Continuity And Change Thirty Seven Years On

INTRODUCTION

Thank Mr Speaker for the loan of this Hall.

Thank Everybody for contributing to this evening
for your friendship and support to me and to Heather
for making my career in public service so rewarding
and so enjoyable

Thank Kate for your encomium

I did not recognise myself. Then I thought: this is the one occasion in my life when the truth doesn't matter!

Thank John, Bev and everyone for gifts

Thank Heather my partner, support and sheet anchor for 35 years:

for shifting houses and homes 17 times in 24 years
for organising and hosting hundreds of official
functions in seven countries and in Wellington
for sacrificing your own professional career for 20
years and then making another one
for making Luke, Andrea and Hunter the normal,
successful and loving people they are

I am conscious here amongst the Ministry family, that I have rather neglected my own. Heather, I'll try to make up for lost times.

I would like now, for the last time as Secretary, to share my thoughts on our Ministry.

WHAT HAS NOT CHANGED

1 Getting the right people

If Sir Alister McIntosh were alive today there are many aspects of the Ministry and its work that he would find familiar. As the first Secretary of the Department he was determined throughout his long stewardship that the highest standards of recruitment should be maintained. He built a cadre of well qualified people prepared to make a career in the New Zealand diplomatic service. That tradition has continued. There has been continuity in the culture, professional standards, values and esprit de corps of the Ministry and in its long-term rotational career structure.

In McIntosh's view, and those of successive Secretaries, "right judgment" was the essential quality for any diplomat. As Lord Plowden observed in 1964, diplomats also require the ability to see and understand the political implications of events and developments, and a flair for recognising the human factor in international relations: a theme I will return to.

2 A Central Policy Ministry

A second feature that has not changed is the Ministry's strong central and coordinating role in foreign and trade policy formulation and execution, including its involvement in security and economic issues. While in the past decade other government departments and agencies have had greater autonomy to pursue external linkages, the Ministry remains the only government department in a position to see the totality of New Zealand's relations with other countries and regional and international organisations and to advise on where the national interest lies.

This was reinforced by the merger of trade policy and negotiations functions in 1988 and, very recently, by the establishment of a Ministerial Team for External Relations, underpinned by an officials committee chaired by the Secretary of Foreign Affairs and Trade. This is an essential piece of government architecture that has been missing for over ten years.

It reflects the fundamental and indispensable link between external and domestic policy-making, especially in the security and economic fields.

3 A Career Ministry

The Ministry is different from many other organisations, both public and private sector, in continuing to offer a long term career for policy staff. Our long term rotational career policy is carried on for both professional and cost-effectiveness reasons, and because the Ministry is a national institution.

At the 1996 Public Service Senior Management Conference, Professor Alan Schick said that:

The investment in home grown management, the human side of management in
well-run successful organisations is enormous.

The Ministry, perhaps more than any other department in New Zealand, has many of the characteristics of the most successful US corporations: a pre-dominance of "home-grown" personnel (both policy and management); "generations" of home-grown CEOs - as have many of New Zealand's most successful businesses; and "a cult-like culture". Given the Ministry's strong emphasis on succession planning, it should not come as a surprise that successive appointments to Deputy Secretary positions - which are contestable - have come from within. Or, that four of the Ministry's Deputy Secretaries have become CEOs in the past two years.

Dr Rod Deane said earlier this year: "there is not much difference between running a large public or private sector organisation ....... The management issues are the same: establishing a vision, developing appropriate strategies and then selecting the right people to deliver.

4 Resource Constraints

The annual battles for resources have been a continuous factor throughout the Ministry's fifty six year existence. Over thirty years ago McIntosh wrote that the Minister (Holyoake) "loathed overseas expenditure".

He wrote to George Laking in August 1965:

"The government is in a mess financially. The Prime Minister, after looking at his own farm prices for crutchings, said the other day: "Don't you ask me for any more money for External Affairs for the rest of this year."

To quote our own Associate Minister, Mr Upton, who was speaking as Minister of State Services:

"To my mind, maintaining the long-run capability of the core Public Service is undoubtedly a defining characteristic of fiscal responsibility .....

He went on to criticise two assumptions of which we are all too familiar:

"The gross assumption that departments can always continue to reprioritise within baselines without affecting organisational capability, and the equally absurd assumption that productivity gains can be extracted centrally through across the board budget costs."

