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Progress on public management initiatives

Hon. Trevor Mallard

30 June 2003 Speech Notes

Progress on public management initiatives

(Speech to the Institute of Public Administration annual meeting)

Thank you for the invitation to speak today and a warm greeting to representatives from the Korean Association of Public Administration who are visiting us.

I have been asked to speak about the Government's agenda for public management.

It is not often that I get to speak at length on this topic as, to be honest, most peoples’ eyes glaze over at the intricacies of the machinery of government.

So I am delighted to address an audience that is very interested and engaged in this topic.

First, I want to reflect on the highlights and achievements in the public management area over the last year and to signal changes and priorities for the year ahead.

Secondly, I will talk in more depth about three major new priorities - the senior leadership and management development initiative, the Treaty of Waitangi Information Programme, and the Public Management Bill.

This bill includes changes to crown entity governance, extension of the State Services Commissioner’s mandate on ethics, values and standards to the wider state sector, and amendments to the Public Finance Act.

Highlights of Past Year

There is change underway in New Zealand’s public management system, but I must stress this transformation is evolutionary rather than revolutionary. I think we would all agree that no one is ready to revisit the major restructuring excesses of the past.

For people working in the state sector this means small steps along a path of rebuilding and refocusing. This path is characterised by a shift in thinking about how we move to reshape the public management system.

I see four issues here that are relevant.

First, there is a need for government to engage the public more in its decisions - this encompasses the range of issues that are contained, for example, in the E-Government strategy, and the Government's commitment to engaging more with unions and community groups.

Secondly, there is a need to keep in mind that the service experienced by New Zealanders is much more important than which agency does the delivery.

We want much more emphasis on a whole-of-government approach and more collaboration and managing across agencies is required.

Thirdly, there is a need for government to manage a series of tensions in public management. These tensions include the proliferation of expectations of use versus scarcity of resources, and immediate results versus sustainable outcomes.

And finally, there is a need for government, and the public service as a whole, to take a more proactive and values-driven leadership role in public management.

In that overall context, here are some of my ideas about the changing direction of public management and the achievements from the past year.

In the public management reforms of the 1980s and 1990s agencies were created so as to better focus on their main purpose, be it service delivery, policy advice or regulation.

This approach is being scrutinised rather seriously by governments around the world.

Enhanced accountability, arms-length arrangements from government and the split between policy and operations served their purpose in their time.

But we are now at the stage where we have had to take a very serious look not only at the structural aspects of public management but also at the re-configuration of processes, accountabilities, and delivery systems.

I believe a focus on delivering a narrow set of outputs has led to a somewhat inward looking view by staff and departments.

What was sometimes overlooked was the bigger picture – a whole-of-government approach to issues and possible solutions.

In my view it is essential that we change the way we think of our own work in individual departments and expand our thinking across the public service and, increasingly, across the wider state sector.

The establishment of a Pay and Employment Equity Taskforce is a good example of that.

Ministers now expect that leadership will be effective both horizontally and vertically - within and between agencies.

There is anecdotal evidence that the ideas of collective ownership of issues, and the need to work more collaboratively are taking greater hold in the public service and the state sector.

This is reflected in the “shared outcomes” agreements between agencies which are now required under their statements of intent. The circuit breaker pilots are another significant example of this collaboration between agencies which I will talk a bit about later.

The changes are not yet system-wide, but the signs are encouraging and show real pockets of innovation and leadership. Another example is the joint work by Inland Revenue and the Ministry of Social Development.

The two agencies have established an Engagement Network on Future Directions.

This is a process which puts policy and the implementation of policy together in the design phase so that when the new policy comes into force, it will operate smoothly and with credibility.

As governments like ours concentrate more on how best to use organisations to deliver our promises to the people out there, managers in these organisations must learn to work with more intractable problems.

These issues, especially in the area of social policy, have no single correct solution.

Even as you grope your way around addressing the different dimensions of the problems, you need to always keep in mind that what you do must be transparent to the general public.

