Lecture Notes on the Executive Branch and Public Service in New Zealand

The Executive Branch

Origins and Definition

• Traces back to Montesquieu's separation of powers.

• Executive as "The Executor of Public Resolutions."

• Modern executive: executor + provides "Direction" (Llewelyn's law jobs).

The Crown

• Most executive actions occur via "The Crown," not the executive itself.

• A debated concept: what's included in "The Crown"?

• Essentially, the "Crown" is the body corporate of the NZ state; ministers exercise its powers.

NZ Executive in Action: Dignified vs. Efficient Constitutions

• Ancient, evolving constitution metaphor: an old man attached to old-fashioned clothes.

• British Constitution: externally dignified, internally efficient.

Dignified Executive: Monarch (Governor-General)

• Role limited by convention.

• Appointment of Ministers.

• Role as 'protector of democratic constitution'.

• Example: Australia 1975 (Gough Whitlam) - GG called election without PM's advice.

• Most powers now exercised by ministers.

The Executive

• Presided over by the Governor-General.

• Advises the Governor General

• Ministers of the Crown are Members (only 2 are required).

• Provides Ministers with Executive powers.

• Executive Law Making body (used very very regularly).

• Orders in Council: Laws created by the Executive Council using powers delegated by Parliament.

• In practice: Formalizes decisions already made in Cabinet; GG's presence not required.

Efficient Executive

• Two elements: Direction and Administration.

Direction

• The Political Executive: Ministers, Cabinet, and the Prime Minister.

The Prime Minister

• Head of Government in NZ.

• "The Invisible Job": Previously, PM not mentioned in legislation (except pensions); now mentioned (e.g., security service).

• Formal powers: Call an election and appoint ministers.

• PM wields significant power; derived from:

  • Control of majority in Parliament (usually largest party).

  • Ability to control party and coalition partners.

  • PM as Party Leader promotes MP's to their ministerial portfolios etc therefore party members will usually stay loyal to the PM. Coalition parties trouble this idea though.

Ministers

• Prime Minister appoints ministers.

• No formal limit on number of ministers.

• Executive Council: Currently 20 Cabinet Ministers (14 National, 3 ACT, 3 NZ First).

• Ministers Outside Cabinet: 8 (2 ACT/1 NZF).

• Associate Ministers (15) + Lead Ministers (2).

• Associate Ministers elsewhere are usually junior ministers - In NZ every single associate minister is also a full minister.

• Parliamentary Under Secretaries: 2 - Sit outside cabinet - specific delegation to undertake some ministerial roles.

Role of Ministers

• Policy Responsibilities.

• Portfolios (e.g., Health, Education, Defence).

• Act and Bill Responsibilities - Taking Bills through the house and the management of Acts.

• Public Sector Responsibilities:

  • Department.

  • Crown Entities.

  • SOEs and other Agencies.

Cabinet

• Not a formal creature; little mention in formal statute etc.

• Operates through Collective Responsibility: All members follow decisions – a constitutional convention.

• Collective Decision making.

• PM's power in Cabinet: dictates cabinet secretary's notes, which public service follows.

• Executive Law Making Power: The Royal Prerogative and Secondary Legislation

  • Power that inherently lies with the crown.

  • Most of laws in NZ are made through secondary legislation - 2020 - 387 Legislative and Disallowable Instruments. "Other Instruments" - 200+ a year.

  • Secondary Legislation - through powers delegated by Parliament

Political Accountability: The Role of Parliament

• The Buckle: Ministerial Responsibility

  • Responsible to Parliament for all portfolio matters.

  • Ministers Responsible for the Public Sector - Departments, SOEs, and other Agencies

  • Ministers Responsible for their Portfolios

  • Crucial because we elect Parliament, not the executive. Executive must hold Parliament majority, raising separation concerns.

  • Ministerial Responsibility - A convention

Parliamentary Mechanisms

• Question Times:

  • 12 Questions per session.

  • For each Minister in rotation.

  • Question must be answered.

  • Minister must answer truthfully.

  • MPs can make an unlimited number of written questions.

• Debates:

  • Primarily instigated by the executive

    • General Debates

    • Special Debates

    • Urgent Debates

• Select Committees:

  • Can investigate any matter within their remit.

  • Often examine government performance.

