Hon Judith Collins KC
Minister for the Public Service

The Government’s move to cut public sector spending on consultants and contractors is on track to save $800 million over two years – double the initial target, Public Service Minister Judith Collins says.

“We set a two-year target to cut $400 million in spending on consultants and contractors across the public sector by 2024/25,” Ms Collins says.

“The latest update anticipates savings will come in at more than $800 million by the end of June

“That’s $800 million that can be spent on delivering core services to taxpayers, in areas such as healthcare, law enforcement and education.

“Taxpayers expect public servants to spend their money wisely, and I’m very happy to share with them just how much money is on track to be saved as a direct result of the Government’s efforts to rein in excessive spending while ensuring core government services continue to be delivered.

Public Service Commission data released today shows the size of the core public service workforce decreased 4 percent in the 12 months to December 2024. At the end of December there were 62,968 public servants (FTEs), compared with 65,699 in December 2023. 

“This reduction largely impacted back-office roles and has been offset by an increase in the number of frontline staff,” Ms Collins says.

“In the six years from 2017 to 2023, total salary costs for the core public service workforce grew a staggering 72 percent, to about $6.1 billion a year. We simply do not have sufficient taxpayers to support that kind of growth.

“The Government will continue to focus on the delivery of frontline services while keeping contractor and consultant spending and the overall size of the workforce in check.”

Note:

The core Public Service are departments and departmental agencies only. It excludes the wider public sector, such as defence personnel, police, teachers and public healthcare workers.

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