A highlight of the previous year has been implementation of the three cross-agency ‘circuit breaker’ teams, as recommended in the Review of the Centre. The teams are working on the difficult issues of truancy, funding for the prevention of domestic violence and the settlement of skilled migrants.

The establishment of these three teams has shown the potential of this approach.

The move to ‘managing for outcomes’ for departments also typifies a new approach to public management. This process creates a stronger link between public management and the results that the Government wishes to achieve.

Central agencies have observed that “statements of intent” are changing how departments manage.

We have more departments developing and publishing outcome indicators which has lead to a greater focus on results.

It has also lead to the implementation of some sector reviews, also recommended by the Review of the Centre. Under the sector reviews the Government is looking closely at how similar agencies can work better together. An outcome of the justice sector review was the recent announcement of the merger of Courts and Justice.

Technology is also changing the way the Government and the state sector engages with, and delivers to, its citizens.

The E-Government Strategy has recently been revised for the second time. This has been done to ensure that the e-government programme is driving ahead in the right directions, that agencies know what is expected of them, and that e-government challenges are understood and addressed.

Highlights during 2002 were a United Nations report ranking New Zealand third among 169 nations on a global e-government leadership index and the launch of the all-of-government web portal.

The portal is the most visible achievement of the e-government programme so far. We know that people are using e-government, and are interested in seeing more of it.

For example, the E-Government Unit’s statistics show that more than 313,000 individual visits have been recorded on the new all-of-government portal at since its launch in late November 2002.

The Coming Year

Looking ahead, communications and visible leadership will be critical in 2003/04, particularly as specific results begin to emerge from initiatives.

With an increasingly complex operating environment, there is a need for capable and competent senior managers to lead change across the public service.

Senior Leadership and Development

In this year’s Budget the Government announced a new collective public service approach to senior management development – supported by a funding commitment of $9.8 million over four years.

The main aim of the strategy is to build a group of talented managers of the required quality, quantity and diversity to meet the future needs of the public service - and this is likely to extend over time to the wider public sector.

We are now well down the track to implementation, and on 3 July the new Executive Leadership Programme and Leadership Development Centre will be officially launched.

There are three streams to the strategy:

 improving our ability to predict the leaders of tomorrow;

 ensuring suitable development programmes are available; and

 developing more leadership talent.

The Executive Leadership Programme is for those who aspire to and are almost ready for a senior leadership role in the public service but need up to three years further targeted development.

Entrance to the programme is not based upon people’s existing positions, although the depth and breadth of their experience will be important considerations.

The benchmark for entry to the programme is high. The target for development is the ‘best of the best’ - bright and talented individuals who are motivated and able to move into a chief executive or large senior management role.

These people would generally require up to three years of targeted development before they are considered ready for leadership in those big jobs.

Suitable candidates will be put through a formal assessment process, which is currently being piloted, and includes both assessment of readiness, and diagnosis of ‘gaps’ or development needs.

The Leadership Development Centre will develop plans to meet the individual needs of potential leaders. This might include mentoring and coaching, academic programmes, specific skills and management development courses, and secondments, development and project opportunities, or “stretch experiences”.

The programme will start small. This year the intake will be between 25 and 40 people, and it will build up to 80 people in the third year.

Because of this, there is likely to be a waiting list of people considered eligible, but for whom spaces are not yet available. The programme is designed to include up to 200 people after five years.

This initiative will bring about significant and meaningful change as to how we grow senior management talent in the future.

Treaty of Waitangi Information Programme

A Treaty of Waitangi information programme was also announced in the recent Budget. Whilst not public management per se, it has sparked a great deal of interest in the public sector and beyond, and is worth spending some time on today.

Ministers have agreed to implement a three-year $6.5 million public information programme on the Treaty. The programme will involve the organisation of seminars, hui and workshops; make information accessible to the public via print and the internet; and explore other avenues to improve knowledge of the Treaty, such as documentaries.

