Two thousand jobs lost from public sector - 'and that's just the start'

Just over 2000 jobs were lost from the public service between December and June, new data shows.

It shows there were 63,537 full-time equivalent staff at the end of June. While that was a 0.7 percent increase from 2023, it was down from 65,699 in December.

The Public Service Commission said some of the drop was seasonal but the size of the decrease and number of redundancies suggested agencies were "implementing the government's savings intentions in advance of the financial impact of Budget 24."

The number of full-time employees dropped by 416 in the March quarter and 1745 in the June quarter.

Infometrics principal economist Brad Olsen said it was "the start" in terms of a pullback in employment levels across the public service and public sector.

"Long story short, the government said it was going to reduce headcount and it's reduced headcount. It's not the full reduction."

Counts that have been tallied up as cuts have been announced have put the number of roles lost at nearer 7000, but Olsen said the difference would be due to the fact that as many as a third of the roles cut had been vacant.

"And it's never clear when the base line for any of those [reported cuts] numbers are. Public agencies have been pretty hopeless with informing that debate. There will be a release that comes either from them or one of the unions saying this is a 'x number of roles' reduction. From when? What's the baseline, is it headcount, is it FTEs - that clouds everything."

But he said it was clear the direction the moves were taking.

"You're definitely seeing the first phase of cutbacks in the public sector workforce coming through more clearly in these figures... he numbers so far don't represent the end of the change numbers in the public service."

The average growth in jobs over the previous five years was 4.9 percent a year.

Year-on-year, 22 of the 39 public service departments and agencies dropped in size. Sixteen increased and one was added, the Ministry for Regulation.

But Olsen said it was clear the reduction was not only from government mandates.

The largest drop was at Stats NZ, which lost 23.8 percent of its staff, because of the Census programme ending.

The Ministry of Social Development lost 3 percent, which was due to "natural attrition, conclusion of fixed term arrangements and some voluntary redundancies".

The Ministry for Primary Industries lost 6.1 percent.

In 2023/24, Public Service organisations spent a total of $940 million on contractors and consultants. This was a drop of 25.9 percent on the 2022/23 spend of $1.268 billion.

Public Sector Minister Nicola Willis said the data showed the steps the government was taking to "restore discipline to public expenditure and drive more value for money" were working.

"The latest data also reflects a shift of back-office resources to the front line. There has been a 10.8 percent decline in the number of clerical and administrative staff and an 8.3 percent drop in policy advisors.

"This has been offset by increases in service delivery roles, including a 16.9 percent increase in contact centre workers who are often the first point of contact for members of the public. There has been a 5.7 percent increase in the number of inspectors and regulatory officers and a 1.5 percent increase in the number of social, health and education workers."

She said the trend was expected to continue.