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Archive for the ‘public services’ Category

The state sector revisited

Posted by on February 2nd, 2014

This is an oped piece I wrote last week which was published in the Nelson Mail on Friday 31 January under the headline “It’s time to reassess and rebuild”. All constructive, forward-looking comments welcomed!

The role and functions of the state services have come under increased pressure in the last five years. The culture and performance of the wider state sector, in which I include all public services, has altered markedly under the current government.

The National-led government vowed to strip back the state sector, undertaking to get rid of the “back room” functionaries and place more people on the “front line”. It undertook to improve public service delivery with a programme called Better Public Services (now, inevitably reduced to “BPS”), with key performance indicators (KPIs) and targets to make sure the improvements were happening.

It was as if a new owner had taken over the company and decided to do the usual Stage 1 managerial reforms such as sacking the old guard simply because they were the old guard and giving people new goals and targets to meet so that they could demonstrate their efficiency.

Nelson felt it keenly for a small town, with 28 real jobs lost in IRD and 22 or more out of DoC, and that was just for starters. The Department of Labour and Housing New Zealand came next. But Nelson was not alone. Public services were stripped out of all smaller towns around New Zealand and centralised into Wellington.

But all of this was done without any real reflection on the role and purpose of the state sector. What does it do? What role does it perform in our democracy? What needs to be done differently? How might things be done better? And fundamentally, what is the difference between running a company and running a country?

Well, there is a substantial difference, actually.

There is no doubt that the public service is responsible for the implementation of the programme of the duly elected government of the day. That is a basic democratic expectation.

But the public service does a lot more than that. It also acts as a buffer between the exercise of the comprehensive executive power of the Cabinet, and the people. It is the repository of political neutrality and the upholder of our country’s constitutional integrity. It is the part of our democratic apparatus which provides the transparency and accountability which citizens in a sophisticated democracy require of their leaders and their leaders’ decisions. It is the place where innovative ideas can be tested and policy development can occur amongst some of the cleverest brains in the country.

It is also responsible for giving free and frank advice to Ministers in order that Ministers might fully understand the impact of their policies on the real people they purport to represent and whose votes put them there. In performing this function, it also protects Ministers, if only they would see it.

It is that tradition of free and frank advice which has been eroded the most under this government.
There are numerous examples, from Conservation to Health to Education and other departments and ministries besides, to back this up. It has got to the point where senior officials vet a report to a Minister before it even gets to him or her because the officials have had some clear indication or pressure from that Minister about the nature of the “advice” they require.

And so we have a DoC policy adviser resigning her position because her 32-page report on the environmental consequences of the proposed Ruataniwha dam in Hawke’s Bay gets reduced to a a single paragraph printed twice in the brief advice given up to Minister Nick Smith. He can say he didn’t even see the 32-page report because he didn’t. He didn’t see it, because senior officials knew that this was not the kind of free and frank advice the Minister wanted and so they didn’t give it to him.

This is a perversion of the public service.

The public service must advise the Minister on the best method and consequences of the implementation of a policy. The advice must be free and frank, without fear of retribution. That advice should be publicly available, and mostly it is, under the Official Information Act.

The ability of the public service to give free and frank advice on the basis of years of experience, research and policy development, is one of the things which contributes to New Zealand’s enviable reputation for a lack of corruption. The most recent Transparency International report on the Perception of Corruption last year, held New Zealand as first (the perceived cleanest) in the world, largely because of the effort and reputation of its public service. But they also expressed concern about the silencing of advice, inadequate or questionable appointment processes, rushed legislation which took away people’s rights such as the GCSB legislation, and poor contracting processes evidenced in the Auditor-General’s criticism of the Sky City deal.

If the government realised it was running a country and not a company, it might value more highly such things as due process, transparency, accountability and the best public service possible. It is time to take a more fundamental look at the role and functions of our state sector. Of course we should always strive for better public services. Every government should – they owe that to their people. But instead of performing a corporate restructuring exercise, they should reflect on what a capable and competent state sector brings to the lives of New Zealanders. It is time for such reflection and the rebuilding of our state sector.

State sector unions win on reform bill

Posted by on May 31st, 2013

Most of the time, it’s hard for Labour and unions to make progress for workers when we don’t have the numbers in the House.  Occasionally, as in the Mondayisation Bill, we get a win.  Sometimes we can help to avoid a disaster.

