The latest in a raft of government reforms will see the establishment of a single, dedicated, business-facing department, to be known as the Ministry of Business, Innovation and Employment.
Rumours swirled freely earlier this week about just such a move, and today prime minister John Key said the new super ministry would integrate 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.
This is subject to due diligence being completed for a report back to Cabinet in April.
The creation of the Ministry of Business, Innovation and Employment follows similar moves abroad, he said.
"The United Kingdom, for example, established the Department for Business, Innovation and Skills in 2009, and Australia last year established the Department of Industry, Innovation, Science, Research and Tertiary Education."
He said this was the only departmental merger currently being planned, although he wouldn't rule out others in the future, and Cabinet's intention was to create the new ministry from July 1. Employees of the four departments would move across on that date.
The four departments, which employ about 3200, were informed today and there would also be changes at the senior leadership level, Key said.
It's not clear how many roles might be at stake; those most likely to be affected are the agencies' chief executives. The government yesterday confirmed the cap on full-time core public sector jobs has been cut to 36,475 (that doesn't include frontliners such as teachers and police).
Economic development minister Steven Joyce said the new super ministry would reduce the complexity involved in working between agencies.
"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."
"I also want effective and efficient public services, but another merger is simply not going to do it. The new 'Ministry of Joyce' shows that in the absence of real ideas they are just shuffling deckchairs." - David Shearer, Labour
"While cutting out duplication is important, we hope the changes will be managed carefully given the potential impact on the Wellington workforce and economy. There is no doubt there are some difficult adjustment costs in the short term that the government needs to be cognisant of as these changes are made. In the longer term, however, we see the changes as being good for Wellington. This city needs more private sector activity and there is good evidence that the retrenchment of the government sector is freeing up skilled labour for businesses to employ." - Wellington Employers' Chamber of Commerce
"The PSA has been calling for a more joined-up and responsive public service for years but if John Key's revolution is simply more job cuts and restructures in disguise it could do more harm than good. Research shows that staff are 20% less productive after major restructurings because it is so disruptive and demoralising. The Prime Minister promised that any mergers would need to meet a high hurdle, it's questionable whether this new ministry of business, innovation and employment meets that. There is no obvious logic to the combination of functions." - Brenda Pilott, PSA
"A single, dedicated business-facing government department, focused on delivering results, will be a great improvement on the current situation. However, significant changes in the way the new merged ministry will operate will require close attention by Government to ensure the changes are implemented successfully."- Phil O'Reilly, BusinessNZ
"For the first time, science and innovation is at the heart of a major government department that links business, innovation and employment, with the objective of improving New Zealand’s wealth and wellbeing.
"Competitiveness and productivity through science-based innovation is a key result for our partnerships with private and public sector clients. The new Ministry will turbocharge that expectation across the economy." - Science New Zealand