Public Sector Volume 35:1

Record levels of Excellence Nominations have now closed for the 2013 IPANZ Gen-i Public Sector Excellence Awards.

A record number of nominations have been submitted for the Awards. The Awards recognise excellence in the public sector, and are a genuine opportunity to celebrate projects that enhance the lives of New Zealanders.

Awards Evening, 3 July 2013, TSB Bank Arena, Wellington Visit www.ipanz.org.nz/excellenceawards for more information.

Rāngai Tūmatanui

PUBLISHER The Institute of Public Administration New Zealand PO Box 5032, Wellington, New Zealand Phone: +64 4 463 6940, Fax: +64 4 463 6939 Email: admin@ipanz.org.nz Website: www.ipanz.org.nz ISSN 0110-5191 (Print) ISSN 1176-9831 (Online) The whole of the literary matter of Public Sector is copyright. Please contact the editor if you are interested in reproducing any Public Sector content.

EDITOR Shelly Farr Biswell: shelly@biswell.net CONTRIBUTORS Jonathan Boston Rosalie Chamberlain Len Cook Bob Gregory Margaret McLachlan John R Martin Kathy Ombler Max Rashbrooke PROOFREADERS Nikki Crutchley Rose Northcott JOURNAL ADVISORY GROUP Len Cook Dr Chris Eichbaum, Chair Susan Hitchiner Julian Light Ross Tanner ADVERTISING Phone: +64 4 463 6940 Fax: +64 4 463 6939 Email: comms@ipanz.org.nz DESIGN J&K Design PRINTING Lithoprint SCOPE IPANZ is committed to promoting informed debate on issues already significant in the way New Zealanders govern themselves, or which are emerging as issues calling for decisions on what sorts of laws and management New Zealanders are prepared to accept.

INFORMATION FOR AUTHORS Public Sector considers contributions for each issue. Please contact the journal’s editor for more information.

SUBSCRIPTIONS IPANZ welcomes both corporate and individual membership and journal subscriptions.

Please email admin@ipanz.org.nz, phone +64 4 463 6940 or visit www.ipanz.org.nz to register online.

DISCLAIMER Opinions expressed in Public Sector are those of various authors and do not necessarily represent those of the editor, the journal advisory group or IPANZ. Every effort is made to provide accurate and factual content. The publishers and editorial staff, however, cannot accept responsibility for any inadvertent errors or omissions that may occur.

VOLUME 36:1

APRIL 2013

CONTENTS IPANZ news ..........................................................................................................................2–3 President’s message – Challenges and opportunities

By Len Cook ..............................................................................................................................4 POWER PLAY – MINISTERS AND CHIEF EXECUTIVES Executing government policy – The relationship between ministers and chief executives

By Shelly Biswell ..................................................................................................................5–7 Ministerial responsibility – The traditional view

By John R Martin ......................................................................................................................8 Considering integrity – An interview with Suzanne Snively of Transparency International New Zealand

By Shelly Biswell ............................................................................................................... 9–11 Blood is a gift – A new blood regime at Auckland City Hospital

By Kathy Ombler .............................................................................................................12–13 Better Public Services Programme Watch.................................................................... 14–15 A century of public service – The eighties: a retrospective view

By Jonathan Boston ....................................................................................................... 16–18 The public’s right to know – Reform a work in progress

By Kathy Ombler .................................................................................................................... 19 Leading from where you are – Statistics New Zealand’s leadership programme

By Rosalie Chamberlain . ............................................................................................... 20–21 Q&A: Something to say – An interview with Lockwood Smith

By Max Rashbrooke .......................................................................................................22–23 Executive Watch...................................................................................................................... 23 Point of view: Seeking role clarity – Of ministers and chief executives

By Bob Gregory ...................................................................................................................... 24

Considering integrity

9

16

Blood is a gift

12

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Journal of the Institute of Public Administration New Zealand

The eighties: a retrospective

Front cover image: Shaking hands © Mast3r | dreamstime.com Public Sector is printed on an economically and environmentally responsible paper sourced from internationally certified Well Managed Forests and manufactured with EMAS accreditation (ISO 14001).

April 2013 Public Sector 1

Institute of Public Administration New Zealand

Governance Lecture Series I

PANZ and the Institute of Governance and Policy Studies (IGPS) have arranged two lecture series, with the theme of governance of the public service.

The Friday lunchtime series, “Improving the Governance of New Zealand”, explores some of the significant governance issues currently facing New Zealand’s major public institutions and private sector organisations. Please check the IPANZ website for venue and registration details: www.ipanz.org.nz.

12 April 2013 19 April 2013 3 May 2013

Ralph Chivers, Chief Executive, Institute of Directors

The Governance of Companies

Panel discussion with Suzanne Building a High Integrity System – the National Snively, Liz Brown, Helen Sutch and Integrity Assessment by Transparency International Michael Macaulay The Governance of the Health Care System

Professor Robin Gauld, Open University

New President for IPANZ

A

t a special general meeting held 12 March 2013, IPANZ Board member Dr John Larkindale was elected to replace outgoing President Len Cook.

Len will continue to serve on the board as Immediate Past President.

Before joining the IPANZ Board in 2012, John was New Zealand High Commissioner in Canberra from 2006 until his retirement in 2011.

A long-time public servant and diplomat, John joined the (then) Ministry of Foreign Affairs in 1972. In the course of his career, he served in New

2 Public Sector April 2013

Zealand embassies in Vienna and Washington, before becoming Director of Pacific aid in the ministry in Wellington and then Tokelau Official Secretary. Later he was Deputy Head of Mission in both Beijing and London, before taking on the role of Executive Director of the Commonwealth Heads of Government Task Force in 1994. He then took up the position of Ambassador, Moscow, returning to Wellington at the conclusion of that assignment.

In 2002, he became Deputy Secretary of the Ministry of Foreign Affairs and Trade.

John was born in Wellington and educated at Wellington College, Victoria University of Wellington (BSc; MSc (Hons)) and McGill University, Montreal, Canada (PhD). He was awarded a QSO in 1996.

The Tuesday evening lecture series, “Governance of the Interface between Ministers and the Public Service”, explores the relationship between ministers and the public service, especially chief executives. Please check the IPANZ website for venue and registration details.

16 April 2013

Working with Chief Executives: Delivering on the Democratic Mandate

Trevor Mallard, MP

23 April 2013

Ministerial Responsibility and Chief Executive Accountability: Implications of the Better Public Services Reform Programme

Dr Matthew Palmer, Barrister

30 April 2013

Working with Ministers: Providing Free and Frank Advice in a Challenging Political Environment

Dr Karen Poutasi, Chief Executive, New Zealand Qualifications Authority

Register for individual lectures at www.ipanz.org.nz.

New staff at IPANZ office

W

e would like to introduce several new IPANZ staff members who have been hired to support IPANZ’s many activities and events.

GENERAL MANAGER, LEWIS ROWLAND, oversees the operations of the organisation. Lewis has a lengthy public sector background, including with the United Kingdom Ministry of Defence, the New Zealand Defence Force and, most recently, Transpower. Lewis works with the IPANZ President and Board to design and implement the strategic direction and business plans.

OFFICE MANAGER, JULIE EDWARDS, has been with IPANZ for a year and provides finance, administration, and membership support for the organisation.

EVENTS COORDINATOR, FIONA MCDONALD, ensures the smooth running of IPANZ events. Previously, Fiona had an event management role at the Society of Local Government Managers.

COMMUNICATIONS ADVISOR, MARGARET MCLACHLAN, oversees communication with members, organisations, and the media. She manages the website and other forms of communication. She has worked for several government agencies, including most recently New Zealand Qualifications Authority.

IPANZ President John Larkindale says, “We now have in place a strong team reflecting our commitment to invest in a step change to achieve a stronger and sustainable future for IPANZ.”

Presentations currently available at www.ipanz.org.nz As they are made available, speeches and audio files from previous lectures will be posted on the IPANZ website www.ipanz.org.nz under ‘Seminar Presentations’ on the ‘Knowledge Hub’ tab. Recent presentations that are available include the following: The Governance of Parliament Hon Dr Lockwood Smith Reviewing Our Constitutional Arrangements Professor John Burrows, Law Commission Reforming the Electoral System Professor Jack Vowles, Victoria University of Wellington Chief Executives, Ministers and Parliamentary Scrutiny Mai Chen, Chen Palmer

April 2013 Public Sector 3

President’s Column – Challenges and opportunities

By IPANZ Immediate Past President Len Cook

advice, with due seriousness and authority, then officials themselves risk becoming complicit in actions that may later be judged wrong, and may prevent ministers accounting for how they determined their position at a time when all is well known and fresh.

Free and frank

Tena koutou, e Rangatira ma, e Hoa ma

I

n my last column, I would like to reflect on the future challenges and opportunities for public administration in New Zealand and IPANZ. The first is the practical tensions that exist in our small country between the ideals of a separation between legislature and executive, secondly a separation through institutional structures and governance of action and oversight, and thirdly the pressure for short-term achievements when so many issues are enduring and require sustained commitment to long-term solutions.

Upholding our system Unless these are well managed, there are constraints on the sovereignty of Parliament, which was well exemplified when the current chair and chief executive of Solid Energy would not explain how the entity operated before they stepped into their roles. Parliament is a special place, and it makes a mockery of its ability to hold the executive to proper account when those who are accountable to it do not do so. In the public sector it is simply unheard of to assert that what went on before your arrival is now lost in the mysteries of time.

The rule of law requires that those who make laws do not administer them or they risk becoming liable to personal influence. We have had several ministers of immigration whose careers have ended unintentionally because they appeared to circumvent due process. It is not always clear that officials offer reservations and cautions in a manner that signals how seriously they perceive the inappropriateness of any particular ministerial discretion.

By not offering ministers free and frank 4 Public Sector April 2013

Free and frank advice should be the hallmark of the Westminster system, although in almost all Westminster systems of government, including that of New Zealand which is perhaps a paler shadow than most, free and frank advice is seen by ministers as more of a handbrake than a navigation aid. When the curtailing of free and frank advice includes the censoring or delayed publication of high-quality scientific studies, or evaluations, then the public and other officials are being denied knowledge that could save lives, money and resources. In pharmaceutical drug trials, there are well-developed processes to stop drug companies hiding the results of drug trials that are negative, because they are then hiding information that can stop people dying through inappropriate treatments. We have yet to recognise the parallel with public science in New Zealand.

