The CPI will be out later this morning and I’m sure all eyes will be on that.
But the Prime Minister’s reshuffle on Sunday prompted thoughts about inflation of another sort – the number of ministerial portfolios/titles in our executive government. When the reshuffle comes into effect on Friday there will (still) be 30 members of the executive (Cabinet ministers, ministers outside Cabinet, and parliamentary under-secretaries), 79 portfolios, and 6 distinct “other responsibilities” (and of course lots – 25 in fact – of “Associate Minister of” titles, but I’ll ignore those).
This is how the official ministerial list is laid out these days.
In this reshuffle, the Prime Minister didn’t add any new ministers (net), but he did add to the very long list of job titles: Tertiary Education and Skills was split into Universities (Reti) and Vocational Education (Simmonds) – as if (eg) law, accounting, or medical degrees weren’t primarily vocational – and a new “other responsibility” was created in the form of Minister for the South Island (like Minister for Auckland it isn’t a warranted portfolio). The new Minister for Economic Growth title was simply a relabelling of the old, and latterly unimportant (announcing handouts to various “major events” – check Melissa Lee’s press releases) Economic Development portfolio.
Numbers of portfolios (and ministers etc) do fluctuate from time to time. Re portfolios, government re-organisations/reforms matter – eg the Minister of SOEs now has responsibility for a whole bunch of government trading entities that once each had their own minister (and others were sold). But the long-term trend has been solidly upwards.
I went back to the New Zealand Official Yearbooks to get some snapshots each quarter century since 1900. (Here I simply followed the lists and counted “Deputy Prime Minister” and “Minister without Portfolio” as portfolios, a description here which does not distinguish (as NZOYB did not) between warranted and other distinct responsibilities. There were very few associate or deputy positions until the 2000 list)
The current Ministerial List structure seems to be available online back to about 2005. So for more recent years I used those lists. For what follows I’ve used Helen Clark’s final list (the numbers from her first list are in the table above), John Key’s first one, Bill English’s last one, Jacinda Ardern’s post-election 2017 and 2020 lists, a late one from Chris Hipkins, and Christopher Luxon’s first and most recent lists. I’ve shown both the number of warranted portfolios and the number of (distinct) “other responsibilities”, partly because over time some roles have gravitated from one column to the other with legislative change (eg responsibility for the SIS and GCSB), and partly because the older lists summarised above didn’t make the distinction).
So that is two new records – 81 job titles in his first list a mere 14 months ago and 85 now – set by Luxon, leading the government that had won office on talk of government bloat etc. And if the number of members of the executive isn’t a new record, it is certainly right up there (we’ve had 120 MPs since MMP was introduced in 1996, and as recently as 1999/2000 had “only” 25 members of the executive).
By contrast, in 1949/50 and 1975 – when the government had its hand in so much of the economy – National Party Prime Ministers Holland and Muldoon had governments with many fewer members of the executive and many fewer job titles (In 1991, Bolger had 25 people in the executive and about 70 distinct job titles).
Do these job titles come at vast expense? No doubt, not (a few changes to ministerial letterheads). Most of the “grace and favour” ones seem empty or unnecessary or just a piece of cheap political rhetoric: “we care” about group or sector, x, y, or z. A cynic who I mentioned these numbers to wondered if perhaps Luxon might have a growth target of getting to 100 ministerial titles: Minister for Wellington, Minister for Regional North Island perhaps, or Minister for Catholics, Minister for Protestants, Minister for Other Religions, and Minister for Atheists? Given how much money we throw at the industry it is perhaps a little surprising that no PM has yet set up a “Minister for Film” or Minister for Gaming”. And in a few countries (including in our region) they do split Treasury and Finance into separate portfolios.
