Why is the Government proposing public-sector mergers for so little apparent benefit?

Listener: 1 May, 2010.

Keywords: Governance;

At a certain point in the political cycle, governments start following officials’ agendas that make no political sense but meet some administrative need.

All policy changes upset the people whose interests are harmed. These changes often reflect a cool political calculation – even if the politicians don’t always get it right.

Auckland business people are thoroughly fed up with Auckland’s governance, so the Government is creating a super-city, even though many Auckland residents expect to suffer. The Government thinks its supporters are less green than the other side’s, so it shifts the balance away from environmental policies and towards commercial ones. It promised its supporters it would reduce the top tax rates many of them pay, but this may well make others worse off.

Then there is the budget deficit. The Government knows it’s too large and is steadily squeezing public expenditure. That makes public servants pretty unhappy. The rest of the public is to be comforted by the promise that despite lower numbers there will be more frontline services. To a similar claim in Britain, commentator Simon Jenkins said believing that is like believing in the tooth fairy; New Zealand commentators say it more briefly: yeah, right.

The point of the recent proposal to improve the state services’ performance – involving Archives New Zealand, the National Library, the Food Safety Authority and the science system – is less clear. The Cabinet paper invokes a babble of “yeah, rights”, for it is poorly argued. It claims to be saving a tiddly amount of expenditure. Since the Prime Minister said the savings from amalgamating the Ministry of Women’s Affairs with another department are tiny, that cannot be the explanation.

So why do it? Why upset so many people? For the proposal to merge Archives New Zealand back into the Department of Internal Affairs, a dispute in the 1990s means we have a rough idea of the pressure likely to come from the stakeholders: archivists, cartographers, genealogists, historians, lawyers, Maori and military. They turned out in force back then and even took the Government to court. Why is the Government bothering again?

A clue to what is going on is that an earlier version of the Cabinet paper was leaked. The Government was outraged and is “investigating” it. I’d have thought it would have been delighted to have any feedback. It is going to have to make legislative changes, so why not consult before the decisions are made and not look stupid in select committee?

That suggests the Government sees these changes as nothing to do with the public – the location of Great-Aunt %Myrtle’s records are of no interest to you. The covert reason for the changes seems to be that of a public administration. The Cabinet paper does not refer to it, but there has to be something more substantial than its “yeah, rights”. Why bother when the focus needs to be on political priorities and getting the deficit down?

The current fashion seems to be for consolidating the core public sector into fewer agencies, although not to obtain synergies, since there are none in the announced mergers. The best account I have come across is that the State Services Commission is overwhelmed with too many agencies reporting to it, and is also finding it difficult to find high-calibre chief executives (presumably as a result of the destruction of career paths following the redisorganisation two decades ago).

If this is right, further mergers are likely to come. Apparently the Ministry of Women’s Affairs has been considered, and presumably some of the other smaller advice agencies, such as the Ministry of Pacific Island Affairs, will have, too. The Cabinet paper suggested merging the Ministry of Research, Science & Technology into the Ministry of Economic Development, but that is not being proceeded with – yet.

An obvious pointer is that the merger of the National Library into the Ministry for Culture and Heritage was not even considered, instead of the far less logical merger into the Department of Internal Affairs. The grand plan must include merging the ministry back into the Department of Internal Affairs.

Such matters are not the public’s business. Yeah, right.