bout de papier, Vol. 13, No. 1 (1996) — Spring 1996 // Printemps 1996, pp. 26–27
by Linda Te Puni
The New Zealand Experience: An Economic Miracle — Or Is It?
Much has been said about the restructuring experience in New Zealand. It has been hailed as a success and the strategies employed in New Zealand’s economic rebirth have been widely emulated. Spending a year on exchange at the Canadian Department of Foreign Affairs and Trade (DFAIT) as the government here works through many of the same issues, gives me an acute sense of déjà-vu. Media headlines on cuts to government spending, closing of hospitals and pruning of the welfare state have a familiar resonance. I see the same strategies, the same debate, the same outraged responses, and the same defensive argument from reform enthusiasts.
No doubt there will be similar benefits. Economic indicators in New Zealand over the last few years point to resounding success — a steadily improving economic growth rate; inflation contained at less than 2% (depending on how you measure it of course, an all important consideration for the governor of the Reserve Bank whose contract specifies that he must keep inflation below that ceiling); good progress made in paying off the national debt; increasing budget surpluses forecast and tax cuts promised as of the next financial year, and a buoyant market, with increasing foreign investment. No wonder Canada and others want a piece of the action. But there will also be similar costs.
The Losers
The human side of the new economic miracle is often kept in the background. It doesn’t fit well with economic theory and detracts from the image of economic success. There is a new class of “unemployables” in New Zealand, among them the Pacific Island immigrants who were brought in as cheap unskilled labour in previous decades and now find themselves redundant. A large number of indigenous Maori fare no better. They and their Pacific cousins rate highly in the statistics, but for all the wrong reasons: high rates of unemployment and of poverty, and a disproportionate number are in jail. Maori lost their economic base through European colonization, and for most, the new mantras of privatization and sale of assets to foreign interests echo a hollow economic victory.
A bitter irony for the thousands of workers laid off in some industries was the concurrent award of hefty bonuses and pay rises to their senior company executives, in recognition of a job well done to restructure and downsize their operations and maintain or boost profit levels. The reality for New Zealand is an increasing gap between the haves and the have nots, right across the political and social spectrum.
Restructuring and Efficiency
Positive results from the changed economic reality in New Zealand include much improved efficiency in delivery of services to the public. From my own experience, it seems the Canadian banking system, as one example, could learn from the competitive environment that now prevails in the New Zealand banking sector. There, it is a tough commercial world and service industries compete to meet the customers’ needs or risk losing market share.
The Foreign Affairs Model The New Zealand public service has been through a dramatic metamorphosis. Perceptions of government have changed as well as operations. The public service is no longer considered a career for life, with automatic progression through the ranks and pay scales — no bad thing. Remuneration and advancement are very much performance based, demanding a more focused and accountable public service. Every aspect of the operation of the Ministry of Foreign Affairs and Trade (MFAT) has been reviewed, with the focus on honing it to a lean and highly efficient organization. That has meant increased pressure to do more with less, to continue to take cuts and achieve the same or greater returns. But, just as on a national scale restructuring has not been without its costs, so too, the reinvention of the Ministry has had its price — low morale, dissatisfaction with remuneration and career opportunities, fewer support staff, having to produce more with fewer resources, high rates of attrition. Sound familiar?
DEAIT — The Parallels It is interesting to see the current “soul searching” in DFAIT, the looking at ways to improve the operation of the department in the face of fewer resources and a changing environment. MFAT employees, across all occupational streams, have been through the same experience; felt the uncertainty about their future; gone through a period of frozen pay; felt that there has been no incentive for them in the job, yet at the same time faced increasing demands to cope with changes in technology, and an expectation to maintain business as usual in the face of these difficulties and fewer available resources. New Zealand overseas representation was cut back, with closure of some posts and loss of positions, particularly at the junior level, limiting even further posting opportunities for junior officers. The carrot that had always been proffered to these officers to compensate for their low salaries vis-à-vis their private sector counterparts and the work required of them, seemed even further beyond reach. For many, it just did not seem worth their while to stay.
However, the New Zealand government also has opened some new posts, most recently in Hanoi. Limited resources have been carefully distributed to better reflect where we see ourselves in the world and where our interests lie (particularly in Asia), and to maximize the return accordingly. But the “average” New Zealander on the street does not always share Prime Minister Bolger’s vision. Not all are convinced by the massive marketing exercise in which the New Zealand government has invested in heavily: the “Asia 2000” programme, which aims to raise the profile of Asia as an important economic partner for New Zealand and to promote business and other links with the go-ahead Asian economies. “Asia 2000” demonstrates the government’s long term strategic thinking to reposition New Zealand in the world economy, to continue to move away from traditional partners such as the UK and position ourselves in the more relevant APEC region. Growing enthusiasm for a republic is another dimension of this, shared, perhaps more vocally, by our friends across the Tasman.
In the DFAIT review exercise, beginning with the Latin America Branch and recently taken up by the United States branch, one of the recommendations made was to set priorities based on real options. MFAT very specifically defines its priorities. This is part of the corporate mentality that prevails across the New Zealand public sector. The process starts with an overall corporate plan defining “output classes”, against which outputs are purchased by government from the Ministry and for the delivery of which the Chief Executive Officer (CEO) of the Ministry is accountable, as per the terms of his contract with the Public Service Commission. The process includes divisional and post operational plans, to which all officers contribute: these define operational objectives, activities to achieve those objectives and set performance measures to assess the extent to which the objectives have been achieved. Resources are allocated to each output class, the human resource component of which is checked against frequent time surveys. The process is taken to its logical extreme, by which individual performance evaluations are based on a set of objectives linked to the post or divisional operational plan. An individual officer is able, therefore, always to relate what she or he is doing and why to specifically defined objectives as part of a strategic plan.
