Speaking Notes for Panel Discussion on State Sector Act 1988.

Sir Geoffrey Palmer QC

26 October 2017


Because of the need for brevity the points made are necessarily didactic.

I will confine myself to the core public service.

Yet the sprawling mass of the state sector that lies beyond deserves attention.

Political appointments to Boards do not in my view provide adequate protection for the public interest.

More order and discipline needs to be brought to these more remote agencies. I would give some powers over them to the State Service Commission on issues like salaries and ethical principles.

I have long held the view that the best and most accountable form of constitutional organization for carrying out public purposes is a department of state.

It has been my privilege to see the New Zealand public service from many different angles over a period of many years.

As a young solicitor who did many public service appeals under the State Services Act 1962.

As a constitutional lawyer teaching in universities.

As an MP and high ranking Minister of the Crown.

As President of the Law Commission.

As a legal practitioner in the public law arena where interesting problems arise that involve the public service.

These various prisms of observation induce different nuances of view depending on the prism through which the examination takes place.

The decisions concerning the State Sector Act 1988 were the work of three ministers of whom I was one.

Stan Rodger was the lead minister and he had the unenviable task of solving the fiendishly complex state pay fixing apparatus at that time. That was cured and I have heard no demands for a return to that system.

The reasons for the state sector reforms in my view were to “reduce the vast amount of bureaucratic impedimentia” from the system of public administration.

I recall as Minister of Justice being required under the then Treasury Regulations to sign off as minister the engineering drawings for a new prison boiler. I refused. I said get an engineer.

I knew nothing of boiler design.

We were aiming in the State Sector Act to provide more flexibility for public service manager to manage.

Many have argued that there were ideological goals in this reform designed to shrink the state.

While some of the officials working on this project may have had that view it was certainly not my view, nor Stan Rodger’s, I think I can say with safety.

There are often mythologies that grow up around reformist governments, but when you are in it you see it differently.

In our ad hoc committee of three ministers we agreed that the career qualities of the public service should be maintained. The Senior Executive Service provisions were an essential part of that vision.

The fact those provisions were later discarded was detrimental to career public servants and the public sector as a whole.

We also felt it was important to retain the principles of the Public Service Act of 1912. Those principles were tried and tested and, from a constitutional point of view, they had given us a high level of public administration on that was free from corruption.

It has been my experience in the design of legislative schemes unexpected and unintended results occur.

The State Sector Act has survived quite well over the years, but it is my view that now and has been for some years there has been a malaise settle over the public service that has damaged its effectiveness and its morale.

Too many department and ministries are too weak, lack creativity and seem to lack ideas.

I have little doubt that the policy prescriptions that I advocate for the public service will not find favour in current official circles. But from where I sit the following problems exist.

About the same time as the legislative changes were made the cult of management seemed to appear.

The teaching was that competent manager can manage anything whether he or she knows anything about the subject or not. This is false.

The changed nature of the economy meant there were many job opportunities available outside the public service and many public servants moved to the private sector.

The silo effect within government was increased by the Act I tend to think in retrospect. But Cabinet is the main co-ordinating body of government and there remain serious problems in this respect with the absence of joined- up government.

Lack of training within the public service is very noticeable to those who have to deal with it.

Serious structural issues exist, some departments are massive, others very small.

The centre is too weak and is a pale shadow of what it once was. The performance of the State Services Commission has been sub-optimal for some years, although it has picked up recently. The Commission needs more resources.

The failure to effectively manage the Crown’s legal risk seems to me to be serious – legal resources within government are splintered and are too thinly spread.

Legislation is not prepared, designed and processed in an optimal manner.

The increased difficulties and complexities of policy problems requires higher standards these days.

Despite official denials I have observed a reduction in the provision of free and frank advice by the public service.

This is serious because it endangers the independence of the public service.

Above all things, we need a politically neutral public service.

It has been hard to recruit good candidates for top positions in some areas because the jobs are essentially unattractive for talented people.

The Official Information Act has fallen on hard times and the system needs to be more transparent and open than it is.

The whole system is deficient looking out for the problems of the future.

The three-year term of Parliament adversely affects the range of vision, despite the stewardship provisions that were added to the Act in 2013.

The biggest enemy of the future is the present.

The problems of the present and their resolution crowds out the prospects of preparing for the future.

Think Climate change.

For many of the reasons outlined here I have been advocating a written codified Constitution for New Zealand along with Dr Andrew Butler.

We thought the New Zealand public service needs constitutional protection.

Here is what we have now provided for in the new draft we are preparing having had hundreds of submissions.

59 The public service and state sector

(1) The public service is a career-based service driven by a culture of excellence and efficiency, where appointment and promotion is on professional merit.

(2) The first duty of the public service is to act in accordance with this Constitution and the law.

(3) The public service must demonstrate that it is imbued with a spirit of service to the community and open democratic government.

(4) The public service is politically neutral and impartial and serves loyally the Government of the day.

(5) The public service provides Ministers with free and frank advice.

(6) The public service upholds the concept of stewardship, that is active planning and management of medium-and long-term interests, along with associated advice.

(7) The public service and the wider state sector must maintain high standards of integrity and conduct.

60 State Services Commissioner

(1) The public service is headed by the State Services Commissioner, appointed by the Head of State on the recommendation of the Prime Minister, after consultation with the leaders of the political parties represented in Parliament.

(2) The appointment of the State Services Commissioner is for a single fixed term of five years and it is that person’s task to provide leadership to the public sector as a whole.

(3) The Commissioner makes decisions independently of Ministers and is the employer of chief executives of departments and ministries of the public service.

(4) The Commissioner is also responsible for supervising standards of integrity and conduct in the wider state sector beyond the public service.

Let me conclude by saying that no statute and not constitution can provide the human qualities that are required to make the public service work properly.

That depends upon the quality of the people in it and the leadership that is provided.

Ministers need to understand our traditions better and not attempt to supress ideas within the public service.

There are quality controls on the public servants, but not the quality of ministers and their understandings.

I am inclined to the view it would be a sound idea to have a Royal Commission into the public service again.

We have not had one since 1962.

Such Commissions are not currently the fashion.

Yet over the years they have provided some solid frameworks for New Zealand policies.