26 JUNE 2019
Announcement of Public Service Reforms
HON CHRIS HIPKINS
State Services

E ngā mana

E ngā reo

E ngā rau Rangatira mā

Tēnā koutou, tēnā koutou, tēnā koutou katoa.

Good afternoon.

It’s been 18 years since I graduated from this great university.

Back then – I’m talking 2001 – Wikipedia was brand new. And the first iPods and wireless headsets were just entering the market.

There was no such thing as a camera on a phone. Facebook didn’t exist. Neither did YouTube. Or Google Maps. When I graduated the first iPhone was still another six years away.

These new technologies and things like the growth in online shopping have changed the way we live. The way we communicate. The way we get information. And the way we get our goods and services. Yet they have only been around or taken off in the last 15 years.

Which brings me to why I’m here today.

The Government and the Public Service are not immune from this fast-changing and unpredictable context. We operate in it. We know the expectations and demands of New Zealanders have gone up. We know they expect to engage with government agencies and to access services in different ways. And they want what they want fast. Immediately.

But it’s not just about moving with the technological times. As a country the issues we face have become bigger and more complex. Our long term challenges include things like breaking the cycle of child poverty and domestic violence, planning for climate change and providing more effective mental health services.

To rise to these challenges, we need to modernise the New Zealand Public Service.

We have already started. An excellent example is SmartStart, where parents have one place to go for step-by-step information to help them and their baby get off to the best start. That’s the key – one place where citizens get everything they need and are not having to run around from agency to another to find a midwife, obstetrician, antenatal care, financial help to cover housing and health costs, information on parental leave, and how and where to get immunisations for whooping cough and the flu. Plus, when you register the birth this automatically triggers an IR number for the baby, a birth certificate is ordered and parents get updates Working for Families Tax Credits and other things they need to know.

When I came into this job as Minister of State Services, I said the Public Service needs to be adaptive and responsive to the changing needs of citizens. I talked about what we needed to do to make this happen.

These include moving from outputs to outcomes, even though outcomes are harder to measure and harder to control.

About making sure that frontline services are joined up because citizens don’t live their lives in in neat compartments.

Enhancing digitisation – how it would be easier if there was one web portal, with one password, for all public services.

Promoting investment for wellbeing – using data to maximise opportunity, and

Rebuilding capability and capacity within the Public Service.

And then I talked about making it all happen:

A new Public Service Act.

A new Public Finance Act – putting wellbeing front and centre of the Government’s policy and Budget decisions.

I also said this is a government that believes in the power of collective action through public services.

All of this in the context of other changes we have already made or are making, such as paying all low-paid public servants a wage they can live on, equal pay for women in the Public Service and introducing a new Public Service Medal to honour excellence. We’ve also removed performance pay for chief executives, introduced a Public Service Day and removed the cap on the number of public servants.

Thinking back, our public service has had several watershed reform moments. In 1912, the passage of the Public Service Act drew a line under a regime of patronage and preferment and replaced it with one of merit-based appointment and administrative efficiency that would endure for over three quarters of a century.

But by the 1980s, even the most passionate defenders of our public service would admit it had become cumbersome, inefficient and bureaucratic.

The State Sector Act 1988 changed all that.

The Act made it crystal clear to agencies where each of their responsibilities lay and what they were accountable for.

Public Services were corporatised and privatised. Clear vertical accountabilities were created from Minister to CE and down through agencies. Arms-length arrangements through Crown Entities became more and more common.

For the most part it worked well because most of the things that most New Zealanders need most of the time can be delivered by an agency working alone.

But it doesn’t work well when we need to come out of our siloes and take collective responsibility when getting traction on some of our most challenging issues and opportunities requires us to work cooperatively across the Public Service and beyond. That is increasingly the case in a world that over the last 30 years has become more complex. Issues such as climate change, security and inequality are global, and the pace of technology development means rapid change is a constant. The Public Service needs to change with it if we are to keep up.

Just as we did in 1912 and 1988, today we need to take the next step forward.

The changes I’m announcing today represent the biggest transformation of the Public Service in 30 years.

This doesn’t mean our current model is broken. In fact, New Zealand’s Public Service has a strong, deserved international reputation for responsiveness to government, effectiveness and integrity.

We are ranked second overall in 38 countries assessed oncentral civil service performancein the 2019International Civil Service Effectiveness Index.

Closer to home, the latest Kiwis Count Survey shows New Zealanders have increasing trust in the Public Service. Satisfaction with theprovisionof services is at a record high.

But we know we can do better. The wellbeing challenges we’re focussing on cannot be solved in one Budget – or even four or five. Public investment is a powerful lever for change, but it’s only one.

Which is why we are also changing the Public Service – how it works, what it prioritises, who joins it and who leads it.