It is insubstantial bloat – fault of successive Prime Ministers, although on this one Luxon appears to be the worst – made worse because every new portfolio titles attracts interested parties and pressure to “do something” under the aegis of that portfolio. Cynics suggest, for example, that the Minister for the South Island title was created mainly because there is no capable South Island minister actually in Cabinet, but presumably now the pressure will be on for James Meager to have some announceables (perhaps even some distinct bureaucrats). It just sends all the wrong signals from a government that talks about restraint, fiscal discipline, focusing on essentials etc. Much better to have slimmed the list of titles – and perhaps the list of people. Without more than two minutes effort I found it really easy to eliminate 21 of the job titles (and that is before starting on the associates – Associate Minister for Sport and Recreation anyone (that’s Chris Bishop by the way), and we once had an Associate Minister for the Rugby World Cup).
Not only would ending the title inflation be quite possible here, it can be and is done elsewhere. In the UK, for example, (a much bigger country and Parliament) there are lots of junior ministers but only around 30 distinct portfolio areas/titles. Australia’s federal government appears to have about 50.
Where might one start? Well, consider James Meager (who seems a perfectly able person, so this is not intended as a reflection on him). He has been given 3 distinct portfolios/responsibilities – Minister for Hunting and Fishing, Minister for Youth, and Minister for the South Island – not one of which is actually needed (at least for anything other than political show).
croaking cassandra 
Thanks Michael. Interesting article. One would think that many of these ‘portfolios’ are just day to day operational stuff for the public service or local councils.
The article raised a number of things I hadn’t considered about how we handle complexity in organizations. I work in the software industry and we have an observation that the ideal size of a team should be the number of people who can share a single pizza.
This limits the number of interactions and communication points each team member has to deal with to about 5 to 10 people depending on whether those people eat none, one or two slices of pizza each.
You point out the unnecessary nature of many of these titles and portfolios – I would add that Luxon is creating an overly complex and potentially disjointed structure for managing his team.
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Either modern programmers are wimps or pizzas have become larger. In my day one pizza per programmer. Not that our software projects were more successful than the NZ government at meeting targets. About a half of software projects achieved what they intended and a third never went live. Fortunately those responsible for building submarines, bridges and medical scanners are far, far better than programmers and public service bureaucrats.
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That made me laugh – yes some teams can be very small if the pizza eating capacity of the developers extends to a whole pizza. I’m talking about millennials who tend to be very considerate and thoughtful of others. The point you make about project failure is a feature of the industry and yet nearly everything we do each day involves software. It is ubiquitous. A strange dichotomy.
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Good morning Michael
I think that the main reason for the jump in the numbers in the Executive and also in the number of portfolios over the past 25 years is MMP, which has required a number of party’s wishes to be accommodated in the post-election negotiations. That trend was exacerbated after the 2023 election because for the first time, all the parties forming the Government were represented in Cabinet (previously, Ministers from parties outside National or Labour were all outside Cabinet). For reasons unknown to anyone but himself, Luxon crowed about this being “a first”, but it required a lot of egos to be satisfied, hence the growth in the Executive and the number of portfolios.
Best regards, Michael Wood
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Makes some sense re the numbers in the executive, both for your reason and because there were more MPs. Less so for portfolio numbers (by 2020 numbers there were only 2-3 higher than Bolger had had in 1991)
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I completely agree. The only exception I can recall where a new govt ministry was created successfully is from the UK: “”In the last week of August 1976, days after Denis Howell was appointed ‘Minister for Drought’, severe thunderstorms brought rain to some places for the first time in weeks.””
Attempts at cutting ‘fat’ in bureaucracies result in the competent moving on to greener pastures and the incompetent grimly hanging on. As some American once said with govt bureaucracy you need to cut the bone not the fat.
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The desire to cut government spending as a cure all for economic woes is overstated. The governments engagement in the economy is critical to it’s success and you’ll be hard pressed to find a successful economy with very low levels of government spending in the historic data.
