Finance Minister Bill English has signalled education, welfare and health departments are the next targets for a shake-up of the public service.
Last month Prime Minister John Key outlined a new round of reforms, including a new business, innovation and employment super ministry and more job losses.
The Government is determined to slash $1 billion of public service spending over three years. As well as merging back office functions, such as IT or payroll, it wants ministries to share targets.
Last night, speaking to members of the Institute of Public Administration, Mr English said improving the lives of vulnerable children – one of 10 specific targets the Government has set the public service – would challenge health, welfare and education ministries, which needed to collaborate.
He pointed to structural changes in the justice sector, where police and Corrections already work under the umbrella of the Justice Ministry.
The Government is planning to amend the State Sector Act and the Public Finance Act later this year to introduce statutory boards overseeing a multitude of agencies.
Mr English said: "That group of social ministers are going to be tested, I think, by the focus we have got on children because that's an area where inter-department co-operation is the least developed ...
"These are big organisations used to getting their own cash for their own programmes and keeping off each other's territory. Well, if that worked we wouldn't have as many children suffering serious assault."
The Government is in the process of drawing up a white paper to tackle the problems that face vulnerable children such as child abuse.
Mr English said this was "the positive side" of public service restructuring.
"If we can demonstrate to department structures [that] working in a different way will actually save the lives of our children, or improve miserable lives, I think they will probably make the change.
"But the process of getting there will be a challenge."
Last month Mr Key said the cap on government administration jobs would be lowered to 36,475 fulltime equivalent positions from 39,000.
Around 2500 jobs have been slashed from the public service since National took office in 2008.
- Fairfax Media
Is the tide turning for David Cunliffe?Related story: Cunliffe: 'I'm going to let people in'