New Zealand ministry proposes 400 job cuts to deliver $50 million in savings

New Zealand’s Ministry for Cities, Environment, Regions, and Transport (MCERT) has proposed eliminating 400 positions as part of a restructuring aimed at creating a smaller organisation and delivering $50 million in annual savings by 2028/29.

The newly established ministry, which began operations on 1 July, currently has 1,675 roles. 

Under the proposal, this would fall to 1,275 positions by April 2027, with 365 of the proposed reductions affecting vacant roles. The ministry acknowledged that the changes would create uncertainty for employees across the organisation.

"Because the proposal changes how the whole Ministry is organised, most of our people will be affected in some way," said Chief Executive Jeremy Lightfoot.

"I know that brings real uncertainty for them, and I don't want to understate how hard that is."

Restructuring the ministry

MCERT was formed by bringing together the Ministry of Transport, the Ministry for the Environment, the Ministry of Housing and Urban Development, and the local government function of the Department of Internal Affairs.

The consolidation was part of the government’s reform agenda to improve outcomes across housing, transport, urban development and the environment, while addressing challenges including housing affordability, infrastructure deficits and climate change.

The proposed restructuring is intended to help the ministry operate within its budget while maintaining its focus on three outcomes: productive cities and regions, healthy environments, and thriving communities.

"The proposed structure is how we would organise ourselves to deliver on three outcomes: productive cities and regions, healthy environments, and thriving communities," Lightfoot said.

"It would be a smaller organisation with five groups: System Performance, Policy, Planning System, Delivery and Enabling Services. Related work and shared services would come together, with people working across teams where needed."

Union criticises proposed job cuts

The Public Service Association (PSA) has criticised the proposal, arguing that the government’s plans contradict earlier assurances that establishing the ministry was not primarily a cost-cutting exercise.

"Now the new ministry is cutting a quarter of its workforce and $50 million from its budget and admits it can't do the same volume of work," said Duane Leo, National Secretary for the PSA.

"New Zealanders were sold one thing and are getting another."

The union warned that the reductions could worsen existing staffing pressures and affect the delivery of public services. It also raised concerns about the loss of institutional knowledge if experienced professionals leave the public sector.

"Many of those affected are experienced professionals with decades of service. Once their knowledge is gone, it goes to Australia or the private sector, and it doesn't come back. This is the hollowing out of the public service in real time," Leo said.

The PSA also questioned whether the government had adequately assessed the potential impact of the restructuring on services used by New Zealanders.

"This restructure is full of uncertain outcomes. The Government hasn't assessed what this means for the services New Zealanders rely on. That's exactly why we urgently need a public good test before any restructure goes ahead."

Leo called for the government to halt the process, describing the proposed changes as "reckless" ahead of the general election scheduled for 7 November.

"The Government should halt this now. These cuts are yet again why we need a new government come 7 November that values the public service," the union said.

Consultation runs until November

Lightfoot said the proposal remained subject to consultation and that employees would have an opportunity to contribute their views before decisions were finalised.

"Nothing is final until our people have had their say. Over the next few weeks our focus is on making sure they are treated fairly, are well supported, and have clear information to base their decisions on," Lightfoot said.

"We'll listen carefully to their ideas for doing things differently before final decisions are made in early December."

Consultation on the proposed restructuring began on 14 October and will remain open until 3 November. Final decisions are expected in early December, with the new organisational structure scheduled for implementation in March 2027 and staff expected to be in place by April.