Summarised by Centrist
Sir Brian Roche’s new State of the Public Service report paints a stark picture: despite years of restructuring, New Zealand’s public sector remains large, fragmented, duplicative and slow, with capability at risk of eroding.
The public service today still employs 62,654 staff, only slightly below its 2023 peak of 65,699, spread across 43 separate entities. Roche says this is “more than most small, advanced economies” and that the complexity “limits our ability to manage costs, maintain critical capacity and deliver joined-up services”.
Departments are buying “expensive digital solutions in isolation”, he warns, contributing to inefficiency and making the system “slow to move on digital and to adopt artificial intelligence technologies”. The report says the sector remains a “digital straggler”, undermining productivity and weakening its connection with citizens.
Roche argues the current operating model is outdated: too many ministries, too much duplication, and too little coordination. A structural shift is needed, with agencies potentially merged or clustered around shared platforms, users or functions, reducing touch points and enabling savings through shared back-office operations.
Despite publicised cuts, staffing issues persist. Career pathways, retention problems and insufficient talent development pose “significant risks” to capability. Only 40 percent of New Zealanders believe the public service adapts based on their feedback.
Roche says the sector is at a “pivotal moment”. Legacy systems are no longer enough, and without modernisation the system risks falling further behind expectations.