Looking to the future If New Zealand is to face up to what we can easily see is a very different future from our past, we need to become more willing to challenge the received wisdom and myths that have previously been important to our sense of place. Clearly we are not anymore a home-owning democracy – so what about the efficiency of rental markets? How do we make politicians understand and be accountable for those inequalities that matter, not only because of their effect, but because we can do something about them.

Solid Energy and South Canterbury Finance are just two examples that highlight just how little even our very best public servants can really know about markets, or at least how we can influence them. Clearly, the world’s marketplace is very different from that of 1988. Do we need new models for how the state invests in areas that are important to us? Does this include influencing the choice between

having strategic assets fully owned by foreign interests, or where the state takes a share, directly or through one of its large investment funds (ACC, New Zealand Fund, Earthquake Commission, Government Superannuation)?

Forty years ago, New Zealand set up the Waitangi Tribunal, put in place a bold Māori Affairs Act, and through the extraordinary leadership of Ihakara (Kara) Puketapu, public services involving Māori began a process of transformation and accountability to the community, as well as to government. As we move from a mode of restitution, we need the same exceptional vision, this time owned as much by Pākehā as Māori.

From 1950 to 1970, the New Zealand population grew by near to one million, mainly through the increased flow of babies that a young and fertile population produced. Over the next 20 years we will see roughly another million, this time six-seventh of the growth will come from people living longer than previous generations. This change will challenge the location of services, and the nature of intergenerational transfers. In all of this we need to recognise the incredible benefit we have from this continued flow of babies, but recognise the huge loss to the nation, as well as to individuals, if we fail to reach the potential that each and every one has to offer.

IPANZ – encouraging robust discussion IPANZ is an unusual place where those within the executive, whether as politicians or officials, along with others with an interest in public life can bring vigour and grit to how we meet these challenges. While we have much to be proud of in the public administration in how we have served New Zealanders in the past, we cannot assume that this alone equips us to remain relevant and trustworthy in the coming decades.

I have enjoyed immensely the opportunity to be President of IPANZ for the last three years, and I wish John Larkindale, the new President, all the best for his term.

Ma te Rangatira hoki, ka kia te kainga, he kainga A place is known by its chiefs

Power Play Executing government policy – The relationship between ministers and chief executives While there are many factors involved in a government of the day’s ability to see its policies enacted, a solid working relationship between a minister and their respective department chief executives is paramount to success. Editor SHELLY BISWELL explores the nexus between politics and performance.

T

he rules of engagement

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With the State Sector Act 1988 and the Public Finance Act 1989 as the foundation, the Cabinet Manual (3.5) succinctly sets out the roles and responsibilities of ministers and chief executives.

“Ministers decide both the direction and the priorities for their departments. They should not be involved in their departments’ dayto-day operations … Officials are responsible for: • supporting Ministers in carrying out their ministerial functions; • serving the aims and objectives of Ministers by developing and implementing policy and strategy; and • implementing the decisions of the government of the day.”

Under the current legislative framework, ministers are required to do more than make demands and expect officials to jump. Instead, the State Sector Act requires a minister to be accountable for the performance of the organisations within their portfolio.

Dr Elizabeth Eppel, Victoria University of Wellington, says to do this, ministers need to know the capability of their departments and understand the sectors they are responsible for.

“While the policy direction is set by the minister, it’s important to realise that getting there isn’t

linear and often requires ideas and actions that percolate up from communities and frontline public servants. Therefore getting to a goal includes the minister and the chief executive working together to foster an environment that is outcomes focused,” she says.

Eppel says the Better Public Services programme with its emphasis on results gets ministers, chief executives and agencies working together toward clear outcomes, but it’s important to ensure the programme doesn’t become an “also ran”.

“It’s my understanding that letters of expectation to ministers and their chief executives spell out what is envisaged, but instead of concentrating on the results there are already conflicting demands.

Education is a good example, the education results set through the Better Public Services programme would put our country as a whole in good stead, but to attain those goals is going to take support from teachers, from schools, and from communities. In the meantime, some of the political capital needed to achieve these challenging results may have been lost last year through actions that appeared to be ill-considered or were not well communicated. In essence, those missteps may impact on policies related to the BPS results.”

Eppel says the success of a policy is often predicated by the minister’s engagement in the day-to-day operational realities that will assist or prevent the achievement of their policy goals. “Some pay attention to the fine detail, expect officials to provide robust advice that will assist them in making good decisions, and are willing to do some ground-truthing with their constituents. Of course they need

to do this in a way that is based on being informed and not interfering in the operations of a department, which means it can be a delicate balance that takes good judgement, trust and maturity.”

Ministers avoid paying attention to the details at their own peril, as the Cabinet Manual (3.21) states, “Ministers are accountable to the House for ensuring that the departments for which they are responsible carry out their functions properly and efficiently.

On occasion, a Minister may be required to account for the actions of a department when errors are made, even when the Minister had no knowledge of, or involvement in, those actions.”

But as Professor Bob Gregory, Victoria School of Government, points out in his paper The Challenging Quest for Governmental Accountability in New Zealand (see page 24): “Although effective governance depends heavily on the workability of the relationship between ministers and their top officials, and despite the fact that the latter must display not only strong managerial competencies but also acute political antennae, both parties march to the beat of quite different drums.

This reality was confirmed by one New Zealand minister who early on suggested that purchase agreements, which were central to the outputs/outcomes bifurcation, were not the sort of thing to which many ministers were likely to commit a great deal of their time and attention.”

The practicalities “The style of the relationship and frequency of contact between Minister and department will develop according to the Minister’s personal prefer> ence.” – Cabinet Manual (3.16) April 2013 Public Sector 5

Ministerial responsibility – THE TRADITIONAL VIEW

Sir Doug Kidd was an MP from 1978 to 2002 and held a number of ministerial portfolios, including Fisheries, Energy, Labour and Māori Affairs following the enactment of the public sector reforms of the 1980s.

When Kidd became the Minister of Fisheries he went to then Prime Minister Jim Bolger to ask for fisheries to become a standalone ministry.

“At the time, fisheries was still a relatively small industry compared to agriculture and forestry which it sat in the same ministry with, but you could see it had potential.

It just needed to be resourced and we needed to get the right policies in place.”

Bolger, who had previously been the first separate Minister of Fisheries, agreed. The separation was accomplished through the Ministry of Agriculture and Fisheries Act 1995. The Fisheries Act 1996 – over four years in the making and internationally recognised as a seminal piece of fisheries legislation – followed closely behind.

Kidd’s contention is that while a good structure must be in place, the ambit of policy setting belongs to interpersonal relationships and being well informed.

“Kanohi ki te kanohi [face to face] is how things happen.

There are the formal rituals and accountability documents that discuss inputs and outputs, but its outcomes that matter.”

An engaged minister, Kidd trusted his chief executives to “get on with running their organisations”, but wanted to be informed “if something was broken, if something was cracked, or if there was a chance something might crack”.

He adds that the relationship between a minister and the relevant department chief executives is important, but to make changes 6 Public Sector April 2013

to policy it’s crucial to have access to lead policy advisers. “A minister sets a tone for how information will flow – I didn’t care what an official’s job title was, I wanted to know I was speaking to the person who could tell me what I needed to know.

“During my tenure I was well served by a number of officials who were able to provide robust advice – meaning frank and sometimes ‘fearless’. It didn’t always mean being right, but it meant providing me with the best information available.”

Over the fence When Barry Carbon crossed the ditch in the early 2000s to become chief executive of the Ministry for the Environment, he had already worked in similar roles in Australia. His perspective is that the current New Zealand model has much to commend it and “fits well with the culture of the place”.

“It sounds simple and it’s something that I think gets taken for granted, but you can make the reasonable assumption that most of the ministers and officials you are working with are good people, most are intent on making life better for New Zealanders, and most work extremely hard.

“Something that has an impact on the public sector, however, is the 24-hour news cycle. One consequence of this is we now live in a world where people more readily get punished for being wrong, but tend not to get much credit for being right.”

He says for ministers and officials alike this can be paralysing.

“There’s a temptation to not make changes based on the fear that if you get one thing wrong you’ll be slammed. I live by the creed it’s better to try and get nine out of 10 things right, but in the current climate there’s a real aver-

sion to doing anything more than what is guaranteed to be perceived as successful.”

He says while Australia and New Zealand have different structures in place, the role of the chief executive is similar.

“CEs need to be aware of the pressures the minister is under, across the administration of their department, and in constant dialogue with their colleagues.

“Again, it sounds deceivingly simple, and yet with modern political correctness, serving the minister is painted as something that’s not positive. It’s not about party politics, it’s about accepting that ministers have been elected by the people to do something.”

Far from being a “Yes Minister” approach, however, Carbon says that serving the minister means ensuring there is rigour in all advice that goes up and being willing to have hard conversations.

“There needs to be a move beyond ‘free and frank’ which should be a given, to ensuring ministers are fully informed.”

Lessons on informing can be drawn from the auditor-general’s Inquiry into decision by Hon Shane Jones to grant citizenship to Mr Yang Liu. In her conclusions, the auditor-general notes amongst several points: “In our view, the information and advice that the Department gave Mr Jones about Mr Liu’s application was inadequate … As a result, when Mr Jones made his decision, he did so without having all the important information. Nor did he fully understand the factors that were legally relevant to the decision or the effect his decision would have on the ongoing immigration investigation.”

While free and frank advice can be seen as the act of responding to a minister’s queries, informing sometimes requires knocking

on the minister’s door without an invitation. As Carbon says, the role of chief executives is to connect the expertise in their departments to the government of the day.

“I was fortunate to work with a great team at the ministry who were able to provide the prime minister and portfolio ministers with excellent guidance and advice. My job as chief executive was to communicate that advice and protect the people who provided it.”

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When things go wrong The ombudsman, the controller and auditor-general, and the parliamentary commissioner for the environment form a triumvirate to ensure the accountability of the government. Appointed by the governor-general, the three politically neutral officers of Parliament investigate and review different aspects of government activity.

When speaking at a recent IPANZ and VUW School of Government lecture on ministers and the public service, public sector law specialist Mai Chen said, “I am passionate about administrative law because I believe good processes bring good decision-making which is the basis for a strong democracy. The three officers of Parliament shine the light where processes need to be improved, where there is maladministration, where there are systemic failures, and where there has been wrongdoing.”

She added that transparency is integral to good process.

