The Government is embarking on a fundamental overhaul of the public service to improve services, lift productivity and deliver better value for money, Finance Minister Nicola Willis and Minister for the Public Service and Digitising Government Paul Goldsmith say.
"The overhaul will reduce the number of government departments, increase the use of AI and other digital tools, and deliver significant savings," Nicola Willis says.
"Businesses and households are using AI every day and, while parts of the public sector have seized the opportunity to innovate, others are still locked into outdated ways of doing things that prioritise box-ticking over outcomes.
"That is not acceptable or sustainable so the Government is putting a sinking lid on agencies' operating budgets to drive progress on three key goals.
"Those goals are streamlining the number of government agencies and entities, digitising customer-facing and back-office government functions, and restoring public service numbers to historic norms.
"Over the next four years these initiatives will deliver savings of $2.4 billion which will be re-deployed to deliver more health services, lift educational outcomes, build infrastructure and strengthen the defence force and police.
"New Zealanders expect public services that are responsive, effective and easy to use, but too often people and businesses are still navigating fragmented systems, duplication and outdated processes.
"A more connected and digitally enabled public service will improve services, reduce duplication, and deliver better value for taxpayers.
Paul Goldsmith says New Zealanders also expect a public service that grows smarter, not simply larger.
"Between 2017 and 2023, the size of the public service expanded from approximately 47,000 people to more than 65,000. That growth rate was nearly three times faster than the overall labour force, while back-office and support functions grew significantly faster than frontline service delivery roles.
"Some of that growth was necessary during the Covid pandemic, but over the long-term New Zealand cannot sustain administrative growth outpacing the productive economy.
"This overhaul is about ensuring more resources reach frontline services and fewer are tied up in duplication and administration.
"Historically, core public service numbers have been equivalent to about 1 per cent of the population. Between 2017 and 2023 those numbers ballooned out to about 1.2 per cent of the population. As part of the programme, the Government will restore public service numbers to the historic norm by mid 2029. That will be an in-principle target of about 55,000 public servants.
"Reductions will be achieved progressively over several years through digitisation, mergers, simplification of systems and processes and natural attrition.
"These changes apply to the core public service so do not include teachers, doctors, nurse or other Health New Zealand staff. Nor do they apply to police or defence personnel.
"This is about ensuring the public service is modern, focused, productive and financially sustainable over the long-term, with a core focus on frontline delivery.
"Progress will be monitored regularly, with agencies expected to demonstrate improvements in productivity, delivery and value for money," Paul Goldsmith says.
"Every dollar saved through fixing duplication and inefficiency is a dollar that can be redirected toward improving productivity, supporting growth, and improving New Zealand's long-term economic resilience," Nicola Willis says.