I believe the ownership interest in and core capability of the public sector is under pressure that cannot be sustained. All too often policy issues and capability issues have been seen only through a short-term fiscal prism. To accommodate continuing welfare spending pressures over the past fifteen years, expenditure on key, core government services has reduced significantly. In my view, it has now been cut too far, the national interest is being compromised, and the long run core capability of the public service is under threat.

Mr Upton is right. Cuts over past years mean that baselines are under extreme pressure and departments are focussed very much on essential outputs. The scope for reprioritisation is limited at best. We must have a more strategic approach to issues, instead of the naive and simplistic formula of reprioritisation. To do otherwise makes a mockery of the theory and model of outcomes, outputs and purchase agreements.

Finally, if we don't treat our employees better -- and that means better pay and terms and conditions -- then we risk losing more good people to the private sector (that's if we can continue to attract them in the first place). This is contrary to the national interest in the long-run.

These observations are now new. In April 1954 Frank Corner wrote to McIntosh:

"We have already a valuable network of posts, but all of them are understaffed. Increase the staff by one or two productive officers, pay them properly, given them tolerable conditions, back them by a human but efficient administrative machine in Wellington, fight tooth and nail for their interests - that is the sort of programme I would recommend."

Ministers and New Zealanders need to develop a higher regard for their public servants, many of whom in my experience are talented, hard-working, and dedicated to the national interest. If this change in public perceptions is to happen, core departments need to be better funded so that they can provide the best service. And Ministers need to be more active in praising the work of their departments.

5 Relations with Ministers

On this, the most delicate of relationships, I will tread warily. "The diplomat must always remember that he is a servant, that he possesses power without substance".

My time in the Ministry spans ten Prime Ministers. I have worked officially with eight of them, and travelled overseas with seven including Sir Geoffrey. All Prime Ministers must take both a strategic and a daily interest in foreign affairs.

So too I've been privileged to work with many Foreign and Trade Ministers including our friend Russell Marshall. During these past nearly nine years I have served under the "reign" of Don McKinnon.

In 1965 McIntosh said:

"The civil servant can advise: he cannot, he does not, he must not decide. When a civil service begins to think it is the government, it is no longer a servant but a political party in embryo, and one totally unresponsive to the people. Admittedly, this position has its frustrations."

Earlier in 1954, in a letter to Frank Corner, McIntosh was more explicit:

"The criticisms that you level at Public Servants and the remarks you make about their frustrations I fully understand and share. On the other hand, the bulk of us are not too hot, and, unless, by sheer ability, sound judgment and common sense, we can convince Ministers that our advice and actions are good and worth being followed, we have no great cause for complaint, and if we all started to walk out because of the inevitable folly of our inevitable masters then the place would be a shambles."

As I have seen and tried to play it, the CEO (indeed all public servants) should:

· not crowd Ministers and keep off their turf. Be one step behind
· give free and frank advice, but make sure it is credible. Ministers are not shrinking violets, nor plagued by self-doubt. They can handle a robust discussion or argument
· do not give political advice, but don't be politically naive either. The only advice to worry about is bad advice
· pose the problem, but also propose the solution. Ministers are not after a search for the truth. They have to decide what to do
· remember: the amount of material Ministers must digest is immense. So public servants who write well are ready, and those who speak clearly are listened to

Finally, I see the Minister/departmental public servant relationship as a creative partnership. Analysis, policy advice, programme and project design, and their implementation are usually handled iteratively as the Minister and the department work their way together through complex matters. There is no greater sense of satisfaction when, after years of working with Ministers on major programmes and projects, they come to fruition. Making a difference is what drives the dedicated public servant.

WHAT HAS CHANGED

1 Greater Autonomy to Manage

The greatest change in New Zealand's public service over the past decade has been the authority devolved to CEO's to manage departmental resources: capital, physical assets, operating expenditure and human resources.

Today, the Ministry has a degree of financial and management autonomy - and accountability - unthinkable in earlier years. It is a responsibility that I have shouldered with alacrity and guarded jealously from unwarranted encroachment by interfering central agencies.

2 Technology and Versatility

The Ministry has been adept at adapting to rapid and dramatic changes in the domestic and global environment.

