in the Budget.

They varied considerably in size, with some amounting to just a couple hundred thousands of dollars a year and others accounting for tens of millions, she said.

"I think New Zealanders will be surprised at exactly where so much of their money has been going," Willis said.

"We have uncovered a layer cake of government initiatives - many of which we had never heard of before - which were absorbing tens of millions if not hundreds of millions of dollars.

"I think New Zealanders will be relieved to see that there's now a government in place who's going to ensure that their money goes to its best purpose."

Meanwhile, the government's baseline savings exercise - based on the most recent advice - would remove about 2250 roles from government departments, and close a further 1150 vacancies, with further savings initiatives (not included in baselines) removing a further 500 roles.

"Budget 2024 has required us to carefully prioritise taxpayer dollars, and Budget 2024 is unashamedly a Budget for the frontline," she said.

She said it was about the money, rather than the total headcount, however.

"I won't rule out any further changes to public service workforce structures. They could change. Our focus will remain on the frontline and that means in future there could be further changes to the back office."

She said the number of jobs being removed through the savings exercise was still changing however, and advice she had seen suggested the number of jobs added to the economy could yet be more than the number being removed.

She had encouraged ministers wherever possible to be very upfront about the number of jobs also being created through new initiatives, she said.

"We will have more to say about that across specific announcements."

As an example, Health NZ had yet to finalise their workforce plan for the next few years but the government hoped to have many many more nurses employed, she said.

Speaking afterwards, Labour leader Chris Hipkins said Willis' suggestion there would be more jobs created than cut showed the initial suggestion of cuts was "likely to have been smoke and mirrors in the first place".

"Teacher numbers for example, they do go up and down each year based on the number of additional students ... Trying to say that they funded those additional teachers by cutting other jobs is a bit disingenuous when they would have had to fund those anyway."

He said Labour's Budgets also had a large number of savings initiatives each year, so he was not surprised the government had found 240 of them.

He said Thursday would reveal to New Zealanders whether Luxon and Willis would make good on the tax cuts they had promised during the election - which he suggested was a $250 tax cut.

National was criticised for some of its language which repeatedly emphasised the maximum $252 a fortnight entitlement, but admitted ahead of the election only 3000 households were expected to be able to claim that full amount.

"Fundamentally I think the government are making the wrong choices here. every time Christopher Luxon or Nicola Willis say 'we couldn't afford that', just keep in mind they gave $2.9 billion in tax cuts to landlords," Hipkins said.

"The proof will be in the pudding."

Read back through Luxon and Willis' media briefing with the livestream above, or RNZ's liveblog below:

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