Time for another shake-up


Peter Nicholl

The major state-sector reforms of the late 1980s gave the New Zealand public sector a huge shake-up. Its size was significantly reduced and its performance significantly improved.

The impact of these reforms has gradually faded over the last 35 years to the point where it is hard to know what the systems of performance monitoring and accountability are in the New Zealand public sector today. There are many examples of poor delivery of outcomes by government agencies, but nobody seems to take responsibility, and nobody seems to be held accountable.

What we do know is that the public service has got a lot bigger again. On June 30, 2017, the public sector employed 348,000 people or 13.8 per cent of the work force. By the end of 2022, that number had risen to 448,000 or 18.7 per cent of the work force.

On top of this, most Government Departments make significant use of outside consultants for many of their projects. The spending on consultants in 2022-23 was just over $1200 million.  The much-vaunted ‘do-it-yourself’ mentality of New Zealanders seems to have disappeared from our public service.

While the number of public servants has risen strongly, satisfaction with the delivery of outcomes from the public service has fallen. Last year, a survey on the “Mood of the Boardroom’ gave the public service a score of only 1.63 out of 5 for the ‘execution and delivery of policies’. That’s an extremely low score. Examples of poor delivery from public sector agencies appear in our newspapers frequently. The latest one was the Electorate Commission failing to get easy-vote cards to almost a million voters before the recent election.

Another survey done last year titled ‘Working in the Public Service’ also had some worrying conclusions. Many of the respondents said that most government agencies are risk-averse and tell ministers what they think they want to hear. That isn’t being an advisor. The ministers are the decision-makers, but their advisors should give them a range of options on most issues and if the advisor thinks something being considered by a minister would not be a good policy, they should say so – and why.

Also, public agencies are spending more and more on communication but most of what is being communicated is more accurately described as advertising than information or accountability. I have been told that the Reserve Bank of New Zealand now has 26 people in its Public Relations Department. When Don Brash was Governor and I was Deputy Governor, there were 3 public relations staff – and Don made a lot of speeches.

The focus of much of the public sector now seems to be on writing reports, media campaigns and advertising programmes rather than implementing policies. The new government will have to reform the public sector’s culture urgently so the emphasis goes back on implementation – and accountability is based on outcomes and not on writing long reports or having fancy advertisements campaigns. If they don’t, they will have a hard job implementing their policies too.

The public service, not the cabinet, is the delivery mechanism for a government’s policies.

  • Peter Nicholl is a former deputy governor of the Reserve Bank of New Zealand

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