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Key assures mergers will boost efficiency

Prime Minister John Key believes that his government should be trim, accountable and more efficient, achieving economies of scale and higher levels of productivity.

Those were the core objectives with which his cabinet has approved in principle the creation of a ‘Super Ministry’ merging the departments of Economic Development, Labour, Science and Innovation and Building and Housing.

The new entity, called, ‘Ministry of Business, Innovation and Employment’ will come into effect on July 1, if the government is able to complete the requisite procedures and obtain the final approval of the Cabinet.

Announcing the initiative at a luncheon hosted by the Auckland Chamber of Commerce on March 15, 2012, Mr Key said that he and his cabinet colleagues were keen to achieve better coordination and a more integrated policy approach than has been possible with the four separate agencies.

“However, efficiencies will be sought where they are appropriate. Further analysis and planning is underway to help determine the structure of the agency pending a report back to Cabinet in April seeking a final decision,” he said.

He said the existing departments will form the initial functional business units of the agency and that further integration will occur progressively over time and affected staff will be fully consulted as changes occur.

“We expect to see efficiencies through reducing duplication and overlaps and to achieve integration within the existing baselines of the four current departments. The State Services Commissioner will convene a Transition Group to undertake due diligence and report to Cabinet in April. This report will include financial implications and scoping of efficiency gains,” Mr Key said.

He cited the examples of efficiency gains effected by the recent integration of Archives New Zealand and the National Library into the Department of Internal Affairs and Fisheries ministry and the New Zealand Food Safety Authority into the Agriculture and Fisheries ministry), implying that integration accrued cost and other advantages.

“Over time, it will be easier for stakeholders to interact and do business with the new Ministry, which will bring together a range of business-focused functions that previously businesses would have to go to multiple agencies to access,” Mr Key said and added that the government did not envisage integration of any other department or agency into the new entity.

“This merger is the only departmental merger planned by the government. We are not ruling out further change in the future, but there is no plan for wholesale reorganisation of the public sector,” he said.

He denied that the moves were designed to cut costs but to develop a single, dedicated business-facing government department that can strengthen policy capability and improve the regulatory environment.

“The new ministry would have about 3200 employees at the outset, making it a similar size as the Justice ministry,” Mr Key said.


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