That’s what has happened with the State Sector and Public Finance Reform Bill (SSPFRB), soon to get its second reading in the House.

This Bill, as introduced by National, would have scrapped redundancy provisions for public sector workers, overridden bargaining rights and allowed state powers to be contracted out without proper protections and accountability.

Fortunately, the PSA, the CTU and many individual civil servants testified powerfully agonists the Bill.

That allowed the Labour members of the committee to insist on further consultations between officials and unions.

We were then able to use our potential vote for the Bill as leverage to negotiate major concessions from the government.

As a result the Bill has been heavily amended.  State sector employee rights are now better protected than they would have been.

Redundancy provisions have been improved so that the state sector employees retain their entitlements unless accepting a position that is ‘no less favourable’ than their existing package.

Transition arrangements have been fixed so that collective agreements and individual agreements are sunsetted equally, three years after the Bill takes effect.

Government workforce policy statements have been revised to ensure that all existing legal and bargaining rights have been protected.

Conflict of interest protections; enhanced governance for delegated powers; and strengthened accountability requirements in public sector financial reporting have all been achieved through the negotiations.

There still are concerns over some aspects of the Bill, but the vigorous work of public sector unions and successful negotiations in the select committee have resulted in a much better outcome that we were originally facing.

Consultants for core administrative tasks?

Posted by on January 10th, 2013

Back in 2008 the then National opposition made two ‘key’ pledges when it came to public services. The first was to ‘cap but not cut’ the number of public servants, and the second was to ‘move resources from the back office to the frontline’. They didn’t keep either promise, but more importantly, evidence is increasingly emerging that their approach to public service provision is costing the taxpayer more, not less.

National’s cap on public service numbers has led to a blowout in consultancy costs, as government agencies continue to deal with the same, or in many cases greater, workloads with fewer people on board to do the work.

Take the Ministry of Education for example. This week I released data that shows they’ve been engaging expensive consultants to undertake core administrative tasks like processing official information requests, drafting ministerial documents, and writing business cases. I’ve got no problem with departments bring in outside expertise when a particular set of skills are required, but this is bread and butter stuff any department the size of the Ministry of Education should be able to deal with.

Between 2008 and 2011 ten of the biggest government departments spent a whopping $910 million on consultants and contractors between them. Those same agencies spent $114 million making people redundant during the same period. Increasingly anecdotal evidence is emerging of former employees being engaged as consultants to do the work they used to do for a lot less when they were employees.

National’s consultancy culture isn’t saving us money, it’s costing us more. It’s also leading to an erosion of the core capability of the public service, and some of the haphazard decisions ministers are making, often based on weak advice, reflect that.

Our democratic system relies on there being a quality public service with the expertise and capability to deliver on the priorities of the government of the day, whomever that may be. That includes the capability to deliver advice the government of the day might not like. Under National, that capability is being seriously eroded.

They’re joking, right?

Posted by on November 15th, 2012

Please give me a moment while I drag my jaw off the floor. As the Novopay debacle continues to roll on week after week, as teachers and support staff continue to be overpaid, underpaid, or just not paid at all, some genius at the Ministry of Education has decided now would be a good time to restructure the Payroll Services Unit. Checked the calendar, it’s not April fools, they’re serious about this!

In their infinite wisdom the Ministry has decided to reduce personnel in the payroll team from 23 to 14. These staff need to be focused on fixing the Novopay mess, not wondering if they are still going to have a job in the New Year. They’ve been given two weeks to comment on whether or not they should still have jobs.

Maybe the top managers at the Ministry of Education should get their pay via Novopay. Perhaps if they went a couple of months without getting paid correctly they’d get serious about sorting this mess out.

It’s the job of whoever authorised this restructuring that should now be on the line, not the jobs of the people working to get things back on track. The senior leadership at the Ministry of Education need their heads examined.

New Zealand’s Wisconsin?

Posted by on September 3rd, 2012

The government is quietly making a move on collective bargaining in the State Sector. The State Sector and Public Finance Reform Bill, tabled in parliament last week, has a provision that has many speculating that this government is intending to implement its own version of the Wisconsin assault on collective bargaining in the public sector.

In a new provision under the bill, “workforce policy matters”, including the government’s “expectations” for pay and conditions, will be issued by Order in Council, which means they will be legally binding. This will allow the government to jump over any collective bargaining and good faith process and dictate pay and conditions.  It will undermine collective bargaining in the State and diminish the employment rights of thousands of workers.

