Review suggests super-ministry shakeup

New Zealand’s first ‘super-ministry’ could be in for a shake-up, with an independent review suggesting the Government should consider peeling off some of its functions to better define its core role.
The Ministry of Business, Innovation and Employment (MBIE) was formed in 2012 by the last National government. The result of a merger of four different government departments, MBIE was intended to provide stronger policy leadership and services for the business sector while also saving money.
But an “independent rapid review” of the ministry, carried out as part of the coalition Government’s Budget savings process but released only this week, has suggested it may now need to do less rather than more.
The review, carried out by former Ministry of Social Development chief executive Brendan Boyle, said MBIE’s expenditure had grown 90 percent since 2017 to support government priorities, fuelled by growth in demand for existing functions as well as the addition of substantive new portfolios to its work.
Boyle said the ministry had been “a large and broad department from inception”, and “the gradual addition of work programmes, appropriations and portfolios risks making the organisation unwieldy, creates competition for policy resources and requires servicing multiple ministers and portfolios”.
“This broadening of scope comes at a cost. The government and central agencies should be clear about what is and is not the core role of MBIE.”
Due to its size, the ministry had been asked to absorb cost pressures – such as new ministerial portfolios for Auckland and resources – and support unfunded new areas, affecting its work in other areas.
Boyle said the Government needed to “agree what role it wants MBIE to play”, with his further suggestions on that point redacted to protect the confidentiality of advice from officials.
However, he identified Immigration NZ as one agency that could be structurally separated from the ministry.
Boyle said the Budget appropriation for immigration services made up a significant portion of both MBIE’s full-time equivalent headcount and operating budget, worth just under 41 percent of departmental operating expenditure.
“In my view there is a need to stabilise and simplify INZ settings and operation to allow leadership to provide a service that is both effective and efficient.”
The Government needed to consider how to build “constructive tension” into the system, he said, with large delivery functions in the public sector not facing “the competitive pressures of a market”.
Boyle is not the only person advocating for a slimming down of the super-ministry. Former National Party minister Steven Joyce, who as economic development minister oversaw MBIE’s establishment, told The Listener in March he would be “happier” if the ministry lost almost half of its 6400 staff.
“Its scope has widened and it has lost focus. It’ll have to stop doing some things it doesn’t need to do anymore,” Joyce told The Listener.
Economic Development Minister Melissa Lee, who is the “ownership minister” for MBIE, told Newsroom no decisions had been made on Immigration NZ’s operating model and structure, and any decision would require consultation with Immigration Minister Erica Stanford.
“As ownership minister for MBIE, I am constantly engaging with officials to make sure it is efficient and effective in delivering services, government priorities, and value for taxpayers,” Lee said.
Labour Party immigration spokesman Phil Twyford told Newsroom he had not seen any evidence that having Immigration NZ within the ministry was having a negative impact on its performance.
There were good reasons to have Immigration NZ sit within MBIE given the ministry’s labour market functions, and there should be a high threshold for any form of structural reorganisation, Twyford said.