Economic growth requires the creation of new money and this comes from 3 sources – bank loans into the private sector, foreign exchange through exports and inward investment and finally government spending. When the government spends money it is created by the reserve bank and then spent into the private sector.
Taxation and governments bonds come after that money is spent and their purpose is to withdraw money from the economy to control inflation. That is the actual operational process of government spending – taxation and bonds come second, not first – I think Michael will back me up on that.
From the perspective of overall demand and growth, the government is the most important contributor and if it withdraws or contracts it’s spending without compensatory credit growth in the household and business sectors then recession is the result – as we are seeing play out in NZ right now.
Some of the best explanations for this come from MMT and in particular Australian economist Steve Keen – in this 80 minute lecture he explains the macro economic dynamics of government spending – https://www.youtube.com/watch?v=WOIaF7sjb3M – this makes a lot more sense than the household budget analogy many economists still hold onto.
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Agree with some of this and not the rest. Low levels of govt spending certainly aren’t critical to econ success, but equally go back 120 years and the richest countries in rhe world had low levels of govt spending/GDP (the big increase is in state provision of welfare – v broadly defined .
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That’s a fair point and a persons definition of economic success will depend on the outcomes and metrics they want to observe.
I look at things from the post New Deal/Keynesian era – where economic success was defined in terms of a broad distribution of national income and shared access to resources – healthcare, education, welfare etc. In this sense a generous welfare state and the political will to deliver it is a key component of my definition of economic success.
A successful economy 120 years ago was a very harsh place for the majority of people and access to the basics a serious struggle. Something that is overlooked or ignored when considering small government as an economic goal by center right politicians and voters.
What most voters don’t realize is just how big a lift was made to living standards and quality of life by the political and economic reactions to the Russian Revolution, the Great Depression and then the Second World War. Modern societies and economies were built on the foundational construction and delivery of the welfare state and a goal of full employment. This applied in the USSR as much as it did across the West and more recently China. (Bold claims – I know)
But as one of the members of the first NZ Labour government (1935 to 1949) wryly observed when they were, eventually, voted out – “they walked to the Polls to vote us into power, but 14 years later they drove to the Polls to vote us out.”
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Your definition of economic success then risks making the question a bit circular: your defn almost requires a high degree of govt spending.
Anyway, interesting issues, which we could debate – emphases mainly – almost indefinitely.
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The line about the cars is a good one, altho on checking – more out of curiousity than anything – not really supported by the data (see graph of per capita cars here https://www.greaterauckland.org.nz/2013/11/27/more-details-on-vehicle-ownership-over-time/) – some combination of the war and the wider import/fx restrictions Labour had put on ).
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That’s interesting. I guess there wouldn’t have been much available so soon after the war. The point – I think – was more general – you spend 14 years lifting up the living standards of hundreds of thousands of working class people – housing, healthcare, education, decent wages, job security and, for some, access to asset ownership – for the first in their entire family history. Like wise for higher education.
But now you’ve created a middle class who grow increasingly disinterested in the whole ‘sharing the national income’ thing when it requires high levels of taxation and equitable public provision of services that limits the choices they can, now, afford to have.
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Who is right here, Michael?
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Law’s sounds very defensive and has to keep cutting off callers he doesn’t agree with. Tourism is a low pay sector with a significant impact on resources such as housing – I would say his callers are making valid points.
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Would love to see some comment on the rather large growth in the Reserve Bank.
thank you
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Not really anything new to say. It is a poor reflection on both the previous Lab govt and, increasingly, this one. The RB has a 5 yr funding agreement that runs to 30 June this year, but if she had been serious Willis could have strongly insisted on spending cuts already, including by replacing the board chair when his term ended last June. In fairness to everyone, the RB has taken on some new statutory roles – which need staff – but I’d still be surprised if the place could not be effectively run with perhaps 350 staff. Orr, of course, is an empire builder and definitely not the sort of person to preside over recreating a lean and efficient RB. But hard to remove him until his term ends in 3/28.
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