New Zealand’s public sector proudly describes itself as ‘world-class’ – but several former politicians and policymakers have taken issue with the description, saying there is much in need of improvement

A stronger relationship between local and central government, as well as officials more willing to listen to outsiders, is needed if New Zealand is to live up to its claims of a “world-class” public sector, former public servants and politicians say.

The state of the country’s public sector was among the topics of discussion at the first day of the annual New Zealand Economics Forum on Thursday, hosted by the University of Waikato.

Former National government minister Anne Tolley, who in 2021 was appointed by Labour to chair a Crown commission tasked with overseeing the Tauranga City Council, said the country’s public service had in her opinion never been world class and was arguably going backwards.

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The relationship between local government and central government was “fraught with conflict and frustration”, Tolley said, with a broader disconnect between governance, policy and implementation.

“The public sector has … a huge focus on planning, which is appropriate – it’s something we do need to do – but it all seems to fall to pieces when it comes to the delivery.”

While government departments gave local authorities access to some of the funding needed to make progress on issues like urban growth and infrastructure, it was rarely in the timeframe needed and with logistical complications.

Tolley mentioned Waka Kotahi as an example, with the transport agency only able to commit funding for a three-year period – in contrast to the required 10-year timeframe for councils’ long-term plans on infrastructure and finances.

“Those two are not even aligned so that when local government comes to do its 10-year plan, it knows what the three-year funding commitment from Waka Kotahi is – how on earth can you plan infrastructure?”

However, central government had shown an ability to work smoothly and efficiently with local government and manawhenua in times of crisis such as the Christchurch and Kaikōura earthquakes, with major infrastructure projects planned and delivered in a fraction of the time it usually took.

While that boded well for the recovery from Cyclone Gabrielle, “my question is, why can’t it always be like that? Because that would certainly be world class”.

Tolley said she was supportive of a four-year term for both local and central government, which would allow for better policy analysis and more time for implementation.

“Working with the Kāpiti District Council to try and put together a locality health network, you find you’re talking to somebody…working for the fourth level of management inside this giant [Te Whatu Ora], and the answer is ‘Don’t call us, we’ll call you –  we’re not ready to talk to you yet’.”
– Graham Scott, former Treasury secretary

Former Treasury secretary Graham Scott, who held the role between 1986 and 1993, said there was a risk of “groupthink” in the public sector.

“There seems to be a lack of creative tension: people are so busy being polite to each other, they don’t argue much anymore, it seems, whereas the public service I remember was actually a pretty hard school.”

Scott was also concerned about the lack of analysis given to how to best deliver public services, with governments showing a natural bias towards centralisation that was not always the best solution.

While the creation of Te Whatu Ora had been framed as empowering local voices, the Government’s health reforms had in fact created “a gigantic Crown entity with something like 82,000 employees, probably the biggest organisation in that sense in New Zealand”.

“Working with the Kāpiti District Council to try and put together a locality health network, you find you’re talking to somebody…working for the fourth level of management inside this giant, and the answer is ‘Don’t call us, we’ll call you – we’re not ready to talk to you yet’.”

Scott said there also needed to be a renewed adherence to financial reporting requirements, which had been largely disregarded in the face of crises like the Covid-19 pandemic.

‘Butter spread too thinly’

Former diplomat and public servant Sir Maarten Wevers said there were too many portfolios and public service organisations in the state sector, and “the butter has been spread too thinly” across different policy areas.

“There’s been a lack of focus on the things that really matter, the ones that would have big multiplier effects … education [and] immigration are the two that have already come up to date.”

Wevers, who headed up the Department of Prime Minister and Cabinet between 2004 and 2012, said he was also concerned about a lack of openness to external voices from those tasked with providing policy advice to governments.

However, he acknowledged there were also reasons for positivity, such as New Zealand’s history as “one of the most stable and long-standing open, and unchallenged democracies globally”, with an independent judiciary and a largely trusted police force.

“A lot of people would give everything to get that sort of package if they could.”

Sam Sachdeva is Newsroom's national affairs editor, covering foreign affairs and trade, housing, and other issues of national significance.

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