The Labour government has found nearly $4 billion in savings across the public service over the next four years. It comes as the government's accounts for the eleven months to the end of May show tax take was $2 billion lower than expected.
The government is treating the $4 billion as savings and won't be making it available for new spending.
Finance Minister Grant Robertson says the savings will come from cuts to public agencies' spending, a reduction in Budget allowances and operational and capital savings.
The Labour government has also directed public agencies to reduce the amount spent on consultants and contractors.
Grant Robertson expects this would save about $165 million every year.
He says this is not an admission the government has spent too much on consultants and contractors.