“New Zealand has a good reputation in this area, and we should be proud of that, but I worry that some departments have become complacent about maintaining that level of transparency. For example, the number

of complaints the ombudsman receives regarding failure to comply with official information obligations is concerning. If there is a basis for withholding information an agency needs to provide that reason as soon as possible, but otherwise it needs to be a priority to release information in a timely manner.

“This responsibility sits squarely on the shoulders of a department’s chief executive. However, it’s also an area where some ministers need to better understand when they are over-stepping their bounds in terms of the signals they give about reluctance to release information. In other words, ministers and senior officials need to ensure that legal obligations under the

The future As the State Sector and Public Finance Reform Bill winds its way through the legislative process, it’s clear the framework that ministers and the public service work under is set to change.

When introducing the bill, State Services Minister Jonathan Coleman said it will “extend chief executives’ responsibilities to consider the collective interest of the Government and make their stewardship role more explicitly focused on the Crown’s mediumand long-term interests”.

There appears to be general agreement with the aim of the bill to foster a more whole-of-government approach that is outcome focused (for example, the results

While free and frank advice can be seen as the act of responding to a minister’s queries, informing sometimes requires knocking on the minister’s door without an invitation.

Official Information Act 1982 are complied with. It is what the public rightfully expects and demands under the Rule of Law.” She says that capacity is an issue for all three offices of Parliament. For example, in its 2012 annual report, the Office of the Ombudsman noted it received over 10,000 complaints during the year – a 22 per cent increase from the previous year.

“On top of that, recently the chief ombudsman noted that her office would be undertaking ‘own motion inquiries’ to investigate matters within their purview that are not being addressed through the complaints process. As a nation we depend on the work of these three officers of Parliament to hold government accountable.

Not to put too fine a point on it, they ensure our democratic ideals are upheld.”

identified in the Better Public Services programme).

As researchers and public sector commentators acknowledge, however, it still gets down to the individuals involved.

Doug Kidd says he didn’t study the State Sector Act in great detail when he became a minister.

Instead, he made sure he understood his powers as a minister and the limitations of those powers and immediately called his chief executives in to provide him with a briefing.

“And then I started asking questions. I wanted to know everything I could about any policy decisions we were going to make, which meant talking to senior officials, independent experts, the people who might be affected, and my colleagues. To be successful requires to be as informed as you can be, committing to a course of action, and tenacity.”

April 2013 Public Sector 7

Ministerial responsibility – THE TRADITIONAL VIEW

The relationship between ministers and the public service is at the centre of the Westminster model of public administration. It does not lend itself to capture in a neat phrase or two. While there is a framework defined by statute and convention, the modus operandi at any time and in any portfolio is determined by personalities, the political context, and the agenda requiring attention – whether it be policies or unexpected events. By JOHN R MARTIN, IPANZ Fellow.

H

istorical generalisations are risky, but it is not unreasonable to say that for most of the first century of New Zealand government, ministers were intimately involved in the detail of administration of the departments within their responsibility. Edward Tregear (Secretary of Labour 1891–1910) and George Hogben (head of Education 1899–1915) could be described as “activist heads” (Henderson, 1990, p 32); but they were among the exceptions. As Polaschek (1958, p 117) summed it up: Traditionally, the New Zealand Public Service carried out Cabinet and ministerial policy: it did not concern itself with research, planning, or suggesting to ministers major courses of action. In a small service engaged mainly on routine work, ministers could make all important decisions and many minor ones as well. They could do their own thinking and planning.

A turning point was when Labour took office in 1935 with the associated expansion of the state’s role and the foundation of the welfare state. The larger role of government and its increasing complexity altered the nature of the relationship between ministers and permanent heads; the latter assumed more prominence, not only in administration but also in the shaping of policy. Indeed the 1940s through to the 1960s were notable for the central part played within the government by such long-serving permanent heads as Sir Bernard Ashwin in the Treasury (1939–55); Sir Joseph Heenan, Internal Affairs (1935–49); Sir Alister McIntosh in External Affairs (1943–66); Dr Beeby

8 Public Sector April 2013

in Education (1940–60); Bert Bockett, Secretary of Labour (1947–64); and Alex Entrican, Director of Forests (1939–61).

During these years, and effectively until the State Sector Act 1988, the essence of the minister/permanent head

“outcomes” aligned respectively with chief executives and ministers seem to invite ministers to transfer responsibility to officials and/or to get more closely involved in the day-to-day operations of departments.

...effectively until the State Sector Act 1988, the essence of the minister/permanent head relationship was captured by (at the time) National Minister Tom Shand’s 1959 description of it as “not unlike that of Siamese twins who move, who stand or fall together.

The one looks out principally upon the world at large, the other looks upon the department which together they must lead.”

relationship was captured by (at the time) National Minister Tom Shand’s 1959 description of it as “not unlike that of Siamese twins who move, who stand or fall together. The one looks out principally upon the world at large, the other looks upon the department which together they must lead” (Shand, 1959, p 67).

That working relationship was governed in constitutional terms by the convention of vicarious ministerial responsibility – responsibility for actions (or inaction) on the part of officials, to be distinguished from primary responsibility, incidents where the decisions are clearly those of ministers. While the opposition and the media tend to focus on the sanction – resign, resign! – the convention imposes on ministers three requirements. First, that the minister should “front up”, desirably to Parliament, and acknowledge responsibility.

Second, to undertake to inquire into the circumstances of the incident. And thirdly, to instigate the necessary action to assure citizens that misdemeanors by the department will not be repeated.

A different view was argued by Geoffrey Palmer in 1987. The convention was “unreasonably and impractically wide … it is unrealistic to say that [ministers] must take the rap for things they did not know about and did not authorise” (Palmer, 1987, p 56). This approach is reflected in the State Sector Act. Arrangements based on the distinction between “outputs” and

The extent to which ministers should be managers is a significant matter for debate (see Di Fransesco and Eppel, 2011). But it should not be allowed to detract from the continuing relevance within New Zealand’s constitutional system of the doctrine of vicarious ministerial responsibility. In the words of the Cabinet Manual (3.5) ministers “are responsible for determining and promoting policy, defending policy decisions, and answering in the House on both policy and operational matters” (emphasis added).

References Cabinet Office, (2008) Cabinet Manual, Wellington, DPMC. Di Fransesco, M and E Eppel (2011) “A public management heresy …” in B Ryan and D Gill, Future State: Directions for public management in New Zealand, Wellington, VUP. Henderson, Alan (1990) The Quest for Efficiency: The Origins of the State Services Commission, Wellington, DIA/ SSC. Palmer, G (1987) Unbridled Power, (2nd Edition) Auckland, AUP. Polaschek, RJ (1958) Government Administration in New Zealand, Wellington/London, NZIPA/OUP. Shand, TP (1959) “The expert and the policy maker” in NC Angus (ed) The Expert and Administration in New Zealand, Wellington, OUP/NZIPA.

Considering integrity In May, in celebration of 100 years of a trusted public service, Transparency International New Zealand will release its preliminary findings from an eight-month assessment of the integrity of New Zealand’s public, private, and community sectors. Titled “Integrity Plus National Integrity Systems Assessment”, the research will be used to consider and evaluate the key pillars in New Zealand’s governance system.

Editor SHELLY BISWELL asked the project’s Co-Director, Suzanne Snively, about the assessment and what it means to New Zealand.

C

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an you provide some of the reasons why a national conversation on integrity is important?

All New Zealanders need to be aware of our excellent reputation – which is largely deserved – and understand that it has a measureable positive effect on their quality of life and financial well-being.

National integrity is New Zealand’s greatest asset. As Business New Zealand’s Phil O’Reilly says, “The world’s perception that it has the most trusted public sector is New Zealand’s greatest competitive advantage.”

Trading partners recognise cost savings of dealing with New Zealand through less need of due diligence, lower contracting costs, and a culture intolerant of corrupt middle men to transact business.

And of course, integrity and good governance are important in their own right in that they underpin government legitimacy and our freedoms, civil liberties and ability to participate in a democratic state. When people trust their institutions, they are more likely to

pay their taxes, fill in their census forms, and to comply with laws and regulations.

The curious thing is – we don’t talk about our national integrity, we don’t push it as an advantage, we don’t necessarily understand how it works and what we need to do to maintain it. In this immediate socially connected world, reputations are ever more important, and all too easily tarnished.

How is TINZ assessing New Zealand’s integrity?

When at Transparency International, New Zealander Jeremy Pope designed the concept of a national integrity system (NIS) to describe the relative strengths of the institutions that hold up the national system. The system is used to assess integrity in countries around the world.

For the New Zealand assessment, we started with the NIS and developed what we call an “integrity plus” approach. The scope is much more ambitious than any previous NIS. For example, New Zealand’s first NIS published 10 years ago was authored by just three researchers. This time 20 researchers from across the public and private sector, including former parliamentarians, academics, public servants, journalists, and businesspeople working on the assessment and consulting widely.

The researchers are led by former Banking Ombudsman, Liz Brown.

The assessment also has input from an External Advisory Group and the Integrity Plus Research Advisory Group. The External Advisory Group, chaired by TINZ Patron Sir Anand Satyanand, meets every six weeks. Outside

of discussion on the assessment process – while ensuring that the assessment remains arms-length and independent, the group will be instrumental in the dissemination of the report’s findings and will provide advice on implementing the recommendations.

To ensure the methodology is robust, Helen Sutch leads the Integrity Plus Research Advisory Group which reviews all draft reports and provides guidance on underlying themes and topics, such as accountability. As co-directors of the assessment, Murray Petrie and I sign off the final drafts prior to public release.

This rigorous approach will allow us to identify and appreciate the strengths of what we have as a country, identify any potential threats to those strengths and build up the link between integrity and prosperity. It also means we will be able to create an action plan for maintaining and improving New Zealand’s integrity systems.

What are the pillars in the national integrity system?

Under Transparency International, the 13 pillars are: • Legislative branch of government • Executive branch of government • Judiciary • Public sector • Law enforcement • Electoral management body • Ombudsman • Audit institution • Anti-corruption agencies • Political parties • Media • Civil society • Business > For the New Zealand assess-

April 2013 Public Sector 9

19 April 2013, 12:30pm, “Linking the NZ Integrity Plus NIS to Good Governance”, Room Railway 501, hosted by IPANZ. Visit www.ipanz.org.nz for information.

