Launch of the consultation process on public service reform

  • Hon Chris Hipkins
State Services

Good afternoon.

Welcome to Parliament. Your place.

If ever there was a statement of the obvious, it is that New Zealand’s Public Service exists to serve New Zealand and its citizens.

The Public Service does things that nobody else can. Running schools and hospitals, issuing passports, keeping pests out, collecting taxes, making our communities safe, protecting our special places and helping those in urgent need.

And yet the obvious isn’t always obvious.

We know we can do better and achieving results that really shift the dial and delivering services in ways that make it easier for citizens to get what they need from government.

To do this, though, we need to make changes.

The Government has big ambitions for the Public Service.

We want, and New Zealanders deserve, a public service with an international reputation for excellence. A public service we can all be proud of.

But the State Sector Act, the law under which the Public Service operates, is now 30 years old.

The Government thinks we need a new Act – one will make it easier for the Public Service to mobilise around the Government’s priorities

These are:

Improving the wellbeing of New Zealanders and their families

Building a productive, sustainable and inclusive economy, and;

Providing new leadership by government.

As the Minister of State Services I am leading this proposed set of reforms.



So the purpose of today is to outline the changes we are proposing and to launch the start of a conversation with you as key stakeholders and with the public. We need you to help us reshape the Public Service. We want to get this right so it’s really important that you have your say.


Setting the scene

But before we take these next steps towards the future, it’s useful to know where we’ve come from.

Back in the late 80s and 90s we took a giant leap towards doing better. The 1988 State Sector Act introduced radical changes to the New Zealand Public Service that had a profound and positive impact.

It was made crystal clear for Individual agencies where each of their responsibilities lay and what they were accountable for.

And it worked well. Most of the things that most New Zealanders needed most of the time were delivered by an agency working alone.

But it doesn’t work well when we need to come out of our siloes and take collective responsibility and get traction on some of our most challenging issues and opportunities. When it requires us to work cooperatively across the Public Service and beyond.

This is increasingly the case in a world that over the last 30 years that has become more complex. Issues such as climate change, security and inequality are global, and the pace of technology development means rapid change is a constant.

The Public Service needs to change with it if we are to keep up.

We need to be more fleet-footed, shifting our focus to where it will make the most difference and changing the way we operate and organise ourselves.

It won’t always work to put a single agency on the job - and we are too locked into that way of working at present.

There are times when what we need to do together is more important than what we want to do alone.

That has been changing over recent years, but not fast enough or far enough.

Our wider work around modernising the way the public service operates will continue to improve the way services are delivered to the public.

The public rightly expects more seamless and easy to access services from Government, when too often the information and advice they get is siloed. The changes we are seeking would break down these barriers and put citizens at the centre of service delivery.

One example of how public services can be improved are during so-called ‘life events’.

There are at least a dozen occasions in everybody’s lives that require major interactions with the government. The birth of a child, moving house, moving jobs, retirement, the death of a close family member are all examples of where having one single contact with government would be much better for citizens.

So we are thinking about how we step it up, and we are interested in your ideas.

So, what do we see as a way forward?


Outline of main points

The first point I’d like to make is that it is about much more than a rewrite of the State Sector Act – though that is certainly an essential part of the changes we are putting forward.

It’s about New Zealand’s reputation for having a compassionate, unified public service that is motivated by a spirit of service to the community.

A public service with an international reputation for excellence.

The Government is proposing, or has already introduced, a number of measures to make this happen.

These include:

Today’s plan for Reform.

Paying all low-paid public servants a living wage

Introducing a new Public Service Medal to honour excellence

Equal pay for women in the Public Service

Removing performance pay for chief executives

Introducing Public Service Day (on November 7)

Removing the cap on the number of public servants.

That’s the big picture.


Why do we need a new Act?

There’s a strong case for change.

A lot of changes we can do without reforming legislation – and some of the initiatives I’ve just mentioned are examples of that.

But it’s not enough.

The State Sector Act is 30 years old.

As I’ve outlined above, and as you know, the Act is currently based on a model of a single department delivering, with strong lines of vertical accountability from one Chief Executive to a single Minister.  That doesn’t work where we need agencies working collectively, across organisational boundaries, to achieve results for New Zealanders.

There is also an expectation that public services are more accessible and organised with the citizen at the centre.

The Public Service needs to be able to work as an agile and adaptable system in which people and resources are able to move more flexibly across present agency boundaries.

There is also an opportunity to reaffirm that the Public Service is imbued with the spirit of service to the community and operates with very high standards of professionalism and integrity to fulfil its constitutional role in supporting Executive Government.

So what are our objectives and what levers do we have to achieve them?

