Public services will be accountable to taxpayers

“ACT will benchmark and then track the performance over time of key government services to ensure taxpayers are getting meaningful outcomes for their money,” says ACT Leader David Seymour.

“Some of the key indicators we will monitor are:

• Education: Student attendance and participation
• Health: Availability and timeliness of primary healthcare services
• Welfare: Jobseeker beneficiaries who find work
• Immigration: Standard wait times for processing and obtaining a visa application.

“Government departments are no longer going to be able to get away with spending billions of dollars while failing to deliver meaningful outcomes for taxpayers. ACT in Government will demand higher standards and greater accountability from chief executives and departments for the money they spend.

“Government spending has grown from $80.6 billion a year in 2017 to $137 billion in 2023, but public services are worse.

“People are waiting longer in hospital emergency departments and 40 per cent of patients given a commitment to treat do not receive that treatment within the required timeframe. Children’s literacy, numeracy, and school attendance are all falling, with 40 per cent of 15-year-old students struggling to read and write. 2,878 fewer criminals are behind bars, but the number of victims is growing.

“To seriously improve the quality of the public services New Zealanders receive, we need to address two underlying problems:

• A lack of measurement and accountability for the quality of day-to-day government services.
• A lack of Ministerial power over, and incentives for, public service chief executives to make sure their departments perform and deliver.

“ACT proposes three changes.

“First, ACT will set meaningful performance measures for key government services based on outputs and outcomes (e.g. student performance in international assessments), rather than inputs (e.g. student-teacher ratios).

“Performance reporting of public services is haphazard, measures are cherry-picked, results can be reported in a way that isn’t coherent, and it’s difficult or impossible to track trends over time.

“Monitoring will be done by the Treasury and reported annually. Measuring the effectiveness of core public services should already be a basic Treasury function, but it has been distracted by dubious concepts like ‘wellbeing’ and the ‘living standards framework’.

“Second, ACT will enable Ministers to publicly issue KPIs for chief executives, conduct performance reviews against those metrics, and then publish them. One KPI all chief executives would have is recognising and stopping wasteful spending.

“Ministers are accountable to New Zealanders for outcomes, but they don’t have sufficient power over departments and chief executives to deliver those outcomes. What happens when bureaucrats are incompetent or have priorities of their own?

“This problem will only get worse under Labour’s Public Service Act which concentrates power with the Public Service Commissioner rather than democratically-elected Ministers. The Public Service Commissioner oversees performance reviews for chief executives. But their KPIs, and the results of performance reviews, are not public. The Public Service Commissioner’s priorities or metrics for success are unlikely to be the same as the Minister’s.

“Third, ACT would reintroduce performance-based pay, remove the cap on the ‘exceptional performance’ component, and enable this component to be determined by the Minister.

“Having excellent chief executives, and incentives for excellent performance, matters. But public service chief executives have few incentives to cut waste, discover efficiencies or innovation, or deliver outcomes that the Minister prioritises. Chief executives can lose focus by not adequately understanding how to manage activities and staff according to the Minister’s priorities. The culture of the public service means that poor-performing chief executives can simply shift from department to department.

“The Public Service Commissioner would still be responsible for setting base salaries, but the discretionary component should be determined in line with the Minister’s assessment of how the chief executive has performed against their expectations and KPIs.

“This change will give Ministers a further lever for driving performance. While the Public Service Commissioner has a role to ensure salaries are in line with labour market rates to ensure recruitment, it is not in the best position to decide with chief executives are delivering on the Government’s priorities.

“ACT’s plan for higher standards and greater accountability for chief executives and government departments is a step towards more effective and more efficient public services for New Zealanders.”