Hon Trevor Mallard
Speech Notes

Thank you for the opportunity to address this conference today.

I would like to thank the PSA for its contribution over the last 14 months to the productive environment that has underpinned the Partnership for Quality and the tripartite forum of Ministers, departmental CEs, and the PSA.

The partnership is yielding more productive relationships inside individual departments. And the tripartite forum is bringing together chief executives, Ministers, and the PSA on subjects that apply across the entire Public Service, and out into the State sector.

I was especially pleased with the work of the forum in getting agreement on the new approach to performance-based payments and special payments. Cabinet approved changes to the bargaining parameters recently and I am making those changes public today.

They were partly prompted by some cases of one-off payments to staff that came to light early this year. But those cases underlined the bigger questions we faced on this issue.

Our view is that salary should be the primary means of remuneration for officials and our system will gradually move away from the one-off payment approach.

We do not propose to put a complete stop to performance-related payments. People will move up scales based on performance. To stop such payments would not assist in growing and maintaining high-quality public services and it would disadvantage the State sector as an employer. However, the circumstances in which performance payments are made, and the criteria to be applied, will be clarified. People will not get bonuses for doing their job.”

I believe we have managed to lay the groundwork for a more consistent and comprehensive approach to those payments in the Public Service and eventually the remainder of the State sector.

So, congratulations to your organisation and to the departmental chief executives who have contributed for this and other ongoing work.

Credit should also go to the dozen or so departments that have formalised the partnership in some way or another. The PSA has signed formal partnership agreements with several departments, and the partnership is working informally inside others.

The SSC and the PSA have established a protocol for how they will work together. Partnership is about the quality of relationships. These always require concerted effort to build and maintain.

I know that the PSA and the SSC are committed to finding ways to improve how they work. So, the spirit of co-operation is evident.

I want to address some of the wider questions that we face right now in the Public Service and State sector because they have an impact on the partnership and because they are among the subjects that you are discussing today and tomorrow in your workshops.

Let me start with an idea that comes through in more than one of the papers that is being presented. That is the idea of reform.

We’ve spent a lot of time in New Zealand in the last decade discussing the reforms of the 1980s and early 1990s.

I would like to make it clear that that type of reform is behind us. We probably won’t see it again in New Zealand, at least not in my lifetime.

At least two of the papers for this conference label the approach to reform as fractionated and de-coupled.

I would interpret that as saying that the reforms were reductionist. We decided to focus on one or two values - efficiency and responsiveness - and we set-up the system to address those values.

Other parts of the system were sometimes overlooked or addressed only in passing.

I think it is fair to say that that was the case, for example, with ethics and values. We knew they were there, and we knew they mattered, but in the rush to reform, they were sometimes overlooked.

That is one of the reasons we are trying to make ground now in that area.

The approach that this Government is taking to the Public Service and the State sector is systemic and developmental.

We have recognised that not only are individual departments an inter-connected system – or a series of inter-connected systems – but so is the entire Public Service and State sector.

Change in one part of the system affects the remainder of the system. A good current example of this is the changes that we are putting in place at the Department of Child, Youth and Family Services.

One of the biggest problems in that department is keeping up the skill level of the frontline staff, and assisting them to manage huge caseloads.

That problem could be phrased solely as one about human resources and skill levels.

But we recognise that part of the problem that CYFS faces is the degree of demand. In other words, the external environment is part of the system in which CYFS lives.

So, in the package of change unveiled for CYFS a fortnight ago, we included plans for closer collaboration with the community in order to grow understanding of the department and what it does.

We are instituting systemic change by addressing the complete world – or, at least, a large part of the world - in which CYFS lives.

To relate this more directly to the work I am doing as State Services Minister, I would refer to the first report of the State Sector Standards Board.

It stressed the need to take a much more sophisticated view of the State sector.

It would have been tempting for the board to become highly prescriptive and attempt to set out some detailed, codified standards to which departments and agencies have to adhere.

Instead, the board set out the major systemic questions about the world in which standards are effected.

For example the board observed that we should consider how we publicly affirm and recognise the success stories in the State sector. That is how we acknowledge people who have done a good job.

In other words, the board was suggesting we should create a system in which we not only have standards, but also where those standards are seen to be manifest and are acknowledged.

I note that Peter Harris' paper, which will be presented to you this afternoon, talks about the ‘rules-based’ bureaucracy we had in the period up to the 1980s. Peter observes that the test of a rules-based bureaucracy is simple: can this department or agency implement the rules properly?

And in a rules-based system, that’s all you get - just rules, implemented over and over again. In a systems-based approach, you recognise that you need much more than rules. You have to acknowledge and model success.

I’d like to look at a couple of other areas that I know are being discussed in the workshops.

I'll start with e-government because it is something that I have a quite an extensive interest in.

I understand that David Russell plans to talk about the potential that e-government offers but will also sound some warnings about it.

I think some of the biggest potential of ‘e’ lies in integration - in serving people as they would like to be served. For example, bringing together services provided by ACC and IRD to small businesses through a single, integrated delivery point.

Even perhaps, bringing together public and private sector services that have common customers, and supplying them through a single delivery point.

A common theme of this conference is the role of the centre.

Indeed, this conference itself is an example of the centre in action.

The PSA has a role in the partnership for quality precisely because it can provide a centre – a hub of information and co-ordination – for organised labour in the State sector.

So, establishing the partnership was, in itself, a step towards strengthening the centre.

Some personal observations on the role of the centre.

First of all, what is the centre?

In the New Zealand system, the centre is probably best defined as the Cabinet, plus Ministers individually, and the three central agencies – the Treasury, DPMC, and the SSC.

Generally, in a system of government like ours, the role of the centre is fourfold:

to set objectives for government policy
to allocate resources in line with those objectives
to co-ordinate action towards the objectives
and to evaluate results and adjust for new objectives in light of the results

The role of the centre becomes critical once you start thinking systemically.

To set objectives, you need information coming in from the periphery. What’s happening out there which is changing the environment in which we are working, and what adjustments do we have to make in light of that? In other words, the centre is part of the information system.

Co-ordination – another role of the centre - requires more than simply enabling people to work together.

Co-ordination requires recruitment and communication – in other words, constantly bringing people on board so they are committed to your objectives. So, the centre is the heart of communications.

Evaluating results requires communicating risk – in other words, recognising that we might not always achieve the absolute result, but 90 per cent might be within an acceptable range depending on what is being done.

In other words, being at the centre of the system requires you to assess risk and embrace it.

The potency of the centre lies in its capacity to run the rest of the system – to receive new information and adjust around that, to communicate and recruit, and to recognise risk.

It’s in those areas that the work that is being led by the SSC – on strengthening the centre – is focussed. Indeed, the entire work of the SSC is being realigned to reflect a systemic view of the Public Service and the State sector.

I look forward to the contribution that the partnership can make to this work.

The partnership and the tripartite forum fit in perfectly with the bigger picture of the strengthened centre. The partnership is a means for transferring information, for co-ordinating activity, and for communicating and recruiting.

Your suggestions, today, on ways in which the partnership can be made even more effective – as a part of the centre - will be welcome.

You have my best wishes for this conference, and I look forward to the ideas that will come out of it, and to another year of consolidating the role of organised labour in the State sector in New Zealand.

Thank you.

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