Minister of Finance Nicola Willis says it will be up to the chief executives of government departments to decide where the cuts could be made. Photo: RNZ / Samuel Rillstone
Front-line services could face cut-backs as the coalition government looks to shave more than a billion dollars in annual public sector spending, the minister of finance has acknowledged.
But Nicola Willis said the chief executives of government departments were expected to use "good judgement" when proposing where savings could be made.
Thirty-nine government departments or agency chief executives were asked in December to suggest annual savings or either 6.5 or 7.5 percent.
Departmental funding is spent on an agency's core business and operational expenses, while non-departmental funding is managed by an agency on behalf of the Crown.
Examples of non-departmental expenditure include the Ministry of Culture and Heritage's funding of Te Matatini, the Royal New Zealand Ballet and the New Zealand Symphony Orchestra.
The Labour Party's public services spokesperson Ayesha Verrall has been critical of National's plan to cut public service spending.
Verrall told RNZ front-line services were at risk.
"Departmental spending is on a ministry, it is those important back-office functions but Nicola Willis has asked for cuts to non-departmental funding. That means [cuts to] Te Whatu Ora ... housing providers, it means all of the services that are provided in a front-line way to New Zealanders.
"Non-departmental cuts means that New Zealanders will suffer losses in their services.
"This is a broken election promise. National promised cuts will be confined to back-office functions," Verrall said.
National campaigned on slashing back-office public service spending across 24 public agencies by 6.5 percent.
But the party has also committed to annual increases in health and education spending.
In a statement, Willis said it would be up to the chief executives of government departments to decide where the cuts could be made.
"Agencies have been asked to develop credible savings options, while ensuring New Zealanders continue to receive quality public services.
"Agency chief executives and their staff are expected to use their good judgement, and proposals for savings will describe any impacts to front-line services consistent with our priorities.
"Ministers and Cabinet will make final decisions on whether to accept those proposals as part of the Budget 2024 process."
