New ministry, public service caps announced
Thursday 15 Mar 2012 12:40 p.m.
By Dan Satherley
Prime Minister John Key outlined the Government's vision for the future of New Zealand's public services at a speech in Auckland today.
Speaking at the Pullman Hotel, Mr Key announced the creation of a new Ministry of Business, Innovation and Employment.
It will come into being on July 1.
The new ministry will incorporate the former Ministries of Economic Development and Science and Innovation, and the Departments of Labour and Building and Housing.
Mr Key says it will employ around 3,200 people, making it similar in size to the Ministry of Justice.
"We’ve always said there is a high hurdle for structural change in the public sector," says Mr Key. "The benefits have to significantly outweigh the costs. A single business-facing department meets that test."
He says other countries like Australia and the UK have recently implemented combined departments in recent years.
"The United Kingdom, for example, established the Department for Business, Innovation and Skills in 2009, and Australia last year established the Department of Industry, Innovation, Science, Research and Tertiary Education."
Stephen Joyce, who is tipped to lead the ministry, said it was not a "cost-cutting measure" and would boost the country's standard of living.
"If we want more and better jobs for New Zealanders we need to encourage more businesses to be based here," says Mr Joyce.
"That means making it easier for businesses and companies to access innovative ideas, markets, capital, skilled workers, resources, and the supporting public infrastructure."
Mr Joyce says it's not possible to identify at this stage just how many jobs will be lost. In today's speech, Mr Key announced a lower cap on the number of jobs in the public service – 36,475 full time (FTE) positions, down from the current cap of just under 39,000.
"That cap was successful in turning around what had been a huge increase in public service numbers," says Mr Key.
"The number of FTE positions in core Government administration stopped growing, and then dropped by about 2,400 over three years. That is not a radical decrease by any means… I do not want the number of positions to rise."
The cap does not include "frontline staff like teachers, police officers, hospital staff or prison officers".
The Public Services Association says the Government needs to consider the needs of its employees if the shake-up is to work.
"The PSA has been calling for a more joined-up and responsive public service for years, but if John Key’s revolution is simply more job cuts and restructures in disguise it could do more harm than good,” says Brenda Pilott, national secretary.
The PSA also questioned whether the merger of four disparate departments made sense.
"There is no obvious logic to the combination of functions," says Ms Pilott.
"We’ve seen the results in departments like Defence, where morale is at an eight-year low, and the Ministry of Foreign Affairs and Trade, where the Government is backpedalling on a radical restructure."
Mr Key says he recognises the importance of the public sector to New Zealand's economic performance as it makes up a quarter of the country's economy.
In the speech, Mr Key outlined 10 "challenging results" he wants to achieve in the next "three-to-five years".
- a reduction in long-term welfare dependency;
- more young children in early childhood education, particularly Maori and Pacific children;
- immunisation rates for infants to increase;
- a reduction in the number of assaults on children;
- an increase in the proportion of 18-year-olds with NCEA level 2;
- an increase in the number of people coming through with advanced trade qualifications;
- a reduction in the crime rate;
- a reduction in the rate of re-offending;
- a "one-stop online shop" for all Government advice and support that businesses need;
- and "transactions with Government completed easily in a digital environment".
"Achieving these results will be difficult and demanding," says Mr Key. "In fact, for some of them it will be extremely difficult, but I make no apology for my high expectations.
"I came into politics to make a difference, and it is time for a clear focus on what will make New Zealand a better place."
Ministers have been appointed to oversee each of the 10 goals.
Business NZ reacted positively to the announcement.
“Reducing current levels of duplication will be appreciated by many enterprises," says CEO Phil O'Reilly.
“A single, dedicated business-facing government department, focused on delivering results, will be a great improvement on the current situation.
Mr Key yesterday said the Government is not going in for "restructuring just for the sake of it" but the public service must be modernised and ministries must share resources.
Yesterday, a video from the 2008 election campaign emerged showing Mr Key promising "no job cuts" to the public service, prompting new Labour leader David Shearer to go on the offensive.
“I think he's broken a promise - that was a clear statement of what he wanted to do [and] now it's the opposite," Mr Shearer told 3 News.
About 2,500 jobs have gone in the last three years.
The Public Service Association says its members have had enough, and is threatening mass rallies and protest marches.
Mr Key says no future reorganisations are planned, but won't rule them out.
"I’m not ruling them out in the future, but there is no plan for wholesale reorganisation. We already have a very full plate with the work that is already underway and the changes I have announced today."
The new ministry is subject to due diligence and Cabinet approval.