Budget 2026 faces a reduced operating allowance of NZ$2.1 billion, cut from an initial target of NZ$2.4 billion.
Government agencies are slated for budget cuts of 2% in the coming year, followed by 5% reductions annually for the next two years.
The administration aims to cap the core public service workforce at 55,000 full-time equivalent roles by July 2029.
Finance Minister Nicola Willis intends to reallocate savings into health, education, defence, police, and infrastructure development.