There are concerns that merging four Government ministries into one with a strong business focus will come at a cost to hundreds of state sector jobs.
Prime Minister John Key announced yesterday a shake-up of the public sector that will include the creation of a new 'super' ministry.
The ministry will bring together staff from the Ministry of Economic Development, the Department of Labour, the Ministry of Science and Innovation and the Department of Building and Housing.
It will be named the Ministry of Business Innovation and Employment. The plan is for the new ministry to begin working on July 1.
The number of people to be employed in Government departments and ministries is also to be scaled down.
Between the four departments there is about 3200 workers.
Council of Trade Unions secretary Peter Conway told TV ONE's Breakfast there will be many jobs lost and there is
uncertainty among employees.
"There's two million workers out there and this department been in existence for 120 years so it is a big call to get rid of the Labour Department. "
Steven Joyce, the minister who will be responsible for the soon-to-be-created Ministry of Business Innovation and Employment, told TV ONE's Breakfast he does not know how many jobs will be lost.
In his speech Key said he also planned to make the public service more efficient by setting 10 specific goals to be achieved over the next three to five years and by lowering the cap on the number of civil servants.
Key said the Government will reset the cap on core Government administration at a lower level of no more than 36,475 full-time equivalent positions.
National reduced the cap to just under 39,000 when it came into Government in 2008.
The cap will include most people working in Government departments and in some Crown entities, but it does not include frontline staff like teachers, police officers, hospital staff, or prison officers.
The Government signalled its intention to make savings in the public service in the 2010 Budget, and Key has said state sector chief executives had been preparing for reforms since then.
Independent view lost
Conway told Breakfast that by merging the four existing agencies the "strong, independent, free and robust Labour Department view could be lost".
Joyce told TV ONE's Breakfast he is sure "that won't be the case".
"The Labour market is obviously a big part of the whole commercial and the whole economy actually and by putting it in the centre of this agency it's going to, if anything, have more attention and be closer to the action," he said.
"One of the challenges is that we have this agency off to the side currently which is supposed to focus on jobs, employment and safe work places," he said.
"It's not right in the engine room of the economic agencies and this will shift it into the engine room and I think that will result in better policy."
Key said the new ministry will make it easier for businesses to work with the Government.
"It will strengthen the public service's ability to work on business policy, regulation and engagement, so the Government will get a much more coordinated and focused resource," he said.