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2016 New Zealand Government Departments Review

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Coded Document - 7TH EDITION -

7th Annual Analysis Of The Inner Workings Of The NZ Bureaucracy A Trans Tasman Briefing Review New Zealand Government Departments

- People And Policy -

An Analysis Of The Inner Workings Of The NZ Bureaucracy

2016 Edition

Published by Trans Tasman Media Limited PO Box 2197, Christchurch New Zealand Ph: 64 3 365 3891 Fax: 64 3 365 3894 Website: www.transtasman.co.nz Email: [email protected] ISSN 2253-4970 (Print) ISSN 2253-4989 (Online) Researched and Written by The Trans Tasman Editors and Senior Writers

ISBN 978-0-9864617-3-6

Copyright 2016 Trans Tasman Media Ltd

Released June 2016. COPYRIGHT ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed.

1 Table Of Contents

Introduction - Everything Hinges On The New SSC Boss 4 Letter From The Editor 8 Independent Board Of Advisers 2016 9 The Questionnaire 10 The Rankings 18 Top 10s 20 Board Of Adviser’s General Comments 22 How Good Is The Minister? 23 The Board Of Independent Adviser’s Comments 24 CEO Of The Year - Peter Hughes [Ministry of Education] 28 Department Of The Year - Accident Compensation Corporation 29 Government Departments - Explanatory Notes 30 Accident Compensation Corporation 31 Crown Law Office 34 Department Of Conservation 36 Department Of Corrections 39 Department Of Internal Affairs 42 Department Of The Prime Minister And Cabinet 45 Earthquake Commission 49 Education Review Office 52 Government Communications Security Bureau & SIS 55 Inland Revenue Department 59 Land Information New Zealand 63 Ministry of Business, Innovation and Employment (MBIE) 66 Housing New Zealand Corporation 70 Ministry For Culture And Heritage 73 Ministry of Defence and NZ Defence Force 76 Ministry Of Education 80 Ministry For The Environment 84 Environmental Protection Authority 88

2 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Ministry Of Foreign Affairs And Trade 90 Ministry Of Health 94 Ministry Of Justice 98 Ministry Of Maori Development/Te Puni Kokiri 100 Ministry Of Pacific Peoples 102 Ministry for Primary Industries 104 Ministry Of Social Development 108 Ministry Of Transport 111 Civil Aviation Authority of New Zealand 115 Maritime New Zealand 116 Transport Accident Investigation Commission 117 Airways Corporation 118 Ministry Of Women’s Affairs 120 New Zealand Customs Service 123 New Zealand Trade And Enterprise 126 New Zealand Transport Agency 129 New Zealand Police 132 Offices Of Parliament 136 Reserve Bank Of New Zealand 147 Serious Fraud Office 150 State Services Commission 153 Statistics New Zealand 157 Tertiary Education Commission 160 The Treasury 163 WorkSafe New Zealand 167 Rising Stars: Some Officials To Keep An Eye On 170 CEO Salaries 171 Budget - Total Appropriations for Each Vote* 173 Staff - (FTEs) 175

3 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Introduction - Everything Hinges On The New SSC Boss

How much rests on the broad shoulders of Peter Hughes, State Services Commissioner-designate, taking up his role on July 4. It’s Independence Day in the United States but it’s also a metaphor for how much the public service – and the Government – is looking for a new way forward. It would be fair to say parts of the public service have been in something of a hiatus in recent years with neither Ministers nor CEOs expressing unalloyed joy with the outgoing Commissioner Iain Rennie. Is this unfair? Possibly, but it is one of the consequences of having someone in a CEO slot for eight years. Given the political cycle and churn, it must be difficult to innovate after such time. Forward or back, you’re damned. However, there is a developing sense around Wellington and among some Ministers even Hughes confronts a nuclear option: either he lifts the performance of the State Services Commission - or it will be folded into the ever-expanding Department of Prime Minister & Cabinet. One of the problems for Rennie is his position has been the focal point for Ministers frustrated by slow progress and departments pushing back at the change he tried to oversee. The Commissioner’s job can be likened to the chief herder of cats – very clever and stubborn cats. Continuity is one thing but unless carefully managed and nuanced, it can be limiting. If there is a single element emerging from our survey of the public sector, it is the need for fresh enthusiasm from the top. “Let’s engage with new thinking and see how it can mesh with the Government’s intention” is a common theme. To be sure there is frustration in some parts with the Government’s Better Public Services initiatives - but there is also a willingness among the sharper CEOs to get on with the work which underpins the Government’s objectives. There is also recognition with Finance Minister Bill English and now Associate Paula Bennett, there are two individuals who are determined to energise, refresh, innovate and make the differences which matter. It helps English has an intimate comprehension of the how the machinery of Government should work. Not change, in the sense of lumping together departments as in the brutal construct of the Ministry of Business, Innovation and Enterprise, or even the Ministry of Primary Production, now the driver from Ministers is co-operation and sharing. Law changes to allow greater cross departmental work and organisation have had little impact so far. However the tools are there to be used. Progress has been made in cross-agency work in a number of sectors, but many still find it difficult. An energetic private-enterpriser might make a fortune in demolishing silos. Crucially English and Bennett are also willing to allow the public sector to take risks and even fail in trying to tackle NZ’s most difficult problems, especially when past way of doing things have had little impact. This is probably one of the biggest mind shifts needed in a sector which is risk averse and where change risks failure. The caution is understandable, no one likes bad headlines and there is a lot at stake financially. Government remains big business, accounting for 25% of GDP. At current count there are 28 departments, 22 Crown agencies, 20 district health boards, 16 autonomous Crown entities, 17 independent Crown entities, 11 Crown entities and 7 Crown research institutes, 150 Crown entity subsidiaries, 2416 school boards of trustees, eight universities, 18 polytechnics and institutes of technology, three wananga, the Reserve Bank, the Offices of Parliament, 14 State owned enterprises and three mixed ownership model companies in the energy sector.

4 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. The most recent employment statistics (June 2015 year) indicate there are 45,438 full time equivalent people in the public sector. FTEs rose slightly by 0.1%. Over the same period, the size of the State sector increased by 0.6%, health sector by 2.4%, education sector by 3.0%, total public sector by 0.8% and the private sector by 3.4%. There was little change in the regional distribution of Public Service employees in 2015. Wellington region remains the largest share with 41.1% down slightly from 41.4% in 2014 followed by Auckland at 20.2%, Canterbury at 9.7% and Waikato with 8.4%. If there is one portfolio which will mark the present Government, it is Social Welfare under Minister Anne Tolley. The Dame Paula Rebstock report on the future of child welfare is one of those which appears only once in decades. It’s most recent equivalent would be the late Justice Sir Owen Woodhouse’s monumental Royal Commission 1967 inquiry into accident compensation. Rebstock proposes a new way forward: follow the child. Minister Tolley has appointed four new independents to the Vulnerable Children’s Board to help support the overhaul of the care and protection system. They are Dame Paula, who will chair the reconfigured Board, Peter Douglas, Dame Diane Robertson and Geoff Dangerfield. They join the current members, who are the chief executives of MSD, Health, Education, Police, Corrections, TPK and Justice. As Finance Minister Bill English put it recently, the emphasis is on the Government’s programme of Social Investment, where the goal is to make sure the baseline spend addresses the drivers of social dysfunction, rather than simply servicing misery. Instead of passively paying a sickness benefit for 40 years, for example, the Government wants to take steps to intervene now to help vulnerable New Zealanders get a job, lead a better life, and save the Government money in the long run. It’s about using data and investment techniques to understand how to change a life. In the Ministry of Social Development, for example, all the funding to support people from welfare into work, $700m per year, has been pooled together to allow the Ministry to channel it to where it will be most useful. This approach has been successful – the latest figures show the welfare system’s future lifetime cost has reduced by $12bn over the last four years as a result of Government actions, or the equivalent of 60,000 people each spending 15 years less on a benefit, compared to pre-reform expectations. English says the Government welcomes the accountability that goes with being measured publicly on results, for example through the Better Public Services targets which, he says, is unique in the developed world. It also welcome’s the public’s rising expectation we the government will use their money effectively. Data sharing is an essential part of this. He says “to understand what works, we the Government need to know what services went to whom, something we don’t yet know. We need to know whether those interventions changed outcomes, what worked and by how much.” Things English says we’re only starting to see now. He argues if the Government can understand the long term fiscal and social consequences of those changes, it can use the information to decide where to invest next for better measurement, evaluation and feedback. Services which take the time and efforts of vulnerable individuals and families for no improvement in outcomes reduce resilience and perpetuate the hardship cycle. While stopping services which don’t work will free up resources, the process is not an easy one, the first steps of Whanau Ora showed this. One reason to stop things which don’t work is it saves Government effort and tax payers’ money.

