The Inland Revenue Department admits its computer system isn't going to cope automatically with a $60-a-week payment for new parents beginning on Sunday.
Photo: RNZ / Richard Tindiller
It means staff will have to manually put in the details of parents in line for the Best Start payment, which is part of the Government's flagship Families Package, to ensure they don't miss out.
The Public Service Association said this is just the latest in what has been a "hugely disruptive and emotionally stressful" time for its members, who have just voted to take strike action next month.
"Just to give one example of the pressures they're under, the system is unable to process the Best Start tax credit, which starts on 1 July," said national secretary Glenn Barclay.
"Our members have been told they will have to process this manually, which will drastically increase their workload."
In a statement to RNZ, the IRD said it has chosen to manually process Best Start applications for the first few weeks of July because of the timing of the implementation.
"This is to enable us to focus on processing annual 7 July income tax returns and ensuring customers receive their tax refunds as soon as possible.
"This will not have any impact on the small number of customers receiving their Best Start entitlements from July 1. Automated processing of Best Start applications is expected to commence shortly after July 7."
The IRD signalled some time ago it's going through what it calls a major Business Transformation Programme, in a bid to streamline its systems so they work better and ultimately save the taxpayer money.
But a big chunk of that cost saving will come from shedding a third of its staff - around 2000 jobs - by 2021.
Mr Barclay said those losses are starting to bite already.
"While that kind of thing is going on in the background, it's just another layer that adds to members' frustration when it comes to bargaining, when they're asking for modest, across the board pay increases," he said.
Four thousand staff across Inland Revenue (IRD) and the Ministry of Business, Innovation and Employment (MBIE) are promising two two-hour stoppages next month over their demands for better pay and wage increases in line with living costs.
Mr Barclay told Morning Report that a better pay offer to counter the "dreadful pay systems" in the public service sector would put a stop to the planned strikes.
"With a bit of luck, we'll achieve a settlement and won't need to take industrial action but our members have voted in such number that we think that they're determined if that's what it comes to," Mr Barclay said.
IRD and MBIE staff join nurses, who are preparing to strike, and teachers who are currently considering a pay offer - if they reject it, that could also lead to strike action.
National Party leader Simon Bridges called it a shambles.
"The real worry is the public services that the public needs, whether it's in the hospitals, or whether it's in terms of Inland Revenue and their tax returns and the like, are going to suffer," he said.
"That's just going to add to the general picture we've got here of uncertainty, and a stalling economy."
Mr Bridges predicted it will only get worse as the government changes employment law which he said will strengthen unions and weaken New Zealanders ability to run their businesses.
Acting Prime Minister Winston Peters said not everything can be perfect from day one.
"Sometimes we just have to make a stretch when the environment in which you're operating in, which you've inherited, is not ready. In this case, whatever contingency is required, the government is attending to in whichever way it can."