Total cost of public servant redundancies not yet known

WELLINGTON: The cost of slashing public servants at a single government department has already exceeded $6 million.

The Ministry of Business, Innovation and Employment is among the agencies axing jobs, as part of the government’s public service cuts. Almost 2000 jobs across 19 departments have already been disestablished, or will soon be.

But the total cost of redundancies across the public service is not yet known and Finance Minister Nicola Willis has not asked for an estimated price tag.

MBIE is one of the biggest government departments — employing more than 6500 staff — and has so far axed 286 jobs, with more redundancies expected.

The ministry has confirmed it had paid 138 employees redundancy payouts so far, totalling around $6.3m.

Corporate services deputy secretary Richard Griffiths said the payments ‘‘include a mix of outcomes related to our initial voluntary redundancy process, as well as stop work notices and formal change processes’’.

The total cost of job cuts at the ministry will not be known until it has finished consulting staff.

MBIE is the only ministry to provide RNZ with the amount spent on redundancies to date. Other departments told RNZ staff were still being consulted, so the estimated cost of redundancy payouts was not yet known.

Using information supplied to Parliament’s Select Committees,

RNZ found the average redundancy or termination payment for a public servant is about $50,000.

Ms Willis’ office said the Minister had not received advice on the projected cost of redundancies and it would be impossible to currently calculate their cost as public departments and agencies were still deciding how many jobs to cut.

Ms Willis’ office also confirmed the cost of redundancies would be covered by department and agencies’ existing funding.

There has been some concern that managerial roles were not facing the same threat from job cuts as junior employees.

That prompted Ms Willis to seek advice from the Public Service Commission on the number of tiertwo and three managers across the public service to ensure it is not too ‘‘top heavy’’.

The minister has since received that advice, which she said confirmed ‘‘significant growth in the number of people employed in senior leadership roles across the public service’’.

The advice showed the number of tiertwo managers across the public service increased by 69 roles — or 41% — between 2016 and 2023.

The average salary for the 236 tiertwo managers was $309,900.

Over that same period, the number of tierthree managers also increased by 323 roles, or 42%.

There are now 1084 tierthree managers across the public service, with an average salary of $215,700.

The minister reiterated senior public service managers are not exempt from cuts across the public service. — RNZ