So why?

HIgh levels of union density in the State Sector, as compared to the Private Sector has an impact in setting pay and conditions overall. The government’s keenness to reduce government expenditure in the State makes collective bargaining and union membership an obvious target for implementing employment policies aimed at reducing the influence on the overall labour market.

These changes, along with the government’s amendments to collective bargaining for all workers will enable employers to pay new workers less; and that’s the clear intention.

Every New Zealander needs to be concerned about these changes.  They might look like they only affect unionised workers, but they will affect everyone.

Wages are already too low in New Zealand.  Take away collective bargaining and further weaken unions, then the only thing left to fall back on is a reliance on the market and good old trickle down.

And has that worked?

I don’t think so.


Government assistance = 0800 PLEASE WAIT

Posted by on August 23rd, 2012

My column on the RadioLive website this afternoon highlights how the government have failed in their promise to deliver better public services. Think how many work hours are lost every day as people ring govt 0800 numbers and wait, and wait, and wait…

Despite National’s promise to move resources ‘from the back office to the front line’ we’ve seen local frontline public services scaled back or closed, while the never-ending list of government 0800 numbers continues to grow.

Take Housing New Zealand for example. The Government has closed the doors of local branches and directed people to an 0800 number where they can wait over an hour just to have their call answered.

Housing New Zealand are a bit better than the IRD though. If you’re calling the govt to make sure you’re paying all your taxes, you could be up for a wait of several hours!

Work and Income call centre statistics aren’t that much better either. Last year some poor soul spent one hour and 10 minutes waiting for their call to the government “job line” to be answered. 6,500 people gave up trying to get through. No doubt Paula Bennett will try to argue that they’re lazy and unwilling to work when actually what they weren’t willing to do was sit around for hours waiting for the government to answer the phone.

I think it’s good that the government is providing a greater range of ways to access public services, such as through 0800 numbers and improved use of online communications, but they need to be properly resourced. New technology isn’t always cheaper, in fact sometimes it costs more to realise the full benefits of it.

National = 0800 hold and wait

Posted by on August 21st, 2012

If the current government are really serious about reducing compliance costs for small business, they could start by getting the IRD call centre into shape. Statistics that I released today make for damning reading. Here are a few highlights:

  • Last year over a million callers to IRD numbers gave up before their call had even been answered
  • A further 260,000 callers ditched their calls after being placed on hold
  • The longest wait time for a call to the IRD was 2 hours and 29 minutes
  • Over 200,000 callers waited for over quarter of an hour to have their call answered

National is always talking about productivity, but how does having people waiting for hours on end to speak to the IRD help with that? Millions of dollars are being lost every day as Kiwis sit around waiting for the IRD to pick up the phone.

In the past four years the IRD has dished out over $31 million in redundancy payments. Clearly that’s having an impact on its customer service record. It’s time for the National government to get this mess sorted out.

$12 million on redundancy, more to come

Posted by on August 20th, 2012

The fact that the various entities being merged to form Steven Joyce’s new ‘mega ministry’ had already spent over $12 million on redundancy payments under National, even before the latest merger gets underway clearly highlights the unnecessary cost of ad-hoc restructuring.

The two agencies that merged to form the Ministry for Science and Innovation spent over $1.6 million on redundancies as a result of that move, now they’re being restructured again. The Ministry of Economic Development spent $4.2 million on redundancy over the past 3 years, while their spending on consultants and contractors during that same period of time exploded, rising from $6.7 million to $19.2 million per year.

National’s public sector restructuring has been characterised by ad-hocism and empire building, rather than a coherent plan for delivering better services to Kiwis and businesses. The fact that the creation of MoBIE will mean a second or even third round of restructuring for some of the employees involved underscores how shambolic National’s approach has been.

Rather than constantly shuffling people around, laying them off and then hiring them back as contractors, and wasting money on slick PR campaigns, the government should be focused on how they can deliver better public services to New Zealanders.

Restructuring for the sake of it

Posted by on August 10th, 2012

Restructuring for the sake of it, without a clear sense of what you’re trying to achieve and where you’re going can be expensive, it can destroy morale, and it can totally de-rail progress on the things that matter. There seems to be quite a bit of that happening in the public sector at the moment.

