Finance Minister Bill English says job cuts in the public service will continue, though he can't predict how many jobs will go.
Mr English told Morning Report the Budget signals the Government's expectations to the public service and it expects to start receiving the dividends from that from 1 July next year.
He says the sector knows it needs to provide more service for less money, while still providing assurances that public services will be high-quality. He says he can't predict exactly how many jobs will go.
The Government says it wants to make up $1 billion of savings from the public sector over the next three years. It is requiring state service agencies to fund their own contributions to staff superannuation schemes ($650 million saved) save another $330 million through increased efficiencies in so-called back-office operations.
Business New Zealand chief executive Phil O'Reilly says the cuts don't have to mean job losses: they can be made in areas the public does not see, such as the purchase of motor vehicles and stationery.
But the Council of Trade Unions says the Government has signalled that the savings will mean job losses, and by imposing a sinking-lid policy on the public sector the Government is effectively wiping its hands of the responsibility for the cuts.