MBIE to proceed from 1 July

  • Jonathan Coleman
  • Steven Joyce
State Services Economic Development

The Government has today confirmed its plans to establish the new Ministry of Business, Innovation and Employment on 1 July this year.

The Ministry will bring together the existing functions of the Ministry of Economic Development, Ministry of Science and Innovation, Department of Labour and Department of Building and Housing.

Economic Development Minister Steven Joyce says the new Ministry 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 that we are better able to afford the sort of society we aspire to,” Mr Joyce says.

“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.”

Confirmation of the new ministry follows an initial “in principle” decision by Cabinet on 12 March, and a due diligence process led by the State Services Commission.

State Services Minister Jonathan Coleman, says the due diligence process confirmed the merits of the new ministry. “The new ministry will provide clear, co-ordinated and focussed policy leadership, and efficient and effective services for business.

“While obtaining savings is not what is driving this change, there will be efficiency benefits.

“In the medium term, we expect the new ministry to deliver savings through the consolidation of corporate services of about $5 million to $6 million a year, and of policy capability of about $2 million to $5 million a year.

“It is envisaged that 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 1 July”.

Mr Joyce expects businesses to see the Government moving faster and in a more coordinated way to tackle the issues that matter to business.

“Strengthening the leadership and integration of Government policy and activity will help create the conditions for businesses to grow and create jobs. Structure is only one part of the story, but the current fragmented structures make it harder to achieve the results we need,” Mr Joyce says.

Media Questions and Answers

What will the new Ministry do?
The new Ministry will play a central role in shaping and delivering a strong economy. It will back New Zealand’s talent, ideas and enterprise by:

  • Building trusted competitive and effectively regulated markets with participation from confident businesses and well-informed consumers.
  • ensuring that business have access to the skills they need, and that current and future demand for skills is matched by supply
  • ensuring safe and fair workplaces
  • developing and supporting a high-performing science and innovation system
  • lifting firms’ capability – including ideas, access to capital and relationships – so that they can succeed internationally
  • supporting the development of efficient, effective infrastructure
  • enhancing the value of New Zealand’s natural resources

What functions are included?
The new Ministry of Business, Innovation and Employment will bring together all the existing functions of the Ministry of Economic Development, Ministry of Science and Innovation, Department of Labour and Department of Building and Housing on 1 July 2012.

Why these four agencies?

DBH’s building and construction policy, regulatory and support functions are closely linked to the business growth agenda.

Many of the policy decisions needed to make our economy more productive and competitive relate to the building and construction sector. It also makes sense to align building control and regulation with other infrastructure areas to create a more integrated regulatory environment and to consider the development and operation of New Zealand’s housing market in the same light as other markets.

The new Ministry is responsible for market regulation, competition and consumer rights.

Ensuring access to housing, through functions such as assessment of need and provision of assistance, already rest with the Ministry of Social Development and the Housing New Zealand Corporation.

The Ministry of Science and Innovation plays an important role in providing leadership for the science and innovation system to deliver prosperity and wellbeing for New Zealanders – and, as part of the new Ministry, this important work will continue.

Science and technological innovation are major drivers of growth and international competitiveness. They can help improve the performance of all sectors of the economy and are essential in helping us understand and respond to domestic and global demands. There is also an increasing desire to see value created from the commercialisation of smart ideas, and an increase in discovery-led research

By investing in science we have a better chance at finding more innovative solutions to issues facing New Zealand.

We need to get much closer connections between the scientists and innovators who can generate new ideas and solve problems, and the business people who can translate those ideas into income and jobs.

The new Ministry will continue to fund social, environmental and health related research (currently the role of the Ministry of Science and Innovation). To ensure there continues to be an appropriate emphasis on these areas, the new Ministry will be transparent about its priority setting (for example through the cross-Government Statement of Science Priorities).

All current science and innovation funding decisions will continue to be made by appropriate Boards.

A key part of the business growth agenda that the new Ministry will be driving is increasing skills and innovation.

The inclusion of DOL’s labour market policy functions will create better linkages between labour market policy and microeconomic policy advice; and allow for sharper engagement with other agencies responsible for developing labour market skills, including the Ministry of Education and the tertiary education sector
DOL’s regulatory and immigration functions are also closely linked to business growth.

MED currently has primary responsibility for the Government’s business growth agenda.

What’s happening to the Ministry of Consumer Affairs?
The Ministry of Consumer Affairs is a semi-autonomous body within the Ministry of Economic Development that provides consumer information and education, investigates unsafe products and provides policy advice. This work will continue as a core function of MBIE but the Ministry of Consumer Affairs will be fully integrated into the new Ministry.

Confident and well-informed consumers are critical to effective markets.

How will the change take place and over what time frame?
The initial transition will be complete by 1 July 2012.

On 1 July the structure will be a ‘federation’ of the four existing agencies, with a new CE and a new set of acting second tier positions above the existing tier 2 positions.

A detailed organisational design and implementation plan for the new Ministry will be developed by 30 September following consultation with staff.

It is expected that the transition to the fully fledged MBIE will take up to 24 months.

This will ensure we can achieve an integrated agency over time while also continuing to deliver on existing work programmes underway in each department.

Clear priorities and a timetable will be set to guide internal integration and the concurrent delivery of economic growth objectives.

How many jobs will be affected and when will staff know what will happen to their jobs?
The four agencies have a total of over 3200 staff. Most are working in areas where there is no obvious duplication and there will be no immediate change.

Strong leadership will be vital to MBIE achieving results, and so the first focus will be on getting the Chief Executive and senior management in place.

An Acting Chief Executive will be appointed to lead MBIE from 1 July.

The four current chief executive roles will be disestablished on 1 July.

The Acting Chief Executive will appoint acting second tier managers to lead the Ministry until the high level organisational design and second tier (permanent) roles are finalised.

It is expected that the Acting Chief Executive will announce on or before 1 July a high level structure for the new Ministry.

A detailed organisational design and implementation plan will be developed by 30 September following consultation with staff.

What difference will business see?
Once the new Ministry has been successfully consolidated together businesses will see the Government moving faster and in a more joined up way to address the issues that make a difference to them and their employees – including market access, innovative ideas, capital, skilled workers, resources and infrastructure. Many of the business facing services will be cheaper, faster and simpler to use.

The new Ministry will engage earlier to get business input and draw on businesses’ knowledge of what works.

Ministers will be getting a better picture of what decisions and actions they need to consider, as the new Ministry combines best-practice joined-up policy thinking with closer connections to business.

What difference will this make to the rebuild of Christchurch?
The work that the integrating agencies are currently doing in Christchurch will continue unaffected.

How soon do you expect to see results?
We expect to see results for Ministers on joined up policy pretty much immediately.

We also expect to see, over time as the new Ministry consolidates, greater momentum around the business growth agenda and addressing the plan for business facing services.