Rt. Hon Winston Peters
Leader NZ First

Address to: The Institute of Public Administration Australia (IPAA)
Annual National Conference
Hotel Grand Chancellor
Hobart
Australia

Date: August 26 2011

Time: 1.35pm

“Minority Governments in Practice What they mean to the Public Service”

Background

Your Prime Minister Julia Gillard this morning shared with you her thoughts on the Australian experience of Minority Government.

Here are some thoughts on the New Zealand experience.

In life many things are not what they seem. Democracy is one of them. It is now said that “perception is reality”. What a New Zealand politician once prickly summated as “We won. You lost. Eat that”.

Democracy is an ideal within which operates an often bitter battle for power with varying objectives, motives, vested interests and egos. Add an undercurrent of another real struggle - the unheralded continuing skirmish between the people and their temporary political masters over who owns the political system itself.

It is difficult to conceive a modern politician describing the objective as “government of the people, for the people, by the people”. The overbearing emphasis is on political products not why the product is needed in the first place. It perhaps explains why governments are disliked regardless of the electoral process which gave rise to them.

Recent politics in New Zealand has seen the emergence of three new elements. First, a serious decline in political party membership. Second, parties have gained vastly increased powers. Third, the media in response to these two developments is itself filling part of the void of mass membership decline.

Which should mean the need for the media to be independent, impartial and intrepid is more important than ever.

Fundamental issues in a democracy go to the character, shape and quality of this form of government. If absent, then democracy is merely “who gets what, when, where and how” with nobody critically asking the most obvious questions, why - and is this the right thing?

MMP changed the political landscape in New Zealand and the environment in which the Public Service operates

Under the former, First Past the Post system, a party with a simple majority could impose policies on the country however widespread the public’s opposition.

Under that “winner take all” system based on a simple majority, only those who voted for the winning party got represented in Government.

Nearly everyone else, and that could be nigh on 60% of the electorate, got representation in a parliamentary, but not a governmental sense, and some got neither

The Labour and National Parties misused First Past the Post voting to the point where New Zealanders saw fundamental change to the electoral system as imperative.

New Zealanders were simply sick and tired of a party becoming the Government and effectively riding roughshod over the Parliamentary process for the following 3 years

This was democracy reduced to one day every three years but it made a mockery of the New Zealand electorate’s judgement
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So in moving to MMP the electorate were looking for a broader, more diverse more inclusive perspective on key issues.

And that is the brave new world that the New Zealand Public Service has had to adapt to.

To use an analogy, modern politics is like being an air traffic controller. For a Prime Minister, or the Executive, they mainly still do what they always have, except there is now more traffic on the radar screens and in the skies. Hence coordinating functions are more important now.

Governments under MMP must secure support constantly so the primary objective is to maintain a majority in parliament. It is an irony that whilst political parties are more powerful than ever, they are in New Zealand, and one suspects in Australia, more constrained now.

Prior to MMP a favourable Caucus decision eventually led to a majority in the House.

It is vastly different now. Getting an issue it through Caucus is one thing, getting it past support parties is another. That is the new constraint. Failing to achieve a majority means one of three things. More work with the support party in extended negotiations to extract support. Or the proposal dies. Or a third distasteful element where a support party apathetic to a proposal seizes the opportunity to extract an unrelated concession.

That is most likely where loose and unprescripted coalition or support arrangements are made. This in itself is a puzzle. Why do governments and some support parties nevertheless favour this looseness? It is unnatural and no business would entertain such a setting yet one suspects that most commentators also support it. Therefore governmental processes are now different but the principle difference is that now we have not one setting but a number of them.

On the positive side, is that today political extremism is less likely. This was also behind New Zealand’s desire for change in the electoral system.

Fifteen years of MMP has seen important changes to how governments and executives operate. New innovations have emerged. Governments have either been coalitions, or coalitions with further confidence and supply arrangements. Coalition parties have had Ministers inside of Cabinet while support parties have secured a New Zealand indigenous development, Ministers outside Cabinet while still Executive Council members. Such a Minister, and his or her party, therefore supports the government on confidence votes, on budget votes, on votes within their portfolio, but not necessarily on others.

Widely criticized when introduced in 2005, it has since been adopted by the present government and indeed used as a model by at least one Australian State Government. The headlong rush to criticise has not stood the test of time.

As well, allied parties, ‘agree to disagree’, and have ‘good faith’ and ‘no surprises’ understandings.

Obviously many still long for the good old days where lobbyists and political commentators confined their interests to the government and one alternative, the opposition party. The enduring feature common to both old and new systems is obvious. Politics is a numbers game.

Is MMP less stable than First Past the Post? Recent history says not. In our recent history the changes in political party leaders were more frequent under First Past the Post and New Zealand’s last Prime Minister, Helen Clark, enjoyed three terms in office which was longer than most. Until MMP in 1996, no government under First Past the Post enjoyed the support of over half of the voters for forty five years.