Take the recent establishment of the new Ministry of Business, Innovation and Employment (MoBIE). Many of the component parts of the new ministry had already been the subject of restructuring under National.

The Ministry for Science and Innovation was barely a year old when it was disestablished to become part of MoBIE. As David Shearer revealled today, that short-lived Ministry managed to clock up over half a million dollars in ‘branding’ and promotional costs, all for an entity that no longer even exists.

I think David Shearer has summed things up pretty well:

“MSI now stands for Ministry of Silly Integrations. For over two years science and innovation officials have been in one merger or another. The plain fact is that mergers stall policy development and that’s why there hasn’t been an innovation policy to speak of from this government.”

I totally support the drive for better public services, but let’s not waste money restructuring every time there is a new Minister who wants to mould their own little empire.

PPPs save money – yeah right!

Posted by on July 18th, 2012

A few weeks ago I revealed in Parliament that the National government have spent $3.5 million developing the business case for a new school in Hobsonville to be built under a Public-Private Partnership. That school is forecast to save $2 million over the 25 year lifespan of the contract, in other words, a lot less than the Business Case cost to develop in the first place.

At the time Craig Foss, the Associate Minister of Education, argued that the blowout in the cost of the Business Case was justified as it could be used as a template for other PPPs for schools. Interesting to note, therefore, that Hekia Parata confirmed at the Education and Science Select Committee this morning that her Ministry will be employing a $100k a year Relationship Manager to oversee the new project in Hobsonville. Over the life of the PPP, that would equate to another $2.5 million.

There is simply no way this PPP is going to save the taxpayer money. In fact, quite the opposite. This school is proving to be considerably more costly than if we’d just built it using traditional public sector practices. Will every PPP school have one of these managers paid for by the taxpayer?

I’m pretty sure there will be a number of boards and principals around the country who will be shaking their heads at this. The government have argued that PPPs could ‘free up’ boards and principals by reducing the amount of time they spend managing property. I’m sure every public school in the country would argue they could ‘free up’ quite a bit of time if they were given an extra $100,000 a year to manage their facilities…

National’s latest targets

Posted by on July 1st, 2012

Is it possible for the government to set out a list of targets for the public service that are both worthy and meaningless at the same time? That seems to have been the tone of debate around National’s latest Better Public Services announcement. There aren’t really any targets in there that anyone would disagree with, but it ain’t the ambitious ‘brighter future’ government John Key promised us 4 years ago. Where is the goal to close the wage gap with Australia? Where is the goal to reduce our overseas debt? Where is the goal to lift wages and create more highly paid jobs?

National’s latest set of targets also look pretty hollow and meaningless in the context of what they’ve actually been doing since they took office. So let’s look at the actual targets and how the rhetoric matches the reality.

1. Reduce the number of people who have been on a working age benefit for more than 12 months

Yet National cut the training incentive allowance to make it difficult for DPB mums to get higher education. 50,000 people have lost their jobs under National, and unemployment has been persistently high. Access to Student Loans has been restricted and they’re contemplating putting interest back on student loans. Lack of jobs is the key reason why people are on the benefit and the Government’s response is “it is what it is” with no sign of the 170,000 jobs they promised.

As my colleague Jacinda Ardern pointed out during question time, National’s goal to reduce the number of people on job-seeker benefits for more than 12 months by 30% means they’re still banking on there being 20,000 more people in that group than there were when they took office. Hardly an ambitious target…

2. Increase the number of young children in ECE

National’s cuts to ECE subsidies mean parents now have to pay higher fees for a lower quality service, hardly a plan to increase participation. In 2010 Key’s Government cut $400 million from the ECE budget which saw more than 2,000 ECE centres have their funding reduced. If parents are to believe Key’s commitment to ECE then he needs to immediately rule out the controversial recommendation from his ECE Taskforce to cut the universal subsidy for 20 hours ECE.

Increasing participation shouldn’t be the only goal for ECE. More bums on seats is good but we also need to ensure that ECE teachers are qualified and skilled enough to give children the best learning environment possible. Nationals ditching of the target of 100% qualified staff in teacher-led ECE services is will reduce the quality of ECE learning and the potentially transformational benefits children can get from it.

