Commissioned report

Government response to the New Zealand Productivity Commission's Reports on Measuring and Improving State Sector Productivity

The Government has a vision for a coordinated and productive State sector. To achieve this vision we need to recognise and retain the strengths of our current public management and public finance systems while making the organisational and behavioural shifts needed for resolving the issues this Government is seeking to address. These changes reflect the themes in the Productivity Commission report findings and recommendations.

The core settings of the public management and public finance systems have served New Zealand well in the areas for which they were designed, including fiscal responsibility, and accountability and transparency to Parliament. However, the Public Service is not working well for everyone and struggles in responding to complex needs and issues, and the longer-term opportunities and risks facing New Zealand. It has created incentives for risk aversion, inhibited innovation, reduced the ability to respond rapidly, fostered silos through vertical accountability and created a focus on the short-term.

To address these issues and deliver on the Government’s vision of a coordinated and productive State sector we are reforming the public management system and public finance system, which includes changes to the State Sector Act 1988 (SSA) and the Public Finance Act 1989. These reforms are working towards the common objective of a modern, agile, flexible, innovative and joined-up Public Service to improve intergenerational wellbeing.

For the public finance system, we are moving to a stewardship approach based around the following four system shifts:

  • considering the creation and safeguarding of value while maintaining a focus and commitment to fiscal responsibility;
  • supporting better collaboration, where required;
  • emphasising support for a more agile system that can respond rapidly to new issues and the longer-term; and
  • fit-for-purpose system settings and reporting that improve strategic focus, accountability, and transparency and performance improvement.

The SSA reform proposals are intended to support a unified, trusted Public Service by:

  • providing better ways of joining up services around citizen’s needs and ensuring agencies work together to achieve results for citizens;
  • formally committing to principles and values which will underpin a professional career in the Public Service as well as codifying the purpose of the Public Service;
  • putting in place the means to address key workforce issues;
  • formally committing the Public Service to work to improve the Crown/Māori relationship;
  • providing stronger leadership across the system to tackle key issues; and
  • increasing the stewardship focus of the Public Service, building the capability to serve future governments.