John Raine: Smaller Government and Less Bureaucratic Bloat - Yes, but How?

Bureaucratic Bloat   

ACT has announced 2026 election policy (28^th June 2026) to reduce government from 28 to 18 ministers, and from 43 down to 19 departments [1].  This complements National’s earlier announcement of a reduction in the public sector by 8700 employees (~14%) by 2029. Both much needed policies, but will they succeed?

Parkinson [2] described bureaucracies as self-interested systems that grow independently of the amount of work to be done, because officials seek to increase subordinates and expand their domain. Niskanen [3], said bureaucracies behave like budget‑maximising firms, not neutral servants of the public (larger budgets mean more prestige, more staff, more influence).

Samuel Thawley [4] talks of the growth across the Western world in commonly non-productive employment in public administration, but also across employing organisations more widely. Thawley forecasts a heavily resisted downsizing correction, partly driven by AI. 

He notes, “For 50 years, the great growth industry of the Western world has not been mining, energy, or manufacturing, or even finance. It has been the production of people who work with symbols rather than things: the graduate, the manager, the official.” This has partly been a consequence of much increased rates of university attendance since the late 20^th century. 

This has led to growth in essentially intellectual roles in the public service and an ever-expanding bureaucracy, but at the same time a devaluation of many university degrees as supply has outstripped demand outside essential professions such as engineering, law, medicine, and nursing. The sheer mass of these bureaucracies has become an untenable burden on the taxpayer, something more acutely evident in the present tough economic times.   

At the microcosm level of the universities themselves, there has been major administrative bloat, since the move to a market-led model in 1990. The New Zealand 1.5 to 1 ratio of non-academic staff to academic (direct revenue earning) staff [5], is among the highest in the Western World, driven in part by costly directorates in areas such as Māori, Pasifika, LGBQTI, and for staff with general DEI responsibilities. But there are also numerous managers across the system in areas such as marketing, community outreach, finance, research administration, student learning and pastoral care support. Many of these services were minimal or non-existent 40 years ago. 

The Law of Requisite Variety means that organisations become more complex to match a more complex client environment, but that does not excuse the bloat in roles that are not directly productive.

In the early 1980s I worked for an industrial company in the U.K. that regularly contracted with the Ford Motor Company. There was brief excitement at one time because a couple of Ford project managers we worked with disappeared overnight. Ford had just removed two layers of middle management - a common enough occurrence. 

The private sector is certainly not immune from expanding management ranks but is inherently more self-correcting than the public sector. The need for profit drives more management decisions, and keeping indirect-to-direct charged staff ratios low drives lower overheads and higher operational efficiency.

Not so in the public sector. Taxpayer-funded organisations tend to grow like tomato plants in a hothouse with a boosted CO₂ atmosphere.  Apart from the sheer cost, such organisations tend to load up with sticky, high-inertia appointments that too often support an ideological position of department heads, who may themselves be ideological government appointments. 

The machinery of the State looks to increase its momentum by accruing sheer mass. However, this paradoxically causes the whole system to move at lower speed as becomes more internally focused and unelected officials place regulatory or operational requirements on wide areas of the public sector, or the wider community. This has become a big problem for New Zealand, as illustrated, for example, by Ivan Barnett [6] on the operation of Te Arawhiti, The Māori-Crown Relations agency. 

Efforts to Downsize

Because of the New Zealand experience 2017-2023, we tend to think Labour governments grow the public sector, and this has generally been the case 1990-2026. The steepest contraction in recent history was under National in the 1990s.  However, the story internationally is more nuanced. In the USA, federal employment has been relatively stable 1990-2026, under both Democrat and Republican presidents. The present Trump administration’s cuts (Elon’s Musk’s DOGE exercise) have had mixed results with – depending on the source – a reduction of 7-10% in federal employees.  

In the U.K. the public sector grew under Labour after 1997 through 2004, then declined modestly through to 2010. The Conservatives heavily shrank the public sector by nearly 50% 2010-2016, then grew it again by nearly 26% back to 523,000 employees by 2024 in the post-Brexit years.

After the 2023 general election, numerous commentators urged the NZ Coalition to address the blowout in public service employment that occurred under the Ardern-Hipkins government of 2017-2023. The figures are well known - public sector employee numbers had ballooned from a little under 49,000 in 2017 to just over 65,000 by October 2023, not to mention huge sums being spent on consultants. Crown spending blew out from $76 Billion per year to $139 Billion per year. Take another look at Alex Holland’s [7] disturbing account of where this money went.

The Coalition has so far only nibbled at the necessary pruning. The National party 2026 election policy’s intended reduction of 8,700 roles by 2029 might release somewhere near $1 Billion per annum towards useful productive stuff like national infrastructure, health, R&D, and retirement of debt.  

In reality, a more comprehensive circuit breaker is needed. This is where the ACT policy comes in.

