Inland Revenue Plans 20% Budget Cut by 2029
Inland Revenue will reduce its baseline budget by 20% by 2028/29, leading to potential workforce reductions and opposition from the Public Service Association.
The Inland Revenue Department must operate within a 20% reduction to its baseline budget by the 2028/29 financial year. Commissioner Peter Mersi informed staff that the agency will cut its budget by 2% this year, followed by 5% in 2027/28 and another 5% in 2028/29. While baselines are reducing by 12%, Mersi noted that inflationary pressures necessitate a total cost reduction of 20%.
To achieve these savings, the agency will consider reducing workforce numbers and other costs, as well as streamlining or stopping certain activities. These measures are part of a broader Budget 2026 mandate from the New Zealand Government requiring agencies to find financial savings.
The Public Service Association has condemned the move, arguing that the cuts place hundreds of the agency's 4,000 employees under threat of job loss and increase stress for remaining staff. The union is calling for a mandatory public good test before major restructures proceed and has expressed opposition to using artificial intelligence as a justification for reducing headcount.
