Budget 2026 Cuts Could Deepen Public Service Crisis

The PSA says Budget 2026 is shaping up to be another austerity Budget dressed up as “reprioritisation” — with public servants warning the Government’s ongoing cuts are hollowing out the very services New Zealanders rely on during a cost-of-living crisis.

The Prime Minister’s Budget 2026 preview today confirms what public service workers already feared: more cuts are coming, and New Zealanders will pay the price.

“Enough is enough. Public services are already being cut to the bone, and the Prime Minister is sharpening the knife for another round,” said Fleur Fitzsimons, National Secretary for the Public Service Association Te Pūkenga Here Tikanga Mahi.

“Thousands of jobs have already been axed. Services New Zealanders depend on are already suffering. And now the Prime Minister says ‘ongoing reprioritisation’ is required. Let’s be clear: that’s code for more cuts, all because the Government made a choice to fund tax cuts over public services.”

The public sector burnout crisis is accelerating

A recent PSA survey of public service workers found one in four public service workers are thinking about leaving.

“This Budget risks turning that into a stampede,” said Fleur Fitzsimons.

“We cannot afford to lose more experienced public servants. Who is going to tackle rising poverty, fix our crumbling infrastructure, care for our ageing population, and grow the economy? You can’t do more with less forever, and the Government has long passed the point where cuts cause real harm.

“The Prime Minister talks about investing in health and education, but those areas too have faced big job losses and real spending cuts. Now he demands further savings from every other agency. That’s not a plan; it’s a recipe for more pain and disruption.

Tax cuts over public services was always the plan

“This is a government that has spent billions of dollars on tax cuts for landlords and big tobacco while gutting the services working New Zealanders rely on. Their priorities are a disgrace.

“New Zealanders deserve a public service with the people and resources to deliver. This Budget should be rebuilding our public services, not running them further into the ground.”

Recent statement:

11 May 2026: Shock survey result – one in four public service workers thinking of leaving NZ

Note:

The Public Service Association Te Pūkenga Here Tikanga Mahi is Aotearoa New Zealand’s largest trade union, representing and supporting more than 95,000 workers across central government, state-owned enterprises, local councils, health boards and community groups.