Govt Announces Major Overhaul of Public Service Act to Boost Performance

The proposed changes are part of the Government’s broader push to streamline public service operations, refocus on core responsibilities, and strengthen accountability across state agencies.

 In a sweeping reform aimed at driving better performance and delivering greater value to taxpayers, Public Service Minister Judith Collins has unveiled plans to significantly overhaul the Public Service Act 2020. The proposed changes are part of the Government’s broader push to streamline public service operations, refocus on core responsibilities, and strengthen accountability across state agencies.

Speaking today, Minister Collins said the current Act—introduced under the previous Labour-led administration—had diluted the effectiveness of public sector leadership by adding layers of responsibility that ultimately detracted from core performance outcomes.

“The Public Service Act 2020 added new responsibilities that, while well-intentioned, shifted chief executives’ focus away from delivering results and making efficient use of taxpayer dollars,” said Ms Collins. “We want to get back to basics—ensuring the public service operates efficiently, is well-managed, and is delivering on the agenda of the government of the day.”

The reforms come as part of the National Party–ACT New Zealand Coalition Agreement, which mandates a review and amendment of the Act to "clarify the role of the public service, drive performance, and ensure accountability."

The Public Service Amendment Bill, expected to be introduced in July, will introduce a suite of structural and cultural changes, including:

• Clarifying the role of the public service to ensure agencies stay focused on delivering results;

• Streamlining chief executive responsibilities, reducing overlapping obligations that detract from performance;

• Reinforcing merit-based appointments across the public sector, aiming to attract top talent and avoid politicisation;

• Enhancing performance management for chief executives and agencies, introducing stronger evaluation mechanisms;

• Utilising tools to reduce silos between departments, encouraging inter-agency collaboration on complex issues;

• Improving risk management practices to prevent costly failures and inefficiencies.

The Government’s push for reform follows significant public sector growth in recent years. From 2017 to 2023, the number of full-time equivalent employees in the core public service ballooned by 34%, reaching over 63,000. Despite this expansion, key outcomes in health, education, and crime prevention have deteriorated, prompting calls for greater efficiency and accountability.

“New Zealanders are not getting value for the billions spent on public services,” said Collins. “We’ve seen more bureaucracy, but poorer results. That’s unacceptable. The public service must be results-driven, not process-driven.”

The reforms will also address the perception that the public service has drifted from its core function—serving the government of the day and delivering practical outcomes for citizens. By reinforcing performance expectations and reducing bureaucratic overhead, the Government aims to restore public confidence in the state sector.

Minister Collins emphasised that the public service remains a vital instrument of democratic governance and national development. However, she stressed that with limited taxpayer resources, agencies must deliver more for less.

“We must ensure that taxpayer money is used wisely. Improving the efficiency and professionalism of the public service will help grow the economy, create jobs, raise incomes, and allow us to invest in the essential services that matter most—like schools, hospitals, and infrastructure,” she said.

Further details on the Public Service Amendment Bill, including draft provisions and consultation processes, are expected to be released ahead of its introduction to Parliament in mid-2025.

This announcement marks one of the first major structural reforms from the National-led coalition government since taking office and signals a strong shift towards performance-based public sector management.