8 May 2013, 8.00–10.00am, “Continuing the Conversation about NZ National Integrity Systems: Key Findings”, VUW Rutherford Lecture Theatre 2.

Visit www.transparency.org.nz for information.

ment, the anti-corruption and law enforcement pillars have been combined and we have extended the public sector, civil society and business pillars. The public sector pillar covers central and local government with a special analysis of Crown entities. Civil society covers community leadership as well as non-government/voluntary, and Māori and Pasifika community organisations. Business covers company directors, the overseas trading sector, the financial sector, and Māori and Pasifika business entities.

We have also enhanced Jeremy Pope’s approach by integrating the Treaty of Waitangi as a foundation topic along with the other social, political, economic, cultural and environmental underpinnings of our society and through widening the analysis of the pillars. We are in contact with Transparency International’s headquarters in Berlin and the researchers from the UK and Australian NIS assessments to incorporate what they learned to compile the most comprehensive NIS ever.

How is the public sector involved in the assessment?

The idea for the 2013 NIS was suggested to TINZ by our cornerstone partner, the Office of the Controller and Auditor-General.

Many government agencies, including all the central agencies, the State Services Commission, the

10 Public Sector April 2013

Treasury and the Department of the Prime Minister and Cabinet, have contributed financial resources to ensure that the assessment is rigorous and a number of those have contributed by sending a delegate to the External Advisory Group.

In addition, the research team has good cooperation from public service officials at all levels who willingly take part in the interviews conducted as part of the assessment.

While the assessment is across public, private, and community sectors, can you discuss the implications for the public sector?

An implication for the public sector is that the NIS affirms where it is doing well and comes up with some specific recommendations to strengthen its integrity systems where it is doing less well or the systems are seen as fragile.

Recommendations include more effective enforcement of anticorruption policies, for example, better identification of beneficial ownership of assets and ensuring that there are sufficient resources for public institutions to meet their mandate to support civil liberties. Other recommendations relate to the formalisation of informal practices and policies that support the integrity of institutions.

Yes – both. The main similarity is a desire to understand more about good governance. The main differences relate to what this means in practice about the existence and operation of explicit integrity systems.

For the wider public sector, both its own and its contracted policy advisers are in constant conversations about integrity systems and these systems commonly include explicit guidelines for all staff.

In the case of the private sector, while there are business leaders such as Phil O’Reilly who take national integrity seriously, it’s harder to have a conversation with the wider private sector about the nature of its integrity systems or about the positive link between the international perception that we have the most trustworthy public sector and the opportunities this provides for New Zealand businesses. To be sustainable, our competitive advantage depends on our private sector actually being honest and trustworthy too. It’s important to recognise that all businesses are impacted by overseas trade, whether as exporters or users of overseas goods and services.

The public sector tends to be more self-aware and self-critical about its governance systems.

Interestingly, it tends to focus on finding the weak links in its integrity systems rather than the strengths of its leadership.

In contrast, engaging some of the business sector in acknowledging that more effort may be required to strengthen its governance has been a challenge. Ideally, company directors should be as concerned about both their company’s and national integrity systems as the public sector

© Maxim Blinkov | Dreamstime.com

Sharing the findings

In conducting this assessment have you found differences between the sectors? Similarities?

is. Regretfully, while there are outstanding exceptions, it has been more difficult to even start the conversation across the business sector.

TINZ’s response to this has been to identify researchers for the business pillar who are known and who have the networks to communicate with the sector.

As a country, New Zealand has consistently received high marks on Transparency International’s Corruption Perception Index (for the past seven years New Zealand has been first or first equal for having the lowest perceived levels of public sector corruption).

Can you discuss why this more in-depth assessment is required?

At the moment, we don’t know why the New Zealand public sector scores so well on the Corruption Perception Index. The assessment will provide insights into where our anti-corruption processes are working and identify weaknesses and potential weaknesses in national integrity

systems, with recommendations about how to strengthen them.

What will happen with the findings from the NZ Integrity Plus NIS? This month, researchers are completing their scoring and draft pillar reports which will then be independently reviewed. The key findings will be presented at public seminars throughout New Zealand, starting with a seminar at Victoria University of Wellington on 8 May. The Integrity Plus NIS Report will be published in the second half of this year.

The focus of the NIS team will then switch to implementing the recommendations.

TINZ’s strength comes from its individual, public, private and non-governmental organisation members who spread the message that the New Zealand public sector is the least corrupt in the world while at the same time support the research projects to maintain the strengths of our integrity systems. We are keeping the conversation about integrity alive on our website www.transparency.org.nz.

In honour…

While past Human Rights Commissioner and tireless anti-corruption advocate Jeremy Pope died last year, his far-reaching work to reduce corruption and improve integrity continues. In 1993, he and six others co-founded Transparency International. He served as the organisation’s first managing director. In 2003, he co-founded the anti-corruption organisation Tiri.

Suzanne Snively says that one of the ways he is being honoured is by fulfilling his wishes that the NIS be carried out with wide consultation and that there be an implementation plan for the NIS recommendations.

“We trust that Jeremy would be pleased too that his mates from the Human Rights Commission and the [Victoria University of Wellington] School of Government are assisting in integrating the Treaty and the environment into his NIS research approach,” she adds.

April 2013 Public Sector 11

Blood is a gift

Why use more blood than you need to? A new blood transfusion regime at Auckland City Hospital has not only increased patient safety and saved precious blood stocks, it has also reaped annual savings of $2.6 million.

Writer KATHY OMBLER talks to specialist anaesthetist Dr Kerry Gunn who is the driving force behind a new “blood regime” that has other health organisations around the country taking note.

D

r Kerry Gunn was project leader of “Blood is a gift,” an Auckland District Health Board Blood Transfusion Committee initiative aimed at improving blood transfusion practices. The project’s success led to its winning the 2012 IPANZ Gen-i Public Sector Excellence Award for Improving Public Value through Business Transformation.

The key focus was not about cost savings, but targeting blood in a better way so that patients, who do not need it, do not get it, says Gunn. “The medical motto that applies is ‘primum non nocere: first, do no harm’.”

“Internationally, the knowledge that there is a problem with inappropriate transfusion has been written about exhaustively. We know that blood given inappropriately leads to patient complications, even death.”

Thus the Blood Transfusion Committee, responsible for overseeing the quality of transfusions within the ADHB, raised the potential for improvement through the board’s CONCORD programme, which encourages 12 Public Sector April 2013

staff to suggest ways of improving patient safety and experience.

The Blood Transfusion Committee believed there were opportunities to make better use of blood products, they just weren’t sure how to make the changes and how much blood was being wasted, explains Gunn.

There were three main issues to address: • blood is a precious resource that needs to be used wisely • future availability of blood is likely to be below requirements therefore more focused transfusion is required • the introduction of blood into the human body raises the risk of reaction and increase of infection.

He says the project team sought out international best practice and aspired to achieve that. World class health providers investigated included the Mayo Clinic and the Cleveland Clinic, both in the United States.

The result – one, not two Historically, two units of blood have been routinely transferred at a time, explains Gunn. The project team’s research, however, revealed that transfusing one unit of blood at a time, then re-assessing the patient, was now considered international best practice. A key project outcome has, therefore, been to change from routinely transfusing two units of blood to transfusing one, then testing and re-evaluating.

At the same time, adds Gunn, a parallel programme that didn’t ration blood was put in place to deal with haemorrhaging patients.

“Initially we developed a Massive Transfusion Protocol where blood was made far more available and more quickly than previously possible for patients bleeding to death. The other big project: ‘why use two, when one will do’, was developed for patients not bleeding to a point that they

are unstable. In essence, these situations make up the bulk of our blood use.

“After a patient has been transfused we often realise they may have been able to do without that transfusion, but looking forward it is not so obvious. So we defined rules to allow doctors to know better how to decide. Part of that is to use less blood each time, retest and re-evaluate.”

Spreading the word Buy-in from the medical profession was paramount to the project’s success. In achieving this, Gunn was impressed with interdepartmental participation.

“We sought agreement from many of the doctors in departments that rarely communicate with each other, to follow guidelines on blood use. We ran education programmes for doctors and nurses about the programme and how it reflected modern evidence. In fact, many

Left to right: Dr Richard Charlewood, Rosemary Pearson, Dr Andrew Old, Kathy Clark, and Rachel Donegan at the 2012 IPANZ Gen-i Public Sector Excellence awards.

doctors were telling us they believed in the modern evidence but the lack of ‘system’ made it difficult to change what went on.

“We were fortunate that the CONCORD project was embedded in the ADHB Blood Transfusion Committee. This meant we had people in blood banks, medical specialities, and nursing to agree to the project and spread the word. We had a great communication team to look at web and poster dissemination of information. Importantly, we had skills from CONCORD in making a project run and be effective.

“Most important though was a belief that it was a good thing to do.”

Gunn says the project team accepted that changing the practice people had been taught from medical school would be difficult, so embarked on various innovative strategies to meet the challenge.

A group of “clinical champions for blood” addressed forums to encourage a change in practice amongst their peers. Relevant and tested research, important for doctors with a scientific background, was placed on the “Blood is a gift” intranet site. Protocols and medical algorithms were also posted on the intranet and added to the junior doctors’ handbook.

Notably, the intranet site received almost 1000 hits in its first 10 days.

An innovative communication plan encompassing social media and eye-catching posters was developed to engage clinicians. It was thought this approach would encourage greater buy-in than simply introducing new policy.

In particular, the poster concept of “Why use two, when one will do?” portraying medical personnel using two stethoscopes, watches, or umbrellas, for example, succeeded as a “thought provoker,” rather than simply directing people what to do.

their doctor peers. The support of New Zealand Blood also added weight to the programme.

Wider buy-in

The success story By all accounts the project has been hugely successful and benefits have exceeded expectations. In terms of numbers, in just 14 months, from October 2010 to December 2011, savings included: 3582 units of red blood cells, 1579 units of plasma, 20,644 hours of patient time, 3871 hours of nursing time, and cost savings of more than $2.6 million.

As well as effective communication, other factors were considered critical to this success. Choosing influential and respected clinical champions to lead the project was a vital factor. While the poster and intranet campaigns were powerful tools, the project team believes these wouldn’t have worked on their own without the clinical champions speaking with

About the sponsor The Treasury Award for Excellence in Improving Public Value through Business Transformation recognises the significant fiscal challenges that the Government faces and seeks to acknowledge some of the people who have responded to “smarter, better public services for less”. The best of these organisations or individual projects will have included creative thinking about different ways of delivering services or carrying out their business. By challenging the accepted or “tried and tested” methods they will have transformed some aspect of their business in order to deliver better services to New Zealanders at a significantly lower cost.

