Story: Nation and government

Page 6 – The state sector and Crown entities

What is the state sector?

The agencies which help the government frame and implement policy are known collectively as the state sector. Organisations in this sector can be as varied as the Ministry of Education, the Reserve Bank of New Zealand or the Inland Revenue Department. With few exceptions they are answerable to ministers of the Crown.

Ministries and departments

In February 2011 there were 38 departments or ministries. Some exist mainly to give policy advice to ministers. Others also have administrative roles. The Department of Conservation, for example, gives advice to its minister on conservation issues and also administers protected Crown land.

Officers of Parliament

A few individuals in the state sector are officers of Parliament and independent of the executive government:

  • the ombudsman
  • the controller and auditor general
  • the parliamentary commissioner for the environment.

These officers review activities of the executive government and report directly to Parliament.

Tier 2 state sector

Beneath departments and offices of Parliament are a group of bodies which are legally separate from the Crown but indirectly accountable to ministers. They include:

Crown entities

In 2011, excluding school boards of trustees, there were 104 Crown entities, funded by the state and performing a range of functions. Important Crown entities include:

  • 20 district health boards, which run the country’s hospitals
  • eight Crown research institutes
  • eight universities, 18 polytechnics and three wānanga
  • Radio New Zealand and Television New Zealand.

What happened to the Post Office?

Until the 1980s, post offices were at the centre of life in New Zealand towns and cities. The post office was a government department which operated both the postal and telephone systems and ran the Post Office Savings Bank. It was one of the largest business enterprises in the country. In 1900, 1,700 branches served a population of 800,000. But in 1987, as part of the sweeping reforms which followed the 1984 election, the department was split up. New Zealand Post has remained a state-owned enterprise, but the telephone system and savings bank were eventually sold into private hands. Post offices were replaced by agency post shops and most of the Post Office buildings have been put to new uses.

Public Finance Act Fourth Schedule Organisations

This small group of 57 organisations are mainly Trusts, Reserve Boards and Fish and Game Councils which are funded by the state but do not operate under a full Crown entity governance regime.

State-owned enterprises

Before 1984, when selling state assets became government policy, the government ran many commercial enterprises directly, including the railways, the telephone system, a savings bank and the electricity system.

The government still owns enterprises which are run on commercial lines, among them power companies and the post office. There were 16 of these state-owned enterprises in September 2011.

How to cite this page:

John Wilson. 'Nation and government - The state sector and Crown entities', Te Ara - the Encyclopedia of New Zealand, updated 2-Sep-13
URL: http://www.TeAra.govt.nz/en/nation-and-government/page-6