MSD's voluntary redundancy costs to go over $14 million: reports

The Ministry of Social Development (MSD) has confirmed that it accepted 218 applications for voluntary redundancies, which will cost the agency more than $14 million.

Social Development and Employment Minister Louise Upston said on Budget Day that the total cost of voluntary redundancy compensation will reach $14,853,921, The New Zealand Herald reported.

A total of 218 people were accepted for voluntary redundancy as of the end of May, according to the minister, who said they are "in the process of finishing" their jobs.

The voluntary redundancies add to the 86 roles the ministry will cut, which are much lower than the 97 positions that it initially proposed in late May.

Nadine Kilmister, MSD deputy chief executive for people and capability, said those impacted by the changes were able to speak with their managers. Senior leaders also reviewed feedback they received and discussed the cuts with the Public Service Association (PSA).

Public sector cuts

MSD is just one of the many employers in the public sector that cut roles following orders from the government cut spending. The ministry was ordered to save 6.5%.

So far, the MSD has already cut $107 million from its spending, according to the NZ Herald report, which cited the Budget 2024.

The ministry is also planning to save an additional $84.8 million in the future.

PSA previously criticised the cuts saying it will impact the quality of service delivered by MSD.

"Right now, need is rising as the economy slows, and as our population grows and ages. This is the time to invest more in systems and workers at MSD not less," said PSA national secretary Duane Leo.