That other health organisations throughout New Zealand have asked to be involved is a key testimony to the programme’s success, says Gunn.

“This is just the beginning.

We worked from the outset with the other two Blood Transfusion Committees in the Auckland area to roll this out across Auckland.

Waikato has also come on board and we are in the process of developing a national network.”

Education is ongoing, he adds.

“This is just one way to do the job better, and we now have eight projects underway in other areas of blood transfusion. We speak internationally now of our experience and share ideas with other groups.

“Looking ahead, the project is easy to template into other district health board systems and could have far wider impact as a national project.”

Gunn says ADHB management needs to be congratulated for its support. “It took a bit of bravery to ‘look outside the square’. I have a great team and they need to be recognised, however, it was done on a wing and a prayer and resources to move forward are really needed,” he adds.

“We need to say thanks for the recognition with the award too. It was nice to get recognition from an unexpected source.”

To view this article online, and other articles which share the latest thinking and best ideas for improving services, see www. ipanz.org.nz > Knowledge Hub > Best Practice Exchange.

April 2013 Public Sector 13

Better Public Services Programme Watch

Government’s update

I

n late February, State Services Minister Jonathan Coleman spoke to an audience at New Zealand House in London about New Zealand’s approach to Better Public Services.

In that speech, he outlined the Government’s aims with the Better Public Services programme and the results achieved to date. The minister shared the preliminary findings from some of the Better Public Service results.

The results

State Sector and Public Finance Reform Bill – IPANZ submission

T

he report for the State Sector and Public Finance Reform Bill is due 29 May 2013.

Introduced on 30 August 2012, the omnibus bill has three parts: amendments to the State Sector Act 1988, amendments to the Public Finance Act 1989, and amendments to the Crown Entities Act 2004.

The bill had its first reading in late November and was referred to the Finance and Expenditure Committee with a submission deadline of 7 February 2013.

In IPANZ’s submission, it was noted that much of what is contained in the bill does not require legislation and a recommendation was made to refer the bill back to officials to remove provisions where legislation is not required. Noting the recommendation may not be practicable, the submission outlined “particular areas of endorsement and of disagreement”, including the following.

IPANZ supports: • the clarification in the role of the State Services Commissioner as leader of the state services • provisions relating to authority to transfer chief executives, Government workforce policy orders and key positions • the greater emphasis on stewardship • removal of the restriction on delegation of powers to employees of other agencies.

14 Public Sector April 2013

IPANZ is not certain that the proposed mechanism is essential to improving performance, but gives qualified support for: • the departmental agency framework, provided further thought and clarification is given to the employment and accountability relationships involved, as these are complex and as currently proposed could have unintended negative consequences.

IPANZ does not support: • the list-based approach to defining the role of the State Services Commissioner. We believe that the following is sufficient: “The Commissioner’s role is to provide leadership and oversight of the State services so as to ensure the purpose of this Act is carried out.”

• removal of the restriction on delegation of powers to anyone other than a state servant • exemption of public servants working in ministers’ offices (ministerial staff who are not political appointments) from the requirement that selection must be impartial and of suitably qualified or objectively best-suited personnel for the position.

The bill’s text, House debate transcripts, written submissions and other background information are available at www.parliament.nz.

Third result – increase infant immunisation rates and reduce the incidence of rheumatic fever.

Part of the third result is that 95 per cent of eight-month-olds are to be fully immunised by December 2014 and to maintain this through to June 2017.

“Our first pulse-check is showing that we’re on track. For the three-month period ending 30 September 2012, 87 per cent of eight-month olds were fully immunised. This coverage rate already exceeds the Health Target goal of 85 per cent coverage by July 2013.

“The coverage rate for Māori was 78 per cent and 81 per cent for those living in deprivation deciles 9 and 10. This is a big increase [from previous recorded rates], but there is still work to do.”

Fifth result – increase the proportion of 18-year-olds with NCEA level 2 or equivalent qualification.

“The Ministry of Education has begun working with schools and communities covering the bulk of students who are unlikely to achieve NCEA Level 2.

“Initially 18 schools were supported to identify and assist 370 learners to achieve NCEA Level 2 in 2012. With a 50 per cent success rate for these 370 learners, most of these schools will be on track to achieve 85 per cent NCEA 2 in 2017.

Seventh result – reduce the rates of total crime, violent crime and youth crime.

“Our seventh target is to reduce the crime rate by 15 per cent, reduce the violent crime rate by 20 per cent, and reduce the youth crime rate by 5 per cent by June 2017.

“As of now, all measures are on track to meet or exceed the targets. In the first period of the programme, crime, violent crime and youth crime

have dropped respectively by 6 per cent, 7 per cent and 4 per cent. This is on top of a recorded crime rate that was at its lowest point in 30 years.”

Eighth result – reduce reoffending.

“There has been a 7 per cent reduction in the rate of re-convictions from the previous year. The re-imprisonment rate has only decreased slightly, which is expected due to the lag in rehabilitative interventions.

“The justice sector has prepared a joint four-year plan, instead of separate plans as individual agencies. It aims to direct resources to where they will make the most difference. The Justice Sector Fund supports initiatives that will create further savings and test initiatives that will further support the Better Public Service result targets.”

AS PART OF Minister Coleman’s candid discussion, he shared some of the findings of an Ernst & Young report recently produced at the State Service Commissioner’s request as an independent quality assessment of the Better Public Services programme.

Noting that the report “certainly wasn’t sugar coated,” he quoted: The programme has yet to develop critical elements that are fundamental and necessary to achieve its aims.

From our interviews it was not evident that leadership, ownership and prioritisation are at the levels required for better public

Designing and growing innovation capability – A case study

R

ecently, the State Services Commission published a case study of two organisations where public sector innovations occurred following the Canterbury earthquakes – Inland Revenue and Canterbury District Health Board.

The case study describes the organisations’ innovation capability with the goal of providing lessons for other agencies and to inform future work to encourage innovation in the public sector. www.ssc.govt.nz/sites/all/files/case-studygrowing-innovation-capability.pdf

Bringing government to the people

B

etter Public Services Result 10 states that “New Zealanders can complete their transactions with government easily in a digital environment”.

The Digital Engagement team at the Department of Internal Affairs is working to realise this result with their work on redeveloping newzealand.govt.nz.

In early March, the team kicked off the beta phase of the site’s development. Projected to be released in July 2013, changes to the site are expected to make it more “user-centred”.

Visit http://webtoolkit.govt.nz to learn more about the behind-the-scenes work on this project.

services to be achieved against its stated culture change ambition.

Central agencies are seen, from the outside and by themselves, as not always presenting a united front.

The array of messages and demands sends a confusing message to departments on what needs to be produced for delivering results.

He said, “Our corporate centre is working to address those criticisms about leadership, ownership and prioritisation in the report, including by developing a joint Performance Hub for providing performance advice on agencies across the public sector.”

April 2013 Public Sector 15

A century of public service

The eighties: A retrospective view Public Sector continues with highlights from the series of seminars jointly sponsored by the Ministry of Culture and Heritage and IPANZ to commemorate the Public Service Act 1912. Last issue we featured Parliamentary Historian Dr John E Martin’s discussion on what led to the birth of the modern public service and IPANZ Fellow John R Martin’s thoughts on the journey of the public service between 1920 and the State Sector Act 1988. In this issue, PROFESSOR JONATHAN BOSTON, Professor of Public Policy, Victoria University of Wellington, recounts the tumultuous 1980s and the revolutionary changes made to the public service during that decade.

P

roviding a retrospective view of New Zealand’s remarkable bureaucratic revolution during the mid-to-late 1980s and the so-called New Zealand model of public management to which the revolution gave rise is no small task. The public sector reforms during these intense, dramatic and unforgettable years were profound in their nature, scope, scale and impact. They transformed the landscape of New Zealand’s bureaucratic institutions.

Why reform?

What inspired these remarkable and rapid changes? Why did New Zealand usher in such comprehensive and far-reaching administrative reforms? And why did we end up in the vanguard of the New Public Management rather than following in the wake of other reformminded countries?

Obviously, there were many drivers. First, there were economic considerations. By the mid-1980s New Zealand had experienced at least two decades of relative economic decline – the Muldoon Administration had resisted significant structural reform and a relatively large fiscal deficit awaited the fourth Labour government. These issues required attention. Public sector reform, and especially a drive for more efficient and effective public services, needed to be part of the solution.

16 Public Sector April 2013

Next, there were very real problems facing the public sector, not least a cumbersome regime of input controls, a relatively inflexible system of human resource management, a complicated and potentially inflationary pay-fixing regime, and serious inefficiencies in the management of the Crown’s commercial assets.

Aside from these wider systemic issues, New Zealand experienced a series of “critical events”, as they are called in the political science literature, without which radical reform would have been much less likely. These included the snap election of July 1984, the very brief but serious constitutional crisis immediately following the election, the slightly longer but no less serious exchange rate crisis, and the entry into office of a relatively youthful Labour government containing many committed, if not passionate, reformers.

A final, but equally important contributing factor, was the vigorous support for comprehensive economic, social and adminis-

Protesting against the sale of Coalcorp (1989).

Photographic negatives and prints of the Evening Post and Dominion newspapers.

Photographer Ross Giblin. Ref: EP-Ethnology-Maori Land from 1976-03. Alexander Turnbull Library, Wellington, New Zealand. http://natlib.govt.nz/ records/22769535.

trative reform from within the Treasury and several other significant state institutions, most notably the Reserve Bank. Inspired by the tenets of market liberalism and the insights of the new institutional economics, a number of senior officials provided incisive analyses of the weaknesses afflicting existing policy settings and advice on how to address them.

Without this combination it is highly doubtful whether New Zealand would have witnessed the bureaucratic revolution of the 1980s. Administrative change would doubtless have occurred, but it would have been less systematic, less sweeping and much slower.

The main features of the reforms In terms of legislation, there were three crucial initial Acts that ushered in the reforms: the StateOwned Enterprises Act 1986, the State Sector Act 1988, and the Public Finance Act 1989. Other related legislative initiatives also deserve note, not least the Reserve Bank Act 1989, the Health and Disability Services Act 1993, the Fiscal Responsibility Act 1994, and the eventual enactment of the Crown Entities Act 2004 – which finally completed some of the unfinished business of the 1980s.

