Cabinet is likely to make decisions next Monday about merging several government agencies in an exercise that seems sure to lead to job losses.
Prime Minister John Key said yesterday it wasn't an ideological move, it was driven by the need to improve efficiency and deliver better services under tighter cost constraints.
"What we do know is that when you have large fragmentation, you have duplication," he said.
"And taxpayers pay for that duplication."
Mr Key wouldn't speculate on job losses and said work was still being done on the details of the mergers.
But he didn't dispute reports that they are expected to include rolling the National Library and Archives New Zealand into the Department of Internal Affairs, merging the Food Safety Authority with MAF, and amalgamating the Foundation for Science, Research and Technology with the ministry of the same name.
Mr Key said New Zealand had more government agencies and departments than countries of a similar size.
"New Zealand looks out of place...this is really about how we deliver the best services for the New Zealand taxpayer -- how do we make sure it is affordable."
The state sector consists of 41 departments and ministries, 84 statutory Crown entities, 11 Crown entity companies, 17 state-owned enterprises, 31 tertiary education institutions and numerous "schedule four entities" such as the Lottery Grants Board.
Mr Key said he had seen nothing in official papers so far that indicated the Ministry of Women's Affairs and the Ministry of Pacific Island Affairs would be disbanded. Both have been the subject of speculation about whether they are worth keeping.
He said they were small ministries which didn't cost much to run, and the Government was looking at much bigger gains.