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Govt sharpens focus on public sector results

Rt Hon John Key
Prime Minister

15 March 2012

Govt sharpens focus on public sector results

Prime Minister John Key today outlined the next steps in the Government's programme to create a public sector that is more innovative, efficient and focused on delivering what New Zealanders want and expect.

In a speech in Auckland, Mr Key announced three changes that will help sharpen the public sector’s focus on delivering better frontline services for New Zealanders. These changes are:

• Setting 10 challenging and specific results for the public sector to achieve over the next three to five years.
• Lowering the cap on full-time equivalent (FTE) positions in core government administration.
• Creating a single, dedicated, business-facing government department – the Ministry of Business, Innovation and Employment – from the resources of four existing agencies.

"Delivering better public services to New Zealanders within tight financial constraints is one of the Government's four key priorities for its second term. The changes I’m announcing today will help deliver that goal," Mr Key says.

"The public sector of the future will be organised more around delivering results. That means getting traction on difficult issues like reducing crime, reducing long-term welfare dependency and reducing educational underachievement. At the same time, it will have a sharp focus on its costs."

Setting 10 challenging results targets
Mr Key has set 10 challenging results he expects to see achieved over the next three to five years. The results fall within five themes: reducing long-term welfare dependency; supporting vulnerable children; boosting skills and employment; reducing crime; and improving interaction with government.

"Achieving these results will be difficult and demanding – in fact, for some of them, it will be extremely difficult. But I make no apology for my high expectations," Mr Key says. "It is time for a clear focus on what will make New Zealand a better place.

"To help public sector leaders achieve these results, we will be making some amendments to the State Sector Act and the Public Finance Act."

Mr Key has appointed Ministers to lead each of the 10 results, and public service chief executives who are accountable for demonstrating real progress against the results.

A measurable and stretching target will sit underneath each result. For example, under result five, Education Minister Hekia Parata has set a target of 85 per cent of 18-year-olds having NCEA level 2 or equivalent in five years.

"The current figure is around 68 per cent, so achieving the target will be very tough," Mr Key says.

The rest of the targets will be agreed and announced by Cabinet by 30 June 2012 and will be regularly measured.

"This information will be publicly available, so New Zealanders will be able to judge for themselves how well we are doing in achieving results."

Resetting cap on core government employees
Mr Key also announced the Government will reset the cap on core government administration at a lower level of no more than 36,475 full-time equivalent positions.

The cap will count most people working in government departments and in some Crown entities, but it does not include frontline staff like teachers, police officers, hospital staff, or prison officers.

"We campaigned on this during last year's election and we are delivering on that promise," Mr Key says.

"Having a cap worked well in our first term. When we came into government in 2008, we immediately imposed a cap of just under 39,000 FTE positions in core government administration. The size of the public service had increased enormously under the previous Labour government, and that was simply unsustainable.

"The result of our original cap was the number of FTE positions in core government administration stopped growing, then dropped by about 2400 over three years.

"That’s not a radical decrease by any means. It does, however, reflect the fact that the public service is subject to the same pressures that are on households and businesses right across New Zealand."

New Ministry of Business, Innovation and Employment
Finally, Mr Key announced Cabinet has agreed in principle to establish a single, dedicated, business-facing government department.

The new Ministry of Business, Innovation and Employment will integrate the functions of:

• The Ministry of Economic Development.
• The Department of Labour.
• The Ministry of Science and Innovation.
• The Department of Building and Housing.

"This new department will help to drive the Government’s priority of building a more productive and competitive economy," Mr Key says.

"It will strengthen the public service's ability to work on business policy, regulation and engagement, so the Government will get a much more coordinated and focused resource.

"And it will be easier for New Zealand businesses to engage with government, rather than dealing separately with a number of different agencies when they are seeking advice or support."

The creation of the new Ministry of Business, Innovation and Employment follows similar moves in Australia and the United Kingdom.

"Our intention is to create the Ministry on 1 July this year. It is also our intention for current employees of the four departments to move across to the new Ministry on 1 July, and for there to be changes at the senior leadership team level," Mr Key says.

Agencies have been informed today and the chief executives will be communicating this proposal with their staff.

Cabinet has asked for a due diligence report in April. This report will provide detailed advice on implementation and transition. It will also include advice on the future location of some functions of the Department of Building and Housing, such as social housing policy and the Tenancy Service.

The 10 public service results set for the next three to five years (specific and measurable targets will be agreed in the next few months):

Reducing long-term welfare dependency
1. Reduce the number of people who have been on a working age benefit for more than 12 months.

(Lead Minister: Paula Bennett and Lead CE: Ministry of Social Development Chief Executive Brendan Boyle).

Supporting vulnerable children
2. Increase participation in early childhood education.
(Lead Ministers: Tony Ryall and Hekia Parata and Lead CE: Ministry of Social Development Chief Executive Brendan Boyle, supported by Ministry of Education Chief Executive Lesley Longstone).

3. Increase infant immunisation rates and reduce the incidence of rheumatic fever.

(Lead Minister: Tony Ryall and Lead CE: Ministry of Social Development Chief Executive Brendan Boyle, supported by Ministry of Health Director General Kevin Woods).

4. Reduce the number of assaults on children.

(Lead Ministers: Tony Ryall and Paula Bennett and Lead CE: Ministry of Social Development Chief Executive Brendan Boyle).

Boosting skills and employment
5. Increase the proportion of 18-year-olds with NCEA level 2 or equivalent qualification.

(Lead Minister: Hekia Parata and Lead CE: Ministry of Education Chief Executive Lesley Longstone).

6. Increase the proportion of 25-34 year olds with advanced trade qualifications, diplomas and degrees (at level 4 or above).

(Lead Minister: Steven Joyce and Lead CE: Ministry of Education Chief Executive Lesley Longstone).

Reducing crime
7. Reduce the rates of total crime, violent crime and youth crime.
8. Reduce re-offending.

(Lead Minister: Judith Collins and Lead CE: Ministry of Justice Chief Executive Andrew Bridgman).

Improving interaction with government
9. New Zealand businesses have a one-stop online shop for all government advice and support they need to run and grow their business.

(Lead Minister: Steven Joyce and Lead CE: Ministry of Economic Development Chief Executive David Smol).

10. New Zealanders can complete their transactions with the Government easily in a digital environment.

(Lead Minister: Amy Adams and Lead CE: Department of Internal Affairs Acting Chief Executive Peter Mersi until new Chief Executive Colin MacDonald commences his role on 16 April 2012).


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