Closed embassies, hundreds of job losses and an outsourced consular hotline for distressed New Zealanders overseas are part of a proposed radical overhaul of the Ministry of Foreign Affairs and Trade (Mfat).

And a further round of job cuts is looming, on top of yesterday's confirmation that the axe is hovering over 305 jobs, including diplomatic and policy positions.

Mfat chief executive John Allen announced proposed changes that would see 169 ministry staff culled in New Zealand and overseas, as well as 136 locally-engaged staff.

That means the loss of 21 per cent of the ministry's 1421 staff, in one of several changes that Mr Allen said would transform the ministry into a flexible organisation with improved expertise.


Among the proposals is a 24/7 consular phoneline as a first point of contact overseas. Mr Allen gave assurances that New Zealanders who were in distress overseas would still receive a quick helping hand, as the service would categorise calls and send the high-priority ones to the relevant embassy.

"The question is can outsourced providers deliver that service? We'll see. We're in discussion, and we think they probably can, but obviously if we're not confident at the end of that process, then we won't be progressing."

He could not guarantee that the service would not be based overseas. "We would prefer to see a New Zealand voice at the end of the line."

Following these reforms, further jobs were likely to be culled in the human resources, information technology and property-management areas.

"In the HR space, with the elimination of rotation [of staff] ... we have 12 or 13 people in place to support that rotation, and obviously we won't need all those people in a new environment," Mr Allen said.

The changes are part of a broader squeeze on the public service, as the Government seeks to create a leaner and more efficient state sector.

Labour's foreign affairs spokesman Phil Goff and New Zealand First leader Winston Peters, both of them former foreign affairs ministers, said the cuts would cripple New Zealand's relationships with other nations.

The Greens said the cuts were putting business interests first, because they would not affect the staff that worked on free trade deals.


But Foreign Minister Murray McCully welcomed the reforms as a constructive step.

Among other proposals are a greater use of hubs, closing embassies in Warsaw and Stockholm - subject to Cabinet approval - and increasing Wellington salaries and cutting some of the overseas pay perks. Those at overseas posts would be asked to pay a sum based on the cost of living in New Zealand.

About 600 staff will have to reapply for jobs. The ministry has set aside a fund to cope with inevitable redundancy pay-outs.

The changes would save $20m to $25m a year.

Mr Allen said the proposals did not mean the ministry wasn't doing a good job, but some of its processes were "cumbersome" and its structure was "top-heavy".

"We've had more senior resource than the ministry probably needs. The rotational model is a barrier to developing the depth of expertise I think is necessary. We haven't seen our young people progress as rapidly as they or we might like."

Mr Allen said staff, whose morale he described as "challenging", had a month for feedback and a final decision was expected on April 10.

* 305 jobs are likely to be cut in an overhaul of Mfat - 21 per cent of the 1421 staff.
* One of the proposals is a 24/7 consular phoneline as a first point of contact for New Zealanders overseas.
* About 600 staff will have to reapply for jobs.
* The changes would save $20m to $25m a year.