Is MMP ‘the tail wagging the dog’? No. It is more of a case of ‘the tail falling off the dog’ where new parties have paid an enormous price for ensuring stable government. The principle cause for that is a commentariat who have refused to adjust to proportional representation constantly longing for the old party duopoly. That unconsciously or otherwise questions the legitimacy of new political forces. No one has explained why this is although one suspects that ownership of the modern media has much to do with it.

Does proportional representation lead to weaker governments. Again this is not supported by the evidence. Some of the measures taken by the New Zealand government in dealing with the Global Debt or the Christchurch earthquakes have been breath taking.

Coevil with New Zealand’s change, the Iron Curtain came down and newly liberated countries shunned the First Past the Post alternative. And in Southern Africa it is hard to conceive anything but bloodshed had Namibia, or South Africa opted for that system.

Some general observations made in the context of today’s Public Service

By the Public Service one is referring to Government Departments and Ministries and other central agencies rather than the wider category of what we might call the state sector. The wider state sector includes for example the education system and universities, the armed forces and police.

A long experience of the New Zealand Public Service has led to a personal view that public servants are in the main hard working and overwhelmingly committed to serving their country with integrity.

That needs to be said because there is a different view widely held – and which certainly prevails in some political parties in New Zealand.

Those on the right of politics see the Public Service as, basically, a burden – and not to be trusted – and always in need of being cut back and trimmed

These wholesale attacks on the Public Service are mostly unjustified.

That is an ideological stance based on a particular view on the role of Government. The oddity is that those who purvey cutting the Public Service strangely always fail to make cutbacks in their own offices or their own expenditure. One of New Zealand’s longest serving Prime Ministers, Holyoake, had five staff in his office. Our present Prime Minister has 126.

Certainly have a debate about the size of the Public Service and how it is to be structured – but a broad brush castigation of the Public Service is neither informed nor objective.

The simple fact is that a modern society requires an effective civil service –it is fundamental to a functioning democracy.

A lot has changed for the New Zealand Public Service with the introduction of MMP and no single party having the Parliamentary strength to govern in its own right.

MMP does create a more complex environment in terms of information management and the processes of policy development for the Public Service. All political processes tend to be messy – and more or less unpredictable. That is the nature of the rough and tumble of politics

In New Zealand that basic condition has been amplified because the Public Sector is no longer trying to fulfil a single agenda – that of a single political party

Under MMP, with multiple political parties involved in policy development each with their own agenda - life for Public Servants gets a lot messier. But this development has, in a way, required the Public Service to be even more apolitical in its interactions with Government

Clearly in a process involving multiple actors there is great value in maintaining trust and co-operation between the players – so in a sense this does create an incentive for the Public Service to play with a straight bat.

In their interactions with Ministers senior public servants now need to be mindful of where all the coalition partners are with respect to a particular policy – keeping all relevant parties informed and ‘in the loop’ is not optional – it is imperative.

The Prime Minister and Cabinet

The Executive as predicted has increased to ensure control is maintained, especially as coveted Cabinet positions are allocated to third Party MP’s.

As forecasted - Cabinet remains the power house of the system, although relying on other parties to pass legislation.

High ranking Ministers outside of Cabinet, are unique to our MMP system and an example of how New Zealand indigenized MMP.

With this has come weakened Individual Ministerial Responsibility and Collective Cabinet responsibility.

However, Cabinet in confidence has not, thus far, diminished

Now ascendant parliamentary wings dominate their organisational units and Cabinet dominates the Caucus.

Now within Cabinet the Prime Minister’s strategic placement is pre-eminent

Now the exponential growth of the Prime Minister’s office (with its own political division) and State resources has led to a power imbalance between a Prime Minister and the parliamentary caucus.

Enduring Characteristics

MMP has had a major impact on the New Zealand Public Service but it is not the only force driving change. A modern democracy is anything but static – we are in a maelstrom of change. Technology, in particular electronic communication, is itself creating a new context in which our type of democracy functions.

Paradoxically, under today’s circumstances it becomes even more important that some of the enduring characteristics of an effective Public Service be strengthened

There will always be areas of stress, pressure and weakness in any Public Service model –the challenge is keeping the system relevant to society’s needs.

There are three cardinal principles any Public Service must have:

• Competence – and that is largely about having capable people

• Cost-effectiveness – delivering real value for money

• Corruption free – a system that the public has confidence in

And achieving that is the ongoing challenge – because these principles can never be taken for granted

Ambiguity and Certainty

To understand the relationship between MMP and the Public Service the key terms are Ambiguity and Certainty.

It is reasonable to assert that most Public Servants – however capable and talented do not have an entrepreneurial sensibility (we would not want them to!)

