Treasury head urges public servants to revolt

Friday 2nd March 2012

Treasury Secretary Gabriel Makhlouf has used his first major public speech to call on public servants to speak up and seek change where it’s needed, as the government challenges its agencies to do more with less for the foreseeable future.

“I call on … public servants: if you see a process that makes no sense, that could be improved, then speak up, say so,” he said in the closing speech to a public sector leaders’ conference held in Wellington by the New Zealand Institute of Chartered Accountants.

“Let us unleash a revolution of innovation,” he said. “This isn’t just about managers and staff. It’s about everyone who has an interest in the public service,” including the bureaucracy’s main union, the Public Service Association.

Makhlouf invoked the spirit of public sector reforms of the 1980’s, which attracted international admiration, but said a revamp of the once ground-breaking Public Finance Act was now needed, along with better measurement of results to ensure they met New Zealanders’ needs.

Makhlouf effectively accused the Helen Clark-led Labour administration of skewing social welfare spending to wealthier New Zealanders.

“The Treasury’s fiscal incidence work shows that, over the last 12 years, households in the top half of the income distribution enjoyed increases in social spending of almost 20 percent more than households in the bottom half,” he said.

Elsewhere, he cited the trebling of assets in the justice system and doubling of total spending on the sector in the decade to 2010 as an example of results often not matching growth in the government’s investment.

“As another example, we spend more of our GDP on health than most OECD countries, but our health outcomes haven’t improved as rapidly as our spending has grown,” he said. Three in 10 children left school ill-equipped for today’s economy.

On the other hand, the Christchurch earthquake had unleashed many new ways to make best use of available resources.

“The sharing of school facilities is an innovation that would have been inconceivable in the past,” said Makhlouf. “A number of these ideas are now being implemented nationwide.”

It should be an open question whether the best provider was in the public, private or voluntary sector.

“While some people may value public sector provision for its own sake, it is the quality of the service that matters to most people rather than its provider.”

With the second annual release of comparative benchmarking between government agencies due next Wednesday, Makhlouf said results from efforts to improve public sector so far had proven modest, with a total value of around $20 million.

“But we know mindsets are shifting. The gains from bringing performance up to the median across agencies are in the hundreds of millions of dollars annually.”

Constant attention to the quality of the government’s assets was also important.

“But we still need better information about the assets that are currently available, what assets are needed to provide services, and whether the Crown is the best owner of those assets.”

BusinessDesk.co.nz

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