Winston Peters wins again - no cuts for MFAT in new Budget

The Ministry of Foreign Affairs has again been exempt from funding cuts in this year's Budget, with the Finance Minister confirming it wouldn't be made to find savings until after the election.

On Tuesday Nicola Willis made a pre-Budget announcement that public service jobs would be slashed by about 14 percent over the next three years in a shake-up that is expected to deliver $2.4 billion in savings.

The cost-saving exercise amounts to 8700 jobs being cut by mid-2029, alongside a greater use of AI and the merger of an unknown number of ministries and government departments as part of a trimming down of the public service.

It also includes baseline funding reductions for some ministries of two percent for the coming year, and five percent for the two years after.

In Parliament on Wednesday in response to questions from Labour's finance spokesperson Barbara Edmonds, Willis revealed MFAT isn't required to cut its spending by two percent this year, but would be included in the future cost savings.

"The Ministry of Foreign Affairs and Trade was excluded from the two percent baseline reduction, but has not been excluded from the out years," she told the House.

On Tuesday Foreign Affairs Minister Winston Peters told reporters he wasn't worried about job losses, because he had a record of standing up for them and "everything's going to stay the same".

Responding to that comment in the House on Wednesday, Willis said she disagreed.

"I agree with Winston Peters on the important things, but on that particular statement, not really, because I think we are in a changing world and I think the ministry of foreign affairs needs to adapt with that world," she said.

Peters had denied on Tuesday that this year's Budget - which he would presumably vote for next week - would set out the savings across four years.

"The Budget doesn't stretch four years, if you believe that with an election coming, you know nothing about democracy," he said.

"That's knucklehead stuff, mate."

Willis has now confirmed - 24 hours later - that the election could be a roadblock in Peters' ministry ever having to commit to the future reductions in spending, depending on the make-up of the government after 7 November.

Willis was asked on her way to Question Time on Wednesday whether she was confident any cuts to MFAT wouldn't hurt the New Zealand economy or diplomatic relations, to which she responded that her and Peters differed on the answer to that.

"He would always have the diplomats have more money for their budgets, for their business class flights, and all of that stuff.

"My view is actually what the foreign affairs service can do, in the same way any other agency can do, is make sure that its back office is efficient, that it is not duplicating services across government, and yes, we need great diplomats on the front line, but they, just like every New Zealander, are accountable, and that means spending taxpayer money well, in some cases."

She went on to say that "in some cases" both MFAT staff, and her, should be flying cattle class - not business.

The two ministers have had "extensive debates" about MFAT's ongoing funding during Budget talks, Willis said.

On Tuesday she said it was "always the case" that Peters would prefer more money went into the diplomacy network, to offshore embassies, and to the Ministry for Foreign Affairs and Trade.

"And I always seek to communicate to him what I hear from everyday voters.

"Which is, 'can you please make sure I can get my hip operation faster, that my kids are getting educated better at school, and yes, invest in foreign affairs, but not at the expense of the things Kiwis really care about'."

Asked if it was a "tough" conversation with Peters, Willis said "yes".

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