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

Under National we’ve seen more children going to hospital with poverty related diseases, including rheumatic fever. Overall, hospital admissions are up by 4800 in the past 3-4 years. New Zealand’s rate of rheumatic fever is 14 times higher than the OECD average. Medical experts have blamed the rise on damp houses, poverty and a lack of primary healthcare. This is not a problem the healthcare sector alone can solve.

4. Reduce the number of assaults on children.

On 1 April 2011 Tariana Turia announced that funding from the following programmes had been ‘reallocated’:

  • Te Rito Collaborative Community Family Violence Prevention Fund
  • Advocates for Children and Young People Who Witness Family Violence programme
  • Family Violence Education Services

5. Increase the proportion of 18 year olds with NCEA level 2 or equivalent qualification

This is a long-term goal and a good one, although I would question the assumptions made in the analysis of the current trend data, which seems to assume on current trends growth in the number of 18 year olds hitting the target will diminish. Why do I call it a long-term goal? Because to achieve it we need to look at things like early childhood education (see above), improving student engagement (technology teaching anyone?) and teacher professional development (funding cut under National).

6. Increase the proportion of 25-34 year olds with advanced trade qualifications, diplomas and degrees

Where to begin? National cut the successful Skill Enhancement programme in Budget 2010. The Skill Enhancement programme provided vocational training for young Māori and Pasifika, had run since 1993 and achieved 82% positive outcomes. The number of Modern Apprenticeships has declined 10% in the past two years without any attempt of intervention or support from National.

National has cut $145 million out of Industry Training, money which could be invested into up-skilling young people, but most of which has gone elsewhere. The $40 million Community Max scheme failed to get people into jobs and in many cases created little more than pumpkins. Access to Student Loans has been restricted as well.

7. Reduce the rates of total crime, violent crime and youth crime.

Well, I guess cutting funding for the police is one way of reducing the rates of reported crimes.

8. Reduce re-offending

Prioritised funding to build more prisons (Wiri) instead of rehabilitation programs. 1.1% increase in spending on prisoner employment, rehabilitation and reintegration last year is insufficient address the recidivism rates given the reconviction rate has gone up under this Government to over 62%.

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

Hardly ground-breaking stuff is it? If anything this is just the government catching up with the private sector.

The consultancy blowout

Posted by on May 19th, 2012

The explosion in the cost of consultants and contractors over the last 5 years clearly shows that the National government have failed to live up their promise of a more efficient public service focused on the frontline. Between 2006/07 and 2010/11 the total spend on consultants and contractors leapt from $336 million to $525 million, the biggest leap coming in National’s first year in office when they imposed their arbitrary ‘cap’ on the number of staff the public service can employ.

National’s arbitrary cap on staff numbers has caused this blowout in consultants and contractors costs, plain and simple. They’re not delivering more efficient public services, in fact quite the opposite – Kiwis are paying more to get less. It can’t possibly be more efficient to make someone redundant one day and then reengage them on consultants rates only a few days later, as we’re now seeing happen throughout the public sector.

National’s supposed drive for greater efficiency in the public service has failed miserably. They’ve failed to adequately monitor the effect of their cuts, failed to stop cost blowouts in other areas, and failed to live up to their promise of a more efficient and effective public service. The consultancy culture has gotten so out of hand under National that Bill English’s own department, the Treasury, even hired a consultant to write a review on the use of consultants.

In these tight economic times, Kiwis want to know that the government is spending their tax dollar wisely. A more efficient and effective public service should be a major priority for any government. National has failed to deliver it.

Consultants and contractors

Posted by on April 11th, 2012

Keith Ng has been digging around the issue of government use of consultants. He’s unearthed some stats that show the use of consultants within the public service has increased under National, despite their promise to bring greater efficiency to public services.

This was inevitably going to be one of the consequences of National’s arbitrary ‘cap’ on the number of people employed by the public service. If government departments aren’t allowed to employ new staff, but still have to do the same amount of work, or in some cases even more, what will they do? They’ll contract the labour in, and it looks like that’s what’s happening.

As Danya Levy’s story on Stuff reminds us, last month the Defence force had to admit that it had rehired two Navy staff just weeks after making them redundant after it was unable to fill their roles. The more arbitrary cuts National inflicts, the more of this we’re going to see.

I’ve blogged before that I support a greater focus on efficiency and outcomes within the public service, but the National government are doing things back to front. They’re too focused on what they can cut and what they can sell, rather than reviewing what they actually want the public service to deliver. That’s where there attention should be focused.

