It’s the Swiss army knife of the public service, a sprawling behemoth with 6400 staff across more than 40 locations, reporting to 14 government ministers and associate ministers covering 17 portfolios.
Monster ministry MBIE, the Ministry of Business, Innovation and Employment, has many working parts but, like the knife, some are used more often than others.
MBIE has its own intelligence-gathering unit, runs the national space agency and is the go-to organisation if you want to sell a new variety of plant or measure the quality of petrol or diesel going into your tank.
Its better-known functions include overseeing the country’s immigration services, the public science sector and regional economic development efforts, as well as co-ordinating its energy planning and strategies.
One of its nicknames is “the ministry for everything” and it’s become the ruling administration’s landing place for work that doesn’t quite fit anywhere else, such as being (controversially) put in charge of Covid-19 managed isolation and quarantine (MIQ) measures in June 2020. It has also played a supportive role for displaced homeowners and businesses in the aftermath of Cyclone Gabrielle in February last year.
According to MBIE’s briefing to incoming ministers late last year, its funding for 2023-24 is about $8.7 billion. This is divvied out to services spanning ACC, science, innovation and technology, regional development, energy, economic development, tourism and hospitality, commerce and consumer affairs, and housing – even the police have a stake. Just over $1.5b goes to MBIE’s own departmental operations.
A quick look at MBIE’s website shows its labyrinthine structure. The eight business groups are each headed by a deputy secretary or a deputy chief executive. Those groups contain up to nine sub-units apiece, called branches. The deputy chiefs report to chief executive and secretary Carolyn Tremain.
MBIE’s employee numbers have more than doubled since it was formed in 2012 out of four smaller government departments – the Department of Building and Housing, the Department of Labour, the Ministry of Economic Development and the Ministry of Science and Innovation. Much of that growth was in the past six years, during the terms of the last two Labour governments.
The new government’s broom wants to sweep clean, requiring MBIE to cut spending by 7.5% as part of Budget 2024.
The ministry has already begun asking for voluntary redundancies and said in the briefing it had identified several hundred million dollars it could return to the Crown over the next four years from savings in economic development, science and research, tourism and energy.
First off the rank are staff at Callaghan Innovation, which specialises in health and science research, employing 382 full-time equivalent people. On March 8, consultation began on changes the agency says will “refocus on our core functions and relieve cost pressures”.
Callaghan, crown research institutes and universities also face the loss of about $68 million annually in research funding when the National Science Challenges end in the middle of the year. The Public Service Association and the Council of Trade Unions have voiced concern about the impact of cuts in science and research funding, with the previous government’s plan to invest $450 million in science infrastructure in Wellington also canned.
“There are dark days ahead for science,” PSA assistant secretary Fleur Fitzsimons told RNZ.
Meanwhile, the withdrawal of funding for regional skills leadership groups – independent business advisory bodies – will cost 40 jobs within MBIE, with the aim of a $46 million saving over four years.
Will such cuts be enough? The driving force behind MBIE’s establishment, former National Party senior Cabinet minister Steven Joyce, believes it is time for a significant overhaul and says he would be “happier” if MBIE lost almost half its 6400 staff.
Joyce ushered in MBIE as economic development minister in the 2011-14 National government. He himself came to be known as “Minister for Everything” in National’s third term when he held as many as six portfolios, including economic development, finance, science and innovation, regulatory reform and tertiary education. He remains influential within the National Party six years after resigning as an MP.
“[MBIE] has suffered from the same experience of the whole public sector, with too much money thrown at it,” Joyce told the Listener. “Its scope has widened and it has lost focus. It’ll have to stop doing some things it doesn’t need to do any more.”
Who’s accountable
Current Economic Development Minister Melissa Lee is MBIE’s “ownership minister”. While 13 other ministers and associate ministers work with MBIE, Lee is accountable to Parliament for ensuring it carries out its functions properly and efficiently, for its financial performance, and to protect the Crown’s interest in it.
Some of Lee’s other duties reflect MBIE’s maze-like structure. For example, she may have to clarify responsibilities and priorities with other portfolio ministers who have a stake in the ministry, including, interestingly, herself as Media and Communications Minister and as ACC Associate Minister.
Lee says MBIE “does a lot of great work” and has a major role to play in supporting the government’s priorities. However, there has been “massive growth” of many ministries under Labour.
She would not give specifics of how she might want MBIE to save money, taking the party line that the public service as a whole has to find $1.5 billion a year in savings. “Anything beyond that is Budget 2024 sensitive information, so I am not able to share details.”
Since the end of November, Lee has been meeting almost weekly with chief executive Tremain and MBIE officials, including deputy secretaries and other leaders.
Scaling the peaks
Workforce data released by the Public Service Commission just after the election ranks MBIE as the third-largest government department with 6400 staff, behind Corrections (9628) and the Ministry of Social Development (9077).
In the 2022-23 financial year, MBIE’s establishment staffing grew more than either of those two, with an extra 450 full-time-equivalents (FTEs) employed.
The explanation for the increase was “to support services delivered by Immigration New Zealand, and to deliver government priorities in several areas, including market competition, climate change and the construction sector”.
But as the data came out in November, MBIE was already preparing for likely redundancies ahead of the government’s economy drive. MBIE says there is no target number of job losses.
Tremain says there were three main factors behind the staffing increase in 2022-23: the “scale and breadth” of the Labour government’s work programme, demand for services paid through fees and levies, and “the need to respond during times of crisis”. That growth in staff numbers also spurred greater demand from support services such as human resources, finance and IT.