First the objectives, which fit into three categories:

ONE --- Public Services that increase the wellbeing of all New Zealanders, focused on achieving improved outcomes and providing citizen-centred services,

TWO --- Public Services that work with integrity and professionalism; a sound support for Executive Government and worthy of public trust and confidence, AND,

THREE --- Public Services that are agile; quick to change and configure to meet new needs.

We have five levers to achieve this change:

ONE --- Legislation: This includes the State Sector Act, Public Finance Act and Crown Entities Act, which set the basic rules and structure of the system.

TWO --- Organisational change: This will help drive our policy priorities, for e.g. changing organisational cultures to encourage collaborative behaviours that would help in establishing new agencies if necessary. Recent examples with this government include the new Ministry of Housing and Urban Development and the Pike River, Recovery Agency.

THREE --- Public Finance: This can enhance effectiveness of public services, for e.g. the reform of the Public Finance Act including the wellbeing budget, the commitment for an Independent Fiscal Institution, as well as specific funding decisions.

FOUR --- Expectations and Accountability: these can be used to focus and drive effort on issues like reducing child poverty and Cabinet Committee outcome measures.

The final lever for change is Employment and workforce policy: This is about decisions that help make the public service an attractive employer by building the skills base and paying the living wage and implementing pay equity and fair pay agreements.


The opportunities

The real opportunity with the legislative changes we are proposing is to give the Public Service a range of flexible organisational options that can be applied to deliver better services and outcomes.

These options include:

Making groups of chief executives jointly accountable for achieving complex government priorities. Let’s call it an Executive Board of CEs. We could set up a CEs board to tackle some of the really big and complex problems facing the country, such as climate change, social wellbeing or child poverty.

The flexibility to join up people and resources from different agencies to work on common issues – let’s call this the Joint Venture proposal. We could set up a JV for targeted challenges whether that be child poverty, housing affordability, clean rivers or family violence, and,

One stop shops for the public by bringing related services together at a single point - the Executive Agency proposal along the lines of Service Canada and the Australian Federal Government’s CentreLink.

But there’s another opportunity at hand as well. We want to enshrine in legislation the purpose, principles and values of the Public Service.

It’s important we do this. It’s a simple thing to do but spelling out the purpose, the principles and values will provide the foundations on which the Public Service operates and we believe it will have a unifying effect.

So, what is the purpose of the New Zealand Public Service?

It has four pillars:

To improve the intergenerational wellbeing of New Zealanders

To deliver results and services for citizens

To serve Executive Government effectively and efficiently, and

To support the continuity of democratic government.

These will be underpinned by principles and values, including:

Political neutrality, offering free and frank advice, selection based on merit, being accountable, behaving with integrity, and finally – having a commitment to service.

Putting these in legislation cements the purpose, principles and values as bedrock for the public service.

We’re also thinking about extending the purpose, principles and values to some Crown Entities, as well as core public service departments. 

The reason is simple – New Zealanders expect the same value and level of service from publicly funded organisations, whether they are delivered by a department, a departmental agency, or a Crown Entity.

The other important opportunity here is to improve the Public Service’s capability to support the Crown in meeting its Treaty obligations.

We want to raise the bar on how the Public Service supports Māori.

We’d like a prominent stand-alone clause setting out expectations, with specific reference to the Public Service’s support of an improved Crown/Māori relationship.

This would likely include some expectations of the State Services Commissioner and chief executive around engagement and partnership with Māori, build cultural competence - such as system wide induction and training in Te Reo me tikanga – and a commitment to developing and supporting Māori public servants into leadership positions.

Another thing we want to embed in legislation is a focus on stewardship to ensure the Public Service builds the capability to serve future governments. In other words, the Public Service needs to take a long term view so it can better contribute to New Zealand’s future development.

This might involve a statutory requirement on chief executives to produce a long term insights briefing. These would be on a sector basis, produced mid-way through the electoral cycle, and forecasting key trends, opportunities and risks over the medium to long term.

What we’re trying to do here is provide stronger leadership across the system to tackle key issues.  We have a couple of opportunities to strengthen public service leadership.

We’re thinking of a legislative requirement that chief executives as a formal leadership group for the whole public service.

We also thinking about providing extra levers to address system issues such as diversity and inclusion, and more consistency when it comes to conducting inquiries.



I need to wind up.

We do ok. But we know we can do better.

We know we can deliver services in ways that make it easier for citizens to get what they need from government.

That’s why we have embarked on what would be the biggest change to the Public Service since the 1980s.

But I have to stress that these are all proposals – this is all open to discussion and feedback from you and the public.

Our goal is a modern, forward-looking public service. A public service with an international reputation for excellence.

I really believe that together we can change the Public Service for the better and improve the wellbeing of New Zealanders and their families.

So please get involved. Take the consultation document away with you and then have your say. It’s a once in 30 year opportunity to reshape our Public Service.

Thank you.