New Zealand’s Health Department to Slash Backroom Roles to Fund Tax Plan

Around270 b ackroom jobs at Health NZ are set to be cut. (Hannah Peters/Getty Images)

Around 270 back office positions within New Zealand’s public health sector will be disestablished as part of the government’s efforts to claw back 6.5 percent in cost savings to fund their greater tax relief program.

Prime Minister Chris Luxon told reporters on April 2 that the government wants “medical doctors, not more spin doctors,” referencing the impending cuts that will affect administrative positions within the Ministry of Health.

The National Party campaigned strongly, along with coalition partner ACT, on the need to trim the fat on a “bloated” public sector they said was riddled with unnecessary bureaucracy, and an over-reliance on contracted consultants who cost taxpayers $400 million in 2022.

The National Party pledged a $594 million (US$358 million) on average per year reduction in spending on back-office functions in government departments, excluding non-core and frontline agencies.

The Public Service Association stated that 59 of the jobs in the firing line are from within the Public Health Agency, 46 in Corporate Services, 41 in Government and Executive Services, 41 in Regulation and Monitoring, 39 in Strategy Policy and Legislation, 34 in Clinical and Community Mental Health, and 31 in Evidence Research and Innovation.

Mr. Luxon was keen to stress that front-line health workers and publicly available services would not be affected, but he said the current public service model needed to be streamlined.

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Finance Minister Nicola Willis added: “No government can live beyond its means indefinitely. And our priority as a government is ensuring that new spending is prioritised towards front-line services and towards income relief for hard-working New Zealanders.”

Finance Minister Nicola Willis's view on the cuts was “No Government can live beyond its means indefinitely." (Hagen Hopkins/Getty Images)

On March 22, the ACT party appeared to welcome the news of the job cuts, posting on their X account: “Good. The number of bureaucrats at MPI increased by 52 percent—or 1,277—between 2017-23. The average salary at MPI is about $102,000.”

Deputy Leader Brooke Van Velden deflected questions about whether the post was insensitive, saying she acknowledged it would be a “very stressful” time for those affected but added, “I think what is important here is that as a government, we are making these hard decisions that the previous government should have made.”

Cuts to an Essential Service

The Public Service Association’s National Secretary, Duane Leo, labelled the cuts “disgraceful,” and said the proposal would see the end of essential services like the Suicide Prevention Office.

“The proposals to axe the Suicide Prevention Office and specialist health workers in mental health make a mockery of the Government’s new portfolio of Minister for Mental Health. We call on Minister Matt Doocey to overturn these cuts which are simply being made to fund tax cuts that New Zealand cannot afford,” Mr. Leo said.

Many of the affected staff are expected to take up a voluntary redundancy scheme that was announced by the Ministry for Social Development.

Deputy Chief Executive Nadine Kilmister told NewsTalkZB that the first raft of redundancies may be followed by more.

“After this voluntary redundancy process, it is likely there will be a further process targeting role reductions in some areas, mainly within our National Office in Wellington,” Ms. Kilmister said.

“This is a difficult time for staff.”