PM Christopher Luxon retains confidence in Shane Reti despite sacking him from health portfolio

• Shane Reti loses Health portfolio, replaced by Simeon Brown
• Melissa Lee no longer a minister
• First term MP James Meager becomes minister outside Cabinet
• Government creates new Economic Growth, Universities, and South Island ministerial roles

Prime Minister Christopher Luxon has insisted he still has confidence in Dr Shane Reti, despite sacking him as Health Minister.

Reti's demotion was one of the major change in Luxon's reshuffle, along with the removal of Melissa Lee from the executive, and the ascension of James Meager to a minister outside cabinet with a brand new South Island role.

Reti was widely expected to lose the portfolio, one which had become a problem area for the government.

Polls show New Zealanders are becoming increasingly concerned at the state of the health sector, which is struggling under staff shortages, governance problems, funding deficits, and the proposal to scale back Dunedin Hospital's rebuild.

Reti will be replaced in the role by Simeon Brown. Luxon said Reti had set good foundations in place in health, but Brown's skills were better placed to take leadership of the health system.

"I haven't lost confidence in Shane Reti," Luxon told media on Sunday.

Reti retains his Pacific Peoples portfolio, and also picks up Statistics and Science, Innovation, and Employment. He will also get a new Universities role.

"He's going to do a great job on universities and the science sector, and that's a very important job for us. But what we need is the skills that Simeon Brown brings, which is delivery and execution, and I want him to now bring that into our healthcare system."

A number of Brown's portfolios have been given to other ministers, to free him up to focus on Health. His Transport role will go to Chris Bishop, while Simon Watts will take on Energy and Local Government.

"Part of this reshuffle is to make sure that I have ruthless focus on healthcare delivery. That's why I've got Simeon Brown very stripped down and focussed, with his major focus and priority area on Health," Luxon said.

Reti was informed on Saturday that he would be losing the role. Luxon said the minister was a "class act" and took news of his demotion well.

In a statement, Reti said it had been a privilege to serve in the role, and he respected the Prime Minister's decision.

"I want to acknowledge the health sector for all its hard work - tens of thousands of staff across the sector go to work every day to deliver better health outcomes for their fellow New Zealanders and they deserve our complete respect. I now look forward to the responsibility of continuing to work hard for Pacific Peoples, and in my new portfolios. Alongside the wider Cabinet team, I am committed to continue making meaningful improvement in the lives of all New Zealanders," he said.

Labour's health spokesperson Dr Ayesha Verrall said Reti was "a decent man," but a changing the minister would not cover up the fundamental issues with the health system.

"Cosmetic personnel changes do nothing to detract from the fact that the government appears to have no plans for these important areas," she said.

Verrall said New Zealanders would judge Brown on whether or not they were getting the services they needed.

Economic growth

Luxon said the refresh was about prioritising economic growth. So much so, he has even changed the name of a portfolio to reflect it.

Finance minister Nicola Willis has been given the new Economic Growth role, formerly known as the Economic Development portfolio.

Willis insisted it was a new portfolio, not just a name change, and it would be less-constrained than the Economic Development role.

"I now have a mandate to lead a group of ministers across government with a singular focus: how do we grow the economy faster? I intend to set very clear expectations for when changes will be delivered, how we will prioritise, and make sure the resources of government are going where we can make the biggest difference," she said.

Willis indicated she would have more to say on her priorities in the role shortly.

Lee out, Meager in

The Economic Development role was previously held by Melissa Lee, who is now no longer a minister at all.

She will be replaced as a minister outside cabinet by first term MP James Meager, who picks up the Hunting and Fishing and Youth portfolios, as well as a newly-created Minister for the South Island role.

Luxon said Meager would be a strong advocate for the Mainland.

"We have a minister for Auckland issues, and I want to have the same voice in the ministerial committee meetings, of referencing and challenging and advocating for the South Island. The South Island is critical for our economic growth going forward," he said.

The Rangitata MP is chair of Parliament's justice committee, which is set to hear submissions on the Treaty Principles Bill. Despite becoming a minister, he will remain chair until the end of the select committee process.

While Cabinet ministers are not select committee members, Luxon said there was precedent for ministers outside Cabinet to serve on committees. John Carter, Judith Tizard, Mita Ririnui, and Clem Simich had all served on committees while ministers outside cabinet.

Luxon said he wanted Meager to carry on chairing the committee until the end of the Treaty Principles Bill process.

"For now, he's doing a great job chairing that select committee through the Treaty Principles Bill. I want that sorted and closed out, and I want him to get into the job of advocating for the South Island."

Luxon said Lee had made a "fantastic" contribution to National over many years, and would support her replacement as Minister for Ethnic Communities, Mark Mitchell (who also takes Sport and Recreation from Bishop).

Cabinet minister Matt Doocey has also lost a number of portfolios, including ACC, Tourism and Hospitality, and Youth. He retains his Mental Health role and remains an Associate Health minister.

Similarly to Brown's roles being reallocated, Luxon said he wanted Doocey focused on mental health.

Other role changes include Louise Upston taking on Tourism and Hospitality, and becoming Deputy Leader of the House. Judith Collins will take over Public Service from Nicola Willis, while Chris Penk picks up Small Business and Manufacturing off Andrew Bayly, who will take on Doocey's ACC role.

Penny Simmonds, who had previously had her Disability Issues portfolio taken off her, will become Minister for Vocational Education.

Coalition partners ACT and New Zealand First are not affected by the reshuffle, which is Luxon's second since taking office.

In April, he demoted Lee out of Cabinet while promoting Watts, and removing Simmonds from the Disability Issues role.

While it is common for prime ministers to shuffle their decks at the start of the year, Luxon had previously said he would take a different approach to reshuffles than his predecessors, instead making changes as and when they were needed.

The reshuffle comes ahead of National's two-day caucus retreat in Hamilton next week, and a State of the Nation speech by Luxon in Auckland.

The changes will take effect from Friday 24 January.