Fiscal sustainability

Fiscal sustainability is a key priority for the Government. As part of Budget 2024, MSD was asked to find savings of 6.5 percent of eligible baseline, or $119.4 million annually. This is in addition to what MSD was already doing to reduce overall expenditure, including absorbing cost pressures and implementing $87 million in savings over four years as part of Budget 2023.

For Budget 2024, we identified a range of savings options for Ministers to consider, including options to:

• make policy changes which will lead to savings
• scale or stop lower value contracted programmes
• reduce more discretionary operational spending, including contractors and consultants.

One of our key savings initiatives was an invest-to-save proposal to support more households, particularly families, out of emergency housing. This included changes to tighten eligibility and extending support for people to find sustainable housing options. As a result, fewer people are expected to be in emergency housing in the future than was forecast if these initiatives were not in place.

We are reducing our property footprint, travel and fleet management costs, and have identified savings in contractors and consultants.

After a period of time-limited funding for fixed-term roles coming to an end and new functions shifting to MSD, there has been a flow-on effect to the number of staff through a combination of voluntary redundancies, attrition, fixed-term roles ending and change proposals for four of our seven business groups. See page 41 for more information.