In policy terms, five initiatives deserve mention. First, there was a rapid and systematic programme of corporatisation, privatisation and commercialisation, together with a greater reliance on competitive tendering and contracting out.

Second, under the State Sector Act human resource management, including responsibilities for staffing, appointments, conditions of employment and pay fixing, was largely devolved from the State Services Commission to the chief executives of individual departments and agencies.

Third, there were comprehensive changes to financial management.

Amongst these were moves from programme budgeting to output budgeting, from input controls to the specification of outputs and outcomes, and from cash-based accounting to accrual accounting.

Fourth, the reforms set in train the development of a more integrated process of strategic planning and performance management.

Finally, there were major changes in institutional design, including the placement of many service-delivery functions into separate, non-departmental agencies.

The goals of the reforms The goals of the reforms included: • improving allocative and productive efficiency, and

enhancing the effectiveness of government services • improving both managerial and political accountability • reducing the level of government expenditure and the size of the core public sector • reducing the range of state functions under direct ministerial control, and minimising opportunities for the non-transparent use of public power

said, many of the gains, particularly in efficiency and effectiveness, were impressive and have been well documented.

The core administrative doctrines In addition to the goals which guided the public sector reforms, their particular nature and form was influenced by a series of distinctive principles and administrative doctrines. Four of these

reforms embodied a series of principles relating to organisational design. It was contended, for example, that all state organisations should, at least ideally, have only one main function and that any conflicting responsibilities should, wherever possible, be placed in separate institutions.

Another principle of organisational design was a preference for small-scale over large-scale organisations. More recently, of course,

The reforms of the late 1980s came during a decade of radical change in New Zealand.

Anti-Springbok tour demonstration, Willis Street, Wellington. Negatives of the Evening Post newspaper.

Ref: 35mm-01602-25-F. Alexander Turnbull Library, Wellington, New Zealand. http://natlib.govt.nz/ records/23181718 • minimising the risk of bureaucratic, provider or regulatory capture • improving the quality of the goods and services produced by public agencies • making public services more accessible and responsive to consumers, as well as more culturally sensitive.

Of course, not all of these goals received equal weight, nor were all the goals fully realised – or at least not to the extent that some of the leading reformers had hoped. That

warrant specific mention.

First, it was argued that the government should only own or provide services which cannot be more efficiently and effectively carried out by non-governmental bodies, whether private businesses or voluntary agencies.

Second, drawing on agency theory and transaction cost analysis, the reforms exhibited a strong preference for contractualist modes of governance.

Third, and related to this, the

arguments based on considerations of efficiency and effectiveness have been employed to justify a programme of organisational mergers and amalgamations across the public sector. Yet there appears to be precious little robust evidence to underpin either the once ascendant doctrine of divided responsibility or the more recent emphasis on inclusive responsibility, whether in the form of horizontal or vertical integration.

Fourth, a central principle of > the reforms was that the respecApril 2013 Public Sector 17

tive responsibilities of ministers and departmental chief executives should be clearly specified and precisely delineated.

Assessing the Reforms While the New Zealand model has continued to evolve since the late 1980s, many crucial features have remained intact. This includes a decentralised system of human resource management, the principles underpinning the Public Finance Act 1989, and at least some of the crucial doctrines of institutional design – such as the separation of commercial and noncommercial functions.

Of course, the period from the mid-1980s to the mid-1990s was traumatic for many New Zealanders. Unemployment almost tripled, as did child poverty rates.

There was a huge surge in income inequality. There were significant social changes including a substantial rise in sole parenthood.

There were also major changes in migration patterns and significant technological innovations, not least in the field of information and communications technology. While the public sector reforms contributed to the social dislocation of these years, they were not the primary driver; this lay elsewhere in the macroeconomic policy shifts and the related programme of economic liberalisation. But collectively these interconnected reforms generated major social impacts many of which were keenly felt.

Not surprisingly, the electoral response to this period of economic turbulence and social upheaval was significant. Without doubt, the trauma of these years contributed to the referendum votes in 1992 and 1993 in favour of proportional representation – a constitutional shift which, at least to some degree, has made any future bureaucratic revolution much less feasible politically. This is but one of the many ironies of these times.

18 Public Sector April 2013

Another relates to the high expectations which the public sector reforms had concerning the managerial capabilities of cabinet ministers. The theory and practice were not well aligned. As Simon Upton reflected, when serving as Minister of State Services in 1999: The theory ... relies heavily upon Ministers playing their role as principals in a contractual regime comparable to a marketplace. We are expected to be energetic and well-informed purchasers, monitoring output delivery and bringing particular sanctions and pressures to bear as required.

The reality is far from a market model. It is characterised more by monopoly supply, compliant demand, arbitrary prices and asymmetry of information.

Enduring issues There are questions we might ponder about what the reforms have – and have not – accomplished.

For instance, why have so few women, Māori and Pasifika been appointed to the most senior public sector positions? Thus far, for instance, not a single woman or Māori has held the top roles in our three central agencies. Similarly, the senior ranks of the public sector contain very few representatives of the many and varied Asian communities that now reside within these shores.

Another example is our strong centralist tendency ever since the abolition of the provinces in 1876.

For at least a century policy-makers in Wellington have displayed a dim view of the capacity, competence and wisdom of sub-national government. The centralist tendency remains dominant and is highlighted by the current government’s desire to remove from local government their statutory responsibilities for the economic, social, environmental and cultural wellbeing of citizens. In my view, this centralist mind-set is misguided and ill-advised.

Finally, I would like to comment on one of the most enduring and unfortunate legacies of our bureaucratic revolution, namely the fixation with organisational restructuring. Between 1985 and the mid-1990s most government departments, as well as a high proportion of nondepartmental bodies, were substantially reorganised and re-engineered.

Not surprisingly, this led the then State Services Commissioner, Michael Wintringham, to suggest that New Zealand had “slipped” into a “restructuring culture” – a culture characterised by an instinctive recourse to the restructuring option, irrespective of the specific nature of the problem.

Such restructuring, he argued, can be damaging and disruptive. Not merely is it costly in financial terms, but it invariably results in a loss of institutional memory and has negative effects on staff morale, commitment and productivity.

The challenge of public management New Zealand’s bureaucratic revolution of the mid-to-late 1980s was remarkable in all manner of ways. The reforms were bold, imaginative, systematic, comprehensive and far reaching. Many benefits were secured and many positive outcomes were achieved.

But not all the reforms of these heady years were equally beneficial.

Indeed, some were based on questionable assumptions and failed to deliver the promised results. Admittedly, without the bureaucratic revolution the performance of the public sector may well have been worse – perhaps far worse. But there is much about which we cannot be proud. This is not to question the overall wisdom or direction of the public sector reforms of the mid-to-late 1980s. Rather, it is to highlight that no system of public administration is perfect. There will always be internal tensions and difficult trade-offs. There will always be mistakes and deficiencies. There will always be scope for improvement.

And there will always be wicked problems for which no system of public management, however well-resourced or competently staffed, can ever fully solve.

The bureaucratic revolution of the 1980s embodied many noble ideals.

It liberated a wave of innovation, creativity and enterprise. Yet it also revealed many of humanity’s intrinsic limitations and flaws. It could not have been otherwise.

References Ryan, B and D Gill, (eds) (2011) Future State: Directions for Public Management in New Zealand, Wellington, Victoria University Press.

Upton, S (1999) “The Role of the State”, IPS Policy Newsletter, 56, pp 8-15.

Wintringham, M (1998) “State Services Commissioner’s Report on the State Services”, Annual Report of the State Services Commission for the Year Ended 30 June 1998, Wellington, State Services Commission.

Boston J, J Martin, J Pallot and P Walsh (1996) Public Management: The New Zealand Model, Auckland, Oxford University Press.

Boston, J and J Pallot (1997) “Linking Strategy and Performance: Developments in the New Zealand Public Sector”, Journal of Policy Analysis and Management, 16, 3, pp 382-404.

Schick, A (1996) The Spirit of Reform, Wellington: State Services Commission.

Scott, G (2001) Public Management in New Zealand, Lessons and Challenges, Wellington: New Zealand Business Roundtable.

The written speech and complete list of references is available on the IPANZ website.

To listen to podcasts of each of the presentations visit www.nzhistory. net.nz/handsonhistory/downloads-and-podcasts or to download written presentations go to www.ipanz.org.nz > Events > Centenary Celebration Programme 2012–2013.

The public’s right to know – Reform a work in progress Reform of the official information legislation has begun, albeit at a significantly lesser scale from that proposed by the Law Commission in its report: The Public’s Right to Know: Review of the Official Information Legislation. Additionally, the progress of some reforms will be complicated as they are considered within the context of associated legislative reform currently underway. Writer KATHY OMBLER reports.

T

he Government announced its response to the Law Commission report in February, nine months after the report’s release last July. After its long deliberation, the Government has opted to focus on just a handful of “targeted priority recommendations” out of the commission’s more than 100 recommendations for reform.

As background, the Law Commission report covers both the Official Information Act 1982 and Parts 1-6 of the Local Government Official Information and Meetings Act 1987.

The report concludes that while these “basic pillars of legislation remain fundamentally sound, the context in which the legislation operates has changed significantly since the Acts became law”.

Accordingly, the Law Commission’s recommendations for reform include several legislative changes, spearheaded by creation of a new, single Act. In its response, the Government cited the current fiscal environment and range of other urgent priorities as reasons for focusing on targeted priority recommendations rather than on major reform. Justice Minister Judith Collins said the government will now progress some of the key recommendations. These include: • extending the OIA to the administrative functions of the courts, including information about expenditure, resources and statistical information about court cases • supporting improved education and guidance from the Office of the Ombudsman • introducing new protections for commercial information and clarifying how the legislation applies to commercially sensitive information • protections for third-party information and other issues related to the Privacy Act 1993.

A Department of Justice spokesperson says that initial agency response will focus on the justice-related targeted recommendations,

and some of these will be considered in the context of associated legislative reviews.

Extending the OIA to the administrative functions of the courts, for example, is being progressed in the context of the Judicature Act review, she says. “This provides the statutory basis for the New Zealand courts and works hand-in-hand with the District Court Act and the Supreme Court Act. “Part of this review will look at bringing these three court-related Acts under a single modernised piece of legislation. Work is very much in the early stages and it has not yet been decided how we will tackle the issue from a legislative perspective.”

