New Zealand has built one of the most complex executive governments in the developed world. With 81 ministerial portfolios spread across 28 ministers and 43 departments, we operate with more than three times as many ministerial portfolios and nearly twice as many departments as peer nations like Ireland, Norway and Singapore. Our executive structure is more like a game of Twister than a system of government.
Last year, The New Zealand Initiative's Cabinet Congestion report first exposed the consequences of this ministerial maze.
Take housing, one of New Zealand’s most pressing challenges. No single ministerial portfolio confers both the mandate and the tools to solve it. Instead, responsibility is scattered across at least six portfolios: Housing, Building and Construction (regulation), Local Government (planning and consents), Environment (the RMA), Transport, and Infrastructure (funding). With so many players, coordinated policy is challenging.
As one former minister told us, “If a proposal needs sign-off from six different ministers, that’s six opportunities to kill it.” Accountability blurs. Veto points multiply. The result risks incoherence and glacial progress on complex policy problems.
Departmental reporting lines add to the mess. MBIE reports to 20 different ministers. No one would have set out to give a single ministry 20 masters.
This dysfunction has a price. International research shows that more budget-holding ministers are linked to higher deficits. When many ministers compete for allocations, each bears only a fraction of the collective cost. New Zealand’s fiscal trends suggest the same story: since the 1990s, public spending and ministerial numbers have risen in lockstep.
That is why The New Zealand Initiative has released Unscrambling Government: Less Confusion, More Efficiency, a report I co-authored. It presents illustrative models for unscrambling New Zealand's executive – practical options to spark debate, not rigid blueprints.
Encouragingly, the need for reform is now recognised in Wellington. Reports over the past week suggest officials are considering options for some departmental consolidation. But piecemeal change risks creating new problems. And it would leave the dysfunction from portfolio proliferation unchecked.
Our report proposes three fundamental reforms. First, consolidating ministerial portfolios from 81 to around 15-20 coherent groupings. Second, creating a statutory junior minister role to allow meaningful delegation by cabinet ministers without fragmenting overall portfolio responsibility. Third, reducing 43 departments to about 20, aligned with the streamlined portfolios.
The pathway is straightforward. Portfolio consolidation could happen the day after an election by prime ministerial warrant. A statutory junior minister role would follow, enabling defined delegation within broad portfolios. Departmental realignment could be phased over 12 to 24 months, coordinated by a central transition office to ensure continuity of service.
Concrete examples illustrate the model. A Minister for the Built Environment would take responsibility for housing, local government, transport, infrastructure and building regulation. These functions naturally interact rather than conflict and should sit together.
A Home Affairs Minister would oversee internal affairs, immigration, culture and heritage, and communities. That creates clear accountability for civic functions. A streamlined Commerce Ministry would focus on business and innovation. It would be freed from unrelated responsibilities like immigration or building regulation that have made MBIE so cumbersome.
International comparisons demonstrate what is possible. Ireland, with a population like ours, has constitutionally capped its Cabinet at 15 since 1937. That limit has survived coalition after coalition. Successive governments have enabled delegation of responsibility without fragmenting accountability through junior minister roles called ‘Ministers of State.’
Norway, also our size, governs with 20 ministers across 17 coherent ministries, each clearly aligned to a broad policy domain.
Singapore, likewise, operates with just 18 ministers and 16 ministries. Its disciplined structure underpins a whole-of-government approach that consistently ranks among the most effective in the world.
By comparison, New Zealand’s sprawling executive is an outlier.
Sceptics may ask whether such reform is politically feasible. Australia shows it is. In 1987, Prime Minister Bob Hawke cut Australia’s Federal Cabinet portfolios from 28 to 16 and created a disciplined two-tier system of senior and junior ministers. Departments were merged from 28 to 18 sector-based ministries. Critics predicted chaos. Instead, the reforms delivered clearer accountability, faster decisions and better coordination.
Most tellingly, they stuck. John Howard’s Coalition government retained Hawke’s lean Cabinet. The system survived a change of government because it works. Hawke’s achievement proves that with political leadership and disciplined design, executive reform is not only possible – it can endure.
The logic is simple. Ministers could develop expertise in coherent areas instead of juggling disconnected briefs. Departments would each answer to one minister, not many. Parliament and the public could hold individuals accountable for defined outcomes.
Coalition negotiations should not be a barrier. Senior and junior ministerial positions provide options for meaningful roles without inflating the number of budget-holding portfolios. The total number of ministerial positions need not fall materially. What matters is coherence and accountability, not titles.
The real obstacle is political will. Successive governments have allowed complexity to accumulate through incremental decisions that made sense individually but created collective incoherence. The next government has an opportunity to reverse that drift and build an executive fit for today’s challenges.
Structure alone will not fix everything. Performance still depends on people, priorities and political will. But New Zealand's executive design has become a structural impediment that makes good outcomes harder to achieve.
A sprawling Cabinet may serve political convenience. But it undermines accountability, fiscal discipline and delivery.
It is time to unscramble the mess.
To read the article on the NZ Herald website click here.