Prime Minister John Key has announced a shake-up of the public sector, including the creation of a new 'super' ministry.
Key has been talking for several weeks about the "tight financial constraints" the Government now works under, and there has been disquiet in the public service in the lead up to today's announcement.
But, in his speech today Key said he plans 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.
He also announced that four Government departments will be merged to create a new Ministry of Business Innovation and Employment.
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.
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.
"And it will be easier for New Zealand businesses to engage with government, rather than dealing separately with a number of different agencies when they are seeking advice or support."
The plan is for the new ministry to begin working on July 1.
'Sharp focus on costs'
Key said the public sector of the future will be "organised more around delivering results".
"That means getting traction on difficult issues like reducing crime, reducing long-term welfare dependency and reducing educational underachievement," he said.
"At the same time, it will have a sharp focus on its costs."
Key said progress on tackling these issues will be measured against a set of ten targets, such as having 85% of 18-year-olds holding NCEA level 2 or equivalent in five years.
He also identified supporting vulnerable children; boosting skills and employment; reducing crime; and improving interaction with Government as other key areas for departments to focus on.
A Minister has been assigned to oversee the performance on each of these objectives, and further details of the targets will be announced by the end of June.
"Achieving these results will be difficult and demanding - in fact, for some of them, it will be extremely difficult," Key said.
"But I make no apology for my high expectations. It is time for a clear focus on what will make New Zealand a better place."
The number of people able to be employed in Government departments and ministries is also to be scaled down.
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.