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Opinion: From The Left - Jordan Carter

Jenny Shipley was wildly out of line when she suggested last year that John Hawkesby might have been paid $1m for his switch to TVNZ.

`I made it up' she later admitted, to much horror and criticism by the current Government. Had she suggested the move would eventually be worth over $5 million, she would have had people rolling out of their seats with laughter. It must be a source of satisfaction to the leader of the opposition that her wild stab in the dark has been proved to be a rather lightweight guess after all.

Levity aside, the TVNZ issue is one which strikes at the heart of the state sector reforms which Labour implemented in the late 1980's - and at the whole issue of management in the wider state sector. The concept of the autonomous board, running an enterprise in the interests of the owner with the intention of maximising commercial outcomes, is one which is now quite rightly under threat - or certainly one which faces revision, and hopefully for the better.

Ownership is the core problem here. In general (and it is a generalisation with growing numbers of exceptions) the State Owned Enterprise model has succeeded in what it set out to do. Commercial firms owned by the state are now rather good moneyspinners. The problem lies with the nature of the social imperatives which are also a key part of the SOE model. There are many examples where SOE's have been blatantly ignored basic requirements of social responsibility. Examples which spring to mind are the vast retrenchment in the postal service (made in the name of `efficiency'), the now-abandoned commercial model that Simon Upton tried to impose on the health system (in the name of `efficiency') and most recently, the bungles of TVNZ and Radio New Zealand, in mistaking the wishes of their viewers and listeners respectively over choices of presenters, all in the name of the `change is good' doctrine.

Note carefully the priorities. Efficiency. Change. Nothing is mentioned about service, or accountability, or relevance to the citizen.

I say that ownership is the problem - and it is, now that we have a left wing government again. And it's a problem because it seems that the current structure of the ownership of crown companies - the State Owned Enterprises - simply makes it next to impossible for the Government to impose its will on the bodies concerned. The mechanisms of the State Owned Enterprises Act, where the shareholder could specify a statement of corporate intent, and appoint a board of directors to ensure management carried out the said Statement, is nice in theory.

Why doesn't it work in practice though?

For me, the answer is in the nature of the boards and the types of people appointed to them. Most have business backgrounds, and bring generic management skills which are honed on the concept of making money for the shareholder. Despite statements of corporate intent which have paid lip- service to the notion of social responsibility, if the Government of the day doesn't believe in it then there is no way commercially oriented boards will focus on anything other than profit - despite the strictures of the Act to the contrary.

Ministers in the new Government must not be shy about putting forward statements of corporate intent which require SOE's to become socially responsible once more. The model was designed initially to run some commercial activities in a business like manner. Not as businesses. This subtle point seems to be beyond the comprehension of the current crowd of SOE boards. If social responsibility - most obviously lacking in TVNZ and Radio New Zealand at the moment - is not within the abilities of Boards of SOE's, then they should be dismissed, and new boards, who will do as they are told by the owners, appointed in their place.


The whole question becomes much more complicated when applied to the core public service. The example I will use is the Department of Work and Income, more commonly known as `WINZ'. WINZ, apparently, is a department whose higher echelons are full of losers. And this has been best demonstrated by their incompetent management of student services since taking them over from the Universities and Polytechnics.

WINZ appears to have learned nothing since 1998-99, when calling lines were overloaded, allowance applications were mixed up, and some students ended up living on nothing while WINZ fruitlessly tried to solve their problems. This year the problem is worse, because WINZ is also running the student loans scheme. It takes over three weeks for a loan application to be processed by WINZ. The University of Auckland did mine last year in one day.

How hard can it be to administer loans and allowances? Well, if you are WINZ it appears to be damn near impossible. I have two ideas why this could be the case: a wider lack of management ability in the public sector, and a denial of the ethic of public service that used to infuse those who worked for citizens via the state.

First, management. While I suppose it is too late for Steve Maharey to sack Christine Rankin now, she appears to be the ultimate example of a public sector which is failing to attract competent management. People who go to University and attain management qualifications very rarely do so with the intention of going on to work in the public sector. The common view is that that would be very much a second rate option.

Yet if the Government wants to have well run state services, it has to attract quality management. And that does not mean people who are obsessed with turning a quick profit. It doesn't even mean gaining people who are obsessed with `efficiency'. The core state sector is there to provide public services to citizens, who are entitled to these services as a fundamental right guaranteed by the Crown. They are obliged to do so in a responsible manner and without wasting public funds, but their first priority should be excellence in the service they provide. Not efficiency - and certainly not profit.

This first problem of a lack of management ties into the second, the problem of the culture in the public service. It extends from the top - a CEO of a Government department dressed up in enormous dangly earrings and spending a quarter of a million dollars on a conference - to the bottom, where counter staff border on being somewhere between incompetent and entirely rude. I do not for a moment believe that there are intrinsic problems with the people who work at the lower levels of the public service. I do believe that the management they suffer to work under is a major issue, and I believe that the organisational culture they endure makes shoddy, rude service not only acceptable, but the norm.

The Government faces a significant challenge in the months ahead. It somehow needs to come to terms with the need to infuse the public sector with a culture of service again. It needs to find a way to attract quality management, and get rid of the dross at the head of too many departments. It needs to do this without removing the political neutrality of the public service that is of critical importance to smooth regime transition and competent administration of public policy. On the SOE front it needs to assert its right to have enterprises managed in the way it wants, by using the powers of ownership more firmly than they have been, and by giving boards who won't do what they're told the sack.

A tall order perhaps, but a critical part of beginning to rebuild the ability of the state to play a positive role in our lives again.


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