A Smaller Government

The New Zealand Initiative (NZI) Report [8] on smaller government noted, “New Zealand has built one of the most complex executive governments in the developed world. With 81 (now 78) ministerial portfolios, 28 ministers and 43 departments, it has more portfolios than any other developed country of similar size – and far more portfolios and departments than peers like Ireland, Norway or Singapore.” 

The NZI report proposed that New Zealand reduce to just 15 to 20 senior ministers and 10 to 5 junior ministers, with just 20 government departments. 

Ireland has capped its government at 15 ministers from the founding of the state. Singapore, with a similar population to New Zealand, has just 21 ministerial portfolios. Its government has deliberately kept the executive structure lean, centralised, and tightly coordinated since independence. The Singapore People’s Action Party (PAP) has held overwhelming parliamentary control since 1959, no doubt a big factor in their stable small government. 

For the ACT 2026 election policy (18 ministers with 19 departments) to deliver its full potential economic benefit, Government must undertake concurrently, through departmental mergers and zero-basing of departmental roles and responsibilities, to substantially cut headcounts and restore some political neutrality to the public service. 

Ideological agendas with compliance requirements on typically vaguely specified Principles of the Treaty of Waitangi, Te Ao Māori-oriented education, and DEI prioritisation ahead of merit, need to be removed from job descriptions anywhere where they are not tightly relevant to the performance of an employee’s role.

The bigger challenge is that turkeys do not vote for Christmas, and we can foresee MPs’ self-interest trumping the national need. 

It will need a government of real objectivity and commitment to vote in the ACT policy and drastically shrink the size of Government.  At least the electorate would be cheering them on, and few votes outside Wellington would be lost because we ended up with a smaller, more agile government and clearer accountabilities. The positive effect on the annual budget would allow more investment in the productive economy.

What can ACT do to sell this much needed slimming down and tidying up of our ministerial responsibilities and departments? So far in this Coalition, National has taken strong positions in few areas, education being an obvious exception.

It is hard to see National and NZ First adopting a ministry framework like that in Singapore or Ireland simply because ACT prefers minimalism.  Setting aside the “not invented here” policy issue, they might adopt it if ACT frames it as:

• Reducing fragmentation across 78 ministerial responsibilities and 43 departments. 
• Improving accountability with fewer ministers, clearer lines of responsibility.
• Strengthening delivery with fewer cross‑portfolio conflicts.
• Cutting duplication but not cutting services.

This would focus the conversation away from ideology to competence, something National and NZ First both apparently value.  Can ACT show how 18 ministries could be formed without reducing the number of ministerial warrants held by National or NZ First MPs? A stiff challenge given that we have 28 ministers now.  Even if ACT gave up its three full minister roles (is that likely?), seven other ministers would have to disappear from National and NZ First ranks.

Hmmm..… this ACT policy should be implemented, and let us hope it is, but it will need a strong following wind. Max Weber [9] said, “Once fully established, bureaucracy is among the social structures hardest to destroy.” The same probably applies to the size of the government itself.

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John Raine is an Emeritus Professor of Engineering and has worked in Deputy Vice Chancellor and Pro Vice Chancellor roles in three New Zealand Universities. He chaired the 2011 Ministry of Science and Innovation “Powering Innovation” Review. 

References

1.          ACT Party, “ACT unveils plan for radically simpler, smaller government”.” 28^th June 2026.https://www.act.org.nz/news/act-unveils-plan-for-radically-simpler-smaller-government

2.          Parkinson, C. Northcote. Parkinson’s Law: The Pursuit of Progress. London: John Murray, 1958

3.          Niskanen, William A. Bureaucracy and Representative Government. Chicago: Aldine–Atherton, 1971.

4.          Samuel Thawley, “The Coming Crash of Intellectuals.” The Spectator Australia, 30^th June 2026  https://app.spectator.com.au/2026/06/29/the-coming-crash-of-intellectuals/content.html

5.          James Kierstead and Michael Johnston, “Blessing or Bloat? Non-Academic Staffing in New Zealand Universities in Comparative Perspective”, The New Zealand Initiative, July 2023, ISBN 978-1-99-115808-6 (print) 978-1-99-115809-3 (online),48pp

6.          Ivan Barnett, “Te Arawhiti Issues the Policy Templates.” Brash and Mitchell, 29^th June 2026. https://www.brashandmitchell.com/post/ivan-barnett-te-arawhiti-issues-the-policy-templates

7.          Alex Holland, “Labour’s Spending”. Bassett, Brash and Hide 27^th September 2023. https://www.bassettbrashandhide.com/post/alex-holland-labour-s-spending

8.          Roger Partridge and Jenna Stevenson, “Unscrambling Government Less Confusion, More Efficiency.” The New Zealand Initiative. 2^nd September 2025. https://www.nzinitiative.org.nz/assets/Reports/Report-Summary-UG.pdf

9.          Weber, Max. Economy and Society: An Outline of Interpretive Sociology. Edited by Guenther Roth and Claus Wittich. Berkeley: University of California Press, 1978. (Original German edition published 1922.