Wellington ‘Club’ may pose risks for leaders
Any private sector appointee is going to need political guile
Chris Luxon and Nicola Willis want the key roles in the New Zealand public service to be filled by appointees with “successful real world” experience. Not only that.
Any appointee from outside “the club” – that is from the private sector – will have to be sufficiently politically skilled and adroit not to fall into the “John Allen trap”.
That is where a former chief executive of NZ Post (Allen) – who was broadly favoured by then ministers Tim Groser (Trade) and Murray McCully (Foreign Affairs) — had his leadership at the Ministry of Foreign Affairs and Trade undermined from within by senior diplomats unhappy with the radical changes he introduced.
This danger is openly cited by ministers when questioned how far they would go to introduce private sector norms and thinking through the injection of external appointees parachuted in to the top tier of the public service.
Luxon, in particular, has chivvied former members of the Prime Minister’s Business Advisory Council that he used to chair that they should step up and perform public service.
But such businesspeople are more likely to emerge as members of shortterm advisory groups to advise on a particular issue where an independent view is needed, or as directors of Crown-related companies, rather than jump in to the river themselves.
Naturally, the Wellington-based public service is concerned at the new Government’s boldness.
But elsewhere, for instance in Canada’s Financial Post which headlined an article “For fiscal direction, look down under to New Zealand”, the moves are praised.
The Financial Post wrote New Zealand may be kicking off a fiscal trend: boldly downsizing public sector payrolls to trim unwieldy government deficits.
“Its new Coalition government, elected last October, is moving to eliminate 15,000 civil service jobs.”
The Post notes the cuts will only reduce numbers back to the 2017 levels when Labour’s Jacinda Ardern came to power. There were 63,117 fulltime equivalent staff in New Zealand in 2023, an increase of 33.6 per cent since 2017, compared to population growth of 9.4 per cent.
The financial newspaper urged Ottawa to take note.
In Australia, John Howard’s former government used his chief bureaucrat, Max Moore-Wilton, dubbed “Max the Axe”, to break the Australian public service from a cobwebbed past and adopt the culture of the commercial world.
There was a considerable changeout in top roles and an 8 per cent reduction in the Federal public service.
Beltway’s slippery shoals
But anyone coming from outside the cloisters of the Wellington Club will have to navigate the slippery shoals of the beltway carefully – particularly during a period of transformation and upheaval for the public service as the Luxon Cabinet insists on not only cutting costs across the board and redirecting resources to the frontline but achieving results.
This should not preclude private sector CEOs from applying for roles in the central agencies, or businessfacing agencies, as they come up for grabs.
The desire for “real world” experience is not surprising given the commercial background and nature of the two ministers with key responsibilities for the public service shakeout.
Already job advertisements for two key roles are being circulated. They include the Public Services Commissioner – a powerful role where the appointee will have overall responsibility to the Minister for Public Service, Nicola Willis, for the performance of the commission but also act as head of the public service.
The role of Chief Executive of the Department of Prime Minister and Cabinet (DPMC), who will report directly to Prime Minister Chris Luxon, is another.
Luxon is a former CEO of Air New Zealand and Willis has senior corporate experience at Fonterra. They will want any leader reporting to them to have “successful real-world executive experience to respond quickly and effectively to the numerous management challenges that arise in the course of business”.
But equally importantly they want bottom-line results. Their political imperative is to slash costs to help restore the Government’s books.
When Peter Hughes was appointed State Services Commissioner on July 4, 2016, his role included having to work closely with the heads of two central agencies, the Treasury and Department of Prime Minister and Cabinet, as a “virtual ” corporate centre for the service. Hughes steps down this month – five months ahead of the expiry of his second term.
Brook Barrington, the prior incumbent at DPMC, is now acting Secretary of the Ministry of Foreign Affairs and Trade, a role he has held before.
Applications are understood to have closed for that role.
That said, there are significant opportunities for a major shake-up.
Two other CEO roles are potentially in the mix. They include Defence where Andrew Bridgman’s first five-year term comes up in July, and Treasury, where Caralee McLiesh’s initial term is understood to expire in September.
Bridgman and the defence services chiefs face a credibility challenge given the current state of New Zealand’s defence apparatus.
McLiesh had to deliver former Finance Minister Grant Robertson’s wellbeing focus and keep the economy humming during Covid.
Now the focus is on economic growth. Willis’s maiden Budget’s success will be a pointer to whether that relationship will endure.