Finance Minister Nicola Willis will today outline plans to reshape New Zealand’s public service, proposing a significant reduction in government agencies, greater use of digital tools and AI, and a target to cut the workforce to 1% of the total population by 2029. The proposals, to be announced in her Auckland pre-Budget speech, mark a major overhaul of a system that has expanded under previous Labour-led administrations.
Willis will direct ministries and departments to develop plans for amalgamating agencies, a move aimed at creating efficiencies in a system currently comprising 42 ministries and agencies with just over 63,000 full-time workers. The government argues that the public service headcount—grown from 48,000 in 2017 to 57,000 by 2020—has become unsustainable.
Labour Leader Chris Hipkins has welcomed the push for greater efficiency but questioned the approach, stating that “bigger isn’t always better.” He told Morning Report that some of the largest agencies are “the most bureaucratic, with the most double handling,” and warned against arbitrary caps on public service numbers. “Rather than setting an arbitrary cap, we need to ask what it is we want the public servants to do,” Hipkins said.
Hipkins also highlighted the critical work of public servants in preparing for low-probability but high-impact events, such as earthquakes and pandemics, calling such “just in case” work “really key.” He dismissed the stereotype that public servants are all based in Wellington, noting that 57% of the workforce is spread across the country, with 21% in Auckland.
The government’s plans could face scrutiny over whether amalgamations will lead to streamlined operations or simply consolidate bureaucratic layers. Hipkins’ skepticism about arbitrary targets suggests opposition parties may push back on the specifics, particularly if the focus on digitization and AI risks undermining frontline public service roles.
A possible next step could involve public consultations on which agencies to merge, though the government has not yet signaled whether it will seek cross-party agreement. The Public Service Commissioner’s earlier remarks suggest that any changes would prioritize functional continuity over dramatic restructuring.
Frequently Asked Questions
How many ministries and agencies currently exist in New Zealand’s public service?

There are 42 ministries and agencies in the current public sector.
What is the target workforce size proposed by the government?
The government aims to reduce the public service headcount to 1% of the total population by 2029, which could require cutting around 8,000 jobs from the current workforce of just over 63,000.
What are the three key proposals in Finance Minister Nicola Willis’ plan?
The proposals include amalgamating government agencies, increasing digitization and AI adoption, and setting a target to reduce the public service headcount to 1% of the population by 2029.
As the government moves to streamline its agencies, what aspects of public service delivery do you think could be most at risk—or most improved—by these changes?











