public sector
Minister calls for AI to become a ‘fundamental expectation for all public bodies’
A wave of layoffs due to the introduction of AI is hitting New Zealand. The country has announced an overhaul of its public services, saying the technology will become a “fundamental expectation” for government agencies and allow them to lay off 9,000 workers, about 14% of their current workforce.
Finance Minister Nicola Willis announced the job cuts in a speech yesterday, lamenting the fact that the New Zealand government is made up of 39 departments, comparing it to 16 departments in Australia and 24 departments in the UK.
He characterized the country’s public services as “scared of AI and slow to move to the cloud” and said the country’s public services operate “a complex and fragmented set of overlapping IT solutions”.
“Our government shares your frustrations with fragmentation and silos, complexity, status quo thinking, and dangerously slow adoption of digital and AI technologies,” she added.
Aotearoa’s answer is to task chief digital officers to “embed the adoption of AI as a fundamental expectation for all public bodies”.
Minister Willis cited “a recent trial of an AI writing tool in hospital emergency rooms that reduced the time clinicians had to spend on file notes and increased the time they spent with patients” as an example of something he would like to replicate.
The planned overhaul will therefore “reduce the number of government departments, increase the use of AI and other digital tools, and deliver significant cost savings,” she said.
The government plans to cap the budgets of ministries and agencies, which it says will save NZ$2.4 billion ($1.4 billion) over four years when combined with job cuts, less than 1% of the government’s total major spending.
Many tech companies have made significant layoffs, justifying them as necessary to create a suitable workforce for the AI era, and this is an explanation we’ve seen deployed to explain significant layoffs at Cisco, Cloudflare, Atlassian, Meta, and Arctic Wolf.
Few governments have done anything similar, but one early high-profile effort, Elon Musk’s Department of Government Efficiency, hoped to use AI to improve government operations but left little evidence of success.
New Zealand is endowed with many resources and extraordinary natural beauty, but despite a modest tax base, residents expect high levels of government services. Minister Willis’ plan is therefore a very big bet on AI. ®
