WELLINGTON, May 19 (Reuters): New Zealand's government plans to cut thousands of public service jobs and avoid pre-election ​giveaways in this month's budget, Finance Minister Nicola Willis said on Tuesday, as the ruling centre-right coalition seeks to burnish its economic credentials ahead of a close-run November election.

In a pre-budget speech to Business North ​Harbour, Willis said the government would reduce the core public ​service to no more than 55,000 full-time equivalent employees by ⁠July 2029, 8,700 fewer than in December last year.

The target ​would return the core public service to about 1% of New Zealand's ​population, which Willis described as its historic norm. She said the cuts would not apply to teachers, nurses, doctors, police or workers employed by Crown entities.

"With ​an election around the corner, it's tempting to proffer another spending ​band-aid," Willis said, rejecting "free" policies or cash handouts. "Our government is not going to repeat those ⁠mistakes."

The May 28 budget will reduce most agencies' operating budgets by 2% in the coming year, followed by a further 5% in each of the following two years, generating NZ$2.4 billion ($1.44 billion) in savings ​over the forecast ​period, Willis said.

Willis ⁠said New Zealand faced a volatile global environment, high public debt and an annual debt interest bill ​of about NZ$9 billion.

"New Zealand simply can't afford ​another failed ⁠spend-up," Willis said.

The New Zealand government last week said it would set new operating spending at NZ$2.1 billion for the 2026-27 year, around NZ$300 ⁠million ​lower than it had forecast in December, ​but would increase capital spending to a net NZ$5.7 billion.

Photo from Reuters