  • Can call witness from inside and outside government.

  • Appointed proprtionately to strength in the House.

  • Politically divided.

  • Spend most time examining bills.

• Regulation Review Committee:

  • Regulations (Disallowance Act) - Examine secondary legislation created by executive branch - Look at if the regulation is supported by statutory power, if the legislation is "unusual", are they clear, are they retrospective etc.

The Administrative Executive

• The "Public Sector"

  • State Sector

    • Public Service

    • SOEs

    • Crown Entities

    • Other Public Entities

  • Local Government

    • Regional Councils

    • Teritorial Authorities

History of New Zealand's Public Service

• Pre 1912:

  • Ministers themeselves were involved in the appointment of the public service - Politicisation and corruption.

• Public Service Act 1912:

  • Draws upon the British Model. Creates an Independent Public Service. Ministers were no longer involved in the appointment. This was delegated to the newly created

• Principles of the system 1912 - 1984

  • Non-political

  • Independent

  • Generalist

  • Anonymous

  • A single service

  • No divisions between advisors/senior management and delivery

  • Ministerial Responsibility

• The Crisis of 1984

  • Economic decline in NZ – largely based on UK (NZ’s most predominant trading partner) joining European Community in 1974. NZ began to develop into a state managed economy. National Govenrment under Muldoon tried (and failed) to introduce drastic and increasingly panicked measures to halt ecoomic decline.

  • Labour elected in 1984 on a traditional platform.

  • 1984 Post Electoral Briefing – NZ in serious financial trouble.

  • Lead to series of reforms:

    • Free Market reforms (such as the floating of the NZ dollar)

    • Removal of import controls and reduction of tarrifs

    • Maximisation of public efficency

    • Improved co-ordination

    • Reduced the range of state functions Ensure clear accountability

    • Ensure clear missions

    • High quality and contestable advice

    • Moved in focus from delivery of processes to outputs

• State Services Act 1988

  • Introduces New public management principles into the Public Sector

  • Break up the single Public Service

• Public Finance Act 1989

  • Financial transparency

  • Financial targets

• State Owned Enterprises Act 1984

  • Removed state owned companies from the public service.

• New Public Service Structure

  • End of Departmental/Permenant Secretaries

  • End of Single Public Service

  • Division of Public Sector

    • Central Service (Treasury, DPMC)

    • Departments

      • Policy (Ministries)

      • Administration (Departments) SOE's

    • Crown Entities

• Current Statutory Framework in NZ

  • Public Service Act 2020

    • Chief Executives appointed for all agencies and departments

      • Finite 5 year term

      • Acts in accordance with the PSA

  • Public Finance Act 1989

    • Sets out the financial framework for all of the executive

Key Feature of the Public Service - Decoupling (e.g. Health)

• Ministry of Health (Manatu Haura)

  • Policy

  • Service agreements and other accountability

• Te Whatu Ora - Health NZ (& Te Aka Whai Ora)

  • Health NZ Regions (Previously DHBs)

  • Purchase health services from providers

  • Directly provide hosital and other services

• Providers

  • GPs

  • Pharmacies

  • Etc

The Public Service Commission

• Institution of the central services

• The employer of the CE's

  • HR responsibilities delegated to Ces

• Recommends appointment of CE's

  • Independent Appointment process BUT

    • Cabinet can orverrule

• Monitors SOI & Outputs

  • Performance of COEs

  • Improved Effectiveness

  • Ensures independence of Public Service

State Owned Enterprises

• Enterprises Owned and operated by the state. Managed by the SOE Act 1986. Interests invested in the Minister Of SOEs and the Minister of Finance.

• Examples of SOE's Today

  • Solid Energy

  • Kiwirail

  • Landcorp

  • NZ Post

  • Transpower

  • Metservice

  • Airways

• Non-SOE State Owned Companies

  • Mixed-Ownership Model

    • Air New Zealand

    • Meridian Energy

    • Genesis Energy

    • Mighty River Power

• Crown Entity Corporations

  • TVNZ

  • RNZ

Crown Entities

• The Quango (Quasi Atonomous (Non) Governmental Organisations)

  • Bodies created by the Crown and exercise power on behalf of the Crown.

