New Zealand has a long tradition of creating ad hoc public bodies intended to operate at arms-length from Ministers and Ministries. The public management reforms of the late 80’s and early 90s expanded the number of these arms-length bodies at central government level. Since the late 90s there have been two key changes – a shift in the formal rhetoric towards reducing fragmentation and the passage of the Crown Entities Act 2004 (CEA). 

This paper is a practitioner’s account  of the origins and policy drivers leading up to the introduction of the Crown Entities Act in 2004. This Act created a unified governance framework for arms-length central government bodies. The paper explores the achievements of that legislation and the policy issues left unresolved. It highlights the lack of policy transfer across jurisdictions and the lack of transfer of ideas from the academic literature into policy development.

This paper briefly summarises new data on the machinery of government changes in New Zealand (NZ) over the last decade. This suggests that the change in the rhetoric is not reflected in the reality of a significant reduction in the numbers of arms-length bodies, nor in choice of organisational form. In fact, the does not appear to be any clear trend in the choice of organisational form – with similar functions being transferred to and from Crown Entities, SOEs and Ministries. 

It concludes with four core governance propositions relevant to other jurisdictions:
 
• All governments have significant arms-length entities which need an integrated governance regime;
• Each arms-length entity is unique but from a governance perspective they are largely the same;
• A standardised statute, by ensuring greater clarity of roles and consistency in approach, will minimise special pleading and develop case law;
• Dealing with the shibboleth of independence involves balancing the inherent tension between being arms-length and being a public body