5 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. A better reason to stop things which don’t work is because it wastes the time, effort and resilience of those for whom we are trying to help. All too often, officials tell English there isn’t the capability outside the public service to make better use of data to show impact. He disagrees and says the perception is certainly changing within the public service. Capability is going to lift. Government departments hold enormous stores of information directly relevant to understanding what services work. All too often this information sits in silos within departments. It is often difficult and sometimes impossible to access. There are also problems with using this information. For instance, there are ethical issues around profiling and privacy concerns around the misuse of data, all areas which set off alarm bells in the risk adverse private sector. The greater use of information in the social sector flows through to financial management. The Crown manages over $263bn in assets and almost $184bn in liabilities. In any year it spends around $73bn and generates revenue of a similar amount. Secretary to the Treasury Gabriel Makhlouf says for Government, money is a means to an end. The “end” being to raise living standards for New Zealanders. As well as managing significant and valuable assets, Government has a role as a regulator and responsibility for delivery of a range of services. The stewardship role the Government plays requires a high degree of trust. Maintaining trust depends on being transparent. In relation to being transparent about the state of the nation’s finance, the most recent global survey on Open Budgeting, New Zealand ranked first out of the 102 countries surveyed. Owning the right assets such as schools, hospitals, roads, IT, managing them well, funding their maintenance sustainably, and managing risks to the Crown’s balance sheet are all critical to the ongoing provision of high-quality, cost-effective public services. He says a modern and trusted state sector, one able to operate effectively in these changing times is crucial to improving outcomes for the people we the Government serves. As a sector the public service must deliver value, and the policy advice it makes to the Government underpins this. In the cut and thrust of front line delivery, this might seem somewhat theoretical and removed from likely coal face realities. In the past, the policy making world has had some degree of separation, in tangible and intangible ways. The State Sector has always known the advice given to the Government cannot be made in a vacuum. There will always be trade-offs and the need to balance specific needs with national impacts. Local Government rules, regulations and services also have a direct impact on communities and businesses. Makhlouf says the public service is using data to innovate how Government works, to understand and manage risk, and to make better-informed decisions. Government agencies like the Department of Internal Affairs are trying to seize the opportunity digital delivery offers by getting easily usable services out to those who need them, in a way which makes it easy for them to use. The ability to accurately measure the effectiveness of Government spending is a fundamental part of transparency. Within the Treasury there is a dedicated Government Investment Portfolio team focused on increasing accountability through greater transparency. The production of the Treasury’s Investment Statement in 2014 which details the Crown’s balance sheet shows line by line what assets the Government’s assets holds. The number of schools, recreational facilities, reserves - everything - is publicly available for anyone to look at.

6 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Last year Treasury released the first annual report providing a snapshot of the Government’s overall investment programme, covering 409 projects such as ICT, new schools, Defence projects and construction with a total annual cost of $6bn. Treasury also released the first tri-annual Major Projects Performance Report, providing a comprehensive update on the 38 most complex of those 409 investment projects, and tracking whether they are delivering on expectations. This has not been a comfortable process with many resenting the public exposure of risk and Treasury’s assessment of this, most notably in Gerry Brownlee’s rejection of Treasury’s views on progress in rebuilding Christchurch. Likewise the impact of four year plans is growing throughout departments. At first many ignored them or paid lip service. But the discipline of being told there is little chance of new money without a credible and viable four year plan is taking hold. The Administrative and Support Services Benchmarking report also provides performance information across agencies and gives transparency over a significant area of expenditure. The benchmarking reports are an important step towards transparency and scrutiny of costs in the public sector. There is a new mantra in the public service: do it with us - not to us. As Makhlouf points out, the State Sector doesn’t always know best. Talking with, and more importantly listening to, a range of people is important - and fundamental to building trust. He says Government services are often complex, fragmented and sometimes hard to navigate. Businesses find it takes more effort to deal with Government than it should. The Better for Business partnership is changing this as part of the Government’s Better Public Services programme. However, there remain problems with new technology which is disrupting many businesses and changing everyday life. The public sector and the laws they work under are not known for their nimbleness. Businesses which fail to adapt go under, whereas departments have a steady flow of funding despite performance, this makes the public sector slow to change. There is no greater example of this than Inland Revenue being unable to implement policy changes because its technology cannot cope with change. This is being addressed through the massive upgrade planned, however smaller examples exist throughout the public service. The times, they are changing.

Max Bowden, Editor-in-Chief Ian Templeton, Senior Editor

Brian Lockstone, Senior Writer Tony Doe, Research Analyst Numerous other Trans Tasman contributors were involved in compiling this report.

7 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Letter From The Editor

DEAR CLIENT, Welcome to the 7th annual edition of Trans Tasman’s look at the workings of the Ministries, Government Departments and Agencies. As always the Ministries, Departments and Agencies are reviewed by some of the country’s best political writers, as well as being ranked on “real world” criteria by an Independent Board of Advisers. The Board of Advisers also nominates the civil service “rising stars.” The top Department and CEO of the year are arrived at by tallying the scores given to individual Departments and CEOs by the members of the Board. The rankings are based on results of a questionnaire published here. The Trans Tasman Editorial team and the Independent Board of Advisers have no contact with regard to the content of the publication. This year’s publication looks at the significance to the state sector of the departure of Iain Rennie as State Service Commissioner and his replacement by one of the Board of Adviser’s favourites, Peter Hughes. The arrival of such a popular and well respected public servant in the top job is sure to have a significant impact, as will the departure of Rennie, whose credibility had been steadily slipping away. The National Party has had its feet firmly under the Treasury benches for another year, and a better public service is still its aim. How well it has achieved this so far, and what changes are needed if it feels it is failing are examined in this Review.

Max Bowden Publisher/Editor in Chief The Trans Tasman Political Alert [email protected]

8 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Independent Board Of Advisers 2016 s Annabel Young Board Of Advisers Shipping Federation Explanation s David Farrar Some of our regular advisers are back Kiwi Blog to add their comments this year, and they’re joined by some new faces as well. s Bruce Robertson Director/Consultant The members of this Board come from a variety of sectors and organisations s Charles Finny which “use” the Government Saunders Unsworth Departments, Ministries and Agencies on a regular basis as customers rather s Malcolm Alexander than politicians. Local Government New Zealand Members of the Board of Advisers s Mai Chen are leaders in fields such as business Chen Palmer consultancy, lobbying, accounctancy, the trade union movement, education, s Ken Shirley Road Transport Forum hospitality, and social services. They are highly placed individuals who have an s Katherine Rich inside knowledge of the workings of Food and Grocery Council the state sector and first hand dealings s Fa’amatuainu Tino Pereira with those who run these powerful Niu Vision Group Government organisations. s Mark Unsworth In order to determine how they relate to and interact with Government Saunders Unsworth Departments we asked them to answer s Tracy Watkins a questionnaire and provide individual Fairfax Media comments, which are published in this Review. s John Milford Wellington Employers Chamber of Commerce s Alistair Shaw New Zealand Union of Students’ Associations s Graeme Peters Electricity Networks Association NOTES s Chris Roberts The Board of Advisers worked Tourism Industry Aotearoa independently of each other with no knowledge of who the other s Kim Campbell contributors were. Advisers who EMA Northern believed they may have a conflict of interest were managed appropriately. Some Advisers worked with colleagues presenting a combined ranking score. Advisers confined their answers to the areas they had knowledge of.

9 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. The Questionnaire

Once members of the Independent Board Of Advisers accept their invitation to take part, they are emailed a link to the questionnaire. This gives them the opportunity to give each Department a numerical ranking out of seven over four categories. The results of these rankings are used to determine the CEO and Department of the Year. They are also asked for additional comments, which are published later in this report, but are not attributed to any individual. The questionnaire is reproduced below.

KEYWORD SEARCH For electronic users of this document please make use of the Keyword Search function at the top of your PDF browser.

10 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Copy of Government Agencies 2016

1. Survey ranking

1. To ensure that the review is objective we have invited 20 opinion leaders to form an independent board of advisers.

This survey asks you, as one of the independent board of advisers to rank the performance of various Government Departments. Your ratings will remain confidential and any comments will be non attributable.

The survey should take no longer than 40 minutes.

This is the fifth year of the review All core state agencies are listed, with the name of their current chief executive in brackets.

Please rank each agency on a 1 to 7 scale with 1 indicating "consistently under-performs", a 4 "does a satisfactory job" and a 7 "consistently exceeds expectations".

If you do not feel able to rate an agency on the individual criteria, you can just rate it on the overall performance. It will be useful to get as many detailed rankings as possible though.

You do not have to answer each question if you do not have the necessary facts. However, please feel free to liaise with any business colleague who could assist you.

Note that you do not have to click on the drop down menu in each box. You can just type a number from 1 to 7 and then hit TAB to go to the next box.

Budget Performance of the Performance/Value Quality of Service Overall Performance Chief Executive for Money Delivery of the Agency

Accident Compensation Corporation (Scott Pickering)

Ministry of Primary Industries (Martyn Dunne)

Ministry of Business, Innovation and Employment (David Smol)

Canterbury Earthquake Recovery Authority (John Ombler, Acting)

Department of Conservation (Lou Sanson)

Department of Corrections (Ray Smith)

Crown Law Office (Una Jagose appointed February)

11 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Budget Performance of the Performance/Value Quality of Service Overall Performance Chief Executive for Money Delivery of the Agency

Ministry for Culture and Heritage (Paul James)

New ealand Customs Service (Carolyn Tremain)

Ministry of Defence (Helene Quilter)

Ministry of Education (Peter Hughes)

Education Review Office (Iona Holsted)

Ministry for the Environment (Vicky Robertson)

Ministry of Foreign Affairs and Trade (Brook Barrington)

Government Communications Security Bureau (Acting Director Lisa Fong)

Ministry of Health (Chai Chuah)

Inland Revenue Department (Naomi Ferguson)

Department of Internal Affairs (Colin MacDonald)

Ministry of Justice (Andrew Bridgman)

Land Information New ealand (Peter Mersei)

Te Puni kiri - Ministry of Mori Development (Michelle Hippolite)

Ministry for Pacific Peoples (Pauline inter)

New ealand Police (Mike Bush)

Department of the Prime Minister and Cabinet (Andrew ibblewhite)

Reserve Bank (Graeme heeler)

Serious Fraud Office (Julie Read)

Ministry of Social Development (Brendan Boyle)

State Services Commission (Iain Rennie)

Statistics New ealand (Li MacPherson)

12 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Budget Performance of the Performance/Value Quality of Service Overall Performance Chief Executive for Money Delivery of the Agency

Ministry of Transport (Martin Matthews)

New ealand Transport Agency (Fergus Gammie)

New ealand Trade and Enterprise (Peter Chrisp)

Tertiary Education Commission (Tim Fowler)

The Treasury (Gabriel Makhlouf)

Ministry for omen (Jo Cribb)

orksafe (Gordon MacDonald)

General Comments

2. Please rate how successful you believe their Minister has been in getting the agency to successfully implement their policy agenda on a 1 to 7 scale with 1 indicating "Very unsuccessful", a 4 "average success" and a 7 "very successful".

