Next week’s Budget is Nicola Willis’s opportunity to prove the government means business about restoring fiscal discipline.  

Treasury’s long-term models are flashing red. The International Monetary Fund ranks New Zealand among the worst in the developed world for structural fiscal deficits (the gap between government revenue and spending even when the economy is not in recession). Core Crown spending continues to rise, and debt is on track to spiral without reform.  

Some of the pressure comes from the rapid increase in the bureaucracy. The core public service grew from around 47,000 in 2017 to more than 63,000 full-time equivalents just before the 2023 election.  

Remarkably, it jumped again post-election to over 65,000. Cynics might conclude departments rushed to fill desks ahead of a change in government so that, after a bit of trimming, nothing would really change. 

So far, they have been proved right. Core public service numbers remain close to the pre-election figure. You can almost see Sir Humphrey Appleby smiling. 

The cuts from the peak may have been modest. But the fiscal cost is not. Core Crown personnel expenses are now north of $10 billion annually – up more than 45% since 2017.  

This growth has not focused on the frontline. Between 2017 and 2022, the number of public service managers increased by 51%. Policy analyst numbers rose by 50%. Information professionals surged by 73%.  

The Ministry of Education illustrates the pattern. In 2000, it employed just 599 people. By 2017, it had grown to the mid-2000s. By 2023, it had ballooned to over 4,300. Student achievement, meanwhile, has declined. 

To her credit, Willis initiated a savings programme on taking office. Agencies that had grown by more than 50% since 2017 were asked to cut 7.5% from their budgets. About 2,250 roles have been removed.  

But this is far from restoring balance. Returning the public service to 2017 levels would save up to $1.5 billion annually. It would also send a clear message: performance, not payroll, is what matters. 

No one knows the optimal number of public servants. But in 2017, few thought the system was understaffed.  

A leaner, more effective public service is not an ideological ambition but a fiscal necessity. The bureaucracy cannot remain a protected species while debt climbs and outcomes stagnate.  

This is not just about numbers. It is about whether the Government is willing to lead by example.