MCERT V MAF V MBIE V Treasury

There’s a really big merger in the state sector happening now. 

The merger of many functions of the central public sector concerned with cities, the environment, housing and urban development, and transport, was announced in the week before Christmas and is now underway.

There’s plenty of good on the face of it. Housing connects to transport and infrastructure. Infrastructure connects to climate adaptation. Climate connects to water, and land use, and primary industries. There’s almost no end to the linkages you can make. The government in particular Minister Bishop who already runs transport and housing, has come to the conclusion that on balance merging agencies was going to generate the right improved toolbox, rather than continuing to try and lift cross-ministry coordination with shared goals, and consistent direction while keeping specialist agencies like NZTA and Kainga Ora intact. There’s a limit to what the SSC and DPMC can do in those coordinating roles.

It continues Bishop’s striking continuity of policy direction to Labour in housing density and making housing construction and alteration much more efficient. 

Implemented well MCERT will also start to provide the lived and built environment with some of the policy heft in other agencies that has been ongoing since Minister Joyce formed MBIE from the old MED, and MPI in 2012 was formed into that formidable bloc of fisheries, forestry, and everything agricultural. Given that nearly 80% of New Zealanders lives in the North Island and 80% of us lives in Auckland, Whangarei, Tauranga, Hamilton, Rotorua, and Taupo, it is indeed high time that there is much stronger capacity for coordinated policy about cities and the lived environment than there has been. 

It raises the expectation that our cities with their 4 million people out of 5.5 million will get a better, more thoughtful and more useful set of bureaucrats to deal with than the powerless wide-eyed PC-saturated nitwits in DIA.

It is likely to corral more of the industry lobby concerned with transport and land development. And hopefully sidelines those absurdly pro-privatisation dorks at the Infrastructure Commission who are thankfully quickly receding from view. 

The coordination may well be looked forward to, but we know what this effort won’t do. 

It won’t find extra money to do things. There’s no money in this upcoming 2026 budget like there wasn’t in 2025. It won’t be a challenge to Treasury’s role. 

It’s not going to alter the prioritisation of transport expenditure. NZTA will continue to form its highway investment programme, regions will put up their ranked requests, but it’s still the Minister writing the GPS that will shape up how money is spent out of the NLTF and other funds.

It won’t slow down the appalling legislative hijack that this government continues in Parliament called Urgency. Who knows maybe we will get better initial legislative drafts, but there’s no apparent sign of it so far out of Bishop who runs the House or the PCO. In particular it’s too late to slow down the dreadful dual replacements to the RMA.

It doesn’t spell out the remaining role for the environment ministry. And I also fear for DoC since this is an irrecoverable divorce from Environment; being left out of a major power bloc may in time turn them into a vassal state of MBIE as essentially a branch of the Ministry of Tourism. 

It centralises an awful lot of power in the hands of Chris Bishop; at least as much as Joyce had. Whoever gets into power next time will need to have outstanding capacity and determination to steer new policy outcomes through this beast. Who on the left would be as god or better at this than Bishop?

Minister Bishop said when announcing the reform that MCERT’s formation was part of the government’s “clear agenda to drive growth and lift living standards for all New Zealanders.” At some point this government should show that it is capable of this by any means at all, let alone by the oblique and awkward scurrying pathway to a new agglomerated entity. Most of the benefits will be gained if they all move into one enormous building to increase clusters of expertise close to other groups. There’s no doubt we have too many state entities for such a small country and it’s good to do better out of the ones we have. But as the merger of all the health entities has shown, it will likely take years to see measurable improvements if indeed there are any, and what it was like before will be lost in the mists of political time. 

It is a good coordinating effort, but without a successful economy generating a lot more government revenue, it’s an exercise in state self-limitation.