PM details public sector shake-up

A new business super-ministry, a lower cap on public servant numbers, and tighter results measures are the main features of the government's state sector shake-up.

Prime Minister John Key outlined the shake up in an Auckland business speech at lunchtime today.

A new Ministry of Business, Innovation and Employment is to be put together by combining existing ministries of Economic Development and Science and Innovation, along with the departments of Building and Housing and Labour.

The Minister in charge of the bulk of those areas, Steven Joyce, said the merger, which will take place on 1 July, 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."

Public sector numbers are also to be capped at 36,475. The number was capped at 39,000 when National took office in 2008, after the numbers had surged to just fewer than 45,000 under the previous government.

Mr Key devoted most of his speech, however, to outlining ways in which his government plans to make the public sector more focused on results.

The government has set 10 targets, with what Mr Key calls "a measurable an stretching target" for each of those areas.

Each of the 10 areas will have a lead minister and departmental chief executives responsible for meeting those targets.

"For example, under result five, Education Minister Hekia Parata has set a target of 85 per cent of 18-year-olds having NCEA level 2 or equivalent in five years.

"The current figure is around 68 per cent, so achieving the target will be very tough," he said.

Not all of the targets are being announced yet, but the ones Mr Key revealed today are: reducing long-term welfare dependency, supporting vulnerable children, boosting skills and employment, reducing crime, and improving interaction with government.