New Ministry to drive business growth agenda
Hon Steven Joyce
Minister for Economic Development
15 March 2012
New Ministry to drive business growth agenda
The new Ministry of Business, Innovation and Employment will help the Government’s business growth agenda by implementing integrated policies to build a more competitive and internationally-focused economy, Economic Development Minister Steven Joyce says.
Prime Minister John Key today announced that Cabinet had agreed in principle to establish the new Ministry, which will absorb the functions of the Ministry of Economic Development, the Department of Labour, the Ministry of Science and Innovation, and the Department of Building and Housing.
The intention is for the Ministry of Business, Innovation and Employment to come into effect on 1 July this year, with the current departments forming the initial functional business units of the new Ministry. This is subject to due diligence being completed for a report back to Cabinet in April.
"If we want more and better jobs for New Zealanders we need to encourage more businesses to be based here. That means making it easier for businesses and companies to access innovative ideas, markets, capital, skilled workers, resources, and the supporting public infrastructure. The Government has a comprehensive business growth agenda to assist business, and a single focused business-facing government ministry will further boost our momentum," Mr Joyce says.
"The new Ministry of Business, Innovation and Employment will also ensure we have clear, co-ordinated and focused government policy leadership with a commitment to economic growth and innovation.
"The new Ministry will reduce the complexity involved in working between agencies, and between agencies and business. At present when businesses engage with government they work with multiple government agencies, which takes away valuable time, as well as incurring unnecessary duplication of effort. This is time that could better be served in allowing companies to work on their businesses rather than on their government relations.
"A more efficient and effective Ministry focused on lifting overall productivity and supporting the growth of competitive businesses is a crucial element in creating more jobs and higher wages, and boosting our standard of living," Mr Joyce says.
Questions and Answers
What are the benefits of the creation of
the Ministry of Business, Innovation and
Employment?
• Principal benefits include:
o
Stronger policy leadership of the Government’s business
growth agenda.
o Making it easier for business to engage
with Government.
o Strengthening Government’s ability
to work on big cross-sector issues.
o Realising
efficiency gains over time.
How will the change take
place and over what time frame?
• Subject to the
due diligence process and final Cabinet approval, the new
Ministry will be established by 1 July 2012.
• The
integration will take place in two phases:
o The initial
transition by 1 July 2012. This will involve putting in
place the framework for the start-up of the new Ministry,
including an acting CE and second tier arrangements.
o
The current departments will form the initial functional
business units of the new Ministry.
o From 1 July, the
Acting Chief Executive will then be responsible for
integrating the functions of the new Ministry.
o This
will ensure we can achieve an integrated agency over time
while also continuing to deliver on existing work programmes
underway in each department.
o Clear priorities and a
timetable will be set to guide internal integration and the
concurrent delivery of economic growth objectives.
• In
the interim, individual Chief Executives will remain
accountable for their Departments.
Is there any
precedent internationally for this proposed
change?
• There are a number of precedents for the
proposed change in international jurisdictions. The United
Kingdom government (establishing the Department for
Business, Innovation and Skills in 2009) and the Australian
government (establishing the Department of Industry,
Innovation, Science, Research and Tertiary Education in
2011) have recently reformed their economic advice agencies
to ensure those agencies are able to respond effectively to
the current global economic situation and to have
established a strong platform for growth as the global
economy improves.
• While there are obvious
difficulties in making international comparisons, both of
these reforms have sought to integrate and strengthen policy
capability around supporting innovation as the primary
driver for improved productivity and competitiveness for
business.
• As part of the 2009 reforms, the United
Kingdom government also moved to ensure its labour market
and employment support functions were integrated with its
broader economic advice agency. Australia and Canada
maintain separate departments for labour market functions,
as they have sought alignment for those functions closer to
social development policy.
How many jobs will be
lost?
• It is our intention for current employees
of the four departments to move across to the new Ministry
on 1 July. It is not possible at this stage to identify how
many jobs will be lost from the merger. Any changes will be
identified through the detailed structural design process
for the new agency, which will take place over time.
•
The key motivation for the merger is to achieve better
coordination and a more integrated policy approach than has
been possible with the four separate agencies. However,
efficiencies will be sought over time where they are
appropriate.
When will the staff in these departments
know what is happening to their jobs?
• 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.
• It is intended the
current departments will form the initial functional
business units of the agency
• Further integration will
occur progressively over time and affected staff will be
fully consulted as changes occur.
What are the
financial implications?
• 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 for a report back to Cabinet in April 2012.
This report-back will include financial implications and
scoping of efficiency gains.
How much is it expected to
save in the longer term?
• Given recent experience
of the efficiency gains possible through bringing separate
departments together (such as bringing Archives New Zealand
and the National Library into DIA and the Ministry of
Fisheries and the NZ Food Safety Authority into MAF), we
expect to see a clear efficiency dividend. The actual amount
won’t be known for some time.
•
What does this
mean for the stakeholders of these agencies?
•
During the transition, stakeholders can expect business as
usual from the four departments.
• 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.
What other
agencies may be brought into the new Ministry?
• We
don’t expect any other agencies to be integrated into the
new Ministry, but other functions may transfer in or out of
the new Ministry depending on the due diligence
process.
What will the process be for appointing the
Chief Executive of the new Ministry?
• This will be
considered as part of the due diligence process for report
back to Cabinet in April.
Are there plans to bring all
business-facing government activities into the one
agency?
• No. There are no plans to bring further
agencies into the merger.
• However, we will be looking
at how some Crown entity functions will report into the new
Ministry.
Are there other mergers planned?
•
This merger is the only departmental merger the Government
is planning. We are not ruling out further change in the
future, but there is no plan for wholesale reorganisation of
the public sector.
Isn’t this just a cost-cutting
move?
• No. The driving goal of this change is to
develop a single dedicated business-facing Government
department that can strengthen policy capability, improve
the regulatory environment, bring together business-facing
services and improve the Government’s own internal
co-ordination.
• However, given recent experience of the efficiency gains possible through bringing separate departments together ( such as bringing Archives New Zealand and the national library into DIA, and the Ministry of Fisheries and the NZ Food Safety Authority into MAF), we also expect to see a clear efficiency dividend as we eliminate duplication, overlaps and integrate back office functions.
Won’t this new Ministry be too big and
unwieldy?
• No. The new Ministry would have around
3200 employees at the outset, making it a similar size as
the Ministry of
Justice.
ENDS