The successes and challenges facing public servants today is a direct result of the great reforms of the 80s under the Labour Government.[1]  Labour’s re-election led to the establishment of the State Sector Act 1988.[2]  Along with the Public Finance Act 1989[3], both were buy-products of the Treasury document Government Management[4] released in 1987, which incidentally exposed the philosophy of ‘new public management’.[5]

One of the most significant changes made by the State Sector Act was the departure from the existing practice regarding department heads.   Whereas previously they were appointed on permanent tenure and called permanent heads, under the new system modelled on the private sector, chief executives are appointed on limited-term contracts.  Under the act, chief executives enjoy greater independence and can exercise discretion in the management of their departments. [6]

The Public Finance Act extended what was set out in the State Services Act by stressing performance of chief executives and their departments and by identifying the type of information required for their evaluation.   The performance for which chief executives will be held accountable is decided through negotiation with the Minister and is laid out in the form of a performance agreement.   The agreement sets out the results sought by the Government while the Chief Executive’s statement determines the means by which their departments intended to achieve these results.[7]

There are obvious benefits with this approach. Firstly, the contractual appointments and performance agreements should provide more accountability and greater efficiency.  Secondly, perhaps more important from the Government’s perspective, by adopting the private sector model, the governments have moved from input controls typical of government bureaucracy to a system of managerial incentives based on outputs as a basis of performance measures.

However, there were also questions raised at the time which are still relevant today that should have been considered and answered before changes were made.  Reflecting on the changing nature of the public sector, the opportunity to revitalise the sector and move with the times was perhaps necessary.  Those critical of the changes argued that the ideology behind the reforms, based on models of the private sector, was without sufficient understanding of the underlying problems affiliating the public sector.   Furthermore, the over emphasis on managerial autonomy has occurred at the cost of overall co-ordination and quality of policy advice.[8]

A report in 2001, entitled Review of the Centre[9] provided further discussions towards addressing the issues of fragmentation and improving alignment not just in the services delivery but in the area of ‘people and culture’.  A whole of Government approach and perspective was recommended as an answer to addressing the above issues.    Under the consideration for people and culture it recommended “..a culture shift in the State sector (more dynamism and innovation, more regional focus, more balance between outcomes, outputs and capability, and a longer term focus) and see staff and leadership development as an important part of the strategy..”[10]

In some quarters this was seen as a major step forward to addressing the unintended consequences of the past.  The report did not go far enough according to Gregory who viewed it as problematic and superficial.[11]  Its failure to revisit theoretical design in the light of about a dozen years of practical experience in New Zealand may simply reflect the fact that the theoretical coherence of the original reforms was something of an opportunistic aberration, since overtaken by the pragmatic contingencies involved in getting on with the job.[12]

In 2009, the State Services developed and piloted the Performance Improvement Framework (PIF) with the Education Review Office, Ministry of Agriculture and Forestry and the Department of Internal Affairs.  Since then several more agencies has undergone reviews as the PIF works its way through all Government agencies.  The framework is identified as:

  • a diagnostic tool for chief executives of State service agencies to drive the most impactful improvement in agency and cross agency performance
  • a tool for Central Agencies to have a view of and drive the most impactful improvements in overall system performance
  • a tool to provide Ministers, the public and other stakeholders with assurance that the most impactful improvements in agency performance and across the system are occurring.

Whether this data will address the fragmentation and alignment issues is yet to be determined.

[1] Hood, C., 1990. “De-Sir Humphrefying the Westminster Model of Bureaucracy.” Governance, Vol. 3 No. 2, pp.205-214.

[4] Government Management was the Briefing to the Incoming Government,

[5]Whitcombe, J. Contributions and Challenges of ‘New Public Management: New Zealand since 1984 from,

[6] Mascarenhas, R.C., 1993.  Building and Enterprise Culture in the Public Sector: Reform of the Public Sector in Australia, Britain, and New Zealand. Public Administration Review, Vol.  53, no.4 (July – August., 1993), p319-328

[7] Ibid. 325

[8] Galvin, B. 1991. Policy Co-ordination, Public Sector and Government.  Wellington: Institute of Policy Studies as cited in  Mascarenhas, R.C., 1993.  Building and Enterprise Culture in the Public Sector: Reform of the Public Sector in Australia, Britain, and New Zealand. Public Administration Review, Vol.  53, no.4 (July – August., 1993), p319-328

[9] Report conducted by the Ministerial Advisory Group on the New Zealand State sector,

[10] Ibid. 6.

[11] Gregory, R. All the Kings horses and all the King’s men: putting New Zealand’s public sector back together again., International Public Management Review. Electronic Journal at Vol. 4. Issue 2, 2003.

[12] Ibid.