• Jenny Shipley
Prime Minister

"Performance pays dividends" is as important to Government, to the public sector and the private sector alike.

As with businesses in the private sector, the Government is interested in assuring achievements that provide for the greatest gains.

Maximising those gains requires performance standards that we set ourselves as politicians and standards that we set for the public service.

For businesses, performance tends to be measured by profits and the dividends or returns to the shareholder.

This measure of performance is too simple for governments. For us performance is not simply about the fiscal bottom line.

It is about outcomes - outcomes in terms of the economic and social well-being of our country, outcomes achieved within this generation of taxpayers' resources.

While these outcomes may be more difficult to measure than businesses' bottom lines, we in Government need to be clear about what we want to achieve and how we're going to achieve it.

It is absolutely vital for us to have a strategic vision of where we want New Zealand to be in the medium to long-term.

We must be a country with a strong and vibrant attitude. We must be confident in our skills and ability to adapt as a people.

These characteristics will see us create new additional wealth and jobs so that we have an ability to pay our way and provide funding and care for those things that are important.

Past Governments have expressed this vision in a variety of ways, through strategic result areas or SRAs. While their focus has been medium-term, too often the strategic nature of these SRAs have been diluted by their broadness and lack of clarity of what outcomes the Government is attempting to achieve.

If you read them it's hard to decide in particular what the government is trying to achieve for New Zealanders.

The large numbers of SRAs that have evolved also brings into question their strategic nature. It reflects, in part, a pressure from our public agencies to see their work mirrored in these SRAs.

While it is laudable for Government Departments to refer to their work as strategic, the fact is that our attention should be on the key critical outcomes that will deliver for our country the most gain in the medium to long-term.

The Government is making a concerted effort to change this.

This year we are doing things differently.

The establishment of six ministerial teams is part of that difference. The primary task of these teams is for Ministers to work together and take a more strategic focus to the work of government.

Aside from ensuring a more robust analytical approach to policy by having Ministers cross the boundaries of their portfolios, the aim of these teams is to push Ministers to think beyond simply the short-term.

Pushing the Government to focus beyond the short-term is not without its challenges.

If truth be known, it would be easier for us in Government to develop and implement policies which are focused solely on the short term electoral cycle.

Implementing policies which are aimed to please voters would be a tempting approach.

However, in terms of performance and in terms of our country's best interest it would be a failure.

Good government is about exercising leadership and implementing policies which improve the medium to long-term prospects of our country.

It is about making decisions which take into account not only the economic and social prospects for the current generation but takes into account prospects for future generations. Opposition parties by nature ignore this need.

Labour, day after, day promise to spend more. We're keeping a tally. In the last week alone another $600 million per annum was promised. I challenge Labour to tell New Zealanders what total tax increases New Zealanders will face to fund their political promises.

The greatest challenge is having the public understand the need for strategically focused policy, not loose or expedient political undertakings.

This includes taking decisions! A good example is the sale of Contact which will not only assist us in the short-term to reduce our debt burden, but manages the taxpayers' risk now and into the future.

In the medium-term, New Zealand businesses and households will be the winners from increased competition and reduced electricity prices.

The Opposition all say no. They would add to debt, not reduce it.

We must face up to our future challenges and responsibilities. The decisions we made last week in relation to Superannuation were not about short-term savings but addressing a long-term problem that the Todd Taskforce clearly identified.

The Taskforce made it very clear that we needed to address this issue sooner rather than later to ensure the sustainability of a publicly funded superannuation scheme. These decisions are never easy to take but they must be confronted not deferred.

Interestingly it has been my experience that most good policy decisions are taken based on medium and long-term implications and outcomes not short term. These are the hardest to sell politically yet they contribute most to future prospects of growth, a balanced budget and prosperity.

Good policy is part of the answer. How we deliver public services is also important.

We in Government are always on the lookout for further efficiencies from the Public Service, improved accountability and enhanced governance structures.

They are doing their share. They have made savings. They are down sizing where possible in areas like Income Support and IRD.

In addition, I am keen to see the public service take a more strategic view of the world. Too many of our departments focus on their business and forget to take a wide look at the world.

The danger of such an approach is that too often important policy linkages are overlooked. Good policy advice is about looking beyond the obvious.

