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Source: ONE News -
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Treasury is urging a radical shake-up of the state sector, one
of the biggest employers in New Zealand.
The department that advises the government on financial matters
says up to $40 billion of public money is not being wisely
spent.
Treasury Secretary John Whitehead on Monday outlined a "much more managerial" approach for the public service with the goal of raising productivity.
In a speech in Wellington, Whitehead outlined a "better way of doing things" for the public sector, which spends $62 billion a year.
He said nothing should be off the table, including private prisons.
The public sector had to raise its productivity.
"Productivity improvements may mean adapting private sector ideas, techniques and experience," he said.
The speech came a week after a major speech by Prime Minister John Key on productivity and at a time when there has been speculation that New Zealand may set up a Productivity Commission similar to Australia's.
Whitehead defined a more managerial approach for chief executives in the public sector as being clear about goals, thinking about the customer, organising to deliver the right outcomes, getting the best price, producing the right quantities and standards and being explicit about the trade-offs involved in decisions.
He cited savings of as much of 30% across government in Canada on administration and support services in finance, payroll, benefit administration and supply chain management.
Treasury and the State Services Commission (SSC) was about to pilot new performance improvement framework with three agencies, he said.
"This should strengthen current practice by systemically highlighting areas of strengths, areas where performance can be improved, and how improvements can be made," he said.
New Performance Improvement Actions, or PIAs, had been identified for departments. They were individually negotiated between ministers and department chief executives.
The aim was to identify a "vital few" practical and innovative actions that would make a difference to performance.
Treasury and SSC have been asked to pick up the monitoring role for government.
As well as agency specific actions, a hard look was being taken to areas of business that departments had in common.
It was in reference to this that he cited the Canadian example where Service Canada was created by merging together more than 70 services from a number of agencies into a single customer service organisation.
"This isn't just about lifting our game, it is about changing it," he said.
"We must take the opportunity to build a leaner, more productive public service and we need to get on with it now".
Whitehead said the public sector would need to give ministers some free and frank advice on the value of some existing policies and programmes.
"They may have some tough decisions to make".
Once the public sector had identified the "right business" to be in, it was a matter of running it in the best way possible.
"That may mean changing our structures, programmes, delivery, or processes or buying more or less services from outside," he said.
He said contracting out delivery, as Australia did with private prisons, may be more effective.
"It also means we can compare the price and results of different ways of doing things and choose the best mix option," he said.
The state sector consists of 41 departments, 84 statutory Crown
entities, 11 Crown entity companies, 17 state-owned enterprises, 31
tertiary education institutions and various "schedule four
entities" like the Lottery Grants Board.
