Source:
Speech to Tauranga Business Chamber: The Case For a Smaller, Focused Executive
Intro
The term of Government is nearing half time, when we should be reviewing the first half and planning the second.
I believe the Government can point to significant progress, and this is reflected in us maintaining a lead in the polls despite tough economic times.
Inflation and interest rates have been beaten back. Government doesn’t control every factor influencing them, but we can control our own spending. The Government’s commitment to spend less, and maintaining that discipline over four years has helped win the war on inflation and interest rates. This week’s announcement that we will come in $1.1 billion under the allowance this year is a very positive development.
The priority in crime has switched from criminals to victims. There is nothing wrong with rehabilitating criminals to reduce crime, and save money on imprisonment. There is a big problem, however, with seeing the gangs as partners, a lower prison muster as a goal in itself, and spending more on pre-sentencing reports for convicted criminals than victim support.
Across the board we have made innocent people the priority and criminals the target. Gangs are no longer partners to the Government, Three Strikes is back, and the expansion of prisoner rights will be reversed, to name just a few. As a result, violent crime is falling and we’re not finished yet.
In healthcare the prescription is very simple and very complex all at once. What we need to do is stabilise years of restructuring and chaos so that New Zealanders get value for money. The health budget is up 67 per cent, from $18 billion in 2019 to $30 billion six years later. The complex part is unblocking the myriad issues that make the system so frustratingly unproductive.
Finally the Government has taken many steps to restore our country’s commitment to liberal democracy. The liberal part means all people are equal, regardless of their immutable characteristics. The democratic part means each person gets an equal say on the wielding of political power, or one person, one vote. These are uneasy conversations, but essential ones. We have problems to solve and they’re easier solved together as a people united by our common humanity than divided by identity politics.
Half time talk
Any good half time team talk, though, should be warts and all. Have we done well? I claim we have. Is it time to declare victory? Far too early? Could we do better? Absolutely, and here’s one way we might do better in the future.
I often hear the change is too slow. People look at Donald Trump, Elon Musk, Javier Milei and ask, why don’t you just change things faster like them?
Part of the reason that we are not a dictatorship, with all the power in one office. That’s a good thing. Power in New Zealand rests in many institutions. There are boards, like the board of Pharmac. There are councils, such as in universities. There are individuals’ statutory positions, such as the privacy commissioner. All of these are there thanks to parliamentary laws, which take time to change. Unless you’re Che Guevara, you probably want a stable, thoughtful political system that consults people affected by its changes and governs by consent.
On the other hand, it’s time to start planning play even better in the future. Today I’d like to float an idea about how we could transform government management and get better results for the people who pay for it.
The suggestion I’m making changes the way we think about government. At the moment it’s supposed to be something that can solve all your problems – although the track record is not good.
Like any business, it needs to be an organisation focused on running itself well first. It is something that a determined manager would do as the first order of business, getting the right people in the right seats on the bus before setting off on the journey, so to speak.
It’s also about tackling head on the lingering feeling in New Zealand of paralysis by analysis, that NOTHING GETS DONE, because there’s too much hui and not enough dui. Everyone is always consulting someone to make sure nobody’s feelings would be hurt if, hypothetically, anybody ever actually did anything.
Our current set up of government, that has evolved over the past 25 years, seems to be an example of our national paralysis.
The idea I’m about to share may seem a little like shuffling deckchairs, but it’s more like pass the parcel, because it involves seriously reducing the number of seats. It goes like this.
Untangling Spaghetti
Here’s a simple question. Each government minister has specific areas of responsibility assigned to them called portfolios. How many ministerial portfolios do you think New Zealand has today? 40? 60?
Well, don’t feel too bad if you’re well off the mark. The truth is, most people wouldn’t know. And frankly, most wouldn’t believe it if I told them.
We currently have 82 ministerial portfolios. Yes, you heard that right. Eighty-two.
Those 82 portfolios are held by 28 ministers. And under them, we have 41 separate government departments. That’s a big, complicated bureaucratic beast. It’s hungry for taxpayer money and it’s paid for by you.
Let’s put this in perspective.
Ireland, with roughly five million people, has a constitutional maximum of 15 Ministers managing 18 portfolios.
And yet, somehow, the Irish have managed to keep the lights on, run hospitals, fund schools, maintain roads, and defend their borders without 82 portfolios, 28 ministers, or 41 government departments.
