Prime Minister John Key says the Government makes no apology for what promises to be a new drive for efficiencies in the public service.

More jobs are expected to be lost with mergers of government agencies, sharing of backroom functions such as human resources administration, and a big focus on technological advances.

Mr Key anticipated, for example, people having the option of applying for a passport via a smartphone. He said the biggest issue around technology was the cost and security of it. On his visit to the United States last year he had had discussions with Google, which was providing such capability to governments on a bigger scale.

Mr Key said he was planning a major speech in about three weeks to go into more detail but "there won't be mergers for the sake of mergers".


All government services would be looked at from education to policing with some hard questions asked and clear expectations set by Government.

"It is quite a revamp of the public service and I think it will deliver better results for New Zealanders.

"We expect to make no apology for wanting greater efficiency out of central government agencies."

The merger of the Ministry of Agriculture and Forestry with the Ministry of Fisheries had been an example of a good merger of ministries connected to primary industries.

Before National took power in 2008, it set a cap of 38,859 fulltime equivalent staff in the core public service and about 3000 jobs were lost over its first term. Just before last year's election the cap was lowered to the reduced number, 36,475.

Just $800 million has been allocated for new operational spending in the May Budget, and most of it would be eaten up by education and health, he confirmed yesterday. That would essentially cover just population and inflation adjustments.

"It is going to be tight for both of those big-spending ministries let alone anybody else. That shows you why the Government needs to save money. If we are going to pay for the general wage rounds ... and the other cost pressures, then we need to find savings in other places."

Mr Key said the Budget Policy Statement to be released by Finance Minister Bill English on Thursday would set the Government's priorities for the term: responsibly managing the Government's finances, building a more productive and competitive economy, delivering better public services within tight financial constraints and rebuilding Christchurch.


The Government was still on track to deliver a surplus in the 2014-15 financial year of between $300 million and $500 million.

Labour state services spokesman Chris Hipkins said technology could deliver some efficiencies, such as enabling Internal Affairs staff processing citizenship applicants to access Immigration records electronically. But he believed the Government's emphasis was on cutting staff in the public service, rather than on creating a good public service.