Rating

Accident Compensation Corporation (Nikki aye)

Ministry of Primary Industries (Nathan Guy)

Ministry of Business, Innovation and Employment (Steven Joyce)

Canterbury Earthquake Recovery Authority (Gerry Brownlee)

Department of Conservation (Maggie Barry)

Department of Corrections (Judith Collins)

Crown Law Office (Chris Finlayson)

Ministry for Culture and Heritage (Maggie Barry)

New ealand Customs Service (Nicky agner)

Ministry of Defence (Gerry Brownlee)

Ministry of Education (Hekia Parata)

13 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Rating

Education Review Office (Hekia Parata)

Ministry for the Environment (Nick Smith)

Ministry of Foreign Affairs and Trade (Murray McCully)

Government Communications Security Bureau (Chris Finlayson)

Ministry of Health (Jonathan Coleman)

Inland Revenue Department (Todd McClay)

Department of Internal Affairs (Peter Dunne)

Ministry of Justice (Amy Adams)

Land Information New ealand (Louise Upston)

Ministry of Mori Development (Te Ururoa Flavell)

Ministry of Pacific Peoples (Peseta Sam Lotu-Iiga)

New ealand Police (Judith Collins)

Department of the Prime Minister and Cabinet (John ey)

Reserve Bank (Bill English)

Serious Fraud Office (Michael oodhouse)

Ministry of Social Development (Anne Tolley)

State Services Commission (Paula Bennett)

Statistics New ealand (Craig Foss)

Ministry of Transport (Simon Bridges)

New ealand Transport Agency (Simon Bridges)

New ealand Trade and Enterprise (Steven Joyce)

Tertiary Education Commission (Steven Joyce)

The Treasury (Bill English)

14 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Rating

Ministry for omen (Louise Upston)

orksafe (Michael oodhouse)

Comments on any agencies you scored very high or very low

. In this section, please make any appropriate general comments on each agency.

Accident Compensation Corporation (Scott Pickering)

Ministry of Primary Industries (Martyn Dunne)

Ministry of Business, Innovation and Employment (David Smol)

Canterbury Earthquake Recovery Authority (John Ombler, Acting)

Department of Conservation (Lou Sanson)

Department of Corrections (Ray Smith)

Crown Law Office (Una Jagose)

Ministry for Culture and Heritage (Paul James)

New ealand Customs Service (Carolyn Tremain)

Ministry of Defence (Helene Quilter)

Ministry of Education (Peter Hughes)

Education Review Office (Iona Holsted)

Ministry for the Environment (Vicky Robertson)

Ministry of Foreign Affairs and Trade (Brook Barrington)

Government Communications Security Bureau (Lisa Fong, Acting)

Ministry of Health (Chai Chuah)

Inland Revenue Department (Naomi Ferguson)

15 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Department of Internal Affairs (Colin MacDonald)

Ministry of Justice (Andrew Bridgman)

Land Information New ealand (Peter Mersei)

Ministry of Mori Development (Michelle Hippolite)

Ministry for Pacific Peoples (Pauline inter)

New ealand Police (Mike Bush)

Department of the Prime Minister and Cabinet (Andrew ibblewhite)

Reserve Bank (Graeme heeler)

Serious Fraud Office (Julie Read)

Ministry of Social Development (Brendan Boyle)

State Services Commission (Iain Rennie)

Statistics New ealand (Li MacPherson)

Ministry of Transport (Martin Matthews)

New ealand Transport Agency (Fergus Gammie)

Tertiary Education Commission (Tim Fowler)

New ealand Trade and Enterprise (Peter Chrisp)

The Treasury (Gabriel Makhlouf)

Ministry for omen (Jo Cribb)

orksafe (Gordon MacDonald)

4. hich department or agency has improved their overall performance the most, in the last 12 months

. Are there any Senior Public Servants you would like to nominate to be a "rising star"

16 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. . If you have any additional comments you wish to make, feel free to do so below.

7. Panel Member name and organisation

17 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. The Rankings

The 16 panelists ranked 36 agencies from 1 to 7. The average ranking for an agency’s overall performance was 4.3 (up 0.2 from 4.1 in 2015) and for a CEO’s performance 4.5 (up 0.1). The range of average rankings for agencies was from 2.9 to 5.7 and for CEOs from 2.3 to 5.9. The range of average rankings for Ministers successfully implementing policy agendas was from 3.3 to 5.4 and averaged 4.3, up 0.2 from 4.1 in 2015. s ACC’s work in both reducing levies and increasing customer satisfaction has seen it get the top rating in three categories - overall, value for money and service quality. It was also the number one ranked agency in 2014, but has lifted its overall agency score a further 0.7 to 5.7. This is the highest score any agency has got in the history of this survey. s The CEO’s rating remains at 5.4, and they get 5.7 for value and 5.5 for quality of service. The Minister was given a high 4.9 for implementation of her policy agenda. s DOC remains a solid performer with a 4.6 overall rating, a 4.7 for value and 4.3 for quality. The Minister’s ability to get her policy agenda implemented remains a low 3.5. s Corrections is the 4th top ranked agency on 4.9 overall and 5.3 (down 0.4) for CEO Ray Smith. Corrections is rated 3rd for value (5.0), 4th overall 3rd for CEO and 6th for quality. s Crown Law has fallen to the bottom half with an overall score of 3.9 (down 0.5). However the Attorney-General has a high 5.2 (2nd overall) for implementing his policy agenda. s The Ministry of Culture and Heritage is much improved on 4.8 (+0.7), and its CEO has a good 4.7. However its Minister remains lowly ranked (34th of 36) for implementation of her agenda. s Customs has risen from 4.8 to 5.4 overall to be the 2nd highest ranked agency. The CEO scores 5.2 (4th) and it ranks well for value (3rd) and quality (2nd). s The Ministry of Defence is also much improved going from 4.3 to 4.8. It scores 4.5 for value and 4.4 for quality. Minister Brownlee is seen as winning the battle with his agency, with his score going from 3.9 to 4.6 for implementing his agenda. s The Ministry of Education improves for the third year running increasing from 4.3 to 4.6. Three years ago it was on 2.4. CEO Peter Hughes is again the highest ranked CEO at 5.9 (down 0.2). Minister Parata also sees her score go from 3.9 to 4.5 for getting her policy agenda implemented. s The ERO scores 4.2 overall (down 0.1), and is rated 3.8 for quality and 4.1 for value. s The Ministry for the Environment has improved a bit from 3.6 to 3.8, but still seen as below average. However there is a lot of confidence in new CE Vicky Robertson, who gets a 4.6 (up 0.8). s MFAT improves from 4.2 to 4.3. The new CE is rated 4.5, value for money 4.1 and quality 4.1. Reasonable scores but a long way from the ratings it used to have a few years ago. Minister McCully’s rating shoots up a massive 0.9 to 4.6 on the back of the successful UN Security Council campaign. s The GCSB is the most improved agency going from 3.4 to 4.3. Its ability to implement the Minister’s policy agenda goes from 4.8 to 4.9. s The Ministry of Health slightly increases from 3.8 to 3.9. The CEO rates 4.3 (up 0.4). It scores only 3.4 for value and 3.5 for quality. The Minister’s ability to have his policy agenda implemented by is static at 4.4. s The IRD remains well ranked at 6th overall, increasing slightly from 2014. It gets a 4.9 (up 0.1) overall and 4.6 for value and quality. The CEO scores 5.1 (up 0.2). s The DIA is constant at 4.5 and the CEO at 4.7. DIA rates slightly above average on value and quality.

