Tony Burton argues public service chief executives are now more interested in making their mark than providing government ministers with decent advice, which is having disastrous consequences

Tony Burton argues public service chief executives are now more interested in making their mark than providing government ministers with decent advice, which is having disastrous consequences

By Tony Burton, The Spinoff*

Sometimes on a Tuesday morning you may hear a low, vaguely rhythmic rumble coming from a Treasury meeting room. A handful of its middle-aged Pakeha bureaucrats will have descended from the department’s working floors where budgets and economic predictions are done to assemble around the table. Stalin humiliated his politburo by forcing them to sing along to a recording of wolves howling. The Treasury leaders are probably attempting a waiata, but the sound they produce is a drone of submission eerily similar to its Soviet precursor. Welcome to the New Zealand public service in 2019.

The reforms that created New Zealand’s public service were all about transparency. When Labour came to power in 1984 it found the previous Muldoon government had created catastrophic problems in the public finances, and had been able to hide them. Treasury gained the credibility to lead the subsequent reforms because it broke rules to warn the incoming government of the impending crisis before prime minister Rob Muldoon had stood down.

One of those reforms was the State Sector Act of 1988. It clarified that ministers were responsible for choosing policies while departments were responsible for advising on and implementing them. There are tens of thousands of people working for government departments, so to make the split workable the departmental chief executives were given responsibility for advice and implementation in a way that apes ministers’ policy responsibility. This sense of specialness is further emphasised by having a different appointment process for chief executives run by the State Services Commission.

This brings us back to Treasury. No doubt most readers of this article associate Treasury with earnest advice about balancing the government’s books and predictions for the economy. More formally, Treasury is government’s main economic and fiscal adviser. The problem for a Treasury chief executive is that their job is generally not to provide this advice, but to keep the department ticking along so its experts can. Maintaining expert organisations is a lot harder than it looks in a political environment with competing and fast moving priorities. However it is very much a background task. It is not particularly special.

Where a chief executive can have a more personal legacy is in the way the organisation is run. This is where they, as chief executive, will be credited with any achievements.

A person who worked for Treasury back in the 1980s would be shocked by how far the search for this personal legacy has seen economic expertise replaced with a herd of strategy, systems, HR and other ‘advisers’. These produce largely meaningless organisational, IT and recruitment strategies that have sucked up increasing amounts of the organisation’s time. Treasury does still advise on economic and fiscal issues, and some of the most talented public servants in New Zealand still work there, but this work and the people who deliver it are treated as a mildly embarrassing bodily function, to be handled with the minimum fuss.

This offhand approach has had an increasing impact on ministers of finance. Bill English struggled to get proper advice to deliver his social investment approach. In 2019 it led to Treasury nearly compromising the budget by releasing details early thanks to poor IT operations.

The collapse in the organisation’s expertise has been so profound that Treasury even appointed an HR professional to the minister of finance’s office. Think about that for moment. The Treasury are government’s main economic and fiscal experts. An important way for Treasury to help the minister of finance is to provide some of those experts for his office. Yet Treasury appointed someone whose area of knowledge is running Treasury as an organisation. Imagine you went to see a GP and were told the office manager was the most qualified person in the practise to provide medical advice. That is the position Grant Robertson is in.

All of this suggests the current government is correct to ask if the public service that emerged after the 1980s is the right fit for 2019. Treasury’s decline has meant the government has turned to SSC. For all the repetition of the phrase ‘neo-liberal reforms’, New Zealand’s policy institutes have been remarkably silent about SSC’s role in the failure of those reforms. It is perhaps worth noting that the government department with the largest budget for expensive executive courses in public policy ‘leadership’ is SSC.

So can SSC be expected to challenge the key institutional problem?

The current commissioner, Peter Hughes, has a blog called A Spirit of Service. Phrases like that are essentially advertising slogans, formed from vaguely uplifting words being combined into sentences with no meaning. It is the practices these phrases promote that give their real meaning. An insight into what service means for Peter Hughes is his time as chief executive of the Ministry of Social Development (MSD).