For example, in the area of social disadvantage the challenge for the public, the churches and policy advisors alike is to look beyond the symptoms and come up with solutions that work and will make a real difference.

Sound policy advice is about providing information on causal factors and which interventions provide the greatest gains over the medium to long-term.

Very few people are prepared to sit down and make the hard decisions within the human and financial resources available.

In government, too often policy advice is fragmented and lacking an integrated approach. Patch protection, if not watched, may be our greatest risk to sound policy. The non-government sector suffers from the same problem to some extent.

The establishment of the ministerial teams is designed not only to enhance the performance of the Executive but to put pressure on the public service to also take a strategic and integrated approach to public policy development.

Ministers want to work closely with non-government organisations, interest groups, the community and the public service leaders alike. We are keen to listen, to work together but also to take decisions that make a difference.

We are currently examining whether the quality of policy advice might be improved by changing the structures of some of our social policy agencies. The key will be to ensure a more integrated approach to policy advice without losing contestability.

It is essential that decision-makers fully understand the major drivers behind how and why people behave and respond to policy changes in the way they do. This is as important as having the financial resources to fund programmes.

By their very nature, strategically focused policies are not always easily understood. Too often, people believe that the only way to achieve a particular outcome is for a straight line intervention in that area. Sometimes this compounds the problem rather than solves it.

Good performance is complicated. The reality is that in social policy no one particular lever provides all the medium-term dividends a government wants to deliver. It usually requires a mix of policies. It also requires government and families and communities to work together.

It is a balance of policies and interventions that deliver sustainable growth, jobs, and a flexible innovative economy. It is a balance of policies that rewards people who work hard while still providing an ability to care for those in need.

To do our share this Government is looking at ways of improving our own performance and the performance of our Chief Executives.

The emphasis will continue to be the delivery of sound policy advice. However, for performance agreements to be effective they have to be more outcome driven than they have been in the past.

The Government's work programme should be seen in the context of maximising the gains or dividends not only for the country as a whole but for all New Zealanders. Most New Zealanders will get direct or indirect benefits from these measures.

The benefits to our country from the clear decisions on

ACC reform
the phase out of tariffs
the sale of Solid Energy and Contact
improving the Resource Management Act
a one stop shop for employment and social welfare
benefit reform
producer board industry plans
road reform
should not be overlooked. They will all assist in allowing New Zealand to do well in the world so that we get benefits at home in New Zealand.

These dividends will not only come in the form of a more efficient, competitive economy, but in building a solid foundation for a well functioning economy which all New Zealanders can gain from. This delivers genuine and well founded hope for the future.

In conclusion, this Government is determined to take a medium-term strategic focus to its policy programme. This is what is required if we are to be a strong and successful nation of people with a positiveand winning attitude.

While it may be easier and more palatable politically to focus onthe expediency of the short-term, I am determined that this Governmentnot fall into the trap of promising what we can't deliver. Nor will National pass the bill to the next generation which the Labourand Alliance intend to do.

For some parties the performance standard is populism. For this Government, performance is about taking those decisions that will deliver real gains for New Zealanders now and into the future.

Performance for this Government is also about balance.

New Zealand faces a serious economic situation. We need to be careful in our spending while still assisting those in real need. We must also ask something of everyone.

students have contributed
the state sector has contributed
Ministers have been bulk funded - Ministerial and Parliamentary services have made savings
welfare programmes have been trimmed back
some things we would have liked to have done have been deferred.
To enhance our performance requires us in Government, as businesses do every day, to review what policies and programmes work and which don't and therefore need to be reconsidered. Action must then be taken.

As with business, performance is about being dynamic, monitoring quality and success and making changes as appropriate to achieve medium to long-term solutions.

While with businesses the proof of performance is the willingness of customers to purchase your products and services, part of our success will be determined by New Zealanders understanding and acceptingthe need for medium-term policies.

This is the most demanding political challenge. It is one that this Government is equal to.

Our success will be tested at the ballot box - the ultimate performance assessment.

I'm confident we'll do well.

Performance pays dividends.

We are a small country. We must work hard to do well. We must have confidence in ourselves and the right attitude if we are to succeed.

Government is confident that with the measures we have taken this year New Zealand will be facing improved prospects next year.