McCully’s actions a disgrace

Posted by on March 25th, 2012

I’ve spent a bit of the weekend talking and thinking about Murray McCully. Its not something I choose to do that often! But bar for the Nick Smith saga last week, I think the actions of Murray McCully would have had a great deal more attention- and I am sure they will get that attention in the coming weeks.

Last week Murray McCully wrote a letter to the Chief Executive of Ministry of Foreign Affairs and Trade telling him that he opposed some of the changes he was proposing to the Ministry and describing various things he wanted to happen. The language was as media said “strongly worded”, and at times barbed.

This letter was then released to the media. Talking to former senior public servants no one could recall an action like this. It is a direct attack on a person who can not really respond.

Beyond that it is a farcical abdication of responsbility from McCully. He is the Minister. It is his government that gave the Ministry of Foreign Affairs and Trade the target on finding $40 million (or $25 million as he claims) in cuts. It is not credible that the change programme in Foreign Affairs would have progressed to the point it did without McCully’s direct and continuing involvement. A Spokesperson for MFAT as good as confirmed that in the Dominion Post article linked above on Thursday.

the ministry has been “in discussions with Government throughout the process and they have provided clear direction on their priorities and expectations.

But McCully has tried to run for cover in the House and in the media, and dump all over John Allen. Now, it has to be said the way change process has been run has been disastrous. Many of the changes seem ill-thought out or just plain bizarre. Staff morale has collapsed. As I have said before I agree change was needed at MFAT, but this process has done far, far more harm than good.

John Allen and the senior leadership team at MFAT have to take their share of the blame for this. But so does Murray McCully. As the Sunday Star Times editorial (can’t find on-line) put it today his actions are a “disgrace”.

Reflections on Key’s speech

Posted by on March 15th, 2012

John Key’s speech this afternoon focused on three things: setting yet another set of targets, lowering the cap on the number of people employed in the public service, and creating a new ‘super-ministry’. A few thoughts on each before some more general observations.

1. Setting targets for the public service

It’s a good thing to set clearer targets for the public service, but Ministers can’t abdicate all responsibility by placing all the onus on departments to achieve them. Ministers set the budgets, sign-off the strategies and plans, and have a huge amount of say over the directions the public service will take when seeking to achieve those targets. They are still responsible. We also need to recognise that some of the targets we set will have long lead-times. For example, getting more 18 year olds with at least NCEA Level 2 starts when those very same kids are 2 and 3 years old, if not before.

2. Capping the core public service at a lower level

As I’ve noted before, this is an ‘input’ measure and cuts against John Key’s stated intention of focusing the public service on ‘outcomes’. It’s also pretty arbitrary and can lead to unintended consequences. For example, if a govt agency needs to take on new people in order to deliver on one of the outcome goals, but they’re up against their quota of staff, they could end up hiring external contractors or ‘outsourcing’ at a higher price than they could deliver the same outcome for internally if they didn’t face such an arbitrary constraint.

3. Creation of a new ‘super-ministry’

Restructuring is often seen as something you do when you don’t have a clear sense of what you’re trying to achieve but want to look like you’re ‘doing something’. I agree with what John Key said “Few problems are solved by significant reorganisations – in fact, many more tend to be created. It is easy to underestimate the amount of energy and inspiration soaked up by institutional change, as well as the loss of personal and institutional knowledge”. Shame he didn’t stick to that.

The public service can continually be sliced and diced in the never-ending search for ‘natural synergies’ but what we should really be focused on is getting the whole of government working more effectively together. Constant uncertainty and restructuring doesn’t achieve that.

So overall impressions? We’ve seen enough action plans, strategies, and targets from National. This latest list follows on from the six-point plan in 2010, the revised six-point plan in 2011 with 41 actions, and 2012’s 120-point plan. Time to start making some progress. About the only ‘progress’ they can point to so far is more people out of work.

Then and now: Key on all sorts

Posted by on March 14th, 2012

Over the weekend I posted some of John Key’s earlier statements on asset sales and public sector restructuring, pointing out how much his current views and approach differ from what he promised people before he became Prime Minister.

Tonight TV3 have gone one better and unearthed video footage of him speaking to the PSA Conference back in September 2008. Not only does John Key rule out asset sales, he makes a compelling case against them.