One of his first acts was to command all staff to heed ‘Peter’s Principles’, of which there were 10. (Yes, he really did issue 10 commandments from on high, though I understand it didn’t take 40 days.) The status given to expertise in the organisation’s culture is best exemplified by the last principle: “’Just do it!’ means … just do it”.

More insidious was the principle “No problems without solutions”.

This may sound like a vacuous organisational exhortation, but in a ministry tasked with providing expert analysis it is catastrophic. For instance, a study in the mid-2000s found most active labour market policies seemed to make no difference. Where such labour market interventions did make a difference the welfare agency might be making jobs less secure for others by displacing those in work. What is to be done if there are “no problems without solutions” and staff should “just do it”?

Even thinking about options to address the problem implies a need to retrain, redeploy or make redundant thousands of Work and Income staff. This would require the chief executive to be involved before a solution was found. So they didn’t think about it. When there are “no problems without solutions”, it is easier to ignore most problems.

The current government’s reform programme is an attempt by elected ministers to overcome barriers created by the culture of the unelected public service. This is a culture that is geared towards public service chief executives, not the electorate. To make these reforms ministers must look outside the current system, because those chief executives epitomise why the system needs to change.


*Tony Burton is a former deputy chief economic adviser at Treasury. This article was first published on The Spinoff here and is used with permission.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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In Chinese, there is a saying 兵熊熊一个,将熊熊一窝 (An incapable soldier is just a soldier, but an incapable commander would bring out a team of incapable soldiers).

In NZ's case, incapable PM and ministers got elected based only on their elections slogans and unavoidably those incapable leaders will only bring out incapable CEOs and senior managers in each ministries and departments. This ripple will be passed on and resulting incapable tier 3 and 4 managements and finally to analysts level who do actual jobs.

That is exactly the reason why a meritocratic system is preferred at any time.

Can you give me an example of this "meritocratic" system?

Singapore is an example of a meritocratic civil service; I expect Hong Kong, Taiwan and Japan might be the same. It would explain why they have achieved first world GDP per capita while other countries that started from similar conditions of destruction and poverty after WW2 have been growing more slowly.

I don't think Xingmowing was referring to meritocratic civil service but rather a "meritocratic government" as opposed to a democratic government. He seems to be under the delusion that China is a meritocracy rather than a brutal communist dictatorship that rewards cronies and removes competitors. Classic communist dictatorship that useful idiots like to peddle.

What explains the countries you mentioned that did improved dramatically post WWII was the adoption of a free market which does include competent civil service which we in NZ overall do have. One of the things the OP did not mentioned was the "no surprises" policies under the Clarke government. This had a massive politicizing of our civil service as they now had think how their decisions looked politically.

Strongly recommend you to watch news from sources other than BBC, CNN, FOX etc.

Try CGTN, RT, Bloomberg, some pod casts on youtube.

You will have a far balanced and far upto-date view on China and the whole world.

Xingmowang, you have reverted to the other classic communist propaganda trick - say the sources are biased and one-sided. The CCP was saying the same thing the other day about the Tienanmen Square Massacre. There is no "other-side" or "balance" to the facts that the CCP continues to imprison political dissidents as well as place large numbers of its citizens in concentration camps. The fact that large number of Chinese people flee the CCP for better lives in the "evil" democracies such as NZ shows your argument is baseless.

I hardly ever watch BBC, CNN, or Fox for that matter. However, you ruin your argument by comparing CGTN (a re-branded CCTV) and RT (a re-branded Pravda) with Bloomberg. Bloomberg has its flaws but is overall decent; the other two are junk. I just received Bloomberg's email newsletter "Next China". I assume you received the email as well since you a committed China watcher and your Bloomberg endorsement. This weeks newsletter it isn't all roses and sunshine. I also have other sources that I get from the YouTube such as the China Uncensored - try watching it, their coverage of the HK protests has been very interesting. I also have personal contacts which I will keep quiet.

Finally, I will repeat, as many CCP apologists fail (deliberately or because of years of CCP propaganda), China and the CCP are NOT the same. I have a lot of respect and admiration for the Chinese people - I work with a lot. However, the best thing that could possible happen for the Chinese people and the World is for the CCP to die. China could be a great country once again if the CCP gets out of the way and stop hurting the people, society, and economy.

