Austerity bites

Rolling maul of public service job cuts begins

❚ About 550 likely gone at two key ministries

❚ Total cuts could be in the thousands

❚ MP barbs rub salt into wound

❚ Outlook for capital ‘miserable’

❚ Boost to frontline workers promised

Hundreds of job losses at ministries in one day are an omen with city leaders forecasting a miserable few months for the city in the lead-up to the Budget.

The Ministry of Health and the Ministry for Primary Industries between them announced 550 job losses yesterday, while the Ministry of Business, Innovation and Employment (MBIE) opened up a second round of voluntary redundancies covering more work areas.

Ministries are scrambling to find savings of 7.5% ahead of the Budget, but just how the public sector will manage the required savings has not yet been made public.

The Ministry of Health was looking at a 25% reduction in staff, or around 180 jobs. The Ministry of Primary Industries was proposing a 9% cut to its workforce, disestablishing 384 roles, which would affect 230 people – the remainder were vacant jobs).

More than 100 people would leav MBIE at the end of the month after taking voluntary redundancies, and another round had opened up.

Wellington Central MP Tamatha Paul said “it will be miserable” for the city as public sector job cuts continue.

“The Government is tanking our city by tanking our public service so that they can line the pockets of their rich landlord mates,” she said.

Bridget Clarke, senior director at recruitment agency Robert Walters, said it was a distressing time for everyone in the public sector.

The agency was already seeing the effects of the proposed job cuts, with existing employees looking to move to Auckland and Australia.

“As more individuals consider leaving Wellington, there is a growing concern that Wellington may lose a significant amount of its skilled workforce.

“If the trend of job cuts persists, there is a potential future scenario where Wellington may lack the necessary skilled workforce to fill public sector positions when the time comes to deliver on Government’s key programmes and projects of work,” Clarke said.

There was an overall sentiment of concern coming from the public sector. Robert Walters would advocate for “a strategic approach” to utilise staff in the public sector better, “rather than resorting to widespread layoffs”, Clarke said.

Mayor Tory Whanau said the knock-on effects of the job losses would be felt deeply throughout Wellington’s economy.

She was deeply concerned at the job cuts announced yesterday. “My heart goes out to all of those who are facing uncertainty about their job right now,” she said.

Public Service Association assistant secretary and former Wellington city councillor Fleur Fitzsimons said the cuts were bad for the country as a whole, but would hit the

“These are skilled, capable people and I am sure that there will be other job opportunities.”

Nicola Willis, Finance Minister

capital particularly hard.

Three-quarters of the proposed jobs to be cut from MPI were in Wellington, Fitzsimons said.

“Not only are cuts personally devastating for individuals but they will impact on families and communities especially in Wellington.”

Public service cuts had been well-signalled, hanging over the city for months, and businesses had already seen “a bit of a pullback and slowdown”, said Chamber of Commerce chief executive Simon Arcus.

Thursday was the “moment of reality that the changes become clearer”, he said. The effect of the cuts would be wide-ranging, from professional services to the hospitality industry.

He couldn’t recall the last time such broad-ranging cuts were implemented.

“While it’s no comfort at the moment, Wellington is often advantaged in a recession because the Government is able to continue to employ.

“We take the rough with the smooth, but this feels a bit more like the rough.”

There needed to be understanding from the top levels of government that the changes they were implementing would be difficult for the people affected.

“While a good, disciplined economic approach to these things makes sense, I don’t think that a rational response is to have any glee with it,” Arcus said.

Earlier in the day the ACT Party tweeted “Good.” in response to the announcement of job losses at MPI, which was reposted by party leader David Seymour.

Prime Minister Christopher Luxon acknowledged it was a “tough day” for people in the affected departments.

“We are working incredibly hard to face up to that reality that we have inherited economically, we have a plan in place to get New Zealand to a much better place.”

Finance Minister Nicola Willis said ministries and agencies had been aware their back office staff had grown too quickly.

They had been “thinking about how they ensure resources are focused on the frontline and that’s what you’re seeing here”.

When asked whether the total number of job cuts could be in the thousands, Willis said, “I expect that there will be job losses, I also expect that there will be more frontline workers”.