Speech to the Institute of Public Administration


It is my pleasure to participate in this sole political forum dedicated to the consideration of New Zealand’s State Services. Because of the significance of this forum, I have chosen to announce Labour’s State Services policy here today.

Labour’s vision for the public sector in New Zealand includes these elements:

  • A public service which is valued for its role in an active participatory democracy, that is, serving the democratically elected government of the day with free and frank advice, and protecting NZ citizens from the excessive use of Executive power.
  • A public service which consists of equally paid women and men with skill and experience to advise Ministers on the implications of their decisions and deliver constant improvement in services to the public.
  • A public service with institutional memory, capacity and capability to serve Ministers and the public efficiently with high quality policy advice and effective administration.
  • A public service which is always open to change and modernisation for the sake of better public service delivery, is responsive to diversity, and recognises that the users of public services are entitled to the best customer services and respect.
  • A public service which is characterised by integrity, courage, a sense of self-worth and a clear understanding of the importance of their role in protecting and delivering on services which underpin our care of citizens.

That is the vision which underpins our policy.

I firmly believe that it is entirely possible to have the best of all the worlds we have tried to build in our historical state sector reforms. The 1912 Royal Commission laid down the underpinning principles for a neutral, professional public service, dispelling all possibility of corruption. The 1968 Royal Commission wanted that, and for the public service to be more efficient and to cost less. The changes of the 1980s wanted a blend of public and private sector methodologies, giving rise to more rigour and efficiency. The post-2008 changes have focussed on managerial delivery of measurable outputs and quantifiable responsiveness.

Along the way, with each set of reforms, apart from those of 1912, there have been drawbacks and unforeseen consequences. I think it is time that we gathered the best of the last 100 years of public service practice and theory and built a state sector properly equipped to contend with the challenges of the twenty-first century.

In recent years I believe we have lost much of that 1912 bulwark against corruption, as Ministers fiddle with appointments, right down to third tier levels of management. We have lost the courage required of a neutral, professional public service which attends that creeping corruption, so that free and frank advice is less readily given. We have lost sight of the state sector’s function to protect the citizenry from the excesses of Executive power and to deliver effective services with commitment, principle and innovation.

In short, I believe our state sector is in a precarious condition and a one-in-100 year jolt is necessary to refocus it.

For these reasons Labour will: 

  • Conduct a Royal Commission into the State Sector with a view to revisiting the principles underlying an effective state sector.
  • Review the state sector legislative framework (State Sector Act and aspects of the Public Finance Act) with a view to enhancing collaboration and outcomes across the public sector.
  • Ensure that the public sector develops coordination mechanisms for implementing goals that ensure agencies work together.

The current government’s indiscriminate cuts to services and the public service are hurting lots of New Zealanders. They are also demoralising and stripping capability from a group of people who have a huge amount to contribute to building a better New Zealand. Public services are critical in the building and rebuilding of resilient communities and should be available to all, irrespective of wealth.

Labour will:

  • Ensure that the public service core capacity is rebuilt to enable it to do the quality job it needs to, with the resources and the ability to draw on whatever expertise is needed.

Working in the public service should be an exciting, satisfying and rewarding experience that attracts the best and brightest young New Zealanders, giving them a way of expressing their support for and belief in New Zealand and its people.

Labour will:

  • Work with public service leadership, workers and unions to facilitate career path development both within and across agencies, including encouraging secondments, sabbaticals and other professional development opportunities.

Part of developing a quality, career public service is making sure that working conditions are at a suitable level to retain skilled people and that they have the chance to develop successful careers.

The Partnership for Quality, negotiated between the PSA and the Government last decade, recognised the leadership role the public service has to offer in terms of quality of employment, in quality of community and public services, in health and safety employment practices, in family friendly workplace practices, and in procurement and contracting practices. It also recognised that this leadership role can only be exercised if there is a genuine commitment to partnership between the government and the PSA.

Labour will:

  • Negotiate a new tripartite approach, between the Government, State Services 

Commission and Public Service Association, to improve the career public service.

  • put in place a comprehensive programme to address the gender pay gap within the state sector. 
  • ensure that adequate investment is made in training and lifelong learning for those working in the public service and recognise the leadership role the Government as employer has in this area. 

Labour will:

  • reinstate the 50% goal for women on state sector boards.
  • require the State Services Commission to ensure compliance with EEO and to advise the Government on strategies to advance employment equity.

Labour supports the Living Wage campaign for New Zealanders. 

Labour will:

  • Take the lead by ensuring that all core public servants are paid a Living Wage.
  • Over time and as funding permits, extend the Living Wage and seek to use the purchasing power of the Crown to assist in moving the wages of the lowest paid, commencing with core public service contracting.
  • Progressively address inequities in the pay of the publicly-funded aged care and disability care workforce and non-teaching staff in state and integrated primary and secondary schools.

State agencies have a role in setting the example of good practice, not just with their own employees, but also with those organisations they contract for services.

Labour will:

  • ensure that all organisations bidding for government service contracts are paying fair wages and respecting their employees’ right to join a union and bargain collectively.
  • require state agencies to consider other benefits such as health and safety systems and training opportunities when comparing tenders. 