While this planning mechanism is indeed an effective management tool, given the very precise allocation of limited resources carefully costed against specific outputs, MFAT risks limiting itself to being predominantly reactive rather than pro-active in its work focus. Fewer resources mean less time available to spend on in-depth analysis and “think” pieces. In an officer’s day to day work in Wellington, that is, during office hours, to do so would be a luxury.
Another of the suggested priorities to emerge from DFAIT in-house reviews is to improve information and communication flow/feedback. Problems identified in Ottawa are found in Wellington also, but perhaps because our operation is smaller, are easier to rectify. Duplication of effort is easier to avoid or contain and the consultative process is perhaps more straightforward. The corporate mentality encourages teamwork and networking, rather than turf battles and individual grandstanding. On the down side, feedback on post reporting is often less than optimal in Wellington, where one officer covers a number of posts and some of those posts can be quite prolific. It is frustrating and discouraging to be at post and feel that your work goes into a black hole at head office, but the reality is that desk officers can be so swamped, they scarcely have time to read what someone at post has put a lot of effort into, let alone respond in a meaningful way. At the officer level, feedback from supervisors could certainly be improved, and not just at the six-monthly performance assessment. Assuming that silence means you must be doing OK does not reflect a good management style.
Technology has created greater expectations of officer output while supposedly easing the burden. It is a useful tool, but only as good as the training you have. Training must be timely, well-targeted and well-defined. There is no doubt that technology is changing the way business is done, be it in government or the private sector, and New Zealanders, who on a per capita basis reportedly have the highest rate of ownership of personal computers in the world, recognize the need to position themselves to ride this technological wave. Government is catching up and needs to allocate resources in a meaningful way to take advantage of what technology has to offer.
Cuts to support staff have been cited as another problem in DFAIT. My own experience is that MFAT has been much more ruthless in trimming human resources and redefining divisions of responsibility. For example, MFAT staff, including divisional directors, do their own photocopying (large print jobs excepted) and send their own faxes and messages to posts. However, MFAT divisions do retain their own files and a multi-tasked divisional officer to maintain them. My impression is that DFAIT has a lot more extra bodies than MFAT. This includes additional layers of hierarchy, perhaps an inevitable function of a much larger bureaucracy. Having too many levels in the pyramid is another concern raised by DFAIT staff. The New Zealand Ministry did, in fact, flatten its management structure and cut out the equivalent of Director-General level and now has a structure which flows from the CEO to four Deputy Secretaries (ADM level) to divisional directors. This is not necessarily an option for DFAIT across the board, but may warrant consideration in some form.
The MFAT Response
Just as DFAIT is looking at where operations can be improved in the face of resource cuts, MFAT recently has been through an exercise of serious self-examination. 1995 was designated the “Year of the Ministry”, a home-based theme as opposed to the usual outward looking annual focus. Staff were encouraged to pull no punches in submitting their comments in a Ministry-wide climate survey; working groups focused on particular areas over the course of the year, coming up with specific recommendations. The exercise was seen as an opportunity to take stock of what the Ministry stands for, how it operates and how to sustain or improve its performance. Areas of concern highlighted included pay, the performance appraisal system, defining career paths, retention, selection process for postings, language training for staff and partners, health issues such as Occupational Overuse Syndrome and stress management, and the working environment in Wellington, to name a few. Many of these are areas of concern for DFAIT staff also.
MEAT senior management are committed to responding to the outcome of this exercise. Some action has already been taken. There has been an improvement in total remuneration for staff, as a result of a job evaluation exercise, including the gathering of comprehensive market information on salaries, and the allocation of funds for the Annual Performance Review round. But the cynics amongst us may say that it is too little and rather late. However, it is a show of good faith and a start. DFAIT might consider one example, to improve the physical working environment which, for those of us in small, windowless offices, leaves a lot to be desired.
So Why Do We Stay?
For many, a stint in Foreign Affairs is a useful stepping stone. For others, it fulfils a lifetime ambition and they see it as a long term career. Many are somewhere in between, comfortable with the relative security offered and level of job satisfaction and not sure what other opportunities are out there. In Canada’s current economic climate, pickings may be slim. In New Zealand, opportunities are presenting themselves to those who are prepared to look as the economy continues to strengthen. MFAT will have to position itself to retain staff, as neither the remuneration nor any perceived prestige of being part of the “Foreign Affairs establishment” alone will suffice.
For me, there are always new challenges, such as operating in another foreign service bureaucracy and being taken seriously as a proponent of Canadian foreign policy articulated in a Kiwi accent! I have other personal challenges and goals, associated with being part of a minority representation of Maori in the New Zealand foreign service. The Ministry is making efforts to encourage more Maori and Pacific Islanders into this career path, to present a face on the international stage that is more representative of our increasingly multi cultural society. But for the time being, these groups are under-represented. That will only change, and not just as far as these groups are concerned, but in order to attract and retain staff across the board, if the Ministry is able to meet the challenges presented by the outcome of the recent self-examination exercise. It risks losing more than credibility if it does not come up with the goods. DFAIT must also bite the bullet and address the concerns of its employees.
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Originally published in bout de papier, Vol. 13, No. 1 (1996) — Spring 1996 // Printemps 1996, pp. 26–27. Read the rest of this issue →