A public service that is more fleet-footed and can shift its focus to where it will make the most difference.

There are two parts to the change.

First, changing the legislation – replacing the State Sector Act, 1988 with a new Public Service Act; and second, non-legislative change to drive a change in culture and leadership approaches across the public service.

We need to make it easier for the Public Service to gear itself towards the Government of the day’s priorities and to tackle big, specific challenges. Not just for this government but future governments. That’s important.

At a system-wide level, the reforms will:

Bring whole-of-government action - shifting agencies from working as single departments to working as one, unified Public Service, able to quickly mobilise and tackle specific issues.

The reforms will mean leaders in the Public Service will take joint responsibility for the whole of the Public Service, rather than just individual agencies, to tackle the country’s big challenges.

It will be easier to deploy public servants to work on single-issue challenges.

Cherished public service principles like ‘spirit of service’ to the community, political neutrality, free and frank advice and merit-based appointments will be embedded in the new Act. These principles are important. They help safeguard the constitutional conventions governing the public service, promote ethical conduct, and enable cross-agency collaboration on services and outcomes for New Zealanders.

The Act will include a stand-alone clause that is clear about the expectations of the public service in relation to Te Tiriti o Waitangi/the Treaty of Waitangi. In other words, the Act will recognise the responsibility of the Public Service – including Crown Agents – to support the Crown to fulfil its responsibilities under the Treaty.

This will also mean chief executives have a collective responsibility to develop cultural competence and capability, for supporting Māori leadership within the public service and ensuring the public service engages with and has strong relationships with Māori.

We also heard in the consultation that some public servants feel a tension between their employment as public servants and their professional obligations when it comes to engaging in political expression in their private lives.

The changes we’re making to the Act will reaffirm that public servants have the same civil and political rights as all New Zealanders to engage in democratic protest, be active in political parties and engage in civil and political debate, except of course if their work as public servants is connected with the subject of the protest.

When the Act is introduced, the Public Service Commissioner will issue guidance on the rights and responsibilities of public servants. And it will address the rights of public servants to freedom of political expression in their private lives.

We are also affirming the unifying common purpose, principles and values for all agencies delivering core public services. This will now include Crown agents, many of which are already providing highly-visible services in areas like health, education, transport and housing.

I’m talking about agencies such as ACC, the 20 district health boards around the country, Housing NZ, New Zealand Transport Agency and NZQA. These are public organisations using public money to deliver public services for public good. They already give effect to government policy and often need to work closely with Public Service departments.

Strengthening the shared identity and underlying behavioural foundations of all public servants – regardless of where they work – is aimed at bringing them closer together in the goal of serving New Zealanders.

This is not about the legal status or decision making powers of individual agencies. It is about reaffirming the principles and values that already hold us together.

Symbolically, we’re also changing the name of Act – away from the State Sector Act, and the cold, functional picture of machinery that name conjures up – to the Public Service Act – more closely reflecting what it’s really about – unleashing the sense of purpose, pride and passion of the people who are the public service.

Let me give you a couple of examples of how these reforms will change the way the Public Service works.

I’ll take one of the Government’s main priorities as a starter – child wellbeing and reducing child poverty.

Putting a single agency on this job won’t work. It’s too big. It involves a multitude of portfolio areas including health, social welfare and education. Big, complex organisations that each hold one or few parts of the jigsaw.

The new Act will cut through these organisational boundaries. It will give the Public Service the tools and options to organise itself around specific issues, without the cost, complexity or slowness of having to create a new, separate department.

Joint ventures will be much easier and faster to set up. They’ll have their own staff, funding and assets. They’ll also lead to less red tape and complexity – both for ‘customers’ of the services, and suppliers and partners such as NGOs and businesses who work with them.

I’m talking, in front-line service delivery terms, about one car up the drive, instead of six. That will be very welcome for people who use government services. Less duplication, better communication and the ability to form deeper relationships.

The Department of Prime Minister and Cabinet Child Wellbeing and Poverty Reduction Group is working with a strong cross-sector team of leaders from 11 Government agencies.

Under these changes, it will be easier for all families with young children to get the services they need, particularly, in this case, in the crucial first 1000 days of a child’s life.

Many of these services, such as lead maternity care, Wellchild Tamariki Ora and early learning are no longer delivered by Government agencies.

For new parents, this can be confusing. A cross-agency leadership team is exploring how we can join up services around all young children, potentially providing a one-stop shop for parents that takes the uncertainty out of who can help with baby-to-school health services or early education options.

We need all the relevant agencies clicking into gear at the same time – before a child falls through the cracks. We want to get away from one agency starting to get involved at the bottom of the cliff.

Instead of a casefile landing on the desk of one agency when a child falls through the cracks we’ll have the knowledge and resources of multiple agencies connecting earlier – and at the same time – so we can get the outcomes that are important for all children.

