Unfortunately, this tendency to invent new things has also extended to successive governments – they just can’t stop creating new portfolios!
New Zealand has 81 portfolios, 28 ministers, and 43 central government organisations (public service departments, departmental agencies, and non-public service departments). Comparing New Zealand to other countries with similar populations shows how extreme this is. Norway (5.5 million) has just 20 portfolios, 20 ministers, and 17 departments. Ireland (5.3 million) only has 18 portfolios, 15 ministers, and 18 departments.
A large executive is expensive. As outlined in Max Salmon’s research, 'When there are more ministers, governments tend to spend more, run larger deficits, generate higher revenues, increase transfers, spend more on government wages, and rely more on labour taxes.’. Because, while each minister benefits from spending in their area, political costs are shared through the doctrine of collective cabinet responsibility. As the burden of fiscal responsibility is diluted, New Zealand’s 28 ministers compete for a larger share of the budget without bearing full individual responsibility for subsequent deficits.
Many of New Zealand’s departments are overseen by several ministers. More ministers oversee the Ministry of Business, Innovation and Employment (MBIE) than Ireland has in total. If the actions, successes, and failures of departments are the responsibility of multiple ministers, to whom are they truly accountable?
Some portfolios even span multiple departments. Where inter-departmental approvals are required for policy initiatives, efficiency is thereby reduced, increasing costs and the risk of delays.
A streamlined system must be established with clear lines of accountability and faster implementation. New Zealand should align its bureaucratic structure more closely to Norway’s, requiring many portfolios to be merged, and the number of ministers reduced.
Portfolios with similar responsibilities could easily be merged. For example, there could be Ministries of Defence and Veterans, Housing and Building and Construction, and Environment and Climate Change Issues. Consolidating portfolios would reduce bureaucratic hurdles and conflicts between ministers holding similar portfolios, encouraging efficiency and cost reduction.
In an upcoming report, the Initiative will outline in more depth how New Zealand can reap the benefits of heightened efficiency and cost reductions. Just think of all the apples and Marmite sandwiches that could be purchased for school lunches from these newfound savings!
Jemma completed her Bachelor of Business at Auckland University of Technology with a double major in economics and information systems. This article was first published HERE
A large executive is expensive. As outlined in Max Salmon’s research, 'When there are more ministers, governments tend to spend more, run larger deficits, generate higher revenues, increase transfers, spend more on government wages, and rely more on labour taxes.’. Because, while each minister benefits from spending in their area, political costs are shared through the doctrine of collective cabinet responsibility. As the burden of fiscal responsibility is diluted, New Zealand’s 28 ministers compete for a larger share of the budget without bearing full individual responsibility for subsequent deficits.
Many of New Zealand’s departments are overseen by several ministers. More ministers oversee the Ministry of Business, Innovation and Employment (MBIE) than Ireland has in total. If the actions, successes, and failures of departments are the responsibility of multiple ministers, to whom are they truly accountable?
Some portfolios even span multiple departments. Where inter-departmental approvals are required for policy initiatives, efficiency is thereby reduced, increasing costs and the risk of delays.
A streamlined system must be established with clear lines of accountability and faster implementation. New Zealand should align its bureaucratic structure more closely to Norway’s, requiring many portfolios to be merged, and the number of ministers reduced.
Portfolios with similar responsibilities could easily be merged. For example, there could be Ministries of Defence and Veterans, Housing and Building and Construction, and Environment and Climate Change Issues. Consolidating portfolios would reduce bureaucratic hurdles and conflicts between ministers holding similar portfolios, encouraging efficiency and cost reduction.
In an upcoming report, the Initiative will outline in more depth how New Zealand can reap the benefits of heightened efficiency and cost reductions. Just think of all the apples and Marmite sandwiches that could be purchased for school lunches from these newfound savings!
Jemma completed her Bachelor of Business at Auckland University of Technology with a double major in economics and information systems. This article was first published HERE
5 comments:
The Liberal governments at the beginning of the 20th century, had only 21 portfolios (including PM). Although they were the founder's of the welfare state, almost all the portfolios related to production.
They had ministers of railways, agriculture, mines, marine, state forests, postmaster general, education, works, labour, industry & commerce, customs as well as the usual justice, health, immigration etc. So their focus was on building up the country rather than spending money they didn't have.
It is no wonder that NZ built itself up to have one of the best economies and standards of living in the world by the mid 20th century, and then a decline when the focus changed to spending and people's self entitlement.
And here we have a PM yabbering on about growth and productivity. All those Ministeries and public servants achieving what exactly? Have you noticed any appreciable improvement in anything on that front in the last two decades?
Time we drained the swamp!
Good discussion piece Gemma that the Coalition said they would implement but have only shuffled about. We have had our eyes opened by President Trump leadership in action . No need for media as he is brutally trnsparent and there is little ambiguity. The NZ podium of truth was used but deviously with an a ulterior motive.
Then there is NZ fiscal waste and balancing the books which is the real reason it should be 20 Minsters 20 Ministeries and 20 Depts NZ also has to drain the bureauocratic "swamp".
Govt spending in total should never be greater than 25 percent of GDP.
Any greater than that is crowding out the private sector and in an economy as small as NZ simply waste
Agree with above comments.
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