'Heartless': Fears Wellington will be 'ghost town' after public service cuts

An economist says more than 3500 jobs could be cut in Wellington, and the capital is set to "bear the brunt" of a major shake-up to the public service.

Some residents and cafe-owners fear the government's plans will crush the city's morale, leaving it a "ghost town".

But senior ministers from Wellington insist the capital is more than a "boring" hub for bureaucrats, with the mayor pushing the city's tech sector.

3700 jobs may go in Wellington alone - economist

The government has plans to slash the public sector workforce - which sits at about 64,000 - by 14 percent, or 8700 jobs, by mid 2029 in a move it says will save the country $2.4 billion.

Are you a public servant affected by these job cuts? Email iwitness@rnz.co.nz

A number of ministries are set to be amalgamated, and most agencies will have operating budgets shaved by 2 percent in the coming year, then by a further 5 percent in the next two.

The Defence Force, Corrections and the Ministry of Health were so far excluded from the shake-up.

Infometrics principal economist Nick Brunsdon said he expected Wellington to be hit hardest by the plans.

He said looking at numbers from the Public Service Commission and applying the 14 percent cut to the city's core public service population of just over 27,000 - excluding frontline roles in education and health - could mean job losses of around 3700 for Wellington.

"Based on [Finance Minister Nicola] Willis stating a target of 8700 jobs gone from the core public service, that works out to about 1.3 percent of all jobs in Wellington. For all other regions it's a much smaller share, sort of 0.3 percent or less."

Applying the 14 percent reduction to Canterbury's 6700 public service equated to 909 jobs, or 0.3 percent of the region's total jobs, Brunsdon said. He said Manawatū-Whanganui, Northland and West Coast had a 0.3 percent reduction through this modelling.

About 42 percent of public service employees are concentrated in Wellington, and the rest spread throughout the country.

"Those sorts of back-office - if you will - jobs are mostly concentrated in Wellington in those government agencies, and that's why cutting the core public service hits Wellington so much harder," Brunsdon said. "If it was a target across the entire public service it would be spread a little bit more evenly across the country."

Brunsdon said it was important to ensure the public service was not bloated.

"The point of the government isn't to support Wellington, and ultimately it's funding what it does through taxes on everyone. So we've got to make sure those taxes are fair and we are getting fair bang-for-buck for everyone."

But he said the challenge with the plan was how each agency would apply a budget cut directive, and it might miss a wider view of where investment is needed overall.

Willis said the changes will be phased in over several years, and it was too soon to say where specifically they will occur.

"Wellington and other centres will have time to adjust. The labour market is dynamic. Every quarter, something like 150,000 jobs are created in New Zealand."

Cafe owner calls move 'heartless', resident fears 'ghost town'

The view from some parts of Lambton Quay was less optimistic.

Kirsten Saunders, co-owner of Smith the Grocer Cafe, said the last round of public sector cuts saw foot traffic dry up - and the prospect of more job losses was crushing.

"You see the stress that it takes on all the people coming in who are going through the restructures and losing their jobs.

"That was very noticeable here, because we see a lot of those sort of business meetings, meetings with recruitment agents, recruitment agents were telling us that there's just not a lot of jobs around, lots of people hunting for them."

Saunders said the city had not fully recovered from its economic downturn, and this was another blow.

"People just don't have the same discretionary spend… The current government seems a little heartless, I would suggest. It would be nice to see a bit more compassion."

Wellington resident Tracy Day said the culture in Wellington was already dying, but the cuts would finish it off.

"People aren't going to want to stay in Wellington, then the shops are empty, the rates go up, and Wellington's just going to be another ghost town."

As a mum, she worried for students leaving university and looking for jobs.

Kim Thomas said the cuts would not be good for the city.

"You're already seeing lots of shops close and cafes close and restaurants close... It'll probably be more of that."

Sagar Sharma, who owns the Annexe Cafe and Cafe Coffee Station in central Wellington, said he had reduced staff about 30 percent over the past two years, due to a combination of the public sector job cuts and a new working-from-home culture.

A recent move of the Wellington City Council offices had not helped Annexe Cafe, he said. He doubted both businesses could remain open if thousands of jobs were slashed in the capital.

"At the moment, we are 11.30, it's almost 12 o'clock, we have four customers in the cafe… If [the job cuts happen] I don't think we will survive anymore."

But Mia Tracey from Dough Bakery, Slice and Pickle and Pie, said she was trying to keep positive amid the unfortunate news.

"We just have to continue to ride the metaphorical wave. Control what we can control and try to have a positive outlook."

She said the city library's recent opening was good news, and could breathe some new life back into the CBD.

Not just a 'public sector town' - ministers

Willis said Wellington was more than just a hub for bureaucrats, with an extraordinary film and tech industry and world-leading firms.

Senior minister and MP for Hutt Valley, Chris Bishop, agreed.

"We've got to stop stereotyping Wellington as just a boring, public service town… it is so much more than that and we've got to stop thinking about it like that."

Bishop said Wellingtonians and Hutt Valley residents he talked to wanted a high-quality, "fit for purpose" public service.

When asked whether public servants might feel vilified, Bishop said people would have a range of reactions to the news, but he valued the contribution of the public servants he worked with

Wellington Mayor Andrew Little said the cuts would spread anxiety for residents and businesses as people wondered "when the axe is going to fall".

But he said the city had a strong tech sector, which he hoped would provide resilience.

"We have a really strong tech sector, not just fin-tech but govt-tech, technology that supports government, so this is a city that can help the government make a difference."

Little said he would be contacting senior ministers to discuss the impact on the city.

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