The recommendations concerning the relationship between the Privacy Act and the official information legislation are being considered as part of the ongoing work on the Privacy Act review.

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THE PUB LIC’S RIGHT T O KNOW REVIEW OF THE O INFORM FFICIA ATION L EGISLAT L ION

The report concludes that while these “basic pillars of legislation remain fundamentally sound, the context in which the legislation operates has changed significantly since the Acts became law”.

“This is a complicated area, and the intention is to strike a balance between making information available and protecting the legitimate interests of third parties.”

The recommendation calling for the support and improved education and guidance from the Office of the Ombudsman has been referred to the Office of the Ombudsman for further consideration.

Both the Ministry of Justice and Ministry of Business, Innovation and Employment are considering the recommendation for improved commercial protections to avoid material prejudice to competitive positions or financial interests.

Recommendations relating to the relationship with the Privacy Act will be considered by the Ministry of Justice, Office of the Ombudsman, and Office of the Privacy Commissioner. The Ministry of Justice will also look at clarifying existing provisions and making minor and technical changes.

The Department of Internal Affairs will be involved in each of the work-streams in relation to local government issues and the LGOIMA.

Yet to be determined are completion dates for various agency response, and the timing for the report back to the Government.

The Government rejected the key Law Commission recommendation that the OIA be extended to the offices of Parliament, Parliamentary Counsel Office, the Office of the Clerk and Parliamentary Service, and the Speaker of the House. Its official response states that Parliament has processes for developing rules around access and use of information and these are more likely to achieve the desired balance between access to information and the proper functioning of Parliament, adding this approach is consistent with the approach taken in the Australian and Canadian federal governments and US Congress.

The Government also rejected the key recommendations for the OIA and LGOIMA to be combined into one new Act, and for the statutory creation of a new oversight office.

The Government considered that current oversight provided by the ombudsmen is effective.

Minister Collins says the Government will review the operation of the Acts and progress any remaining recommendations as opportunities arise and priorities allow.

April 2013 Public Sector 19

© Michael Brown | Dreamstime.com

Statistics New Zealand’s holistic approach, embodied in its work under the banner of “Leading from where you are”, has enabled it to excel in leadership and has improved staff engagement results.

Linda Douglas’ Capability and Change team, together with Terry Hutchins’ HR team, led the programme, which won the 2012 IPANZ Gen-i Public Sector Excellence Award for Improving Performance through Leadership Excellence. Writer ROSALIE CHAMBERLAIN learns more.

S

tatistics New Zealand leads the Official Statistics System (OSS). As such, the organisation’s goal is to provide New Zealand with the

information it needs to grow and prosper, and to provide information that people can access, trust, and use to make important decisions.

“Leadership is an organisational value and is part of our everyday work,” says Linda Douglas, Manager – Capability and Change.

“Our ‘Leading from where you are’ approach means that everybody can contribute. People across the organisation are consciously thinking about leadership – what it means in their role, in their team, and for their development.”

Need for stronger leadership In 2007, the Government Statistician and Chief Executive

“Leading from where you are initiatives” include: • developing both a leadership behavioural framework and a leadership accountability framework • being more responsive in working with and for Māori • adaptive leadership work to help people become more adept at working in a change-paced and agile environment • individual development planning work to develop the right skills at the right time and retain the right people, with the right skills • developing career pathways and talent management in the organisation and supporting the public sector to retain talent.

20 Public Sector April 2013

Geoff Bascand outlined that Statistics NZ needed stronger leadership to succeed in the desired OSS outcome of an “informed society using official statistics”. Statistics NZ introduced a People Strategy in 2008, and refreshed it in 2011, to improve performance through greater leadership and “to develop exceptional leaders who strive for excellence and balance competing demands”.

Douglas says, “We recognised that we needed to change. We have great skill in the technical leadership space, but it’s not just about technical leadership; it’s more than that. Good leaders help others be the best they can. They know what’s important – that’s what they work on and they get others to work on. Good leaders help to achieve results and benefits. In addition, great leaders are sometimes great followers.”

Relentless focus on leadership The CE-initiated approach was endorsed by the management team and includes a multi-layered series of activities throughout the organisation.

Douglas says, “We made it clear this would demand more time from staff – it had to be something people would support. We value achievement and high performance and we relentlessly focus

on the importance of leadership.

We reinforce this through every mechanism available, including performance agreements, training, internal communications, reward and recognition, and themes for staff workshops.”

Statistics NZ communicates through multiple internal channels to celebrate leadership achievements. The CE regularly acknowledges leadership success and there are consistent messages in manager, leader, and team updates, as well as on the intranet.

The CE and the management team have regular meetings through an engagement series with people from across the organisation. They also hold specific events with the senior leadership team and first-level leaders (who are the frontline leaders of Statistics NZ).

There are also culture coaches from within the organisation who help support managers and teams to build the preferred behaviours and culture, to enable Statistics NZ to transform the organisation and deliver on its strategic priorities.

Improving staff engagement Statistics NZ identified what it needed to add to its leadership skills base and set up two development programmes. It initially targeted first-level leaders and then targeted its senior leadership team.

“People might observe that it’s unusual to train first-level leaders first, but we recognised that by investing in this key group we would gain momentum,” Douglas says. “They are a significant group

(120 people) who lead or work with most of our 1100 staff. As part of our commitment, they all completed a formal leadership development programme.”

The results were telling with 93 per cent of the senior leadership team noting that first-level leaders who completed the formal leadership development had increased their leadership skills.

In addition, half of the appointments to managerial roles in 2010 went to internal applicants, showing evidence of improved performance and leadership.

Leadership transferability Job rotation is another part of the programme, to enable the organisation to ask people to move into another area to apply their leadership skills and knowledge. This helps individuals to gain different perspectives and hone their leadership transferability. Statistics NZ also encourages leaders to participate in cross-government networks and events.

Douglas says, “To gain buy-in and model what leadership is, we started at the top. The CE rotated all of his direct reports. This is an unusual step and leaders who had previously worked in policy and strategy are now managing a statistical work group, and vice versa. It has helped our people to see that the executive leadership team practice what they preach.”

Since starting the programme, Statistics NZ has rotated 17 managers. The organisation now considers opportunities to rotate people, before moving into the

Left to right: John Ombler, Deputy State Services Commissioner; Geraldine Needham-Girven, Principal Advisor Strategic Governance; Cathryn Ashley-Jones, Deputy Government Statistician, Organisation Development; Terry Hutchins, Manager, Human Resources; Linda Douglas, Manager – Capability and Change; Rosemary Hannah-Parr, Chief Executive, Leadership Development Centre. recruitment process. It has seen a marked increase in its people valuing the role of their leaders and their leaders role modelling.

Exposure to good coaching Statistics NZ set up a formal coaching programme for first-level leaders and the senior leadership team. These individuals have access to a coach to help them deal with leadership challenges and gain exposure to good coaching. They can use those skills with their own people to support them to lift their performance.

“We have had good take up of the coaching and seen obvious change. For example, people are having development conversations and managing high-performance issues more effectively,” says Douglas.

Building on successes “Leading from where you are” has become part of the day-to-day conversations at Statistics NZ. “We’ve achieved a lot and people are still willing to invest their time, efforts, and thinking into what the organisation is doing,” Douglas says.

A 10-year transformation programme is underway at Statistics NZ, which requires skilled change leaders and managers, and provides the impetus to build on its skills base.

Statistics NZ has refreshed its learning and development strategy and the capability framework to provide people with greater change skills.

This will ensure that it does things differently to deliver information more effectively and efficiently to a wider audience.

“We have an ambitious programme of work, phased over several years to continue to grow our leadership capability,” says Douglas. “We evaluate and refine those things that are working well and then we introduce new initiatives.

“Leadership is part of the big picture and, for us, that is making sure New Zealand has the information it needs to grow and prosper. Official statistics are our business and great leadership helps us to ensure we do it better.”

To view this article online, and other articles which share the latest thinking and best ideas for improving services, see www.ipanz.org.nz > Knowledge Hub > Best Practice Exchange.

About the sponsors The State Services Commission and Leadership Development Centre are committed to developing high-performing leaders across the New Zealand public sector. The Improving Performance through Leadership Excellence Award, which is co-sponsored by the SSC and LDC, recognises leaders who are “walking the talk” in identifying, developing and supporting highpotential individuals in their organisation and providing relevant opportunities for development in the public sector.

“We commend Statistics New Zealand on developing leadership excellence within their organisation and on being recognised for their work through the IPANZ Gen-i Public Sector Excellence Awards.”

April 2013 Public Sector 21

Something to say

An interview with Lockwood Smith Dr The Right Honourable Lockwood Smith recently stepped down as Speaker of the House of Representatives. As a member of the National party, he served as an MP from 1984 until this year when he accepted a position as the High Commissioner of New Zealand to the United Kingdom. Smith talks with writer MAX RASHBROOKE about MMP, accountability, transparency, and how his wife made him a better Speaker.

ency seat mean more than it does at present.

Accountability doesn’t mean that you sacrifice what you believe to the opinions of your constituency. But it means that, if they think your judgement is incompatible with their views, they ought to be able to get rid of you.

You have warned that politics must not lose contact with local issues. What is it about dealing with people on local matters that improves politics?

Sadly, the party vote is so powerful that members need to be totally in line with their party at all times. And that applies to the whole House.

Well, in your constituency, when people come to see you because of the way certain policies have affected them, often they are people who didn’t vote for you, but they still need help.

As a constituency MP, I always did my best to help people and get to the bottom of their issue and how it affects them. And you learn so much more about the impact on people of policies – people who don’t think the same way you do, if you like. I think Parliament is enhanced when more people have that broader view.

So MMP, and in particular the party vote, has made political debate more predictable, by forcing politicians to hold closely to the party line?

Similarly, you think that proportional representation can weaken the accountability of Parliament?

Systems work the best when the accountability sits in the right place. And the accountability of MPs is quite an important issue. It’s becoming a cause of concern around the world.

As proportional systems have become more common, accountability has become increasingly to the member’s party, not the broader community.

Political reform has focused so far on representation, on trying to get 100 per cent proportional representation of people’s political allegiances. But we haven’t really looked at whether in fact that 100 per cent proportional representation is actually compatible with good accountability. What I’m hinting at, is that it’s not. To get better accountability, you may need to compromise on perfect proportional representation.