I’m also talking, for example, about one contract between an NGO and the joint venture rather than individual contracts with each of the government parties that are involved. NGOs can spend more of their time helping those people in the way that is most useful for them, and less time doing the paperwork for all the different agencies and contracts.

The second example is preventing family violence and sexual violence.

This Government regards reducing and preventing family violence and sexual violence as a key aspect of improving the country’s wellbeing. In Budget 2019 we committed more than $320m over four years to new initiatives in this area.

Part of this funding goes to support the new joint venture business unit, which was established to coordinate policy, strategy and work across all the different departments and agencies that are involved.

It involves Social Development, Health, Corrections, ACC, Police, Education, Oranga Tamariki, Te Puni Kōkiri and others. All big and complex multi-functional organisations.

A lot of effort and goodwill is going into making the joint venture work – but there are limits to what we can be achieved. The reforms I’m announcing today will remove some of the frustrating stuff – like sorting out which department employs the joint venture staff and administers its money.

The difference is that under the changes we will rely less on goodwill from each participant. The changes mean a budget appropriation will go directly to the joint venture itself and a group of chief executives, rather than one of them, will be accountable to one Minister for the money.

The new Public Service Act will also play its part when it comes to transforming our economy and helping to build a more productive nation.

Every day hundreds of aircraft and ships pass through New Zealand ports, carrying people, animals, goods and mail.

The Government has a key role in ensuring there is a system to prevent anything that might threaten New Zealanders and their livelihoods from entering the country.

The Customs Service, Ministry for Primary Industries, and Immigration New Zealand, along with other agencies, all work at the border. They each have their own dedicated focus but all with a shared goal of protecting us from external threats.

These agencies often work together on specific projects and operate as a sector, but as the border sector grows more complex and volumes of travellers and goods increase, greater collaboration will be required.

The new legislation will allow agencies to join together to invest in shared systems and tools – such as joint data and analytics platforms to allow for better information sharing and decision making.

For New Zealanders, this will mean a faster and more streamlined experience for legitimate travellers. For businesses there will be less disruption and delay for goods coming into and leaving the country. And for New Zealand, better protection for our economy, environment and health, now and into the future.

Another big change the Government is grappling with, alongside business and the unions, is the ‘future of work’. The world of work is changing significantly, and vocational education needs to adapt to stay ahead of these changes.

We expect around one-third of jobs in New Zealand will be significantly affected by automation. Today, people over the age of 65 are three times more likely to have jobs than in 2001. The trends driving the future of work will change the skills needed in all jobs, see people changing jobs and careers more frequently over the course of their working lives, and see people working beyond the traditional retirement age.

People with no or low qualifications are most likely to see their jobs become extensively automated, and many will find it difficult to adapt to new jobs and new technologies. Workers will need to either upskill to do new aspects of a job, or reskill to adapt to a digitally automated environment or a new field.

It’s why, as Education Minister, I’m in the process of reforming our Vocational Education system. The system is not currently equipped to be able to deal with these challenges and needs to be much more cohesive and seamless. But that’s not the reason I mention it here. The changes being considered to vocational education wouldn’t require these reforms for it to proceed.

It is relevant in this context, however, because it too is an example of where government agencies will continue to need to find new ways of working together to be able to meet the needs of the public. In this case education agencies, education providers, employment agencies and MSD, along with unions, businesses, NGOs and other organisations.

The reforms will also bring much needed change for how the Public Service works in the regions:

People living in the regions will get more joined up government services

Regional leaders will be able to drive change and share property and IT models to support regional offices and greater integration of services for communities.

Agency boundaries will be more aligned with communities.

Regional leaders – together with local government, iwi, business and community groups – will help develop public service focus areas.

So, I’m excited about these reforms.

A couple of points worth noting. Things won’t change overnight. It will happen gradually. And it will be staged.

The changes will be enabling rather than prescriptive. They provide the tools and instruments to tackle the big challenges.

The new Public Service Bill will be introduced to the House later this year. The legislative process will run into mid-2020.

However, a draft of the Bill will be circulated for targeted consultation before introduction to Parliament. And the public can still make submissions through the select committee process which will start after the introduction of the Bill.

Setting a new course for the Public Service is the right thing to do. Because we can’t wait. The world is changing fast and the big, inter-generational challenges we face as a country need to be addressed now.

The Public Service needs to adapt and improve, just as citizens do with advancements in society and technology. A new Public Service Act will make it easier to address and adapt to these challenges.

The New Zealand Public Service has a long history of being at the forefront of change. I’m confident the public service’s international reputation - and the trust and confidence New Zealanders have in their public service - will only be enhanced by these latest changes.

Thank you.

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