What next for New Zealand's public sector?

Back to the '90s?

While we don’t yet know the shape of coalition agreements, we can see signs of what may be in store for New Zealand’s public servants under a Luxon-led government.

National’s 100-day action plan makes work for public servants just to disestablish and repeal things that were established and enacted by the Labour government. Te Aka Whai Ora and Te Pūkenga, for instance, are targets – and yet, improving Māori health outcomes and boosting the numbers of qualified tradies are still important goals for any government.

If the ACT Party gets its way on new prison beds, then I guess Corrections will be busy in particular.

The incoming prime minister expects public-sector chief executives to reduce expenditure on average by 6.5 percent, however. They should target consultants and contractors and ‘back-office spending not critical to frontline services’.

I’m guessing that readers already see through this artificial back-office/frontline distinction. But I’ve come from an institution in which, for every 10 frontline workers (who teach and research), there are about 13 people doing other stuff, not counting external contractors and the 400 or so people in the Tertiary Education Commission. So, while the details may be questioned, I do get the point about cutting back-office spending.

For example, by way of advice to the incoming minister of education: scrapping the performance-based research fund’s (PBRF) individualised assessment method and replacing it with a digital bibliometric method would reduce the back-office, while producing much the same formula for allocating research funding across universities. 8,000 academics would be relieved of weeks of unproductive work; quite a few administrative jobs would be surplus to requirements.

This country has been good at proliferating bureaucracy and stifling service delivery. We hire more people to achieve less. Work expands to fill the space available – but not all work is really useful.

Dig a little deeper, though, and it looks like change in New Zealand’s public sector could go further than just cuts. The ACT Party promotes fundamental changes, so let’s look at what they’d be pushing for in coalition negotiations.

When I first read ACT’s policy on public services it was a blast from the past: ‘new public management’ (which was new in the 1990s) could undergo a revival.

ACT proposes doing away with Treasury’s wellbeing approach and getting back to performance benchmarks based on outputs and outcomes. They’d take it further, though, and ‘enable Ministers to issue their own KPIs [key performance indicators] for chief executives and publish performance reviews against those metrics’. There’d be larger at-risk components in the remuneration of chief executives. This ‘discretionary component should be determined in line with the Minister’s performance expectations, as set out by the KPIs issued’.

That would give ministers some control over senior public servants’ reward structure. In my opinion, that crosses a constitutional line: elected ministerial office-holders wouldn’t only set strategic policy objectives, they’d directly handle an important aspect of the management of career officials. It’s not even clear whether ACT wouldn’t go as far as to let a minister of education, for instance, set bonuses for university vice-chancellors, who are normally accountable to their Councils. That would breach statutory institutional autonomy, but the ACT policy doesn’t distinguish core departments from Crown entities. More than one Crown entity gets mentioned in their policy statement.

Bonuses and pay-for-performance were a big thing in the 1990s. Experience showed us, though, that these methods aren’t all that easy to implement equitably in public services. If you reward people for meeting targets, their behaviour will change, often to the detriment of otherwise important goals that weren’t measured (or weren’t even measurable). Rewarding people for measurable outputs (or busy-ness) loses sight of the greater good. And yet it’s hard to determine how much one agency’s (let alone one person’s) efforts have contributed to a complex, but highly desirable, social outcome like a reduction in child poverty. Partly because of such difficulties, there’s less pay-for-performance nowadays.

Under Labour, the aim was to reinforce a spirit of public service, rather than pay out bonuses to people who meet or exceed KPIs. The emphasis moved away from performance and towards pay gaps, pay equity, diversity and inclusion.

An indignant taxpayer can be forgiven now for wondering if public servants even think about improving the quality and delivery of actual services. I hasten to say that I’m sure they do. It just wasn’t obvious when I looked at the website of the Public Service Commission.

The New Zealand public service is in for more than just budget cuts. The pendulum will swing back to a focus on performance and value for money.

National and ACT may figure that the election results in Wellington indicate that they’re not popular with public servants, especially union members. But they’ll want to keep their grip on Auckland and on rural/provincial electorates, so lighter regulation and effective service delivery in the real world will be their aims. Will they achieve them?

Having had a publicly funded career myself, people might ask me what I’ve achieved and how useful it’s been. How equitable my workplace was (or wasn’t) does matter – but it matters only to those who worked there. A shift back towards accountability for performance may be coming.

