The government's announcement of massive public sector cuts has ramped up the election year battle - even between coalition mates.

Prime Minister Christopher Luxon has warned the public sector is not a make-work' scheme as the government looks to merge agencies and save billions.

The government has been accused of "taking a blowtorch to the public service" by the Greens, but ACT has welcomed the latest moves.

The government plans to slash 8700 public service jobs over the next three years in a bid to $2.4 billion.

The government's announcement of massive public sector cuts has ramped up the election year battle - even between coalition mates.