The case for a smaller government executive

Based on a speech David Seymour gave to the Tauranga Business Chamber last
month where he floated 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 doey. 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. We currently have 82 ministerial portfolios, 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. 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.

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. 

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’etre. 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. 

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. 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.

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.

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.

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.”