What next for the Ministry for the Environment?

MfE trebled in size during the last Government. How big will it be at the end of this one?

While idly sifting through Treasury’s proactive release of mini-Budget papers, I spotted an interesting line.

“Due to the sensitive nature of the proposals being put forward, the Climate Implications of Policy Assessment (CIPA) team has not been consulted to review these results.”

This passage appears in Treasury’s appraisal of the emissions impact of the Government cutting the “feebate” (aka the Clean Car Discount) and ETS spending subsiding industrial decarbonisation.

You may ask - why are Treasury the ones looking at the potential impact on the climate and New Zealand’s emissions budgets of Government decisions? It’s certainly a reasonable question! Especially since the Ministry for the Environment (MfE) have a a whole team set up to review the climate impact of various Cabinet decisions, checking the work of other agencies. This was a big win for former Climate Minister James Shaw - that all Government decisions with a climate impact get a proper assessment, which was then peer reviewed by this newly set up squad of public servants at MfE.

In this case, Treasury didn’t consult this team, “due to the sensitive nature of the proposals being put forward”. In other words: They were worried about leaks.

This is quite funny given both the policies were National Party manifesto commitments, but clearly the actual emissions impacts (they make the 2030-onwards climate budgets much tougher) were deemed too important to risk becoming public early.

Some worry about confidentiality is understandable - the Government’s first few months were rocked by a series of serious leaks. But I’m more interested in what this might say about the attitude of the new Government towards MfE itself.

MfE’s rapid growth under Labour

When Labour was elected in 2017, MfE was a minnow of an agency, with just 349 staff.

Size isn’t everything - Treasury had less than 500 people! - but it is something. Treasury has no real competitors in the public service¹, while MfE’s advice on things like agricultural emissions would always be going up against MPI’s take (2455 staff in 2017), while its advice on energy would be up against the hulking mass of MBIE (3366 staff).

But the Sixth Labour Government had a lot of environmental policy, from cleaning up waterways, to creating a brand new Zero Carbon Act, to consenting denser homes, to reforming the RMA.

And so it went on a hiring spree. MfE roughly trebled in size over six years, growing from 349 FTEs in 2017 to 1049 by 2023. Much of this growth was in policy advisors - there were 520 as of 2023, more than the entire staff of the Ministry just six years earlier. And they produced a lot of policy, largely to the liking of the last Government. When they partnered with MPI, as they did for the attempt to price agricultural emissions? Not so much.

Every institution has a view of the world, no matter how impartial it claims to be. Ministries can mould themselves to shape new Governments somewhat, and individual might have deeply heterodox views from their peers, but you can generally see patterns in how certain agencies respond to things.

Treasury’s famous instruction guide for the Fourth Labour Government’s economic policy is one such instance of this, but it is hardly alone.

Another example I’ve written about here before is the different ways MfE and MPI see climate change. In their contrasting Long Term Insights Briefings, MPI suggested climate-driven food scarcity would actually be a good thing for New Zealand economically, as it would drive up the price of our exports, while MfE had a very different view.

The way forwards

The Government are making cuts across the public service, so some loss of staff at MfE are inevitable. The Government has asked them to trim 7.5% - larger than some other agencies, but not drastically large. If other agencies shrink by a similar amounts then MfE does not lose relative power.

Thus far these cuts have taken the form of voluntary redundancy - which might prove fairly popular. The payouts can be quite strong and a lot of the policy folks will be very hireable elsewhere.

Ideologically, it might seem obvious that National would want to cut jobs at MfE, preferring advice on things like farming from MPI, or energy from MBIE, who are both far more interested in economic factors. The cutting out of the CIPA team from the Government’s flagship climate policy thus far certainly suggests something of that nature, although that could also just be Treasury itself.

But MfE will be crucial for the Government’s replacement of the RMA, which they have a lot of experience with, having helped to replace it under the last Government already. They are also at the heart of the very controversial fast tracking bill, running the process itself as well as helping to develop the policy.

That doesn’t mean all is fine sailing for MfE. But they are definitely an agency to watch closely.

Have a great day.

1. Well, maybe RBNZ.