18 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. s The Ministry of Justice improves slightly to 3.9 overall but is still below average. The CEO is also at 3.9. Rated 3.5 for quality and 3.8 for value. s LINZ drops slightly to 4.3 and has above average ratings for value and quality. s TPK improves from 3.2 to 3.4 overall. It also gets 3.4 for quality and value (up 0.6) s The Ministry of Business, Innovation and Employment continues to slide, down 0.2 to 3.6. Two years ago it was a 4.4. CEO David Smol also drops from 4.4 to 4.1. It scores well above average for value (3.5) and quality (3.8). Minister Joyce’s rating for policy agenda implementation drops from 4.3 to 3.6. s The Ministry of Primary Industries remains at 4.1 overall and the CEO also constant at 4.5. Rated 4.6 for value and 4.3 for quality. s The Ministry of Pacific Island Affairs goes from 3.4 to 3.1 overall. It gets 3.4 for value and quality and 3.3 (down 0.6) for the Chief Executive. s The DPMC improves from 4.5 to 4.7 overall. The CEO rises from 4.2 to 4.7. It gets a 4.6 for value and quality. The Minister’s ability to have his policy agenda implemented is 5.4, making the PM the top rated Minister for getting his policy agenda implemented. s The Police improve from 4.7 to 5.0 and the Commissioner goes from 4.7 to 4.9. The new Minister gets a 5.0 rating up 0.8 from her predecessor. s The Reserve Bank has a massive drop from 3rd overall in 2015 to 23rd in 2016. Its overall rating drops from 4.8 to 4.2, Governor Wheeler drops from 4.9 to 4.2. The Reserve Bank is rated 3.9 (-0.9) for value and 4.0 (-0.9) for quality. There has been an obvious loss of confidence in the Reserve Bank in the last year. However Bill English has the 2nd highest rating for getting his policy agenda implemented at 5.2. s The SFO improves from 3.8 to 4.0. It gets 4.2 for value and 4.3 (up 0.7) for quality. The Director increases from 3.6 to 4.3. s MSD remains well ranked at 4.7 overall, similar to 2015. It gets 4.6 for value and 4.4 for quality. The CEO rating at 5.0 is rated 7th highest. The Minister’s ability to get their policy agenda implemented increases from 4.2 to 4.8. s The State Services Commission remains the bottom ranked agency in all four core areas. It has improved over 2015, but Peter Hughes has a huge job ahead of him to rebuild confidence in the Commission. It scores 2.9 overall (up 0.5). For value it gets 2.8, quality 2.9 and the State Services Commissioner gets a 2.3 (up 0.2). s Statistics NZ has the 4th highest overall rating. It gets a 4.9 overall, 5.1 for the CE, 5.1 for value and 4.9 for quality. The Minister’s rating increases very significantly from 3.1 to 4.2 s The Tertiary Education Commission rises falls from 3.9 to 3.5 making it the 5th lowest ranked agency. The CEO is on 4.0, and it gets a 3.1 for value and 3.3 for quality. The Minister’s rating also drops from 4.5 to 4.0 for implementation of his policy agenda. s NZ Trade and Enterprise has a good rating of 4.7 overall and its CE is on 4.6. It gets 4.4 for value and 4.5 for quality. s The Ministry of Transport is rated 4.3, up 0.2. The CEO is up from 4.3 to 4.7. s The NZ Transport Agency is up from 4.3 to 4.7. The CEO is down 0.8 though to 4.2. s Treasury goes from 4.5 to 4.6 and the Secretary from 4.6 to 4.7. Treasury scores a 4.4 for value and 4.3 for quality. It is rated at 5.1 for its Minister’s ability to get his policy agenda implemented. s The Ministry of Women’s Affairs is down 0.2 to 3.2 and the CEO is constant on 3.3. s New agency Worksafe has a good start with 4.7 overall and 4.8 for the Chief Executive. It gets 4.4 for value and 4.6 for quality. Minister Woodhouse gets a 4.1 for implementing his policy agenda.

19 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Top 10s

These are the top 10 Departments ranked by the Board in each of the five categories we measured. The rankings are from 1 (poor), to 7 (excellent).

Performance of CEO Ministry of Education 5.93 Accident Compensation Corporation 5.38 Department of Corrections 5.27 Customs 5.21 Inland Revenue Department 5.08 Statistics NZ 5.07 Ministry of Social Development 5.00 NZ Police 4.92 WorksafeNZ 4.79 Ministry of Culture & Heritage 4.73

Minister’s policy agenda successfully implemented Department of Prime Minister & Cabinet 5.43 Reserve Bank 5.23 Crown Law 5.23 Corrections 5.14 Treasury 5.13 NZ Police 5.00 Accident Compensation Corporation 4.87 Government Communications Security Bureau 4.86 Ministry of Social Development 4.80 Ministry of Defence 4.64

The Budget performance and value for money of the Department Accident Compensation Corporation 5.69 Statistics NZ 5.08 Department of Corrections 5.00 Customs 5.00 Police 4.85 Ministry of Culture & Heritage 4.80 Department of Conservation 4.67 Inland Revenue Department 4.64 Ministry of Social Development 4.62 Ministry of Primary Industries 4.60

20 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. The Department’s quality of service delivery Accident Compensation Corporation 5.46 Customs 5.00 Police 5.00 Statistics NZ 4.92 Ministry for the Environment 4.91 Department of Corrections 4.79 Ministry of Culture & Heritage 4.70 Inland Revenue Department 4.64 NZ Transport Agency 4.58

The overall performance of the Department Accident Compensation Corporation 5.71 Customs 5.38 Police 5.08 Department of Corrections 4.93 Statistics NZ 4.93 Inland Revenue 4.92 Ministry of Defence 4.64 Ministry of Social Development 4.73 WorksafeNZ 4.73 NZ Transport Agency 4.69 Department of Prime Minister and Cabinet 4.69

* The rankings for CEO Performance and Overall Department Performance are separate from voting for the CEO of the Year and the Department of the Year.

KEYWORD SEARCH For electronic users of this document please make use of the Keyword Search function at the top of your PDF browser.

21 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Board Of Adviser’s General Comments

The Advisers were asked to make comments on the state of the public sector, and any issues they believe are important going forward.

Great call Peter Hughes running SSC - blow for Education though. The level of performance for the public sector this time round is below par as many Departments and Ministries continue to be hampered by incessant changes with no tangible benefits to show for them. There also seem to be leadership issues across the public sector mostly reflected in the poor performance of the State Services Commissioner who has now stepped down. Fergus Gammie of NZTA unproven in this role but has made a promising start. Hard to evaluate large Ministries such as MBIE, MPI and DIA as they have variable performance from different sections. I am surprised at how many women (12) there are, albeit in the lessor roles. Good leaders create good departments. Barry really struggling with Culture and Heritage - big problems with officials and stakeholders. PM needs to do something fast. Nick Smith could cost the Government the election if he keeps Environment. RMA a mess and he failed to consult on Kermadecs. Bridges has problems with NZTA. TEC continues to fail to provide neutral funding across the different platforms. The relevance and performance of Maori, Pacific and Women’s Affairs is very hard to see. ACC and Health have largely stayed off the radar despite the propensity for controversy. The Public Service needs reinvigorating. A key and critical role for the new leader of SSC. We seem to have a lot of very average Ministers. Where are the big policy ideas of this Government? Social Welfare has a vision but it will be years in the making.

22 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. How Good Is The Minister? The Board Of Advisers is asked to rate how successful they believe the Department’s Minister has been in getting the agency to successfully implement their policy agenda on a 1 to 7 scale with 1 indicating “very unsuccessful,” a 4 “average success” and a 7 “very successful.” Here’s what they decided:

Name Department Ranking John Key DPMC 5.43 Bill English Reserve Bank 5.23 Chris Finlayson Crown Law 5.23 Judith Collins Corrections 5.14 Bill English Treasury 5.13 Judith Collins Police 5.00 Nikki Kaye ACC 4.87 Chris Finlayson GCSB 4.86 Anne Tolley Social Development 4.80 Simon Bridges Transport 4.64 Gerry Brownlee Defence 4.64 Murray McCully MFAT 4.60 Michael Woodhouse Inland Revenue 4.50 Hekia Parata Education 4.47 Jonathan Coleman Health 4.40 Amy Adams Justice 4.36 Todd McClay NZTE 4.30 John Key Internal Affairs 4.23 Simon Bridges NZTA 4.21 Chris Finlayson Serious Fraud 4.17 Hekia Parata ERO 4.17 Nicky Wagner Customs 4.15 Craig Foss Statistics 4.15 Nathan Guy MPI 4.07 Michael Woodhouse Worksafe 4.07 Steven Joyce Tertiary Education 4.00 Nick Smith Environment 3.93 Paula Bennett State Services 3.85 Steven Joyce MBIE 3.63 Louise Upston Land Information 3.50 Maggie Barry Conservation 3.47 Te Ururoa Flavell Maori Development 3.38 Maggie Barry Culture and Heritage 3.33 Louise Upston Women’s Affairs 3.29 Peseta Sam Lotu-Iiga Pacific People’s 3.27

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Accident Compensation Corporation s It can be quite hard to find the right person (Scott Pickering) dealing with an issue. s Good operator. s David has united a complex and difficult s Really feel they are getting ahead of the game in organisation into something resembling order. terms of an investment approach to reduce long term costs. Department of Conservation (Lou Sanson) s Pickering has taken the controversy out of ACC - evidenced by a big improvement in public s Under-funded and lost. trust and confidence in the agency. s Reduced politics of conservation successfully. s Performs extremely well on its treasury services. s Bland profile. Fails to ignite public interest. s Working the best it has for many years. Smart s Doing very well and building strong stakeholder management of funds. relationships. s Got things back on track. s Making some progress in commercialising s Extensive reform programme implemented well. concessions. s Making good progress off the radar and levies s Not as consultative as they could be when their are reducing. decisions affect the real world. s They seem to be able to stay out of the media these s Gets a lot done with not nearly enough days. I still hear complaints that they are chaotic resources. when dealing with health providers on contract. Department of Corrections (Ray Smith) s Efficient and responsive gives the minister excellent guidance s Doing great work with new technology. Excellent staff. Ministry of Primary Industries s Remarkable how CE has survived the (Martyn Dunne) Department’s roll call of fiascoes. s Subterranean. s Despite the issues with Serco he’s still New s A solid year for the agency. Zealand’s most successful jailer. Safe pair of hands. Difficult gig. s Improving every year. s The change of Minister seems to have worked. s Strategic leader that’s not afraid to make tough calls. s Tough gig with non performance of Serco but s Stolid and lacking profile. acted decisively. s Safe pair of hands has turned the ship around. s Innovators and making real progress. s Crucial for our exports and needs to step up on Biosecurity. The Aussies make us look like Crown Law Office (Una Jagose) amateurs. s Can’t see what they actually do. Ministry of Business, Innovation and s Too soon to give a fair rating. Employment (David Smol) s Appears to be just doing business as usual. s Too big, no strategic direction, meetings, meetings. meetings. Ministry for Culture and Heritage (Paul James) s Hard ask. Beyond him. s No measurable improvements on performance s MBIE epitomises the stereotype of a since last assessment. bloated bureaucracy. s Enthusiastic. A potential star. s Lost momentum as is distracted by its spending excesses. s They can’t be blamed for the flag debacle but who did devise the process so it was designer-free? s Difficult role as MBIE has turned into such an amorphous beast. s Small but important agency well run. s Too many unsynchronised moving parts. New Zealand Customs Service s Things are not tracking in the right direction. (Carolyn Tremain) s Too many silos not working together. s Now has funding from every traveller through s MBIE still seem like a disjointed collection border clearance levy but will they spend of lost souls. it wisely?

