Innovation 'super ministry' to focus on business growth

BUSINESSDESK: A new "super ministry" created by merging four public service departments will be established on July 1.

The government has confirmed the new mega ministry will oversee economic development, skills, innovation and science policy, which will be aimed at opening up new opportunities for business.

The Ministry of Business, Innovation and Employment will proceed from July 1 and be headed by Economic Development Minister Steven Joyce. 

It will bring together most of the operations of the Departments of Labour and Building and Housing, the Ministry of Economic Development, and the Ministry for Science and Innovation. 

The Ministry of Consumer Affairs will also be integrated into the new super ministry.

MSI is itself barely 14 months old, having been created from a merger of the Ministry and Foundation of Research, Science and Technology.

The reforms have sparked widespread criticism from elements of the business community and Opposition parties for their complexity in areas of significant economic policy need, at a time when policy action rather than restructuring should be the priority.

While savings are not the main driver for the changes, the State Services Commission suggests they will save between $7 million and $11 million a year.

Business New Zealand has backed the move, but director Phil O’Reilly warned the business community was watching for strong implementation, given the patchy track record of major corporate reshufflings in improving outcomes or costs.

Mr Joyce says the mega-merger “will assist the government drive forward its business growth agenda and make it easier for businesses to engage with the government".

“The government is committed to building a more competitive and productive economy that will grow more and bigger businesses so we are better able to afford the sort of society we aspire to,” he said in a statement with State Services Minister Jonathan Coleman.

“Our business growth agenda will make it easier for businesses and companies to access innovative ideas, markets, capital, skilled workers, resources and the supporting public infrastructure.”

Mr Coleman said medium-term savings of $7m to $11m annually through consolidating corporate services ($5m to $6m annually) and extra policy capability of $2m to $5m a year.

“It is envisaged the current separate agencies will form the initial functional units of the new ministry, which will then be further consolidated over time.

"For most staff the transition will be seamless – they will be doing the same job with the same pay and conditions on July 1.”

The transition is expected to take up to two years, with a “federation” of the four agencies under a single chief executive from July 1.

The four existing chief executive positions will be disestablished.