Inland Revenue faces 20% budget cut and possible job losses

Inland Revenue staff have been told the agency will need to consider further job cuts as it deals with a shrinking budget.

An intranet message to Inland Revenue staff from chief executive Peter Mersi said savings required across multiple financial years meant “we will need to operate within a 20% reduction to our baseline budget in 2028/29”.

Workers were told the agency would need to consider “reductions in both workforce numbers, alongside other costs” to deliver required savings, and some activities would stop or made more efficient.

Inland Revenue is one of many Government agencies tasked with reducing its baseline budget by 2% this year, and 5% in 2027/28 and 2028/29.

Public Service Association Te Pūkenga Here Tikanga Mahi national secretary Duane Leo said it means IRD’s more than 4000 staff are “now all working under threat of losing their jobs”.

The PSA union has been calling for a public good test before Government agencies start what it sees as “major restructures”.

“The prospect of further budget reductions and potential job losses is creating significant concern for members. Many are questioning how Inland Revenue can continue to meet increasing expectations while reducing both funding and staffing levels,” Leo added.

In a statement, Inland Revenue said as part of Budget 2026, agencies were tasked with finding financial savings over the coming years, and as part of its response, staff received an update “on our work to find efficiencies and make savings to ensure we continue to operate within future annual baseline budgets”.

“Baselines are reducing by 12% and to meet inflationary pressures, costs will need to reduce by 20% by 2028/29. We are beginning planning on how we meet this and no decisions have been made yet,” the agency said.

Inland Revenue said it made a commitment to staff to be as transparent as possible throughout this process, and was keeping unions briefed on plans as appropriate.

“While change can be unsettling, IR staff are dedicated to continuing delivering the important work we do for New Zealand,” the agency said.