24 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. s The way to this Government’s heart is P-busts under resourced. and Customs has been delivering. s Some rumblings about too much control from s These folk do a great job always friendly CEO’s office. always professional. s Some Senior Managers need to be found new jobs. s Still think Carolyn could work wonders at SSC. s Can take some credit for NZ getting on the Security Council. Ministry of Defence (Helene Quilter) s MFaT need to be refocused on what helps NZ... s Getting on with the job. No fuss. or get better at explaining what they do. s Brownlee seems to have won the culture war with his officials. Government Communications Security Bureau (Lisa Fong, Acting) s Still questions about the ability to make good hardware decisions. s Significant improvement on last year. s Recognize NZ’s rapidly changing defence needs s Much work needed. and adapting well. s Not broken the law this year which is good. s Work in progress a more open approach may be Ministry of Education (Peter Hughes) improving public confidence. s Education no longer a basket case under his watch, rewarded with the top job as State Ministry of Health (Chai Chuah) Services Commissioner. s Short waiting lists and improving longevity s Amazing improvement in a short time. shows progress is being made s Made great strides to getting Ministry out of s Poor morale is becoming a big problem here. the public scrutiny - has much greater focus on s Restructuring is confusing and wider health what it should be doing. sector especially District health Boards are also s If literacy is a product of our education system none the wiser! must get a low grade. s Smart, effective and has engaged all s Well led but entrenched conservatism with stakeholders. Challenges DHBs in the right way. narrow outlook. s Performing well with good results. s Hughes a class act but huge problems remain. s Is he up to the job? Financial blowout difficult to justify. Education Review Office (Iona Holsted) s Solid under the radar. s Almost a silent operator. s MoH has been through a messy time but may be getting back on track now it has dumped the Ministry for the Environment whole inner structure of internal boards. (Vicky Robertson) s Massive improvement needed. Inland Revenue Department s Our waterways are still just as polluted right? (Naomi Ferguson) s Early days with a difficult Ministry. Needs to s One of the few innovative revenues in the world invest in stakeholder relationships. they are quiet achievers s MfE need to better consider the effects of their s So far so good with IRD’s big IT project but the decisions on business. money at stake is eye-wateringly large so this one will be closely watched. s Lurching into the 21st century well. Vicky has given the place a new sense of purpose. s Making real progress in senior management performance. Ministry of Foreign Affairs and Trade s Has embraced modern technology. (Brook Barrington) s Becoming highly respected for policy and s Back on its feet after taking a battering in morale operations. and the loss of some of its top diplomats. s Good progress in tax simplification will be s Settling down since the departure of last CEO challenged to deliver a seamless working - building its morale and appears to be making technology upgrade. good progress. s The Generic tax Policy process seems to have s Recovering from a period of trauma. Seriously lost its horsepower both inside IRD and outside.

25 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Department of Internal Affairs dealt mainly with intervention. (Colin MacDonald) s Police are loosing public support by trying to s Business as usual. make the law rather than enforce it. s Best passport service in the world without doubt. s It will be interesting to see where they get the s Is Colin doing too much - capable person but next Commissioner from. stretched perhaps too far. Department of the Prime Minister and s Difficult to judge across the catch all Cabinet (Andrew Kibblewhite) department. Good marks for fire service review and turnaround on 10 year passports. Struggle s A good year for Kibblewhite and DPMC; some to deliver IT progress in some areas. big brains and safe hands housed in this agency. s Runs like clockwork. Ministry of Justice s Business as usual. (Andrew Bridgman) s Is DPMC providing the leadership it should and s Doing good work. which is necessary? s Archaic with process and systems. s DPMC started out as a think tank but now s A challenge to deal with, suspicious of appears to be more of a briefing tank, a sort outside stakeholders need to trust more. Lack of eyes and ears for the PM to keep an eye experienced people. on Ministers and departments. It would be interesting to return to the original model. Land Information New Zealand (Peter Mersi) Reserve Bank (Graeme Wheeler) s Didn’t do itself any favours with the botched s A bit aloof. release of so-called foreign house buyers figures. s Out of control housing market, first home buyer s New CEO having an impact. angst, a high dollar - something’s not working. s Performing well. s Performing well in sticking to his line of policy despite much criticism from financial sector and Ministry of Maori Development some Government quarters. (Michelle Hippolite) s Outstanding Governor and a safe pair of hands s Absent from consultation during the TPP on the tiller. negotiations, which might explain the lack of s Difficult job but seems to have things in hand. buy-in now from Maoridom. s Not liked much in Beehive. Made big mistake s Long process of changes appear to be helping increasing interest rates. the Ministry as the CEO starts to provide clear leadership and direction. s Interesting dynamic with the Minister the balance of 2016 will be interesting s Performing well and engaging well with stakeholders. Serious Fraud Office (Julie Read) s Not sure what, if anything, it has done. s Disappeared from view. Ministry for Pacific Peoples s Struggle to get runs on the board may be under (Pauline Winter) resourced. s Making very little progress in making this little s Unable to make any meaningful impression. Ministry strategic and effective. s Not sure what if anything they have done. Ministry of Social Development (Brendan Boyle) s Small but effective Ministry enthusiastic staff. s Minister doing a great job. Under-rated. New Zealand Police (Mike Bush) s Has led the recovery from the tragedy in the s Seems to be doing well. South Island, but appears to be struggling to cope with the changes brought about by the s Still has a culture of arrogance and still protect Rebstock review. their own even when this is not justified. s The CYF review implementation will test them. s Pressing ahead with fundamental changes to Police strategic approach by planning prevention s Investment approach seems to be working and at the front end of its work, which is a significant is getting public support. change of direction from an organisation which s Difficult agency containing costs well.

26 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. State Services Commission s Lack of respect across the sector. (Iain Rennie) s A long history of poor performance. s Leaving - for the best. s Whole place should be replaced with s Rennie’s departure won’t be lamented by the something else. public service, who will be hoping for a firmer s Needs to be more pro-active on rorts. hand from Hughes. s They talk about an investment approach but are s Consistently poor performer. yet to deliver on it. s Simply hopeless. New Zealand Trade and Enterprise s This hasn’t been a good end to his career. SSC (Peter Chrisp) should be driving performance in the public sector but it has disappeared from view. s Too focused on helping the big companies sell more offshore and only now waking up to the s Such a waste of space it is hard to comment. potential of and value of NZ’s service industries. Statistics New Zealand s Some questions are being asked about whether (Liz MacPherson) we are leveraging as much off our China FTA as we could. s An underutilised source of insight into what’s happening in NZ. s Has made NZTE a focused offshore machine seeking out opportunities for our economy. s A reliably good performer. s Great to deal with. s One of the best performing CEOs in the public sector. The Treasury (Gabriel Makhlouf) s Shaking things up in a good way. s Too low profile. s Good data becoming increasingly available in a s A solid year, Treasury had its nose to the user friendly manner. Very approachable. grindstone for most of it. Ministry of Transport s Consistently leading reform initiatives in the (Martin Matthews) public sector space with a strong performing senior management team. s Has done an excellent job. Great stakeholder relationships. Has set the bar on how to bring s Has a very low profile when compared to stakeholders along on strategy formation. Treasury secretaries of the past. Maybe this approach bears reconsideration. s Seems very focused on getting ready for autonomous vehicles. s Not afraid to be controversial and has a good grasp of NZ’s challenges s What about giving inter-model transport policy advice to his Minister? Ministry for Women (Jo Cribb) s Good breadth of vision but needs a greater s Not working. sense of urgency s Nice website populated with stories about New Zealand Transport Agency inspiring women - but aren’t we past that? . (Fergus Gammie) s Not sure what they have achieved, ever. s Good with roads, slow with everything else. s Not sure why we need such a Ministry but Jo s Knows best. does a great job . s Great with infrastructure projects. Poor with Worksafe (Gordon MacDonald) regulatory functions. s Generally doing a good job and loss of CEO so s Much work to do on relations with Minister. soon is disappointing. s This is misnamed as its statutory mandate is s Didn’t cover itself in glory over the workplace land...hence its roading focus. They are good at safety legislation. what they do. s There are risks Worksafe will become too officious. Tertiary Education Commission Not handled well this could become a source of (Tim Fowler). difficulty for the Government. s Have been taking a long time to not get s They seem to be winning the PR battle and anywhere with the “new” approach announced changing mindsets. Good on them. Sad they two years ago. couldn’t hang onto their chief executive.

