‘Stop Work Notices’ will cut $1 billion of waste on day one

“ACT will defund failing and wasteful projects by requiring Ministers to immediately issue ‘Stop Work Notices’ to their chief executives. This will save up to $1 billion on day one of the next Government.

“By issuing Stop Work Notices to MBIE, for example, ACT would aim to reduce the number of staff in that department by up to 50 per cent.

“New Zealanders busy trying to balance their household budgets will be astonished to hear about some of the insane projects that have grown up like mushrooms under Labour.

“Those doing the work will be told to down tools, then they'll be made redundant, or maybe redeployed, but it is better to send them home than let them keep doing damage to New Zealand.

“These are just a few of the Stop Work Notices Ministers would issue to their chief executives on day one of a new Government:

*Includes both operating and capital savings.

“These are just a few of the wasteful activities that can be stopped on day one. Other Stop Work Notices would cover, for example, the Ministry of Education's curriculum refresh and Let’s Get Wellington Moving.

“ACT keeps an open mind about government waste and there will be more wasteful activity than we currently know about. That’s why Phase Two will require chief executives to provide Briefings to Incoming Ministers (BIMs) explicitly outlining:

• the teams that sit within Ministries and departments
• the activities these teams do and the outputs they produce
• a breakdown of expenditure on those teams and activities.

“Ministers will then identify teams and activities they require departments to cut because they aren’t providing value for taxpayers or because they overlap with functions that exist elsewhere in the bureaucracy.

“The Ministry of Business, Innovation and Employment is home to countless pet projects and the number of MBIE staff has grown by 2,400, or 64 per cent, since 2017. It wastes hundreds of millions of dollars and is actually an obstacle to business, innovation, and employment. The Minister who inherits MBIE will need to issue many Stop Work Notices to its chief executive. ACT would aim to reduce the number of staff at MBIE by up to 50 per cent.

“The next Government needs to take on the bureaucracy from day one and defund failing programmes that aren’t delivering for taxpayers.”

ENDS

Appendix: Issuing Stop Work Notices to MBIE

Despite its name, the Ministry for Business, Innovation and Employment (MBIE) is possibly one of the greatest obstacles to business, innovation and employment in this country. MBIE administers a wide range of policies and regulations, including in employment law, immigration, consumer law, procurement, and research and science.

As one of the country’s largest government departments, it has become the natural home for any Government pet project and intervention that a Minister might dream up. As at March 2023, MBIE employs 6,123 full-time equivalents and spent $74.1 million on contractors and consultants in the 9 months prior. By comparison, in June 2018, MBIE had 3,723 staff. In fewer than five years, MBIE has grown by 64 per cent.

MBIE spends an extraordinary amount of money on policy advice, when what businesses need most of the time is for the government to get out of the way. For example, $8.7 million was spent on policy advice to Ministers on tourism issues. Around $3 million was spent just on operational support (i.e. staff salaries) to administer Economic and Regional Development grants and crown investments. Over $10 million was spent on services for the attraction of migrants, when most businesses would tell you that the key thing stopping migrants from coming to New Zealand isn’t that they’ve never heard of the place, but that government policy and slow Immigration New Zealand processing actively stops migrants from coming.

At best, the role of MBIE bureaucrats is to figure out how to spend taxpayers’ money to “grow” businesses, and to give them “advice” on how to do their jobs - money and advice businesses don’t need. At worst, there are public servants who actively undermine the ability for businesses to get things done, with Immigration New Zealand’s sheer incompetency being the most obvious example.

Which of MBIE’s functions and programmes would be cut as a result of issuing Stop Work Notices?

• MBIE has established a ‘Just Transitions Unit’ “to help share and coordinate the work of transitioning New Zealand to a low emissions economy”. In reality, it is a talk-fest that results in a lot of strategy documents, and an excuse for new corporate welfare hand-outs.
• Regional Skills Leadership Groups: We would try and explain what these groups do, but even the Minister didn’t seem to have a clue of their purpose in her Letter of Expectations.
• Workforce Development Councils: Intended to be industry-governed bodies which made sure that vocational education met the needs of industry. They were also meant to give a stronger voice to Māori business and iwi development. Instead of being "industry-led" they ended up being co-governed organisations with Ministerial appointees. They deliver no tangible value for $65 million a year.
• Income insurance: When Chris Hipkins became Prime Minister he announced that the controversial and problematic income insurance scheme would be put on ice and the implementation unit shut down. Yet, as of May 2023, both ACC and MBIE confirmed that they are continuing with policy work. MBIE has the equivalent of 7.5 full-time staff currently working on this, and were advertising for a further two posts.
• Kānoa - Regional Economic Development & Investment Unit: Kānoa is now the home of the Provincial Growth Fund, as well as a range of other funds the unit administers. Since 2018, the Government has allocated $4.5 billion of taxpayers’ money through such funds.
• Fair Pay Agreements would be scrapped immediately. MBIE warned in its Regulatory Impact Statement on FPAs that there is a significant risk that the costs of setting up the system and costs to employers would outweigh benefits to employees. It was irresponsible of Labour to rush through this ideological pet project regardless.
• Space policy: There is a role for government in ensuring regulations are kept up to date to enable new ventures and activities such as Rocket Lab, and to ensure national security policy accommodates new developments. It is not the role of government to actively “[grow] an innovative and inclusive space sector”.
• Industry Transformation Plans: Bureaucrats don’t have the information or the incentives to pick winners and play an active hand in the development of favoured sectors. It inevitably leads to taxpayer money being wasted.
• Game Development Sector Rebate: Announced as part of the 2023 Budget, the Government allocated $40 million per annum for delivering and administering a rebate for the game development sector.
• Major Events Fund: The Major Events Fund gives priority to events that that are, or have potential to be, internationally significant and which create social connection, reflect, and celebrate New Zealand culture and build national pride. It justifies its existence by stating "without deliberate government intervention, the full potential for these benefits may go unrealised. Accelerating and extending these benefits is the main reason government invests in major events”. That sounds rather grandiose given the niche interests it actually funds, including the Weightlifting Masters, the Jim Henson Retrospectacle, and the New Zealand White Water Invitational.
• Te Ara Paerangi - Future Pathways and Vision Mātauranga: This picks winners in the research and science sector.
• ACT has already announced in our Alternative Budget that we would abolish screen sector handouts. The teams involved with the screen sector would be scrapped too.