Streamlining is one thing. Merging is another.
Finance Minister Nicola Willis drew attention to this when discussing the Government’s public-sector policy objectives yesterday:
Goal Number one. We are going to streamline the number of government agencies and entities.
Comparisons are not exact, but New Zealand has, by latest count, 39 departments and ministries administering Budget lines. That compares with 16 in Australia, 24 in the UK and around 12 in Finland.
More departments equal more managers, more HR departments, more comms teams and more administrators. More departments also equals more statutory compliance requirements, more silos, more inter-departmental consultation and more costs for the citizens and businesses forced to multiply their interactions with government.
So, over the next three to five years, we are going to significantly reduce the number of public service agencies.
But will the country be better off after the number of public service agencies has been significantly reduced?
We ask because of the difference we recognise between streamlining and merging.
Willis went on to say public service agencies will be asked to come up with proposals “to logically merge their existing activities around citizen-facing functions, using common technology platforms”.
The creation of the new Ministry of Cities, Environment, Regions Transport is an example of what is possible.
Merging the Ministry of Housing and Urban Development, the Ministry of Transport and the Ministry for the Environment will reduce duplication and ensure a faster, more integrated approach to issues like housing affordability and climate adaptation. It will also create significant savings along the way.
Three ministries will be thrown together to make just one.
That looks like an intention to reduce the numbers of agencies by creating big bureaucratic conglomerations.
Conglomerations are apt to be cumbersome.
And bigger is not necessarily better when it comes to delivering benefits, efficiencies, better value, improved productivity – or whatever.
Remember the creation of Fonterra by merging dairy cooperatives to create a giant dairy company?
The Tatua Co-operative Dairy Company stayed out of the mega-merger.
But Tatua consistently delivers the highest financial returns for dairy farmers, leading the industry by a wide margin.
Fonterra dominates global market share and is the largest player in the industry, true. But its sheer scale means it operates primarily in high-volume commodities.
Specialized processors focus on high-value, niche infant formulas and medical nutrition, yielding superior per-kilogram payouts.
Looking at the business world generally, small companies often outperform large companies because they have more room to grow, making them more agile and quicker to adopt disruptive technologies.
Stocks like Apple, Microsoft, or Mainfreight in New Zealand, offer stability. But small companies frequently generate higher returns during periods of falling interest rates and economic recovery, because they rely more on borrowing to fund rapid expansion.
Agreed, we should not compare businesses with government ministries or departments.
That does not mean a bigger government department is more effective then a smaller one.
Nor is a bigger cabinet necessarily better or smarter than a smaller one.
Take a look at the behemoth known as the Ministry of Business, Innovation and Employment.
On its website you will find:
Comparisons are not exact, but New Zealand has, by latest count, 39 departments and ministries administering Budget lines. That compares with 16 in Australia, 24 in the UK and around 12 in Finland.
More departments equal more managers, more HR departments, more comms teams and more administrators. More departments also equals more statutory compliance requirements, more silos, more inter-departmental consultation and more costs for the citizens and businesses forced to multiply their interactions with government.
So, over the next three to five years, we are going to significantly reduce the number of public service agencies.
But will the country be better off after the number of public service agencies has been significantly reduced?
We ask because of the difference we recognise between streamlining and merging.
Willis went on to say public service agencies will be asked to come up with proposals “to logically merge their existing activities around citizen-facing functions, using common technology platforms”.
The creation of the new Ministry of Cities, Environment, Regions Transport is an example of what is possible.
Merging the Ministry of Housing and Urban Development, the Ministry of Transport and the Ministry for the Environment will reduce duplication and ensure a faster, more integrated approach to issues like housing affordability and climate adaptation. It will also create significant savings along the way.
Three ministries will be thrown together to make just one.
That looks like an intention to reduce the numbers of agencies by creating big bureaucratic conglomerations.
Conglomerations are apt to be cumbersome.
And bigger is not necessarily better when it comes to delivering benefits, efficiencies, better value, improved productivity – or whatever.
Remember the creation of Fonterra by merging dairy cooperatives to create a giant dairy company?
The Tatua Co-operative Dairy Company stayed out of the mega-merger.
But Tatua consistently delivers the highest financial returns for dairy farmers, leading the industry by a wide margin.
Fonterra dominates global market share and is the largest player in the industry, true. But its sheer scale means it operates primarily in high-volume commodities.
Specialized processors focus on high-value, niche infant formulas and medical nutrition, yielding superior per-kilogram payouts.
Looking at the business world generally, small companies often outperform large companies because they have more room to grow, making them more agile and quicker to adopt disruptive technologies.
Stocks like Apple, Microsoft, or Mainfreight in New Zealand, offer stability. But small companies frequently generate higher returns during periods of falling interest rates and economic recovery, because they rely more on borrowing to fund rapid expansion.
Agreed, we should not compare businesses with government ministries or departments.
That does not mean a bigger government department is more effective then a smaller one.
Nor is a bigger cabinet necessarily better or smarter than a smaller one.
Take a look at the behemoth known as the Ministry of Business, Innovation and Employment.
On its website you will find:
- Minister for Economic Growth
- Minister of Housing
- Minister for Infrastructure
- Minister for Energy
- Minister of Immigration
- Minister for Media and Communications
- Minister for the Public Service and Digitising Government
- Minister for Social Development and Employment
- Minister for Tourism and Hospitality
- Minister for Trade and Investment
- Associate Minister of Housing
- Minister for Auckland
- Minister for Building and Construction
- Minister for Space
- Minister of Science, Innovation and Technology
- Associate Minister for Social Development and Employment
- Minister for the South Island
- Minister for ACC
- Minister of Commerce and Consumer Affairs
- Minister for Small Business and Manufacturing
- Associate Minister of Immigration
- Minister for Workplace Relations and Safety
- Parliamentary Under-Secretary to the Minister for Infrastructure
- Minister for Regional Development
- Minister for Resources
- Associate Minister for Energy
- Associate Minister of Immigration
- Associate Minister for Regional Development
- Parliamentary Under-Secretary to the Minister for Media and Communications.
We trust Nicola Willis, the PM and their colleagues have given some thought to how many ministers they need in their administration during their latest exercise in delivering better results to citizens.
This raises the question of ministries and other government agencies that cry out to be culled.
We have a little list at PoO – and none of them would be missed if disestablished.
Readers are invited to create their lists, if they don’t already have them.
Bob Edlin is a veteran journalist and editor for the Point of Order blog HERE. - where this article was sourced.
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