27 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. CEO Of The Year - Peter Hughes [Ministry of Education]

There’s no coincidence Peter Hughes has appeared so many times in our annual review. Quite simply, he is the outstanding public servant and CEO of a generation. It is hard to think of another in recent years who engenders such a positive response. As we have said elsewhere, the cheers greeting his appointment as State Services Commissioner were an amalgam of pleasure and relief. However the pressure will be on him when he moves to his new role. There is a feeling in Wellington if the SSC cannot boost its performance it will be rolled into the Department of Prime Minister and Cabinet. As one of his colleagues tells us, here is an individual HUGHES - COULD HE BE THE SAVIOUR OF SSC? with that rare mix of leadership skills - humility, patience and sheer humanity. The sort of person who will take time to coach and encourage a junior to seek higher positions. The sort of individual who has run some of the hardest departments in the public service - Education and Social Development. Both are mine fields with vocal and frequently vociferous clients. Everyone is an expert on both subjects. Social media, assisted at times by gullible reporting in the mainstream media, makes the task of the administrator that much harder. His time out at Victoria University provided the opportunity to recharge the batteries, focus on public policy and develop his skills at knitting together a Government’s political agenda and workable outcomes in the public service. Hughes already enjoys widespread approbation across the public service. This is vital as he is regarded by many of his peers as about the only one who can re-energise the State Services Commission with effective leadership and provide the essential bridging between Ministers and their Departments. His selection as CEO of the year is well merited and endorsed by all who have helped compile this annual review. We wish him well in his new appointment commencing in July.

28 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Department Of The Year - Accident Compensation Corporation

Early on in our assessment of the department of the year it became evident the Accident Compensation Corporation was heading almost every metric. So it came as no surprise our advisers concluded ACC was the winner. The result is a tribute to the work of CEO Scott Pickering and his executive leadership team backed by a first-class board headed by Dame Paula Rebstock. In three years Pickering has transformed ACC. No longer is it the ambulance at the bottom of the cliff. With its energetic accident-prevention programmes, its educational capabilities and a strong focus on quality customer-service it has proven what can be done with solid teamwork. It successfully weathered the storm of claims generated by the Canterbury earthquakes. Not many years ago ACC was synonymous with disabled ducks. Now, with astute management and careful stewardship of financial resources, it is a model government corporation. No wonder ACC Minister Nikki Kaye is proud. Levied accounts are now fully funded - a significant milestone, as it means ACC holds sufficient funds to meet the lifetime costs of existing claims. She says ACC’s improved financial position, combined with the significant package of reform aimed at ensuring greater transparency and stability, means the scheme is in great heart. There are significant levy reductions, of around $450m for 2016/17. Work and earners’ levy cuts took effect in April and the average motor vehicle levy will fall around 33% from July 1. This demonstrates what can be done with focused team work and perceptive oversight by an experienced board giving Ministers confidence in the way ahead. ACC is a deserved winner.

29 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Government Departments - Explanatory Notes s Inclusion: This year we have included the Defence Force along with the Ministry of Defence. As CERA has now been folded into the Department of Prime Minister and Cabinet, it no longer has its own entry. All other Ministries, Departments and agencies covered in previous years appear as usual. s Content: The aim of this publication is not to provide an extensive outline of the work these organisations do, but to look at how they fit into the overall scheme of NZ Government, some of the major issues facing them now and into the future, while featuring some of the key people who drive this. s Statistics: We have taken figures from The Budget, The State Services Commission and Departmental and Ministry Annual Reports. Current Vote figures are from Budget 2016. For comparison of staff numbers over time, refer to tables at the back of this publication. s Budget Update: We have included a “Budget Update” section if there has been a material change in Budget 2016 which effects a Department or Agency. Other Budget matters are referred to in the text for each Department or Agency as most Budget announcements had been made prior to May 26.

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PURPOSE: The ACC provides comprehensive, no-fault personal injury cover for all NZ residents and visitors. Its role is to prevent injury, ensure people can receive treatment for injury and to assist people back to everyday life as soon as possible.

„„The good news rolls on, says ACC Minister Nikki Kaye. Since 2009 when it posted a yearly deficit of $4.8bn, the scheme’s assets have grown from $10bn to $33bn. „„Levies are dropping on average 11% this year and ACC’s three levied accounts are now fully funded, providing reassurance it is well placed to meet ongoing support needs. „„The first stage of the five-year transformation programme will begin to address long-standing issues. The changes are among the biggest in the 42-year history of the ACC scheme. The Government says they will demonstrate ACC is on the right track to improve trust and confidence among all NZers. „„The Govt remains wary of IT challenges and is involving Treasury and the Government’s Chief Information Officer in the transformation process.

CEO PROFILE The Government is confident the ACC is in good health and making real progress across a range of issues. The corporation Scott Pickering. One of the high fliers in the Govern- is working hard to improve its standing. The Government says ment’s firmament, Scott Pick- in recent years, ACC has remained ineffective in delivering core ering is now in his third year services to customers. As it has grown processes have become as CEO. He is driving through a programme of substantial more complex. Its operations have focused more on itself than the institutional change. Insiders customer. It relies too heavily on manual and paper-based work say he has the capacity of with the risk of privacy breaches. It doesn’t offer enough options carrying people with him and of stimulating debate. He is when it comes to exchanging information and it is not always a seasoned executive with a available when and how its customers require. background in global insur- ance gained through a career Cabinet signed off the $450 million transformation programme serving several companies in earlier this year. Funding for the programme is coming from ACC’s many regions and countries. operating budget, and is broadly in line with ACC’s usual spend on Defining Moment: Digitisa- tion of access to ACC, while strategic change initiatives over a comparable period. This means quelling privacy concerns. it will not impact on levies. As ever people want reduced premiums, but also want bet- This next step in ACC’s transformation comes on the back of ter coverage.. significant legislative changes including a more robust framework for funding ACC, greater transparency around the levy setting process, and the removal of residual levies which collected historic claims costs. The transformation programme has undergone extensive scrutiny and was before Cabinet twice. Lessons learned from other major IT projects were taken on board, and robust mitigations put in place to minimise risks. Mitigations include extending the programme from three to five years, independent quality assurance and oversight by the Government Chief Information Officer and Treasury.

31 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. There are six major targets: improving customer trust and confidence, improving claims- processing, reducing the number of days lost to injury, empowering staff to deliver core services more effectively, reducing the number of data issues by better supporting core systems and reducing business customer levy debt Clients will provide information to ACC only once. They will get certainty around financial security during recovery. They feel empowered and supported to manage long-term injury needs and maintain independence in their lives On the other side providers will be able to deal with patients’ needs, rather than spend time on paperwork. They will be better informed about the estimated rehabilitation pathway for patients and how unique factors can impact recovery. They will have a single point of contact with ACC. Business customers will have choice and control over how they pay their levies to suit their business needs. There will be visibility over and planning for likely levy amounts and timing. They will gain a clear understanding of how levies have been calculated and what value the levy provides within their industry. They will be supported to plan for any business impacts with quick and easy access to ACC information. ACC Minister Nikki Kaye says improved services for businesses will be a key focus of the first stage of the transformation programme. An 11% reduction to average work levies paid by employers will be part of a further $450m of ACC levy cuts which took effect on April 1 took the total work levy cuts since 2012 to $690m, and the total levy cuts overall to $2bn. This year will also see the removal of residual levies, which were used to collect historic claims costs, and this will see businesses pay fairer work levies based on more recent injury trends. However research carried out last year showed that just 26 % of businesses believe ACC understands their needs, and just 24% believe ACC provided good value for money. One of the first changes will be improved levy invoices, which have long been a source of dissatisfaction for the more than 500,000 businesses invoiced each year by ACC. It has worked with businesses on ways to simplify invoices, and from July 1 they will be easier to understand and have fewer pages. The average self-employed invoice will reduce from eight pages to two; the average small employer invoice will reduce from ten pages to four, and the average large employer invoice will reduce from 12 pages to six. ACC is also aligning its system with Inland Revenue and Statistics New Zealand, to make it easier for businesses to advise ACC of the particular work they do. A new Business Industry Classification Code website helps businesses to have the right classification and are not overcharged levies. ACC is looking at using the NZ Business Number tool to gather correct and up-to-date information about new businesses. This will reduce the number of times business customers have to provide the same information to Government departments or agencies. ACC will also move to introduce online payments for businesses within the next year. At the moment, businesses complain about how hard it is to pay their levies and how long it takes, and this is contributing to the debt of over $182m for unpaid levies. Kaye says the biggest gains for businesses lie further ahead. New digital services will provide businesses with real-time information on injury rates and workplace trends, giving a clearer picture of what drives levies and supporting them to develop more effective injury prevention initiatives. The Government agreed to $450m of ACC levy reductions recommended by the board for 2016/17, with a 33% reduction to the average motor vehicle levy, comprising the petrol levy and annual

32 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. licence levy, from an average of $194.25 currently, to $130.26 per vehicle. The average work levy paid by businesses is falling by 11% to 80c per $100 of liable earnings, and the earners’ levy, paid by everyone in the paid workforce, will decrease by four per cent to $1.21 per $100 of liable earnings.

INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 5.38 5.43 sBudget performance & value for money 5.69 5.14 sThe Department’s quality of service delivery 5.46 5.14 sThe overall performance of the Department 5.71 5.00

Address: 19 Aitken Street, PO Box 242, Wellington, 6140. Ph: (04): 918-7700. Fax: (04): 918-7701. E-mail: [email protected] Web: www.acc.co.nz Senior Staff: Minister in Charge: Nikki Kaye, CEO, Scott Pickering. Chair, Dame Paula Rebstock, Deputy chair Trevor Janes, Professor Gregor Coster, Professor Des Gorman, Anita Mazzoleni, Kristy McDonald, QC, James Miller, Jill Spooner. Staff: Current: 3,135.

33 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Crown Law Office

PURPOSE: Crown Law Office represents the Government in court, advises the Government about the law, makes sure government policy is done legally and makes sure the operations of the executive government are done according to the law.

„„ Una Jagose has replaced Michael Heron QC as Solicitor-General. „„ Crown Law has settled after a prolonged period of reshaping.

When Attorney-General Christopher Finlayson QC announced Una Jagose’s appointment, there was a palpable sigh of relief around Crown Law and in the wider legal fraternity. She was a widely-experienced Government lawyer before being thrust into the unfamiliar world of intelligence. These circles are opaque to begin with, but her appointment to lead the Government Communications Security Bureau, the agency specialising in signals intelligence, was a step into the dark.

Her leadership skills and sound legal judgment played a major CEO PROFILE role in re-establishing order and confidence at the troubled GCSB. Una Jagose. As Solicitor-Gen- Now her return to Crown Law has been received with equanimity. eral Una Jagose is both Junior There had been questions about Heron’s departure. However Law Officer of the Crown and Chief Executive of the Crown Minister Finlayson went to pains to recall when he was appointed Law Office. Before moving to Solicitor-General in 2012, he indicated he would serve at least the GCSB, she was Deputy three years in the role. His family remained in Auckland and he Solicitor, Crown Legal Risk and had worked at Crown had decided it was time to return home. Law for over a decade in various roles. In an earlier Finlayson said during his three years in office Heron oversaw appointment, she was Chief significant reform of the Crown Law Office, the Crown Legal Advisor at the Ministry of prosecutions system and the Government Legal Network. He left Fisheries. Defining Moment: Bedding down restructuring Crown Law in a very strong position. and dealing with a demand- ing Attorney General. Con- Crown Law has strengthened its overall position in recent cerns remain over whether the years. The recommendations of three external reviews were Crown Solicitor arrangements influential in shaping Crown Law’s progress. A new structure are sustainable. and operating model were implemented in 2013/14. This enabled improvements in efficiency, quality, value and sustainability. Crown Law has since transitioned from implementing change to strengthening its focus on the medium and long term provision of effective high quality legal advice and services, according to its most recent annual report. In 2014/15 Crown Law continued strengthening its contribution to the Government’s priorities. Crown Law works within the justice sector and across the wider public sector environment and hosts development of the Government Legal Network. This links 800 government lawyers and enables them to share information and legal resources. Increasing awareness of Crown legal risk has been an important focus. The network also supports learning and development opportunities for new and established government lawyers.

34 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. The Public Prosecutions Unit completed the successful transition of the Crown Solicitor Network to a new funding model. This helps the Government to ensure the network is sustainable while providing the quality and level of services required. A new reporting framework was also introduced across the Crown Solicitor Network. Information from the reporting framework helps to ensure efficient and effective delivery of public prosecution services.

INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 4.56 4.64 sBudget performance & value for money 3.78 4.27 sThe Department’s quality of service delivery 3.50 4.17 sThe overall performance of the Department 3.90 4.40

Address: Level 3 Justice Centre, 19 Aitken St, Wellington 6011, PO Box 2858, Wellington, 6011. Ph: (04) 472-1719. Fax: (04) 473-3482. E-mail: [email protected] Web: www.crownlaw.govt.nz Senior Staff: Minister in Charge: Chris Finlayson. Solicitor-General (Una Jagose). Staff: Current: 147.

35 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Department Of Conservation

PURPOSE: To manage and oversee 8.6 m hectares of public conservation land - 33% of NZ’s land area - with 13 National Parks,44 marine reserves, 8 marine mammal sanctuaries, 2,800 threatened species, 330 campsites, 960 huts and 14,000km of tracks - and preserve the country’s natural and heritage assets.

„„DOC has made good progress with a transformational restructure. „„Stakeholders appear happier with new levels of consultation and co-operation.

The Department of Conservation has come through a bruising and difficult period of transformation under Director-General and CEO Lou Sanson. The process was monitored closely by the State Services Commission under its Performance Improvement Framework mechanism. Sanson has been careful to praise the work of staff and the Public Service Association in working through the process. Essentially, DOC has been reorganised into two arms. Services delivers a range of essential conservation programmes. Partnerships engages and cooperates with wider interests – communities, CEO PROFILE interests groups or businesses. PIF reviewers said the extent of Lou Sanson took over as transformational change required was profound, representing the Chief Executive Officer in most significant change for DOC since its establishment, It was 2013 after heading Antarctic extensive by any standards within the public service and involved NZ where he was a veteran, having won an Antarctic Medal radical operational changes. for his services. He worked in the Antarctic on glacial drilling The re-organisation was a major disruption for DOC staff; and geohydrology projects the ongoing commitment to delivering services and servicing for the NZ and US Antarctic customers could only be admired, said the Government’s Central research programmes in the Dry Valleys in 1982/1983. He Agencies of State Services Commission, the Treasury and the has also been a NZ Govern- Department of Prime Minister & Cabinet. ment representative and as guest lecturer on Antarctic In its statement of intent 2015-19, DOC says conservation is at the cruise ships, both in the Ross core of national identity. It makes New Zealand special, the “engine Sea and Antarctic Peninsula. He was Conservator for South- room” of the tourism industry and drives New Zealand’s global land Conservancy in charge reputation. Environmental credentials differentiate New Zealand’s of Fiordland National Park, primary produce exports in a very competitive world. We rely on Stewart Island and the Sub Antarctic World Heritage Area. many of the essential natural services our environment provides, He led the establishment of from the fresh air we breathe and the food we eat to the natural Rakiura National Park. Defin- processes that provide clean water, and prevent flooding and erosion. ing Moment: Maintaining staff morale in the face of Nature has shaped who we are. It is intrinsic to New Zealand’s way ongoing change and secur- ing much needed funding to of life and our national identity, and it underpins the economy. maintain the Department’s To meet the challenge and make progress in the medium term, work streams. DOC intends to: s Work with whanau, hapu and iwi and communities to protect, restore and manage natural places and native species.

36 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. s Grow conservation by working in partnership with others including business. s Ensure that caring for nature is seen by New Zealanders as everyone’s responsibility. s Continue to embed the new structure and strategy. There have been notable achievements. Through the energy of the private sector boosted by $350,000 from the Nature Heritage Fund, Awaroa Beach will be added to the Abel Tasman National Park. Duane Major and Adam Gardner led a Givealittle campaign when some 40,000 New Zealanders contributed $2m towards buying the privately-held beach. In its most recent annual report, Sanson says DOC remains firmly focused on growing conservation by working with others and engaging many more New Zealanders in protecting our natural and historic heritage. Important partnerships have been strengthened, making a big difference for conservation, including Project Janszoon to restore the Abel Tasman National Park, the “Living Water’”project with Fonterra, and making Great Mercury Island pest free in collaboration with landowners. A partnership with Air New Zealand has expanded to include marine monitoring and promotion of marine reserves, in addition to ongoing support for the Great Walks and DOC’s biodiversity work. In Northland, the new Rangihoua Heritage Park, a long-term partnership between the Marsden Cross Trust Board, the Anglican Church, Ngati Torehina/Ngapuhi, and DOC, is open. DOC reports major progress in sustaining the kiwi population. In March 30 little spotted kiwi were flown to new homes in the largest-ever translocation effort attempted by the department to increase the genetic diversity of the birds’ population. It worked with iwi from five different rohe or areas, the Kiwis for Kiwi Trust, Cape Sanctuary and Air New Zealand. Conservation Minister Maggie Barry says all the 1700 little spotted kiwi alive today trace their descent to just five birds taken to Kapiti Island from Ngai Tahu’s rohe in Jackson Bay, South Westland, more than 100 years ago. The 2015 Budget committed $11.2m to save the kiwi from extinction in the wild. New conservation partnerships are underway. Discussions involve the dairy industry, NEXT Foundation, and Gareth and Sam Morgan. The Zero Invasive Predators project, involving the dairy industry, looks for innovative ways to completely eradicate predators from large areas of mainland New Zealand. DOC works with Northland, Auckland and Waikato communities, iwi and councils and partner agencies in central Government to prevent further spread of the devastating kauri dieback disease. DOC positions itself at the heart of a sustainable New Zealand tourism industry, including investing in providing high-quality outdoor recreation experiences and working more closely with the tourism sector to understand how tourism and conservation can grow together. DOC hails the new era in co-management with the new Te Urewera. It has an evolving relationship with Ngai Tuhoe to expand working through whanaungatanga with Treaty partners, and actively protecting matauranga Maori and other cultural values. Its largest-ever pest control programme, the “Battle for our Birds,” involved 27 aerial 1080 operations over more than 600,000 hectares of South Island beech forest which had an exceptionally high beech seeding event. DOC says the programme was an outstanding success, with dramatically reduced rat and stoat populations in almost all locations, giving much-needed protection to vulnerable species including mohua, kiwi, riflemen, kea and whio.