“There’ll be no asset sales in the first term of a National government, and there may never be asset sales in the years ahead… Nor am I hell-bent on selling assets actually. I personally think it’s not the issue that the current economy faces. In the world of making the boat go faster, actually I don’t think selling off state assets is going to make the boat go faster.

Labour has been arguing all along that asset sales will not make us a richer country. We’ve been consistent. John Key and the National government have done a complete u-turn and have now placed asset sales at the centre of their economic strategy.

“The Crown’s dividend streams from the Meridians, the Mighty Rivers of the world is large, so on both motivations we don’t have a debt problem, they’re acting, I think, highly effectively as companies, and they’re making money. There is no motivation to sell assets.

Once again, Key is borrowing the line that Labour has been consistently arguing for over a decade. The SOEs are highly profitable. They make more money than we would save in debt repayment costs if we sold them. Also note Key arguing we don’t have a debt problem (Bill English also made similar comments both before and after the 08 election). Interesting how after 3 years of a National government debt seems to be the biggest issue we face…

“So there’s no agenda to sell assets.

This is perhaps the most damning quote. Although Key was careful before the 2008 election to qualify his no asset sales pledge with “during the first term” he gave New Zealanders the very clear impression that he wouldn’t be selling assets long-term either.

“What we are saying is we’re not going to cut jobs, we’re simply capping at 36,000.

That commitment didn’t even last a term. Now he’s promising even more job losses during National’s second term. Nothing about that in their manifesto for 2011.

“The second point is, no we’re not borrowing for tax cuts.

So if they’re not borrowing for tax cuts, and New Zealand didn’t have a debt problem when they took office, why are they now arguing we have a major debt problem and need to sell assets to fix it?

John Key has built his political career on telling people what they want to hear. Eventually that strategy always catches up with people, and it’s catching up with Key big-time.

Massive structural change not worth candle

Posted by on March 13th, 2012

I was Minister of State Services from 1999 – 2005. Did some pretty big changes. Education, MSD and MED. Along the way I lost faith in the power of structural change to either release funds or improve services.

Change always took longer than we planned. Two years to implement and another two to bed in. It was always accompanied by a drop in morale and productivity.

Important skills and institutional knowledge were lost.

Some of the best people left with very expensive redundancy packages only to be rehired on contract at 150% of their former rate or left for Australia where they got 200%.

I now think it is better to have a longer term vision, make changes at the margins and focus on sharing as many services as possible.

Behind every good diplomat…

Posted by on March 12th, 2012

In the midst of the train wreck that has been the changes to MFAT, the treatment of partners of MFAT staff has been disrespectful, if not downright disgraceful. Remarkably, early on after the release of the change document the MFAT partners group were told that they were excluded from contributing to the so-called consultation process. They were reduced to asking for information under the Official Information Act. This is a huge slap in the face for people who put their lives on hold to accompany partners overseas, and often play an essential and unpaid role in advancing New Zealand’s interests overseas.

Tonight they have released an open letter to CEO John Allen. Just how significant an impact going on a posting has on couples is in some of the statistics in the letter

– 100% of responding partners (83) were or had been in full time employment in NZ or their country of origin.
– Of these, only 1 had not had to resign from their employment to join their partner on posting.
– Only 14 partners had been able to find comparable employment – either on posting or return to NZ (i.e. 83% had not).
– 55% of partners had been in a NZ superannuation scheme, of which 61% had had to leave or suspend the scheme to accompany their MFAT partner on posting.
– 83% of partners felt they were in a worse position in terms of their current employment status compared to what they could have expected had they not been an MFAT partner.

What comes through the most in the partners submission is just how hurt they are that they have been excluded. MFAT has struggled over the years to get its family friendly policies right, but this is a whole other level. The conclusion of the letter is worth quoting in full

Through the restructuring proposals you are putting at issue the question of how New Zealand can best achieve its foreign policy objectives and provides services to New Zealanders abroad. This includes securing vital objectives such as obtaining a seat on the Security Council and the securing of trade and economic agreements on which the country critically depends. We do not for a moment question that there are aspects of MFAT that are in need of change. However our only possible conclusion, from the changes you have proposed, is that you have not understood the impact your proposals will have on the Ministry’s ability to attract and retain partnered staff. Refusal to properly consider and understand the impact of your proposals on the commitment of staff and their partners and families to the Ministry would be deeply irresponsible.

