Figures released to the Otago Daily Times show that between 2008 and 2012 the number of public service employees across the country declined by 490, Otago recording 250 jobs losses and Southland 112.
Those combined job losses puts the South second only to Wellington (down 499), and ahead of Auckland (up 273) and Marlborough (up 192).
''In my view, the South has been hit harder than most areas and that is a travesty for the South, and it is simply not good enough,'' Dunedin North MP David Clark said yesterday.
Questions for State Services Minister Jonathan Coleman concerning the figures were referred to the State Services Commission.
''While some regions have lost staff, others have gained.''
Public services job losses were offset by increases in other regions, most notably Waikato (802), Bay of Plenty (231) and Nelson (187).
''Staff numbers in different regions and between different government departments shift over time.
''Staffing decisions are based on the need to provide effective services to New Zealanders rather than maintaining numbers in a particular region,'' the spokesman said.
Dr Clark noted that since the global financial crisis no projects for new schools or hospitals had been brought forward for the South, while the $14 billion to be spent on roads of national significance had all gone to roads north of Christchurch.
''Yet the taxpayers of Otago and Southland continue to pay their share of tax and we're simply not getting the returns.''
In addition, core public sector jobs in Otago had gone from 3.5% of the national total in 2008 to 2.9% in 2012, and ''we are seeing [those jobs] disappear out of town ... This is huge for the region'', Dr Clark said.
If the State Services Commission annual headcount figures included other state sector agencies such as police, hospital and education, the Otago and Southland figures were likely to be much worse, he said.
While the Government had advocated for public institutions to support regional growth, ''the Government is not putting its money where its mouth is''.
