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Government public service cuts becoming clear as Willis forecasts ‘frontline’ Budget

Author
Adam Pearse,
Publish Date
Tue, 28 May 2024, 7:12am

Government public service cuts becoming clear as Willis forecasts ‘frontline’ Budget

Author
Adam Pearse,
Publish Date
Tue, 28 May 2024, 7:12am

The level of the public service cuts needed to fund the Government鈥檚 tax cuts is becoming clear with more than 240 programmes scaled down or scrapped in Budget 2024.

Finance Minister Nicola Willis also revealed yesterday the Government鈥檚 drive to reduce public service spending could lead to 3900 job cuts, comprising about 2750 currently filled roles and about 1150 vacancies.

Listen live: PM talks to Mike Hosking at 7.35am

While she wouldn鈥檛 say how much the cuts were worth, Willis promised they would go towards National鈥檚 commitment to provide tax relief as well as employing more doctors, teachers, police and corrections officers as part of her 鈥渇rontline鈥 Budget to be released on Thursday.

鈥淥ur hearts go out to anyone losing their jobs, but Budget 2024 has required us to carefully prioritise taxpayer dollars. Budget 2024 is unashamedly a budget for the frontline,鈥 she said.

鈥淚nstead of being a confetti of new spending ideas, you鈥檒l also see examples of careful reprioritisation in almost every area of government.

鈥淭ogether, our savings exercise has freed up considerable cash and as promised, some of this will go to support tax relief.鈥

Labour leader Chris Hipkins is taking aim at the scope of the cuts, saying New Zealanders would find out 鈥渢he true price of those tax cuts鈥 in the Budget.

Thursday鈥檚 political theatre will likely be intensified by a nationwide protest effort called by Te P膩ti M膩ori and others in M膩oridom, designed to oppose what they describe as the 鈥淕overnment鈥檚 assault on tangata whenua and Te Tiriti o Waitangi鈥.

Prime Minister Christopher Luxon says Te P膩ti M膩ori and its supporters were entitled to peacefully protest and reinforced his commitment to deliver better outcomes for M膩ori and non-M膩ori.

Willis, appearing with Luxon in a press conference yesterday, gave the most definitive update on the Government鈥檚 鈥渟avings鈥 exercise as she revealed how many programmes would be impacted in order to facilitate tax cuts.

Some of the 240 would be cut completely while others would be scaled down. The cost of those programmes varied from the hundreds of thousands to tens of millions.

Prime Minister Christopher Luxon and Finance Minister Nicola Willis arrive for their press conference. Photo / Mark Mitchell  Prime Minister Christopher Luxon and Finance Minister Nicola Willis arrive for their press conference. Photo / Mark Mitchell

She wouldn鈥檛 give an overall figure, invoking the well-worn Budget-week answer that all would be revealed in a matter of days.

Willis also provided her latest estimate for how many public service jobs would be gone, seeking to address speculation of the final count as government departments were proposing how many roles it sought to cut to comply with the Government鈥檚 request to trim up to 7.5 per cent of spending.

She clarified her estimate of 3900 jobs was subject to change as departments undertook staff consultation, but warned further cuts were possible.

鈥淲e see that the new normal for our Government will be constantly evaluating our dollars ... so that means I won鈥檛 rule out any further changes to public service workforce structures, they could change.

鈥淥ur focus will remain on the frontline and that could mean in the future, there will be further changes to the back office.

She also noted it was expected job growth from Budget intiatives would exceed the level of job losses, but didn鈥檛 specify how many jobs would be created.

鈥淲e have encouraged ministers where possible to be very upfront about how many jobs are being created through initiatives and we intend to keep you updated about the impact of policy changes.鈥

Finance Minister Nicola Willis gave an estimate for how many jobs would be lost. Photo / Mark Mitchell  Finance Minister Nicola Willis gave an estimate for how many jobs would be lost. Photo / Mark Mitchell

National鈥檚 鈥淏ack Pocket Boost鈥 tax cut plan it took to the election promised an array of changes including adjusting income tax brackets to compensate for inflation and introducing a childcare tax credit - which would combine to give an average-income family with children up to $250 more per fortnight.

She has repeatedly promised the tax cuts wouldn鈥檛 require borrowing and wouldn鈥檛 worsen inflation.

On Monday, Willis wouldn鈥檛 state her commitment to implementing National鈥檚 policy when asked, saying she wouldn鈥檛 be spoiling Thursday鈥檚 surprise.

She also wouldn鈥檛 address why the tax calculator National created to help people learn how much they would save from the party鈥檚 policy wasn鈥檛 operational online yesterday.

Hipkins believed this indicated the tax cuts being offered in the Budget would not be the same as those National had promised.

He pointed to the already announced cuts to the free school lunch programmes and the grants to first home buyers, as well as the likely demise of free prescriptions.

鈥淓very time Christopher Luxon or Nicola Willis said 鈥榳e couldn鈥檛 afford that,鈥 keep in mind they gave $2.9 billion worth of tax cuts to landlords.鈥

He also cast doubt on Willis鈥 claim that cuts to the back office staff would not come at the cost of frontline staff.

鈥淭his distinction they鈥檙e making between back office and frontline is farcical.鈥

Labour Leader Chris Hipkins suspects Willis won't be able to deliver on National's pre-election promises. Photo / Alyse WrightLabour Leader Chris Hipkins suspects Willis won't be able to deliver on National's pre-election promises. Photo / Alyse Wright

The national protest action planned for Thursday reflected the sentiment behind a similar effort in December shortly after the coalition Government was confirmed and its policies agreed upon.

That protest was partially fuelled by opposition to Act鈥檚 proposed Treaty Principles Bill that aimed to redefine Te Tiriti鈥檚 principles in law.

National, which promised to support the bill to select committee, was initially vague on whether the controversial bill would get its support after select committee. Luxon has since confirmed it would not receive National鈥檚 ongoing support.

Hipkins said he was not surprised protest action was planned for Budget Day: 鈥淭here [are] increasing numbers of New Zealanders concerned about the impact that the decisions this Government have been taking are having on the day to day lives of a whole wide range of New Zealanders, whether Maori, Pacific New Zealanders, whether it鈥檚 those with disabilities, whether it鈥檚 women wanting to have pay equity.鈥

Adam Pearse is a political reporter in the NZ Herald Press Gallery team, based at Parliament. He has worked for 九一星空无限 since 2018, covering sport and health for the Northern Advocate in Whang膩rei before moving to the NZ Herald in Auckland, covering Covid-19 and crime.

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