  • Often distribute money

  • Appointed by Ministers

  • Established by Prerogative or Statute

  • Part of state sector but not part of public service

  • Recgonised by Public Finance Act 1989

• Examples:

  • Accident Compensation Corporation

  • Families Commission

  • Commerce Commission

Executive Accountability in Aoteaora New Zealand

• Executive accountability exists in two forms:

  • Political accountability (Parliament)

  • Technical Accountability (Audit, Targets, etc)

Technical Accountability: Government by Contract

• Largrly managed by Public Finance Act

• 3 main points: Inputs, Outputs and Outcomes

  • Broad Outcomes (aims) but Specific Inputs and Outputs

• Accountability through

  • Strategic Intentions (General aim about what the department is going to do.) – Public Finance Act s38 & s40

    • Cover four years

    • Once every three years (previosuly annual)

  • Output Plans

    • What is agreed by ministers and departments to deliver over annually etc – related to performance agreements – minister agrees to provide particular resources, equipment, money etc through chief executive to departments. Tested through annual reports.

  • Targets – Specific Targets that are going to be hit e.g. reduce the number of road death by %, free up hospital beds by %%. Target based system.
    * Can be difficult to link output plans with outcomes
    * Outcomes usually involve many variables that often cannot be controlled by the relevant department e.g. Reduction in road deaths (e.g. human error)
    * Outputs are specific and measurable to monitor the performance of the department and the individuals

• Outcome – Healther Population – too vague and consisting of many variables –

• One output maybe – Increase in cancer scanning.

• Outcome – Reduction in Road Deaths

  • Output – Number of road side breath tests

• Performance Agreements

• Annual Reports

  • Annual reports that state how the executive is doing in relation to these targets.

Shift to new public governance

• Governance by contract -

  • Benefits

    • Increased efficiency in the public service (however potentially outweighed by barrerite response in making it more efficient)

    • Improvement in the advice given to government

    • Departments are more focused and have clearer objectives to which they can plan towards.

  • BUT…

    • Politicisation of Public Servants: Rankin v State Services Commissioner [2001] ERNZ 476 - Failure to reappoint because of political bias. Lost case - Government had complied with employment law but Judge was critical.

    • COVID - Blurred the lines of of the Government and the Public Service - association of Ashley Bloomfield, as DG of Health with the political aspect of Covid.

  • Other Problems

    • Output not always outcome focused – e.g. Outcome – good health outcomes – outputs shortened waiting lists – Department simply just doesn’t put people on waiting lists.

    • Fragmented – Departments are focused on delivering their own individual outputs and not the collective executive outcomes

Problem of Accountability Measurements

• "Goodhart's Law"

  • "Any observed statistical regularity will tend to collapse once pressure is place upon it for control purposes."

    • "When a measure becomes a target, it ceases to be a good measure" - Greater focus instead on manipulating the measure rather than actually improving on targets/outcomes.

• The Cave Creek Tragedy (1995)

  • Collapse of a viewing platform at Paparoa National Park, 14 people died.

• Accountability

  • Judge Noble - 'No individual or particular collection of individuals was singly or jointly responsible'.

  • Pressure within the target system - DOC was pressured in to building tourist facilities. Outputs DOC had to deliver on were things like viewing platforms.

  • It was found that platforms like the one at cave creek were built by non-engineers (staff and volunteers). Drills hadn't be taken to the site so bolts hadn't been drilled properly.

  • The focus on the output - the production of platforms was the narrow focus of DOC and as a result quickly and cheaply built viewing platforms were constructed.

New Executive Model

• New Public Management & The New Zealand Model

  • Technical Accountability

  • De-Coupling & Specialism

  • Arm's length management

  • Financial Accountability

• The Critiques

  • The Headless Chicken school of management? - Focus on particular outputs and not on the broader collective outcomes

  • Political Accountability & Independence? - 5 year appointments, political favour? Public Service Commissioner is one of the only appointments where ministers are directly involved.

2020 Reform Principles (Public Services Act)

• A more holistically unified public service

• Strengthening of the Maori/Crown relationship - Te Ao Tumatanui

• Changes to Employment

  • Employees to be both Crown and CE employees

  • More flexibility - movement between departments combat siloisation of SOEs

• PFA principles still apply: Targets & Siloisation

• Disasters and Law

• Changing Outcome focus - COVID-19 Responses - Headless chicken management