The Ministry of Health is proposing to axe 134 roles in its change proposal, after a directive by the Government. Reporter Azaria Howell reveals what staff have been told and how they learned their fate.
Leaked internal documents reveal the Ministry of Health considered trimming executive salaries but instead chose to cut more than a hundred roles to reduce costs.
The ministry was directed to identify 6.5 per cent savings, with the final sign-off and confirmation to be made by the Public Service and Finance Minister Nicola Willis before Budget Day, May 30.
All government agencies have been directed to seek savings between 6.5 and 7.5 per cent on average, leading to a swathe of public sector cuts. The proposals for reductions are being tabled by senior leadership at public agencies, rather than the Government itself, though the Government will have a say in the final proposals.
In a Ministry of Health consultation document seen by NZME, the ministry considered reducing the salaries of the executive governance team and senior leadership team, in addition to the remuneration changes.
“This would be a difficult decision to implement both practically and legally,” the document added.
When asked why by NZME, the ministry’s transformation programme office director Geoff Short reiterated it would be difficult to implement “both practically and legally”.
“Instead, Deputy Director-Generals have tried to ensure the appropriate proportion of managers to staff,” Short told NZME in a statement, adding the remuneration increase proposal for those above mid-point would also apply to leadership members.
A number of other ideas were floated in the consultation document, one of which was reducing hours for all staff. This option was not recommended as it would impact all staff and require their agreement to the proposal.
In the document, chief executive and Director-General of Health Dr Diana Sarfati told workers she was “genuinely thankful” for the contributions staff make, their skills and commitment to health. She added none of the work was lost on her, or the executive governance team, who had been working through potential savings options “for months”.
“I also know that many of you have been through a sea of structural changes at the Ministry of Health over the last five years and it must feel as if another great wave is approaching,” staff were told.
Staff have also been urged to give feedback and highlight any other savings opportunities.
The ministry went back and forth about when to inform staff of the proposals, announced to all Ministry of Health workers today. The Herald previously revealed staff would first learn their fate the day back from an Easter break.
More than a quarter of all roles are impacted.
The ministry confirmed in a statement 134 roles are proposed to be made redundant, while 271 positions across the ministry are set to be disestablished, and 137 new roles are proposed. Other jobs are set to face minor changes, such as reporting line shifts and a different job title.
Jobs which are proposed to be set up may be contested by staff who are set to lose their jobs. Offers of redeployment are being considered for people whose roles are proposed to be disestablished, in some areas.
A consultation document on the cost savings measure states the environment has “changed significantly” since June 2023, when the previous Government’s changes were being considered.
“Last year we anticipated we may need to propose further changes to our structure and that the ministry would need to become smaller in size over time. We expected the scale of this would be limited and achieved largely through efficient management and removal of vacancies and other non-personnel savings. We now know this is no longer possible,” the document said.
A number of roles in the Mental Health, Addiction, and Suicide Prevention team are proposed to be under a “contestable process” for deployment.
The Ministry of Health expects forecast departmental funding will reduce by $78 million between the 2023/24 and 2024/45 financial years, from more than $287m to $209m.
The document states a “more fiscally constrained environment” means the agency needs to downsize, and be smarter about how it carries out its role across the sector.
It suggests the Ministry of Health has identified a further $27.8m worth of savings since November last year from non-personal budgets and needs to find a further $20.2m of savings.
Under the current proposals, a research and evaluation fund would decrease by $3.2m and floor space at 133 Molesworth Street would be sub-leased, alongside other ideas.
Alongside the axe looming over 134 roles, the ministry is also proposing not to apply remuneration increases for those above a set midpoint, expected to save around $2m. Proposing role changes, including the aforementioned redundancies, would save around $18m, according to the documents sent to staff.
Voluntary redundancies, an option at the Ministry of Business, Innovation, and Employment (MBIE) and now the Ministry of Social Development, was said to not be in the ministry’s best interests “because it risks losing people and capability in critical areas and increases the overall cost to the taxpayer”, according to the consultation document.
Among the public sector cuts, the Ministry for Primary Industries and MBIE have planned to slash hundreds of roles.
Consultation on the controversial Ministry of Health proposal ends on April 26, with decisions expected to be announced in June and redeployment to take place through to August.
The Public Service Association, a union representing public servants, has slammed the proposal. The union said the current proposal includes closing the Suicide Prevention Office, reducing by half the number of staff working in that specialist role.
However, Minister for Mental Health Matt Doocey said the office “will remain open”, 1News reported.
Labour Party public service spokeswoman Ayesha Verrall said she was concerned the country is “going backwards” on mental health with the proposal.
“These are not simply back-office roles, they are roles that include regulation and monitoring of the health system. When our health regulatory system fails, people get hurt, like they were with surgical mesh,” Verrall added.
The former Minister of Health took aim at the Public Service and Finance Minister in a statement, adding “these hard-working people do not deserve to bear the brunt of Nicola Willis’ reckless fiscal promises”.
Willis has been approached for comment by NZME on the Ministry of Health cuts.
Meanwhile, the Commerce Commission today also advised staff of work to identify cost savings that will include changes to the organisational structure.
Chief executive Adrienne Meikle said in a statement the focus will be on “maintaining the delivery of all of our statutory functions”.
Meikle said any proposed changes to organisation structure and roles will be shared with staff in due course.
Earlier today, the Herald revealed that despite the new Government’s widely broadcast cost-cutting intentions, fulltime equivalent staff (FTE) increased by 4.1 per cent and reached an all-time high of 65,699 FTE positions across the public service in the six months to December 31.
Azaria Howell is a Wellington-based multimedia reporter with an eye across the region. She joined NZME in 2022 and has a keen interest in city council decisions, public service agency reform, and transport.
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