Contrary to popular belief, the Ministry was ahead of the game, not behind it when the State Sector and Public Finance Acts were introduced.

It also came to grips well in the 80s with what a former Secretary in the Department of Foreign Affairs and Trade in Australia has called "new managerialism - the kitbag of public sector reforms": corporate planning, devolution, modern financial management, unit and programme budgeting, programme and personnel evaluation, performance agreements and so on. Similarly, the Ministry has taken on board the panoply of modern office equipment and communications technology. Former Secretaries would not recognise the workstations of today's foreign service officers. They might be appalled that a desk officer can now communicate direct in seconds with his or her colleagues at overseas posts, often without higher intervention from senior officers (or Ministers)!

It is a matter of fact that many of the changes the Ministry pioneered have been introduced by other Foreign and Trade Ministries, eg Australia, UK, Singapore and Canada.

3 Public Affairs and More Openness

Up to the time of the Viet Nam war, there was little public or parliamentary interest in or substantive discussion of international issues and not much need for the Ministry to perform a role in informing members of parliament, the media and other public audiences of the background and nature of them: let alone seeking out and listening to their views. This is a far cry from the situation today, where the Ministry is expected and encouraged to get out and talk about foreign and trade policy issues to a wide range of audiences and clients.

The Official Information Act, and more recent activistism of Parliamentary Select Committees has spurred this activity.

The Ministry must accept an even higher public profile if it is to do its job and meet ministerial expectations. It has substantial public affairs and business communications programmes designed for a much wider public audience than in earlier years: the business community, the media, numerous NGOs, university and research institutes, service organisations, and the general public. It is essential that the Ministry be resourced well for this integral part of officers' work.

THE FUTURE OF DIPLOMACY

Finally, I want to offer an observation about the future of diplomacy in the age of the internet and the video conference. I do so because it is relevant to all agencies of government.

It seems to me that we live in an age where trust is being confused with reliability.

You can order a book or CD or whatever over the internet, or by mail order, and it will be delivered to you in perfect condition, in good time, and at a reasonable price. In short, and at its most extreme, the internet is able to deliver a theology of "perfect, now and free". If this is so - if we can purchase goods and services, or communicate by email - in a way which is reliable, immediate, and cost-effective, why should we maintain a network of posts and diplomats abroad?

My answer is emphatic: reliability and convenience are not the same as relationships and trust. Technology will not and cannot effectively replace the benefits of direct contact which is broadened and deepened over time.

When it comes to communicating ideas or advancing a negotiation, technology can be a tool of enormous effectiveness. But it works best only where a personal relationship already exists.

This is certainly the case in our profession: the gathering of sensitive information or the pursuit and closing of a difficult negotiation is often an extremely personal and very informal process, done not in set-piece meetings but rather in smoky rooms or over lunch on a weekend. And such a process is invariably underpinned by a sense of mutual trust and confidence.

There is a personal dimension to diplomacy - and indeed to all the business of government and beyond - which cannot be substituted by technology no matter how reliable or cost-effective. Personal relationships will remain the principal sinews of diplomacy: in negotiations, problem solving, conflict resolution and the settlement of disputes.

CONCLUSION

The Ministry has changed hugely over the thirty seven years I have worked for it, especially over the past decade. Foreign services have a hard row to hoe. They are criticised for being elitist, behaving above themselves, and spending more time socialising than working.

That image is wrong. I believe perceptions have changed somewhat over the past ten years as the Ministry has developed a better informed, more supportive domestic constitutency, especially in the business community.

The Ministry is not a smug old crock, unwilling to change, bent on self-preservation, and peopled by staid, grey-haired males in dark suits (48 percent percent of all our staff are female, and the average age of all staff is under forty years).

I prefer a recent comment from a well-known New Zealand businessman: he said the Ministry's great strength is its enviable brand image, which he described as "excellence, achievement and prestige". He added that people wanted to work here, not for the money, but because the firm was the best in the business.

As I make a last bow I'm mindful that while some footprints will remain in the records for a period - in reality the marks one has made, and my words this evening, are like stick drawings on the sand: the tide comes up and washes them away.

Heather and I have two enduring things to treasure and to take into the next phase of our lives: wonderful memories and a web of magnificent friends in the Ministry family and throughout the globe.

Few are so fortunate. We salute you and we thank you all.

ENDS

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