Thirty-nine Government departments or agency chief executives were asked in December to suggest annual savings of either 6.5 or 7.5 percent.
Treasury confirmed on Friday the chief executives could suggest cuts to both departmental and non-departmental funding.
Departmental funding is spent on an agency’s core business and operational expenses, while non-departmental funding is managed by an agency on behalf of the Crown.
Examples of non-departmental expenditure include the Ministry of Culture and Heritage’s funding of Te Matatini, the Royal New Zealand Ballet and the New Zealand Symphony Orchestra.
The Labour Party’s public services spokesperson Ayesha Verrall has been critical of National’s plan to cut public service spending.
Dr Verrall told RNZ front-line services were at risk.
“Departmental spending is on a ministry, it is those important back-office functions but Nicola Willis has asked for cuts to non-departmental funding. That means [cuts to] Te Whatu Ora… housing providers, it means all the services that are provided in a front-line way to New Zealanders.
“Non-departmental cuts means that New Zealanders will suffer losses in their services.
“This is a broken election promise. National promised cuts will be confined to back-office functions,” Dr Verrall said.
National campaigned on slashing back-office public service spending across 24 public agencies by 6.5 percent.
In a statement, Willis said it would be up to the chief executives of Government departments to decide where the cuts could be made.