We have got to make winning a constitu22 Public Sector April 2013

Are you saying that constituency MPs are more independent than list MPs? It’s hard to think of evidence of that.

Yes, absolutely. When I arrived in this place, you would get members giving a different slant on issues, reflecting what they picked up in their constituency. The party vote has definitely changed the debate in House. It’s simply the reality of the way that the party vote is all that matters. And the media plays a role in that, because they feed things into the public domain if they sense party disunity, so MPs are under pressure to be in line with their party.

But all the problems you identify have also occurred in countries, such as Britain, that don’t have proportional representation. Isn’t the problem the influence of public relations, advertising and the media on politics?

I would agree that these things I’m concerned about have tended to happen for those reasons – the professionalisation, the effect of the media, the changes towards modern communications. But I believe that the power of the party vote has exacerbated them.

So what is the alternative?

Well, under something like the supplementary member system, the list can’t any longer be a rescue parachute for unsuccessful constituency candidates, but it allows you to make sure the gender balance and the ethnic make-up are appropriate, that there are specialists, and so on. But there has never been a discussion

of this. It was off-message during the election campaign: you couldn’t talk about the referendum.

Are there better ways to increase accountability, such as referenda or devolving powers to local government, rather than making the system less representative?

No, I don’t think so. Referenda can be valuable on particular clear-cut issues, but in general they are no substitute for members exercising judgement on complex issues based on all available information.

As for a more general use of referenda?

Sounds appealing, but rarely works well in practice. As for devolution, there are certain things that central government has to do and local government has enough on its plate.

You also don’t think that MMP has made politics less partisan?

I suspect it was actually inevitable that politics would remain partisan. People involved in politics feel issues very deeply and consequently tend to be partisan. It was naïve to think that MMP could have changed that, although the nature of coalition government does change it to the extent that parties do have to negotiate a way of governing.

The people behind the reports that led to proportional representation weren’t experienced Parliamentarians. They didn’t understand how Parliament would adapt.

Proportional systems have yet to prove that they really work well over the long term.

How would you describe the amount of bad behaviour in the House?

I think in my time as Speaker it was at a minimum. I ejected four or five people in my four years, and the tone of the chamber was much, much better. In particular, previous Speakers have allowed members to use points of order to enter into the debate and abuse each other, and I didn’t allow that.

In addition, I tried hard to be non-partisan.

There’s nothing that makes the opposition more negative than if they feel the Speaker is siding with the Government. Whereas, I was

very strong on requiring ministers to answer questions.

I think you can judge the improvement from the reaction of the viewing public.

People had stopped watching Parliament.

Now you’d be amazed how many people watch it. People stop me in the street to talk about it.

Requiring ministers to answer questions has been important to you, hasn’t it?

Absolutely. The House has two key functions – passing legislation, and holding the Government to account. That second function had slipped over the years. Question time is one crucial part of that holding to account, but even my predecessor acknowledged that it was no longer fulfilling that function.

Ministers were no longer answering questions.

But I just didn’t believe that was acceptable.

I was really lucky that Government ministers, if initially shocked, stepped up to the plate. And they looked much better when they actually were answering questions. It didn’t cost the Government support in my view.

So ministers didn’t object strongly to the way you were running things?

In all my time as Speaker, I never had any push back from any ministers. The prime minister never tried to influence me in any of my decision-making or how I was handling the House.

But whatever the accountability within Parliament, isn’t it more concerning that external accountability, in the sense of voter participation, is falling?

By world standards, we still have very good levels of voter participation. But yes, it is concerning. I don’t know what the exact answer is for turning that around. It’s a combination of things – putting more effort into civics education, making New Zealanders more aware of how Parliament operates. We have taken steps towards televising select committees; looking to stream them live on the internet – things to make the place more accessible.

Speaking of transparency, should MPs be covered by the Official Information Act? I don’t think that would be an effective way of providing for transparency. The experience we have of the Official Information Act is that you have to employ hundreds of staff

across the various departments to handle requests. I’d hate to see that replicated across Parliament.

What I would rather see is for Parliament to be proactive about putting information out there. We have started to do that with information on individual members’ expenses, and there is other information that could be released regularly.

There’s more thought needed on how best to do that. We need to look at what is currently released by the Office of the Clerk and Parliamentary Services. A lot of information is released there, and maybe we need to make sure it is transparently available. And by transparently available, I mean people have to be able to digest it. The Crown accounts, for example, are made available, but how transparently available they are is another matter.

The other reason we should be proactive is that greater transparency is coming one way or another. Either we make it happen, or the pressure will continue to grow for MPs to come, as you say, under the Official Information Act.

Do you have any concerns about greater transparency?

The scrutiny is greater than when I arrived in Parliament. Members are really under a microscope now. It is not just on the way members spend money – it is on members themselves. It’s a worry to me whether we’ll still get ‘real’ people in the House. I have had people say to me, I wouldn’t want my life to be under that kind of microscope.

You have said recently that your wife made you a better person and thus a better Speaker. How is that?

She made me more of a person who can find good in others. She is a counsellor, and often works with people who are struggling with their lives and therefore have behavioural issues. She’s shown me how you can see the good in other people.

And if you can see the good in members across the House, it helps you be an effective Speaker.

Finally, did you give any advice to your successor David Carter?

Yes! I told him, David, be yourself. The Speaker needs to go about the job in a way that works for them. You are a good guy.

You have got what it takes. Just be yourself.

EXECUTIVE WATCH Peter Hughes Peter Hughes has been appointed Acting Chief and Secretary for Education. In accepting this position, Hughes has taken a leave of absence from his role as Professor and Head of the School of Government at Victoria University of Wellington. He has had a 30-year career in the New Zealand state sector, including as Chief Executive of the Ministry of Social Development.

Len Cook Len Cook has been appointed Acting Chief Executive of the Families Commission. A professional statistician, Cook has held a number of management positions, including as Government Statistician of New Zealand and National Statistician and Director of the Office for National Statistics in the UK. Cook is also the Immediate Past President of IPANZ.

Tim Fowler Tim Fowler has been appointed Chief Executive of the Tertiary Education Commission.

Prior to this role, Fowler served as Deputy Chief Executive of the New Zealand Qualifications Authority. He has had a career in the higher education and international business sectors in both Australia and New Zealand.

Geoff Bascand Geoff Bascand has been appointed as Deputy Governor and Head of Operations at the Reserve Bank. He will step down from his role as Chief Executive and Government Statistician of Statistics New Zealand in May 2013. Prior to this role, he worked for the Treasury, the International Monetary Fund in the US, and the (then) Department of Labour.

April 2013 Public Sector 23

POINT OF VIEW

Seeking role clarity – Of ministers and chief executives

By Professor Bob Gregory, Adjunct Professor in the School of Government, Victoria University of Wellington

Excerpts from the published paper: “The Challenging Quest for Governmental Accountability in New Zealand”.

A

t the heart of what is commonly called the New Zealand model is the statutory distinction drawn between “outputs” and “outcomes” under the Public Finance Act 1989.

In this, public service chief executives are managerially accountable for the production of the outputs assigned to their organisations, while their ministers are held to be politically accountable for the achievement of policy outcomes.

Metaphorically, ministers steer, while officials row – and they row as if renewal of their fixed-term contracts largely depends on the strength and quality of their oarsmanship. The binding principle in this division of executive labour is the understanding that officials should not be made accountable for things over which they themselves have no direct control.

If chief executives became hostages to their capacities to deliver clearly specified outputs, then they need not worry that they might also be made publicly accountable for policy shortcomings and failures brought about by circumstances and conditions beyond their managerial control.

The original designers of the New Zealand reforms were fond of simple bifurcations like funder and provider, owner and purchaser, and outputs and

24 Public Sector April 2013

outcomes. Almost exclusively economists, they had solemnly rediscovered the policy-administration dichotomy, a piece of conceptual apparatus that had been largely discarded decades before by public administration scholars in the United States and elsewhere. The latter had come to see its shortcomings in providing a workable distinction between the legitimate responsibilities of elected politicians, on the one hand, and appointed bureaucratic officials, on the other. In fact, while the outputs/outcomes terminology is used in many governmental systems around the globe, no other country has made the distinction such a fundamental component of its system of public management in the way that New Zealand has done.

It’s high time this artificial distinction between outputs and outcomes was abandoned completely, but that’s another story. In the meantime, one of the unintended consequences of the reforms has been the increasingly fraught nature of the relationship between ministers and their officials, with substantial levels of mutual frustration and mistrust. Although effective governance depends heavily on the workability of the relationship between ministers and their top officials, both parties march to the beat of quite different drums. This reality was confirmed by one New Zealand minister who early on suggested that purchase agreements, which were central to the outputs/outcomes bifurcation, were not the sort of thing to which many ministers were likely to commit a great deal of their time and attention.

It would be misleading to suggest that there was ever a time in New Zealand when ministers were completely unwilling to hang their officials out to dry in public when something went badly wrong.

Nor does the doctrine of ministerial responsibility necessarily require that they not do so. There has always been room, if not for mutual “cheating” on both sides, then certainly for some “give and take”.

But in this, ministers could invariably give more blame than they took, especially

as it was, and remains, constitutionally inappropriate for officials to answer back in public.

In general, however, departmental chief executives head agencies in which managerial and operational duties can generally be readily specified, and in which performance can be regularly assessed – if not always precisely measured. This state of affairs is undoubtedly a huge advance on rulebound administration as an end in itself, but as the Cave Creek tragedy of 1995 confirmed, replacing the former relational contracts between ministers and their former permanent heads with classical contracts between the two, in which ministers “purchase” outputs from their chief executives and enter into performance agreements with them, has done little to ensure that public demands for greater accountability are met.

The New Zealand experience has confirmed what many might have suspected: that governmental accountability is usually multi-faceted, often complex, and always political in nature.

New Zealanders are often frustrated by what they see as failures of accountability when governmental processes or policies fail, and like people elsewhere, they will always seek clarity, rectification and attributions of culpability when the most egregious lapses occur. When these expectations often fail to be or cannot be met, popular frustrations may be soothed by the knowledge that standards of public accountability are sustained politically as much as forensically, and that living with doubt and uncertainty in an increasingly complex world of responsive governance is an essential requirement of citizenship.

Especially in recent years, New Zealanders have come to know that accountability, while hugely important, is not the only thing that matters in government, and that if it is pursued as an end in itself it will tend to defeat the maintenance of values which are at least of equal importance – especially policy effectiveness.

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