Nicola Willis: Finance Minister on the savings from the public sector job cuts

The Finance Minister says they've over-delivered on their promise to save money from public sector job cuts. 

Latest Public Service Commission data shows the core workforce decreased 4% in the year to December 2024. 

Public Service Minister Judith Collins says the Government's expecting to save $800 million by June – double the initial target. 

Nicola Willis —the coalition government's initial Public Service Minister— told Mike Hosking the money saved is going into much better purposes. 

She says it’s instead going into things like the Family Boost Policy, to support early childhood education costs. 

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Episode Transcript

Speaker 1 (00:00):
Some very good news from the government on the crackdown
on consultancy spending though, so they're looking to save eight
hundred million dollars over a couple of years, being they've
done at four hundred million dollars a year. Numbers out yesterday,
they've been successful. Finance Minister Nikola Willis, good morning, Good
morning rain. I watched Youth Collins in the house yesterday.
She's seemed proud as punch with these numbers, as indeed
she should be, shouldn't she.

Speaker 2 (00:18):
Indeed, we've over delivered and this is an area where
there's no doubt money was being wasted, taxpayers money and
that money is now going to much better purposes, including
into the back pockets of Kiwi's dealing with a pretty
high cost of living.

Speaker 1 (00:33):
How are you doing How are you doing that? So
is this four hundred million eight hundred eventually is that
going to be spent or is it going to be
to retire debt or what?

Speaker 2 (00:41):
Well, this was part of our plan at the last
budget to help fund tax relief without having to borrow
for that tax relief. So by delivering these savings, we've
been able to, for example, deliver the Family Boost policy
which is giving family support with their early childhood education costs.
By reducing waste for spending in one pace of place

(01:02):
of government, we've been able to make sure that kiwis
can hang on to a bit more of what they earn.
Good result.

Speaker 1 (01:08):
What literally was the money spent on? Because it's easy
to lose jobs and it's easy to cut spending, But
the counter argument from the unions and such is that
stuff isn't being done anymore. What was eight hundred million
dollars being spent on?

Speaker 2 (01:22):
Well, in my opinion, a lot of it was being
spent on reports by very expensive firms that then set
on shelves and gathered a little bit of dust. I
think we had developed a culture in the public service
where if you wanted to get someone to say that
your idea was a good idea, send it to a
consultant put the stamp on. If you wanted to get

(01:43):
someone to give you some graphs and some numbers, send
it to a consultant, get them to do a PowerPoint
set of slides for the minister. And it had become
so endemic that the money being spent had just sowed
up quite dramatically to more than a billion dollars, and
the minute that we came in and said, ah, not
happening anymore, those numbers drove down quickly. I still catch

(02:06):
public servants every now and then sort of out of
the old habit saying, oh, we'll get a consultants report,
But ultimately public servants are capable. They can do this
stuff themselves, and that costs the taxpayer a lot less.

Speaker 1 (02:19):
Judith Colin says, there's more weathers came from. How much
more do you reckon?

Speaker 2 (02:24):
Well? I think that the public service itself is going
to get a lot better at using digital tools and
new technology to deliver a lot of the work it does,
and then over time that's going to free out more
money in their budgets for the frontline services that we're
wanting them to focus on. But with the consultants, we

(02:45):
haven't set a target beyond where we are now. That's
something I'm thinking about because I've found the targets that
we put in place in our first year were really
useful in driving these numbers down. So I'm sure that
that's something that Judith will look at.

Speaker 1 (02:59):
Now, is some you're making the supermarket's announcement or Saturday
Sunday Okay, Sunday, because I've got the warriors Sunday. Is
this worth it or not?

Speaker 2 (03:09):
Well, what I'm announcing, Mike, is the next steps that
the government is taking to push grocery competition along. We
want Kiwis to get fear of prices at the checkout.
We're convinced by the case that says it's not a
very competitive market here. In fact, it's one of the
least competitive in the world. And when you don't have
good competition, consumers don't get the best steel. So you're

(03:30):
a call. A month ago, I said, look, I want
someone else to come to this market. Let's look at
what the regulatory burdens are. I've now gone back to
Cabnet and on Sunday, I'm going to announce where we've
got to.

Speaker 1 (03:39):
He So those are specific, So you're not toying with
me here. These are specifics. Something tangible will happen out
of your announcement Sunday.

Speaker 2 (03:48):
Well, I'll announce where we've got to. So what I've
gained from going out to the market and saying what
are you interested in? And then I am going to
announce where we're going next. There's two things I need
to achieve here. Mike one is sure pace patient, sorry
not patients in this coast. There'sh offers have been waiting
for a long time for progress on this one. On

(04:10):
the other hand, when you're dealing with a two and
a half billion dollar market, you don't want to move
so fast that you're not moving with care and consideration.
So I'm going to announce what the next steps are,
what progress we've made, and what progress New Zealanders can
expect over the next six months.

Speaker 1 (04:25):
I hope it's good, Appreciate it. Nikola Willis win and
it's minister for more from the Mic Asking Breakfast.

Speaker 2 (04:30):
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