In fact, they’ve done much better than us on most measures this century. That’s not in spite of having simpler government, I suspect it’s because they have it.
If we look further abroad, the comparison is even more stark.
South Korea, with a population of 52 million, has 18 Ministers. The United Kingdom, with 67 million people, has around 22. The United States, with over 330 million citizens, runs a Cabinet of about 25.
By comparison, New Zealand’s executive looks bloated.
Now I recognise these countries have different political systems. But that doesn’t mean we should accept inefficiency as inevitable. It certainly doesn’t mean we should celebrate it.
Something has to change. That means fewer portfolios, fewer ministers, and fewer departments. Sure, that might put me and a few of my colleagues out of a job. But if that’s the price of having a government that delivers core services efficiently and gives taxpayers real value for money, then it’s worth it.
It wasn’t always this way.
New Zealand once had a lean cabinet. Sixteen ministers all sat at the same table. Each responsible for one or two departments. You were the Minister of Police. That was your job. Everyone knew who was accountable.
Then came the 1990s and the dawn of MMP.
Suddenly, governments needed to bring in coalition partners. The idea of ministers outside cabinet was invented. These were people with the title but not the seat at the table. Four of those ministers were created initially. That brought the total number to 20.
A few years later, Helen Clark came along and took things further. Her government had 20 cabinet ministers and eight Ministers outside cabinet. 28 in total. And it’s stayed around that number ever since.
With such a large executive, coordinating work programmes and communicating between ministers inside and outside cabinet is difficult, and as a result governments run the risk of drifting.
Some departments now report to a dozen ministers or more.
Officials at MBIE report to 19 different ministers. When you have 19 ministers responsible for one department, the department itself becomes the most powerful player in the room. Bureaucrats face ministers with competing priorities, unclear mandates, and often little subject matter expertise. The result? Nothing happens. Or worse, everything happens, badly. There’s a wonderful line in a report by the New Zealand Initiative: “Confusion empowers the bureaucracy.”
The size of the executive might have stabilised, but the number of portfolios has exploded.
It used to be roughly a one-to-one equation between a minister and a department. Now ministers hold three or four portfolios each.
There are portfolios without a specific department, including Racing, Hospitality, Auckland, the South Island, Hunting and Fishing, the Voluntary Sector, and Space, just to name a few of the 82 portfolios that now exist. We have to ask ourselves, do we need a Government Minister overseeing each of these areas?
I’m not saying those aren’t important communities. What I am saying is that creating a portfolio or a department named after the community is completely different from running a real department to deliver a service. It’s not a substitute for good policy. It’s not proof of delivery.
It is an easy political gesture though. The cynics among us would say it’s symbolism. Governments want to show they care about an issue, so they create a portfolio to match. A Minister gets a title, and voters are told in the most obvious way possible that it is a priority.
Take the Child Poverty Reduction portfolio under the Ardern Government. It came after Jacinda Ardern made child poverty her raison d’être. Creating the portfolio was a way to show she meant business. But five years later, has the creation of the portfolio improved the rate of child poverty? Were children better off because of a new Minister for Child Poverty Reduction?
We all know the answer. Child poverty rates plateaued and New Zealand is still grappling with the same problems. At the time, only ACT had the courage to say this and to vote against the Child Poverty Reduction Act, because we knew it was window dressing.
I’m proud to be part of a government that believes the path out of poverty isn’t paved by political slogans but better school attendance and achievement, making it easier to develop resources and build homes, getting more investment into New Zealand, and ending open-ended welfare in favour of mutual obligation.
Deep down I think we all know that the only true path out of poverty is building the individual’s capacity to provide for themselves and their family. There are no examples of anyone escaping poverty though dependence on their fellow citizens.
I know that if I start talking about specific ministries, people will start talking about the examples and the politics of who survives and who is cancelled and so on. Let me just say that I’ve been through the current list and I believe we could easily get to 30 departments.
Now, some people might be thinking, hang on, didn’t you just create the Ministry for Regulation? Yes, I did. And here’s why it matters.
Because government doesn’t just spend and tax. It also regulates. It restricts what people can do with their property. It dictates what can be built, where, how, and by whom. In fact, everything government does is either tax your money or put rules on the property it hasn’t taxed yet. That’s it. Try to think of something government does that isn’t either a) taxing and spending your money or b) making rules about what you can do with your remaining property.
And yet, until now, there was no central department looking at the cumulative effect of regulation. No one asking whether the rules were achieving their goals or just stacking up and strangling productivity in red tape.