It is a generalisation but a fair one that a Public Service is comfortable when it knows the ‘rules of the game’

Well with MMP and Minority Government the rules of the game changed – profoundly.

To all the usual imponderables of politics another level of uncertainty was added.

What that means is that the Public Service has had to come to terms with a whole new world of ambiguity in terms of policy initiatives.

Political programmes are not set in stone any more.

It is no longer a world of a Minister saying to a Head of a Government Department– “well here is our policy platform now go away and make it happen”

Whatever a political party states in its pre-election manifesto – whatever it’s announced policy platform – in practice what gets implemented is the outcome of negotiation between parties, the trade-offs and a protracted policy process.

In this sort of environment what sort of skills are required?

Basically in the MMP Minority Government world you need people who are:

• comfortable being in ambiguity and where there is not a set of rules to follow

• flexible and able to take the wider view

• not desperate to impose a false certainty on a fluid situation

• able to operate in a negotiable world and

• able to respond with little warning to major shifts in priorities

You could say these have always been valuable attributes in a public service but they are now imperatives in the New Zealand Public Service –particularly at the senior level.

The role of the Civil Service in this new setting therefore requires a heightened appreciation of more numerous political influences and factors. A public servant who understands this new complexity is better able to assist a government in advancing its policies. That may be as simple as drafting nuances where language and approach is critical in assisting positive persuasion.

Using language which amounts to” a red flag to a support party bull” should be avoided. Seen this way the public servant can assist in gaining wider public approval for a refined product rather than a crude one.

Irrespective of MMP and New Zealand’s particular circumstances, the ambiguity factor is rising in all developed societies

Whether it is in the realm of economics, social structure or politics there is pervasive uncertainty.

The issues and challenges we face are less and less amenable to being simply handed over to ‘experts’ to solve for us.

In view of the way modern societies operate, the notion that there are neat fixed boundaries – entrenched rules of the game – is increasingly obsolete.

So one idea to leave you with is that a modern and relevant Public Service needs to be able to think.

The Public Service needs to see its role as broader than just implementing predetermined solutions. It too must be a source of ideas and innovative thinking.

Time will tell whether that is the direction in which the Public Service moves but given the speed of change in contemporary society we are going to need more people at the ambiguity end of the spectrum.

Finally a long career in politics has confirmed the obvious truth that no one party has a monopoly on wisdom – and in an uncertain world one of the greatest dangers we face is those peddling a bogus certainty. That goes for the Public Service too.

So in the Public Service we need not just the people competent in dealing with the second order questions of process, implementation and delivery.

We need people who are able to ask the big question –

What is the right thing?

Keeping the “Service” In Public Service

Although the people, the systems, the political parties and the technologies may all change over time, the core role of the public service must remain essentially the same.

Ultimately, the public servant’s final obligation is not just to his or her political masters, it is to the people.

Unfortunately, some governmental organisations and their so-called policy experts appear to have lost sight of the fact that real people are affected by the advice and recommendations they give on to ministers.

What used to be the practical common sense of public servants has given way in too many cases to theory based advice that fails to take into account simple “cause and effect”.

In New Zealand, you will be horrified to learn, we have thousands of children in poorer areas going to their lowly ranked schools without breakfast. They are fed by an army of volunteers who willingly give their time and money because they, in all conscience, cannot tolerate this situation.

But we have government policy advisers whose advice is indifferent to the lives of these children. Their economic theories do not take into account, or place a value on these volunteers. Yet, if we are honest with ourselves, we know that the community volunteers who prepare food for hungry youngsters are the true servants of the community.

This is an example of what “being of service” actually means.

Ladies and Gentlemen, surely the purpose of economic understanding is the improved condition of humanity, not some abstract. It means:

• We need more top class civil servants at the top end who understand that.

• Governments need alternative advice driven, not by career prospects, but intellectual rigour. There is no intellectual honesty whether it be of the left or the right in eschewing all alternative advice. A General would not tolerate it. Why do Ministers?

• The integrity of any operation is important. How challenging it must be for Warren Buffet to chastise the rich for not paying more taxes and yet know that some governments have not heard the same, as contestable advice, from the Public Service.

• If it’s good enough for top Law, Accounting, and Businesses to seek to hire the best why not the Civil Service?

Much of what has just been said is illustrated in New Zealand by two major departments suffer from two very different conditions.

• Treasury has for over two decades pushed policies contributing significantly to New Zealand’s economic decline. That’s what happens when the Public Service seeks to impose a false certainty on a fluid situation.

• Foreign Affairs is operating under impossible restraints of under investment in capital and human assets. Norway and Singapore has two and half times New Zealand’s numbers in the field. Their success speaks for itself.

In conclusion, it may be anathema for politicians to have to share their ‘genius’ with a top class Public Service. However, there is a serious truth, to borrow the words of an old English poem about the Thames River:

“For politicians may come, and politicians may go, but you go on forever”

ENDS

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