Not quite. There are very much elements to Chinese government where good works are rewarded with promotion. The hierarchical election of officials inside the CCP actually functions rather well - those that do good work are promoted to higher positions. But this isn't completely true. Two other factors come into promotion, usually the amount of guan xi one possesses (think mana, but with more focus on personal relationships) and, as you say, your friendships within the higher levels of hierarchy (which is kind of an extension of guan xi). But given all that, it is very unusual for people to be promoted who do not have a list of accomplishments behind them.

There is a negative side to this too though. The officials in many cities, for instance, build subway's before they are needed or new ring roads. This causes indebtedness to the local governments, but is seen as a "sexy" project and they use it as a platform for promotion. Further, they don't develop things like sewage plants as fast as they should as you can imagine this is "less sexy". However the policy has resulted in a massive transformation of infrastructure in China, which generally benefits the people and generally ensures the best people with the most experience at delivering are promoted. Remember in a short 20-30 years they have completely transformed their country creating hundreds of millions of middle class citizens and have dramatically improved health and wealth.

I suggest you don't just write off China with the hard line Western view of the way they operate. Sure, sometimes cronies get promoted, but it is the exception the Western press jumps up and down about, not the rule. Better to understand and reflect about how we could actually benefit from implementing something closer to a meritocracy - rather than our current system of electing people based on popularity and looks. Like it or not Xingmowing has a point. Our system is steadily failing as evidenced by voter turnout, generational wealth divide and more and more polarisation of political ideology.

Blobbles, if a person is not aligned to the Xi faction then he or she won't get promoted to high office. The so-called "anti-corruption campaign" has only focused on the Jiang Zemin faction. Find out what is happening to that "talented" group. If that isn't cronyism then I don't know what is.

The Chinese opening up over the last 40 years has been spectacular to say the least. However, the poverty alleviated was mostly caused by the CCP's policies under Mao. Compare the situation in the People's Republic with the Republic of China. Or how South Korea and Japan went from countries totally destroyed to powerhouses today. The oppression ushered in by the CCP's reign cannot be justified the economic development achieved. Whether the debt will be an issue for China only time will tell.

The West has its issues and I think we can discuss the reasons for that on another post (notice how we are free to do that compared to China). However, as I noted above, many Chinese citizens are desperate to move to democracies such as NZ so I can't believe we are that bad. That desire to move is not just for economic reasons but also for freedom. Perhaps we take for granted freedom in NZ but life without, as Chinese citizens know, can be unbearable.

try this

Eric X. Li: A tale of two political systems
https://www.youtube.com/watch?v=s0YjL9rZyR0

I do not disagree that their is an element of corruption and an element of cronyism. Yes, it is more extreme than here, if you don't agree with the current stance, or don't align yourself with the current leaders views, or are seen as a threat, you should watch out.

But you seem to think this has made a country that is a basket case. When in fact the opposite is true, they have been the best performing country of the past 30 years. If you cannot reconcile or at least understand why this is, you are poorer for it.

The Chinese system emphasises different values than us. Our values usually idealise personal freedom and freedom of expression as the highest ideals, wheras the Chinese system emphasises social harmony and personal/familial guan xi as the most important values. This is what you fail to acknowledge - there are different values which you can hold and STILL have effective or completely ineffective governments. There isn't just one path to become a "developed society" and the definition of what that is needs to change with China as it is distinctly different to anything the world has had before (Communism with Chinese characteristics plus capitalism).

You also seem to think people don't have personal freedom in China. Absolute tosh. Having lived there for a number of years, you have as much freedom as anywhere, given cultural and social norms, you just aren't allowed to question whether the government should be in power. And if they are making the country stronger and stronger, making you richer and richer year after year, most Chinese people don't need or want to question it. I have also had associations with a vice governor of a province and they talk about what policies they support or don't support freely, creating different divisions of thought within the CCP. The leadership sees diversity of thought amongst the smartest among them as a strength, not a weakness. However they don't tolerate grandstanding once a policy is decided and started to be acted upon.