The Ministry for Regulation is one of just five central agencies in government. It was created not to grow bureaucracy, but to hold the bureaucracy accountable.
We don’t need more Ministers, we need fewer. But we also need smarter government. And that means focusing on what matters
Portfolios shouldn’t be handed out like participation trophies. There’s no benefit to having ministers juggling three or four unrelated jobs and doing none of them well.
Take Nanaia Mahuta. She was Minister for Foreign Affairs and Local Government. Two large, complex areas. It’s not uncommon for a Minister to fail at one of their major portfolios when performing this juggling act. She managed to be equally bad at both.
Ministers should have a remit over a single, clearly defined, policy area. Stretching ministers across multiple, disparate areas of complex policy empowers the bureaucracy because there will always be a knowledge gap where ministers are overly dependent on the bureaucrats. This situation empowers the Wellington bureaucracy.
That’s how they get away with spending your taxes with little accountability. Take Labour’s health restructure as an example. There’s no doubt our health system needed change, it clearly still does, and this government is working hard to address this. However, the change it needed was never to create more enormous, tax-absorbing bureaucracies with little explanation of how they would change things for you. That’s what Labour delivered.
There was never any evidence that the creation of the Māori Health Authority and Health NZ was going to have any positive impact. Labour politicians simply knew that health was a big issue and Māori health in particular has appalling statistics.
Progress would be figuring out the underlying causes and addressing them with evidence-based policy, like this Government has done with its changes to bowel screening ages. However, it was easier to publicise a glitzy administrative reform that cost billions. It’s decisions like this that mean our next budget is going to be so tight, and getting a doctor’s appointment is still just as difficult as it was before the change.
They burnt billions of dollars shuffling deck chairs, restructuring, and creating the divisive and ineffective Māori Health Authority. We even got to the point where a call to Healthline, New Zealand’s primary telehealth service, began by asking patients’ ethnicity. A voice would say, “If you are Māori and would like to speak to a Māori clinician, please press 1. Alternatively, please stay on the line with Healthline who will triage your call.”
I’m pleased our government is now prioritising workforce training, development, and retention. It doesn’t grab as many headlines, but it’s more likely to provide another GP down the road, train another mental health nurse, or deliver a midwife to rural New Zealand. We’re unwinding the divisive race-based categorising that was so prevalent. The goal must be to treat people first, as human beings, and to not make assumptions of people based on their background.
You could say that the health reforms were just bad policy by Wellington’s prospective Mayor Andrew Little, who despite that disaster is somehow an improvement on the current Wellington Mayor.
But I’d say that the size of the bureaucracy was as much the culprit for the health reforms. They write the memos. They draft the advice. When a minister isn’t providing leadership, they decide the pace and direction of reform, if reform happens at all. When no one is clearly responsible, the only people left standing are the officials. Because if you want to know why it’s so hard to shrink government, why red tape keeps piling up, and why reform feels impossible it’s because no one is really in charge and the bureaucracy is too big to pull itself into line.
That’s not how a democratic system should function.
Now, for the first time, ACT is at the centre of government.
We didn’t set the table, but we’re sitting at it. If we could set it, there would be a lot fewer placemats.
Here’s how we’d do it:
- Only 20 Ministers, with no ministers outside cabinet
- No associate ministers, except in finance
- Abolish ‘portfolios’, there’s either a department or there’s not
- Reduce the number of departments to 30 by merging them and removing low-value functions
- Ensure each department is overseen by only one minister
- Up to eight under-secretaries supporting the busiest ministers, effectively a training ground for future cabinet ministers
Some simple rules to improve the way government works.
This wouldn’t just act as a structural reform, but as a philosophical one.
It’s a shift away from the idea that the government exists to solve every problem by creating a minister named after it. And towards a view that the government’s job is to manage your money responsibly and provide core public services that allow you to go about your life, respecting your property rights
That’s it. That’s enough.
I think we could easily cut the number of portfolios in half, while reducing the number of ministers by eight. Bringing cabinet back to a scale that is manageable, focused, and accountable.
New Zealanders deserve better than bloated bureaucracy and meaningless titles. They deserve a government that respects them enough to be efficient.
New Zealanders don’t need 82 portfolios to live better lives. They just need a government that does its job, and then gets out of their way.
I’m looking forward to the second half, and floating more ideas like this as we plan for a better tomorrow.
Thank you.
