A major political argument has erupted over the future of New Zealand’s public service after ACT unveiled plans to remove the statutory “good employer” requirement, restrict government-funded cultural and spiritual practices, and put a “need before race” principle into law.
ACT leader David Seymour says the proposed changes would create a public service based on “merit, need, neutrality, and results”. The Public Service Association, however, has responded with a blistering attack, accusing ACT of attempting to weaken workers’ rights and targeting Māori within the public sector.
The competing claims expose a much bigger political question heading towards the 7 November general election: what should New Zealand’s public service look like, and how far should governments go in prescribing employment, cultural and equity obligations?
What ACT is proposing
ACT announced its public service policy on Sunday, 16 August 2026.
One of its most significant proposals is the repeal of Section 73 of the Public Service Act 2020, along with Section 118 of the Crown Entities Act.
Section 73 currently requires chief executives of government departments and boards of interdepartmental ventures to operate employment policies consistent with being a “good employer”.
The law defines this around the fair and proper treatment of employees and includes equal employment opportunities and other employment responsibilities.
ACT argues that these additional public-sector requirements are unnecessary because protections covering matters such as discrimination, disability and workplace health and safety already exist elsewhere in New Zealand law.
Seymour said government jobs should be awarded to the person best suited to the role, with decisions based on merit, skills and experience.
It is worth noting that the Public Service Act already contains a specific merit provision. Section 72 says that when appointments are made under the Act, preference must be given to the person best suited to the position.
That makes the dispute more complicated than simply being a choice between merit-based recruitment and non-merit recruitment.
The disagreement is really over what additional responsibilities public sector employers should carry alongside merit.
‘Need before race’ would be written into law
ACT’s second major proposal would establish what it calls “need before race” as a legal principle governing public services.
The party says there is already a Cabinet expectation that services should be delivered according to need rather than race, but ACT wants that principle written directly into the Public Service Act.
According to ACT, decisions that breached the requirement could potentially be challenged through judicial review.
Seymour said that if two New Zealanders had the same level of need, they should receive the same treatment from government.
Supporters of this approach are likely to see it as equal treatment and a move away from ethnicity-based government policy.
Critics argue that treating everyone identically does not necessarily result in equal outcomes when different population groups experience substantially different health, economic or social outcomes.
That philosophical disagreement has become one of the sharpest dividing lines in New Zealand politics.
Changes proposed for karakia and cultural practices
ACT also wants to separate what it describes as spiritual practices from public service work.
Its proposal would prohibit public service employers from initiating or funding practices such as prayer, karakia or other spiritual activities as part of workplace operations.
However, there is an important distinction in ACT’s policy that risks being lost in the political argument.
ACT says individual public servants would remain free to practise their own religion, culture or traditions in their own time, with reasonable accommodation where appropriate.
The proposal therefore does not appear to amount to a blanket prohibition on public servants observing cultural or religious practices.
ACT also wants government agencies to remove cultural requirements from job advertisements and position descriptions unless there is a genuine occupational reason for requiring them.
The party says applicants should not have to demonstrate knowledge of particular cultural concepts, values or worldviews where those requirements have no direct relevance to the work.
PSA launches fierce attack
The Public Service Association Te Pūkenga Here Tikanga Mahi strongly rejects ACT’s interpretation of the changes.
PSA National Secretary Fleur Fitzsimons said the policy revealed what the union regarded as ACT’s broader agenda of shifting power towards employers and weakening public services.
The union argues that the existing good-employer requirement exists for an important reason: the Government should demonstrate high employment standards rather than simply meet minimum employment law requirements.
Fitzsimons said removing the provision would weaken expectations around fair treatment and employment practices within government agencies.
The PSA also linked the latest proposal to other employment reforms pursued during the Coalition Government’s term, including changes involving pay equity, personal grievances and workplace regulation.
The union says these changes collectively represent an erosion of worker protections.
ACT, by contrast, presents its proposals as removing unnecessary obligations and refocusing government agencies on delivering services efficiently and impartially.
Māori representation becomes central to the dispute
The sharpest disagreement concerns Māori.
The PSA says a public service that reflects the population it serves improves both its effectiveness and legitimacy.
Existing legislation has historically placed responsibilities on public-sector employers around diversity and inclusion, although the Public Service Act itself has already undergone significant changes.
The Public Service Amendment Act became law on 2 June 2026 following legislation introduced by the Government. According to the Public Service Commission, those reforms were intended to reinforce political neutrality, merit-based appointments and professional competence, while clarifying the role of the public service and strengthening accountability.
ACT is now proposing to go further.
The PSA characterises the combination of “need before race”, changes to cultural practices and the proposed removal of the good-employer provision as an attack on Māori participation and policies intended to improve Māori outcomes.
ACT rejects that interpretation and says its objective is equal treatment of New Zealanders as individuals rather than different treatment based on ethnicity.
These are fundamentally different political philosophies, and describing either interpretation as established fact would oversimplify the dispute.
Is ACT proposing to make the Government a ‘bad employer’?
Despite the PSA’s provocative description, repealing Section 73 would not literally create a legal requirement for government departments to become bad employers.
Normal employment, discrimination, health and safety and other workplace laws would continue to apply.
The more substantive question is whether government agencies should be held to an additional statutory standard beyond those minimum obligations.
The PSA says yes, arguing that the state should operate as an exemplary employer.
ACT says no, arguing that public service employers should operate under essentially the same employment framework as other organisations.
That is the real policy argument behind the headline.
Election battle lines are becoming clearer
The timing is significant.
New Zealanders are due to vote in the general election on 7 November 2026, and the PSA has openly stated that it will campaign for a change of government.
The union has previously said the election represents an opportunity to reverse policies it believes have damaged workers and public services.
ACT, meanwhile, is presenting the public service reset as part of a wider programme centred on smaller government, individual equality, political neutrality and tighter limits on ethnicity-based policy.
That means the debate is unlikely to remain confined to employment law.
It touches questions about Māori Crown relations, equality versus equity, religious and cultural expression inside state institutions, public-sector employment standards, and how government services should be allocated.
Those questions will now increasingly be put before voters.
For New Zealanders trying to make sense of the competing rhetoric, one distinction is particularly important.
ACT says it wants to remove specific statutory obligations and government-supported cultural practices. The PSA believes doing so would weaken fair employment standards and disproportionately affect Māori.
Whether voters see that as restoring neutrality or dismantling protections is likely to become part of the wider 2026 election debate.
References
ACT New Zealand, “ACT will restore one public service for all New Zealanders”, 16 August 2026.
New Zealand Legislation, Public Service Act 2020, Sections 72, 73 and 75.
Public Service Commission Te Kawa Mataaho, Public Service Act 2020 amendments, updated 3 June 2026.
Public Service Association Te Pūkenga Here Tikanga Mahi, media statement supplied to Webfit News.
Public Service Association, 2026 election and public service campaign material.