There is some hint that the government might be about to back down on aspects of its proposals. Good. How about relenting and getting the partners view included as part of the process as well?

Then and now: Key on public services

Posted by on March 10th, 2012

Yesterday I blogged about John Key’s pre-election promises about asset sales and pointed out how the post-election reality falls well short of his earlier rhetoric. Key’s pre-election promises on public services back in 2008 paint an even starker contrast. What National promised and what they’ve been doing are polar opposites.

“A new National Government is not going to radically reorganise the structure of the public sector…..Few problems are solved by significant reorganisations – in fact, many more tend to be created.  It is easy to underestimate the amount of energy and inspiration soaked up by institutional change, as well as the loss of personal and institutional knowledge.” (John Key, speech to PSA Congress, September 2008)

I’m not sure the staff at MFAT, where one on four could end up out of a job, would agree that isn’t radical restructuring. Under National, multiple agencies have been merged, over 2,500 jobs have been lost, regional offices have been closed, and now Key is promising even more to come.

“So let me reiterate National’s position.  We are in no way going to reduce the number of frontline staff.  Let me make this absolutely clear – under National the numbers of doctors, nurses, teachers, social workers, police and other frontline staff will grow.” (John Key, speech to PSA Congress, September 2008)

In the past few weeks we’ve seen DHBs talking about laying off medical professionals because of under-funding, education officials talking about bigger class sizes so that we employ fewer teachers, police being told they have to make massive savings, closure of frontline regional offices (eg. Housing NZ), and the replacement of frontline consular services overseas with an 0800 number.

“In additional (sic) to upholding the professionalism of the public service, we are also going to uphold its political neutrality….There has to be a clear line drawn between the political role of the Government and professional independence of the public service.” (John Key, speech to PSA Congress, September 2008)

I’m not sure how John Key appointing his own local National Party electorate chairman to broadcasting funding agency NZ on Air lives up to this commitment, particularly given said chairman’s role in deciding which political documentaries got funding in the lead-up to the general election.

“The New Zealand government is in a sound fiscal position.  We can afford to protect the vulnerable and maintain social services….”  (John Key, speech to PSA Congress, September 2008)

Quick, somebody tell Bill English. According to Key, NZ’s books were in good shape when they took office. Of course, having flushed our sound economic position down the toilet they’re now trying to blame the previous Labour govt, who paid back the debt and left the books in good shape.

Getting public sector reform right

Posted by on March 4th, 2012

In the past few days a few more details have started to emerge about National’s plans for further cuts to the public service. It’s been interesting to note how the current rhetoric emanating from the top floors of the Beehive hasn’t been matched by the reality so far.

As Andrea Vance reports, despite putting over 2,500 people out of work, National’s bold plan to save $1billion over 3 years has come up short, with only $20m in savings actually realised.

In my view, the National government have got the whole process around the wrong way. There is room for improvement in the way our public services are delivered, and we should start by asking how that can happen, rather than starting by asking how much we can cut.

I tend to agree with Colin James, who has argued that greater efficiency should be a flow on effect of greater effectiveness, not the other way around.

John Key talked only of efficiency at a recent press conference in which he discussed the “better public services” programme. He did not mention effectiveness… But in the real world where people, not equations, live, efficiency is an ingredient of effectiveness, which is the translation of outputs into recognisable, measurable — and desired– outcomes. Better public services will be better only if they are effective. John Key didn’t make a good start.

National started off entirely on the wrong foot three years ago. Then they weren’t focused on outcomes or even outputs. They were focused on ‘inputs’ in the form of staffing numbers, rather than worrying about what those staff actually do/did.

What we should be asking is what New Zealanders expect from their public services and how that can best be delivered. There is certainly a lot of room for improvement, and again I agree with Colin James:

[There is now] an expectation now that goods and services will be custom-made and so the means of access to them and delivery of them be customised. This expectation has been building for two or three decades as technology and globalisation have enabled a transition from mass production to mass customisation. Particularly younger people have that expectation. Fordism is long dead in the private sector and is dying in the public sector. The factory state was time-bound in the twentieth century.

Reform in the public sector is necessary and should be a positive thing, but we need to start by asking the right questions. Focusing on inputs and outputs, rather than the outcomes we want our public service to achieve sets any reform agenda up for failure before it’s even started.