She is tight-lipped about early meetings with Lee and other ministers. “My senior leadership team and I have had initial discussions with our 14 ministers and associate ministers. However, it is not appropriate for me to comment on the content of these discussions, or on how we are forming relationships with the new government.”
Change at MBIE often feels never-ending, she says. “We need to make sure we are always set up to deliver … in the most efficient way. As we move into 2024, MBIE’s focus continues to be on getting the best value for money, reprioritising where possible … and ensuring we are using our funding responsibly.”
‘Stay in your lane’
A former MBIE staff member, who six years ago worked on digital issues in what is now the labour, science and enterprise division, offers insights into working in such a large ministry.
In his experience, employees had to “stay in their lane”. Suggestions or contributions beyond that were not generally welcomed.
“Increasingly, staff are managed by people calling themselves ‘leaders’ who only want the outcomes that have appeared in previous documents. Senior leaders are often not interested in good ideas, connections to other issues or innovative thinking. Divergent thinkers tend to be pushed out.
“The strategy is given to staff, but tactics or ideas are above your pay grade. In the larger departments, there are teams of itinerants – contractors and consultants – who don’t know other staff and are not encouraged to. The connections with external, and in some cases internal, stakeholders are the role of the deputy chief executives.
“There are some clever staff at MBIE. A lot of the best and brightest went there, as it had a lot going on and lots of money for salaries. But conditions for many are like a colony egg farm – there are rows and rows of benches, you have to rush in and find a space, and the early people get to sit by a window in their favourite seats.”
The ministerial demands on MBIE are significant, and “good and bad” ministers claim information from its departments at short notice. “Most crises from that aren’t really that important and could have been planned for. They’re used to pressure-cook staff.”
So how can a chief executive of such a huge organisation communicate effectively with all its staff and monitor all its work?
Tremain admits there are complexities in managing such a large ministry.
The senior leadership team keeps in touch with staff using various communication channels from webinars and video updates to regular emails, staff meetings and by encouraging employees to comment or raise questions.
‘Time to trim down’
According to the ministerial briefing paper, 70% of MBIE’s people are now involved in operational work, with just 9% in policy and 21% in corporate and support roles.
Joyce thinks MBIE needs a major revamp and says it would benefit from reverting to a leaner and more policy-oriented agency from the operational organisation it ballooned into under Labour.
“It had 3200 [staff] when I was minister at the end of 2016, so it’s pretty much doubled since. I’d be much, much happier around the three-and-a-half-thousand mark than I am around the six-and-a-half-thousand mark.”
When MBIE was set up, it was about the same size as the Ministry of Justice and dwarfed by the Ministry of Social Development and the health sector.
“It was definitely the biggest on the economic side, but it was smaller or the same size as the big agencies on the social sector side at that time, and to me, that was about right,” says Joyce.
The rationale behind MBIE was to combine “a series of under-scale agencies”.
“In later years, it’s suffered from what I would say is the same experience of the whole public sector, with too much money thrown at it.
“Basically [under Labour], MBIE went from being what was largely a policy agency, which is what it should be, to being an operating agency more so, with a predisposition that agencies should do a lot of the operational work themselves.”
At the peak of the pandemic, MBIE was operating 32 MIQ facilities in five regions and a workforce of more than 4500 staff.
Joyce says the issues facing MBIE with the change of regime are not unique to it. “It’s just the challenge with the whole public sector, and one of the things the current government and the new public service commissioner will have to grapple with.”
Labour’s public service spokesperson Ayesha Verrall says, “Steven Joyce uses raw numbers that ignore population growth. If you look at the public service as a proportion of New Zealand’s total workforce, the increase is 0.3% between 2016 and 2023.
“There is no doubt that some savings can be found when economic times are tough, and the Labour government was looking at about 2%.”
But the last word goes to the architect of the super ministry, Joyce: “There’s a tendency for agencies to offer up things they know that the government can’t get rid of. Ministers will be awake to that.”
He also refers to an “element in public sector organisations and large organisations of any type, that once something’s been built, they tend to keep it, just in case”.
“This is an opportunity to say, ‘hang on, do we need to be doing all these things that we were doing in the last five or six years?’”
How the monster grew
MBIE’s umbrella spans a vast range of apparently unrelated public sector activities. Here are two of them:
New Zealand Space Agency
Set up in April 2016 to boost the country’s space industry, as Rocket Lab was preparing for its first orbital launch.
Iain Cossar, general manager, science innovation and international, says there were no legal or regulatory regimes at the time to ensure New Zealand met its international obligations, but the country now hosts the fourth-highest frequency of rocket launches in the world.
As a launching state, New Zealand is financially liable for any damage or injury caused on Earth or in the air from our launch activities, and for any damage caused in space.
The group has grown from five staff to about 17, some part time, and has an annual budget of $3.8 million. It helped develop New Zealand’s first National Space Policy.
MBIE Intelligence Unit
Not as cloak and dagger as it sounds, according to Jacqui Ellis, general manager of data, insights and intelligence.
Analysts and researchers evaluate and disseminate information. “They are not spies or diplomats – there are no MBIE Intelligence staff posted offshore.”
Duties include helping identify migrant exploitation and people trafficking. Investigations have to be conducted in line with New Zealand law and the unit does not have statutory intelligence-gathering powers like agencies regulated by the Intelligence and Security Act 2017.
The intelligence wing was part of Immigration New Zealand before MBIE. It has 115 staff and annual funding of $11.18 million for 2023-24.
