Administrative reforms and reinventing government in Australia and New Zealand

by Laura Trotta


The key to doing more with less in the public sector lies in productivity, innovation and increased adaptability in the provision of programs and services. Governments need to remain open to new business models and new technologies and be willing to phase out existing practices when they are no longer appropriate. Future sustainability of Government operations will depend on being open and receptive to change’ (CFAR 2012).

In December 2010 the Minister for Finance and Deregulation announced that the Department of Finance and Deregulation would undertake the Commonwealth Financial Accountability Review (CFAR). The review would be an opportunity to analyze the existing Commonwealth financial framework from first principles and develop a framework that had the flexibility and capability to meet the changing demands on government. The CFAR was the first major review of the Commonwealth financial framework since the establishment of the FMA Act and CAC Act. The aim of the review was to ‘improve performance, accountability and risk management across government, though a framework that is simple, easy to use and valued by all stakeholders’. The basic premise is to develop a framework that is simple, adds value to all and is easy to use. The goal is a modern, streamlined and adaptable public sector that is able to meet Australia’s changing needs.

I have started my thesis’ outline with that effective sentence because in my opinion it is a very meaningful affirmation which helps us to figure out the main feature of administrative reforms in Australia and in New Zealand too. The key words are : the ability to go beyond. Somebody could ask me : beyond what? Beyond every law, scheme, organization or everything else that seems to be outdated according to the times. It is fundamental to change with the times to make the things work, and I think that Australia and New Zealand are two paradigmatic examples, which are very interesting to be studied and, from a certain perspective, to be followed too.

My thesis’ title is : ‘Administrative reforms and reinventing government in Australia and New Zealand’. Everybody knows what is an ‘administrative reform’, and I’m going to talk about this topic in a moment, but first of all I would like to clarify what ‘reinventing government’ means. It is a movement which aims at reforming radically all the public administration’s methods in a specific country, especially in those which are federal systems. The fundamental methods of this movement are also called, very briefly, ‘result-based management’, because it is a kind of management based on the results.“Reinventing public institutions is Herculean work. To succeed, you must find strategies that set off chain reactions in your organization or system, dominoes that will set all others falling. In a phrase, you must be strategic. By strategy, I do not mean detailed plans. There is no recipe you can follow to reinvent government, no step-by-step progression to which you must slavishly adhere. The process is not linear, and it is certainly not orderly. Things rarely go as planned; reinventors must constantly adjust their approaches in response to the resistance and opportunities they encounter. Rather, by strategy, I mean the use of key leverage points to make fundamental changes that ripple throughout the bureaucracy, changing everything else. Reinvention is large-scale combat. It requires intense, prolonged struggle in the political arena, in the institutions of government, and in the community and society. (David Osborne, 2007).

Regarding the administrative reforms, Australia has undergone sweeping structural reforms over the past two decades that have helped transform its economic performance. To most economists the reforms themselves would no doubt appear unexceptionable. In the broad, they typically apply conventional prescriptions for improving growth by removing policy-related distortions and impediments to a well-functioning market economy. However, given the magnitude of the reform requirements in Australia, and the entrenched political obstacles to reform, the manner in which the reforms were introduced and sustained may be of wider interest and relevance.

My purpose in my thesis is to focus not exclusively on the why of reform. I would rather outline what reforms were undertaken in Australia and provide some indication of their outcomes, before focussing on aspects of how we went about it. I will look in particular at some institutional innovations that appear distinctive to Australia and which have attracted the attention of a number of other countries.

On the other hand, regarding the New Zealand, it is fundamental to take into account that since the late 1980s the New Zealand public service has been in a constant state of flux. Numbers employed in the sector have fallen dramatically, departments have been reinvented as publicly owned corporations, and a great deal of service delivery has been devolved to non-statutory organizations. Prompted by concerns with some of the damaging effects of reform, a new centre-left government formed in late 1999 set about rehabilitating the sector. Its agenda stemmed largely from a major review of the sector completed in 2001, one of the novel features of which was the institutionalized engagement of the dominant public sector union, the Public Service Association. Moreover, the union’s role in that process reflected a new relationship with government brought about by the signing of a partnership agreement in 2000.

Over the last decade and a half the architecture of the New Zealand public service, which had been largely unchanged since the passage of the Public Service Act 1912, has been comprehensively dismantled and rebuilt. As has been the case in other countries in which reform has been vigorously pursued, the relevant political imperatives included a desire for reduced public expenditure, improvements in the quality and timeliness of service delivery, and tighter bureaucratic accountability. Similarly, as elsewhere, the New Zealand reforms reflected the conviction that governments ‘should privatize public services or their delivery wherever practicable; and … reform their own operations in accordance with market concepts of competition and efficiency’ (Self, 1993).

In any case I think that one of the most interesting aspects which I would like to analyze regarding New Zealand is the NPM model (New Public Management) and its evolution (or involution?). New Zealand is a real ‘milestone’ in this sector, in such a way that it is frequent to talk about “The New Zealand model”. The New Public Management movement in New Zealand focused on the financial management of central government departments and the shift in emphasis from management in the public sector to management of the public sector, that is, from defining management in terms of where it takes place to defining it in terms of the nature and outcome of the task. In a series of analyses Hood (1991; 1995) identifies the main characteristics of NPM, which are:

  • The lessening or removal of differences between the public and private sectors

  • A shift in emphasis from process accountability to accountability in terms of results

This new concept of accountability ‘reflected high trust in the market and private business methods … And low trust in public servants and professionals … whose activities therefore need to be more closely costed and evaluated by accounting techniques’ (Hood, 1995). Nonetheless nowadays this model is partially outdated and also disapproved by some scholars and politicians, especially after the financial crisis of 2008.

In order to conclude my outline I would like to sum up briefly the principal points that I have the intention to study in my thesis, with relation to the two main topics (administrative reforms and reinventing government), with a comparative approach between Australia and New Zealand :

– Public management model rather than rule of law

– Capacity for renewal and adaptation

– Meeting the needs of citizens

– Creating more open government

– Provides strong leaderships and strategic direction

– Enhancing policy information

Reinvigorating strategic leadership

Highly capable workforce

– Clarifying and aligning employment condition

– Strengthening the workforce

– Operational efficiency and high standard

– Agency agility, capability and effectiveness

– Improving agency efficiency