You are a bit delusional if you think all Chinese people are fleeing China because of an "oppressive regime". They are much like us and like to travel and experience different places. And they have a real pioneering and entrepreneurial spirit which makes them want to live elsewhere. Ask Chinese people their reasons for coming to a place like NZ and very few will say "to escape the government".

Quite a few emigrated because of the one child policy...brought in by the government.

Also learn history better. The wealthy China we see now is a direct result of the ascension of Deng Xiaoping's policy of embracing capitalism, opening markets to foreign investment and basically creating a modern China. Mao did quite a few awesome things, but even Chinese people say Mao did "7 things good, 3 things bad". His unification of China and standardisation of language and education set the platform for the future. But he was highly anti capitalist, which is antipathy to general Chinese characteristics. Had someone with similar beliefs come to power after him, I believe China may have collapsed along with the Soviet Union as another failed communist regime.

Methinks a slogan as “no solutions without problems” would be much more productive for all of us.

Except the way MBIE deals with this approach is that the problems where they are incapable of providing a solution get buried.

I could cut this guy some slack as it can be challenging leading quantitatively talented staff (they are opinionated and often low EQ), but I'm not. He sounds full of himself and a poor leader. What's really concerning is that Treasury manage all the Board appointments for Govt and Non-Govt. departments. It really is jobs for the "aligned", anyone with an independent thought doesn't stand a chance and culminates in truly dismal performance like Treasury.

I thought the Peter Principle was as follows:
The Peter Principle is an observation that the tendency in most organizational hierarchies, such as that of a corporation, is for every employee to rise in the hierarchy through promotion until they reach a level of respective incompetence.

This combines with the tendency to promote the hard working and compliant and discourage anyone who thinks differently or searches for shortcuts and opportunity. Thus the idea that a comander should be intelligent and a little lazy, wheareas a staff officer should be intelligent and hard working. The creative, opportunistic entrepreneur versus the research specialist. The pilot and the navigator.

Well yes there is that tenet true enough. But more often than not you can throw some of Northcote Parkinson’s wisdom into the mix. It used to be called empire building. Create more staff, create more work, then my position, prestige and recompense as the “Chief,” must then elevate relatively. Well done son!

And then add the Dunning Kruger syndrome....where they start believing they know better than anyone else.

Yep that one too! The old self deception of conceit. I hold the position therefore I must be infallible, otherwise I would not have the position would I. Bloody annoying!

“A handful of its middle-aged Pakeha bureaucrats” are we identifying people by their ethnicities now, even when it has no relevance to the story?

It is relevant in that it indicates the extent to what demographic controls the seats of power in bureaucracy.

It is very relevant when you have critically important state institutions like the RBNZ adopting Maori protocols, language and symbolism yet Maori in senior management are nowhere to be seen.

J.C and Te Kooti- here’s a shocker for you both, ethnicity doesn’t determine how one behaves! To assume that we are bound to actions through ethnicity is in essence racist.

I think behaviour is determined more by "breeding"than ethnicity.

It is relevant in so far as the treasury ought to be full of experienced top economists - about 20 years ago the top brains choosing to study a nerdy maths based subject like economics would have tended to be pakeha males; there would have been some female graduates but a subset would have moved to more female friendly environments as would the Maori economists preferring to work for maori organisations. I expect the top management would have been looking for more diversity but bringing in staff from the UK was not a great solution.
Enter 'famous economists' into wikipedia and you get 2 females in the first 30 - so NZ treasury is only reflecting the international reality.

It is only relevant in "Spin-Off" articles where white-men have to virtue signal first before they are allowed a platform. The self-hatred that our so-called "thought--leaders" is pathetic.

I couldn't find any evidence of Stalin making his politburo sing along to wolves howling. Apparently, according to a book called "The Secret Life of Joseph Stalin" an aged Stalin invited a couple of politburo members over to dinner at his dacha in Kuntsevo and as they were departing he played a record of wolves howling for his own amusement. The guests were a bit baffled but I don't think they were asked to sing along. Who knows if even that really happened.

An all encompassing extremely accurate word to describe "Peter's Principles", and all their ilk; Dilbertian.