The programme will target the general public and will not promote a particular view of the Treaty. While I am responsible for overseeing the programme, an ad hoc group made up of the Minister of State Services, Minister of Māori Affairs, and Minister in Charge of Treaty Negotiations will meet from time to time to discuss the programme objectives, implementation plans and programme results.

The State Services Commissioner is responsible for ensuring that the programme meets Ministers’ needs. In order to meet Ministers’ needs, the State Services Commissioner will:

 set up an Advisory Board that can help him guide the development and implementation of the programme; and

 establish a small Unit within the Commission to implement his decisions.

Ministers have asked that work will begin next month and the public can expect material before the end of this year.

This programme presents a significant opportunity to raise public awareness about the Treaty, and because of its nature will almost certainly be subject to political and public interest.

The Public Management Bill

The last major initiative that I wish to discuss today is the looming Public Management Bill. This Bill will have four key parts arising from the work signalled in the Review of the Centre.

First, in order to support the Senior Leadership Development initiative there will need to be technical changes to the State Sector Act repealing the provisions for the Senior Executive Service (which is effectively defunct) and clarifying the respective roles of departmental chief executives and the State Services Commissioner.

Secondly, there will be clarification of the ‘State Services Commissioner’s Mandate’. At present the State Sector Act is a misnomer, it is a Public Service Act and the State Services Commission is the Public Service Commission. While this distinction is important constitutionally, from citizens’ perspectives this is ‘Wellington waffle’. Citizens don’t distinguish between bits of government – they expect State servants to perform to the same standards.

Accordingly, the Commissioner will be responsible for leadership on Ethics, Values and Standards in the State sector. This means the State Services Commissioner will also be mandated with:

 providing advice and guidance on matters or at times that concern the conduct of State servants in general (such as issuing guidelines on conduct at Select Committee meetings or during General Election periods) to the non-Public Service Departments, Crown entities and the Reserve Bank; and

 setting minimum standards of integrity and conduct and issuing a Code of Conduct to Crown entities, the Parliamentary Counsel Office and Parliamentary Service.

Thirdly, there is the Crown Entities Bill. This Bill has been a long time in development. Improving the governance of Crown entities is important to reduce fragmentation and improve alignment. It will:

 reduce risk by putting in place a consistent accountability and reporting regime, making the Statement of Intent the centre piece of accountability;

 clarify vertical accountability relationships. The legislation will provide clear and consistent roles, duties and powers, in relation to individual Crown entities, for Ministers, board members and sole members. Provisions for categories of Crown entity will reflect degrees of influence on matters of government policy through differentiated powers of direction by Ministers to individual entities; and

 strengthen horizontal relationships through relationship letters and a whole-of-government power of direction. The legislation will provide a power for Cabinet by Order-in-Council to direct classes of Crown entity on matters of whole-of-government interests.

In developing the legislation we have had to walk a fine line between:

 improving consistency without imposing a “one size fits all approach”;

 recognising the diversity of the types of organisation without giving way to ‘special pleading’; and

 strengthening a horizontal whole-of-government focus but not treating all agencies as if they were departments.

This is more than tidy minds. Crown entities spend 50 per cent of the state sector budget and employ two thirds of the staff in the sector.

They are simply too important to leave to the ad hoc legislative patchwork that established them, and that is why the Government has asked the State Services Commission to take a more active role in the broader state sector with the mandate and power to act.

The last part of the changes relate to the Public Finance Act. This area is still work in progress and this falls within the portfolio of my colleague Dr Cullen. Perhaps I could offer the following thoughts as Associate Minister of Finance.

The PFA has been in place for 15 years so it is a good opportunity to remove the rough edges and future proof the system for the Government of the 21st Century – as we move from outputs to Managing for Outcomes.

The sorts of changes that we are looking at include:

- reviewing appropriations, in particular, appropriations to output classes;

- reviewing the controller function to ensure this role is effective in the current environment; and

- changing the way funding (Votes) is allocated to departments to enable them to more easily work together on cross-government projects.

I expect a consultation document will be released in order to engage with other parties on this important set of changes.

This concludes my summary of the public management agenda. Thank you for your time and interest today.


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