New Zealand firms deserve the right to bid for large government contracts without locking them out on the basis of lowest price in favour of overseas companies. The benefits of keeping New Zealanders in work include the fact they pay income tax, GST, contribute to our skill base and the community as a whole. It shouldn’t just be about looking at the bottom line.

We must own our own future by keeping Kiwis in work instead of favouring offshore firms.

Labour will: 

  • implement a modern, sustainable, WTO-compliant, procurement regime with the aim of increasing procurement from New Zealand manufacturers by $200 million a year and increasing procurement from SMEs by $300 million a year.
  • require government departments and agencies to undertake a wider (economic) analysis of the impact of its preferred provider on the domestic economy, rather than a narrower (financial) analysis when making procurement decisions.
  • require government departments and agencies to consider the design, size, and sequencing of contracts to ensure they do not unnecessarily disadvantage Kiwi firms. 
  • require the production of an Industry Participation Plan (IPP), which sets out how Kiwi companies can play a bigger role for contracts over $50 million.

The most essential of all principles underpinning the public service must be neutrality and freedom from corruption and patronage.

Phil O’Reilly, Chief Executive of Business New Zealand recently said in the wake of the latest Transparency International assessment, that "New Zealand’s high trust public sector is its greatest competitive advantage". Who would have thought that the fabled bloated bureaucracy could have done that for New Zealand’s economic prospects and not just its reputation?

Of course it is a source of competitive advantage – second only to the rule of law in my view as the first requirement for business success. I don’t need to labour that point.

The best bulwark against patronage and corruption is keeping appointments at all levels away from Ministers. An independent system which protects and guides a career public service through appointments processes should do this.

A matrix of a supported career path combined with contestable application processes should be able to deliver the best of all worlds – the harnessing of experience and expertise, plus the injection of new energy and fresh perspectives from applicants outside the public service.

When Murray McCully signalled that the Ministry of Foreign Affairs and Trade needed a shake up and the appointments process was going to be opened to other skilled applicants, he failed to acknowledge the value of the skills and expertise built up over time, and set himself on a collision course with a large proportion of MFAT staff. This need not be an either/or. It can be a both/and.

There is no room however for shoulder-tapping favourites in public service appointments. There is no room for the Minister to tell the State Services Commissioner to ring someone and tell them to apply or not to apply. Both of those things have happened in recent times and have led to a dulling of the reputation of our senior public servants. The Prime Minister’s old school chum might well be the best person for the job, but the Prime Minister has to be far more than an arm’s length removed from the process. While one of the joys of living in a small democracy is that everyone knows everyone, this is one of those moments when it is not helpful.

I thought we had given up that form of meddling in 1912. This is the road to corruption.

Similarly, a Minister should not be allowed to punish a public servant for a presumed but unproven slight, by getting him stood down on gardening leave for a time, while she works out that it is not in her power to dismiss him from a different department to which he was only recently appointed. Apart from being against the law, there is no natural justice in this.

The public service is not something for Ministers to reel in and cast out at will. It is not their plaything and should not be picked up when needed and discarded when it becomes inconvenient.

It is certainly not to be used by Ministers to crush citizens, as seen in the Paula Bennett vs two beneficiaries case. Bringing all the access to information and power that the state has to bear on two beneficiaries who speak an inconvenient truth, is unconscionable.

Of course the core public service must implement the programme of the democratically elected government of the day. That is their role and function. That is their constitutional place. A Minister may choose to ignore their free and frank advice but then must defend her or his decision to the public.

Conversely, the public can expect to be protected from excessive Executive power. A core public service performing its highest function properly, can protect citizens from arbitrary decisions and illegal and harmful actions of Ministers, at the same time as it is delivering effective services to those citizens.

The requirement of free and frank advice for both of these functions to be performed is fundamental. That has been eroded in recent years in my view. It needs to be restored and Ministers need to understand it. It is not good enough for a critical 32-page report on the Ruataniwha dam proposal to be reduced to 2 repeated paragraphs BEFORE it even gets to the Minister, simply because more senior officials have second-guessed the Minister’s preferred outcome.

It takes courage to give a Minister free and frank advice. Our best public servants are courageous because they know and believe in their role in our democracy. Ministers can be bullies. Usually the degree of bullying behaviour stands in reverse proportion to the Minister’s ability. Good Ministers do not need to be bullies.

It is the role of the state sector in the apparatus of our democracy which for me is the most compelling thing to inform our projections for a future state sector. Citizens are not willing to be taken for granted by their government. They do not like things being kept from them or done by stealth.

We in New Zealand are used to the application of the Official Information Act, the reach of the Human Rights Commission, the powers of the Office of the Auditor-General, the oversight of the Independent Police Conduct Authority, the independence of the Ombudsman’s office and the Parliamentary Commissioner for the Environment, and now even the live streaming of select committees. These are important parts of our democratic apparatus which keep us a civilised and orderly country, free from corruption and the excessive application of power.

That is why we need a fresh look at our state sector. That is why we need a Royal Commission to revisit the principles underlying an effective state sector and lay out a blueprint for 21st century state services.

Kiaora koutou katoa.


More information: