28 February 2013

Size does matter- at least to the Chinese government. The Chinese reportedly are about to announce a major amalgamation of agencies – even merging the railway ministry and its 2.1 million employees with agencies that oversee road and air travel.

In contrast the State Sector and Public Finance Reform Bill currently being considered by the New Zealand Parliament provides for the establishment of departmental agencies. The purpose is not to rationalize an undiminishing number of Crown Entities, but to split off enforcement functions currently conducted as a core function of a number of Departments. And concurrently, a new health and safety organisation is to be created as an arms length Crown entity.

Although only half a dozen of New Zealand’s 30 departments have more than 3,000 employees, the policy seems to be to facilitate fragmentation, reversing a short flirtation with super ministries that led to the creation of the Ministry of Primary Industries and the Ministry of Business, Innovation and Employment.

Meanwhile China which has reduced the number of central government agencies from 100 in 1982 to 29 by 1998 is continuing its pursuit of super ministries. Having fewer and bigger ministries is seen as making the economy more productive and a way of keeping incomes growing.