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I commented on the limitations of the KPI approach back in the 1990s. One or two senior public servants were none too pleased with my critique, and they pointed out that the model was developing to focus more on social outcomes.

Duncan, G. (1997). The management of risk and quality in the social services. Social Policy Journal of New Zealand, 9, 66-79. Click here.

Performance-based incentive systems tend to resolve themselves into form-filling and box-ticking to collate evidence. The PBRF (mentioned above) is a good example. The basic problems are:

• The cost (in terms of time) of collecting the performance-related information cancels out financial incentives.

• Rewards come easier through getting smarter at filling out the forms (window-dressing) or manipulating the system (gaming) than by improving actual performance.

• The cost of showing how we’ve met measurable targets starts to outweigh the benefits; but this is largely an impost on work-time, and hence unmeasured.

• The accountability system demoralises workers and detracts from their performance.

• The distribution of performance-based rewards is perceived (often correctly) by some workers as unfair and as creating the wrong incentives.

National and ACT say they want to reduce bureaucracy and red tape, but a drive for greater accountability for performance will proliferate bureaucracy. And I can already see someone approaching KPMG and PwC for a report or two on this – rather than exercising their own judgement.

Thank you to readers who did last week’s poll, which got me on to this topic.

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Did Chloe Swarbrick get it wrong?

At a pro-Palestine rally, Green MP Chloe Swarbrick led the crowd in chanting: ‘From the river to the sea, Palestine will be free.’ This refers to the land between the River Jordan and the Mediterranean Sea (aka Israel). She may have meant it as a plea for the liberation of Palestinians from oppressive control – and now bombardment – by Israeli forces.

‘From the river to the sea’ has been used by the anti-Zionist jihadist group Hamas. Its 2017 policy states: ‘Hamas rejects any alternative to the full and complete liberation of Palestine, from the river to the sea.’ It refuses to recognise the state of Israel, which it calls ‘the Zionist entity’; it seeks a ‘sovereign and independent Palestinian state, with Jerusalem as its capital’. In the present highly sensitive moment, that ‘river to the sea’ slogan is inflammatory, as those who say it are proposing an objective that could only be achieved by more violence – on a much greater scale.

Historian Simon Sebag Montefiore has described ‘from the river to the sea’ as ‘a chilling phrase that implicitly endorses the killing or deportation of the 9 million Israelis.’

The US House of Representatives voted on Tuesday to censure Rashida Tlaib (Dem, Michigan) for similar rhetoric including that slogan. Tlaib is the only Palestinian American in Congress, and the 234-188 vote saw some Democrats join Republicans. (I’m not suggesting a similar motion in NZ’s House.)

The present response of the Israeli Defence Force is also unacceptable, however. Indeed it’s potentially genocidal. So I’m not making excuses for that either.

Palestinians (and all people) should live in safety, equality and liberty. But my local MP Chloe Swarbrick associated herself (let me assume unintentionally) with a group that’s committed a shocking terrorist attack – and that threatens much more to come.

Hamas won’t stop fighting, as they see the losses of innocent Palestinian lives as ‘martyrdoms’ on the way to an eventual liberation. According to Hamas’s 1988 Charter, ‘There is no solution for the Palestinian question except through Jihad. Initiatives, proposals and international conferences are all a waste of time and vain endeavors.’ Such sentiments were reaffirmed in 2017. Hamas may not want to bargain for a settlement now or in the near future. They’re not committed to peaceful solutions. Their primary means is jihad, rather than governing peacefully for their people.

I don’t share Hamas’s eschatological religious beliefs at all, and I guess in good faith that my local representative doesn’t either. Does she even know about them though?

The controversy about whether Chloe should apologise – and how she should do so – arguably distracted NZ media attention from the real suffering of people in Gaza. It did, however, remind us to reflect on how we reflect on, and how we talk about, unfolding events of this magnitude and complexity. Chloe appeared to be acting on the simplistic assumption that the oppressed can never do wrong – even when it’s mass murder. Her freedom to say so, however, had consequences.

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You can check out – or even pre-order – my next book here. Government and Political Trust: The Quest for Positive Public Administration. It’s about government globally, and how we could do it better. Due out in early 2024.

The previous book How to Rule? The Arts of Government from Antiquity to the Present is available here.

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