37 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Two native herbs Dysphania pusilla and Leptinella filiformis previously thought extinct, were found flourishing in Canterbury and South Marlborough. Growing visitor numbers using DOC’s huts, tracks and campsites; and from DOC’s inclusion at number eight on the Ipsos list of the most influential brands in New Zealand. This says New Zealanders value conservation and the work DOC does in leading conservation. DOC has worked with stakeholders to develop 10-year stretch goals, which act as milestones on the way where 90% of New Zealanders’ lives are enriched through connection to nature. Whanau, hapu and iwi are able to practise their responsibilities as kaitiaki of natural and cultural resources on public conservation lands and waters. 50% of New Zealand’s natural ecosystems benefit from pest management, 50 freshwater ecosystems are restored from “mountains to the sea.” A nationwide network of marine protected areas is in place, representing New Zealand’s marine ecosystems. Telling the stories of 50 historic Icon Sites and 50% of international holiday visitors come to New Zealand to connect with natural places. In the June 30, 2015 financial year, DOC had a revised total revenue of $365,117,000 with total expenditures of $367,117,000. The $2m deficit is expected to be the same for the June 30, 2016 year.

INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 4.38 5.00 sBudget performance & value for money 4.67 4.83 sThe Department’s quality of service delivery 4.31 4.50 sThe overall performance of the Department 4.60 4.60

Address: Conservation House Whare Kaupapa Atawhai, 18-32 Manners Street, PO Box 10420, Wellington 6143. Ph: (04) 471-0726. Fax: (04) 381-3057 E-mail: [email protected] Web: www.doc.govt.nz Senior Staff: Minister in Charge, Nick Smith. Director General, Lou Sanson. Deputy Director-General, Business Performance Group, Christeen Mackenzie. Deputy Director-General, Science and Capability Group, Felicity Lawrence. Deputy Director General, Kaupapa Atawhai Tata Lawton. Deputy Director-General, Policy and Regulatory Services, Doris Johnston. Deputy Director-General, Conservation Services Group, Michael Slater. Deputy Director-General Conservation Partnerships Group, Dr Kay Booth. Staff: Current: 1,942.

Budget Update New funding of $20.7m for the conservation initiative Battle for our Birds 2016.

38 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Department Of Corrections

PURPOSE: The Department of Corrections works to make New Zealand a better, safer place by protecting the public from those who can cause harm and reducing re-offending. Each week it manages 9,000 people in prisons and 30,000 offenders in communities.

„„ Resources are becoming stretched as the prison muster approaches a record 10,000. „„The Department weathered a storm of criticism over the Mt Eden Corrections Facility. Corrections will receive $8m from Serco to cover the costs of Corrections Stepping-In last July to manage the facility. „„Corrections has a new task, managing New Zealanders deported from Australia. „„Hon Judith Collins, one of Cabinet’s harder-nosed Ministers, took over the portfolio from Hon Peseta Sam Lotu-Iiga.

It has been a difficult year for Corrections which has one of the toughest jobs in the public sector. Its clients range across the criminal spectrum, from those at the bottom to an increasing number of sophisticated criminal minds, well-versed in modern technology and social media, prepared to meet an evident demand across a range from narcotics to financial, tax and fraud offending. Labour MPs and the Corrections staff union used trouble at the Mt Eden facility to launch a sustained attack on the private-public prison model, despite its success elsewhere. Corrections decided not to renew Serco’s management contract, invoking a break point CEO PROFILE of March 2017 in contract which allows non-renewal after six Ray Smith nears the end of years. Last July management returned to Corrections after serious a five-year appointment. He allegations involving the safety of prisoners and staff and the joined Corrections from the Ministry of Social Develop- emergence of “fight club” videos and the use of contraband. ment. Defining Moment: Reinstated corrections Minister Judith Collins says the agreement Managing the Serco fallout which was symbolised by fight with Serco narrows down the contract to a labour supply clubs in the Mt Eden prison. agreement with other transition services for the balance of the Looking forward, manag- contract through to March 31, 2017. ing increasing prison mus- ter numbers, while reducing Corrections will continue to manage Mt Eden Corrections recidivism. Facility, with Serco providing personnel at cost until the end of the contract. Serco will make no profit from the arrangement. Corrections will continue to run the prison from then. The longer term management structure will be determined by the Government at a later date following advice from Corrections. The decisions are separate from the Chief Inspector of Corrections’ report into Serco’s management of Mt Eden. This also comes at a time when Corrections is struggling to recruit sufficient staff even for its own facilities – particularly in the upper North Island. In December Collins announced the Government will provide an additional $17.6m to the department. This will address cost pressures from the greater than expected prison population growth and enhancements to electronic monitoring.

39 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Despite significant progress in reducing crime and improving public safety, the number of prisoners has been increasing at a rate consistently above forecasts. In October 2015 the prison muster was 800 higher than at the same projected point in the 2011 Justice Sector forecast, equivalent to a large sized prison. The number of prisoners reached a record of 9,171 on the 30 November. Around $15m will address the prison population growth. A further $2.6m is being provided for improvements to the electronic monitoring system. Corrections established a 24 hour GPS Immediate Response Team as well as an Electronic Monitoring Assurance Team. Funding for monitoring of returning offenders from Australia is coming from the 2016 Budget. Corrections’ annual report makes sobering reading. Chief Executive Ray Smith observes when Corrections was created in 1995 it had 3,500 staff, 4,235 prisoners in 16 prisons and 23,000 sentences were being served in the community. In 2015 it had nearly 8,000 staff managing over 35,000 sentences and orders in the community, and over 9,000 people in prison, the largest prison muster NZ has ever had. The opening of Auckland South Corrections Facility a year ago eased pressure on the prison network. The prison is New Zealand’s first full services Public Private Partnership (PPP) and at the time was New Zealand’s largest construction project, with 1.4m hours worked, equating to one person working for 800 years. The new facility is “state of the art and designed with rehabilitation and reintegration at the front and centre.” The South Auckland location means more prisoners will be closer to families and support networks, community groups, and potential employers. Programmes or initiatives showing good results can be used across the other prisons, enhancing efforts to reduce re- offending. Units no longer fit for purpose are being closed. Older prisons at Waikeria, Tongariro/ Rangipo and Rimutaka will go. Over the last three years Corrections showed it is possible to reduce re-offending. Much remains to achieve the Better Public Services target of a 25% reduction in re-offending by 2017. Last year it launched major programmes, RR25% Boost, to give more offenders access to the programmes and interventions such as alcohol and other drug treatment, road safety courses, and work and living skills. There is a focus on short-serving prisoners and community offenders, who in the past have not had access to as wide a range of services as other offenders. There has been a raft of new building under a nationwide $70m renewal programe. A new $2.4m Timaru Corrections site was opened in March. It will manage 300 offenders on community- based sentences and orders including home detention and community work sentences. Whanganui Prison’s refurbished west wing has been officially opened as part of a more than $19m upgrade of prisoner accommodation at the site. The east and west wings with 141 beds, have been earthquake-strengthened and enhancements made to meet security classification requirements, and improve staff bases and prisoner areas. In October, construction of a new maximum-security facility at Auckland Prison was started. The $300m 260-prisoner establishment will replace the 1968 maximum-security block and is being developed under a Public Private Partnership. A contract with Next Step Partners was signed on September 11 to design, build and maintain the facility for 25 years. Corrections, however, will operate the prison. Construction is expected to be completed by the end of 2017 and the facility operational by mid-2018.

40 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 5.27 5.69 sBudget performance & value for money 5.00 5.25 sThe Department’s quality of service delivery 4.79 4.75 sThe overall performance of the Department 4.93 4.88

Address: Private Box 1206, Wellington. 6140. Ph: (04) 460-3000. Fax: (04) 460-3208. E-mail: [email protected] Web: www.corrections.govt.nz Senior Staff: Minister in Charge, Judith Collins. Chief Executive, Ray Smith. Deputy Chief Executive Corrections, Christine Stevenson. National Commissioner Corrections Services, Jeremy Lightfoot. Deputy Chief Executive, Finance, Technology and Commercial, Neil Cherry. Deputy Chief Executive, Corporate Services, Vince Arbuckle. Deputy Chief Executive, Service Development, Jo Field. Staff: Current: 7,571.

Budget Update $356m for corrections, to keep on top of rising prison population.

41 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Department Of Internal Affairs

PURPOSE: The Department of Internal Affairs spans much of life in New Zealand with policy responsibilities across local and central Government, the community and voluntary sectors. It provides many important services ranging from issuing passports to registering births, deaths and marriages and processing citizenship applications.

„„Ten-year passports are back. „„A major shake-up of urban and rural fire services is underway. „„The Government kicked for touch over vexatious Easter trading hours by shifting responsibility to local Government.

By any standards Internal Affairs has a remarkably broad brief. Apart from citizenship services, its regulatory responsibilities span gambling, censorship, spam, anti-money laundering and private security personnel. It also looks after the National Library, Archives

New Zealand, the Office of the Community and Voluntary Sector CEO PROFILE and the Charities Commission. Colin MacDonald became The Chief Executive also has important functional all-of- Chief Executive, Secretary for Internal Affairs, Secretary Government responsibilities and is the Government’s Chief for Local Government and Information Officer. It’s fortunate Colin McDonald is a top-line Government Chief Informa- CEO. Equally important is the evident enthusiasm its Minister, tion Officer in April 2012. Previously he was Chief Ex- Peter Dunne, displays for his portfolio. ecutive of Land Information New Zealand (LINZ) where Equally it has impressed the Government Administration Select he led the cross-Government Committee for when, in March, it conducted its annual review of the programme for data and infor- 2014/15 performance and current operations of the Department of mation re-use and established LINZ as the leader of the geo- Internal Affairs, it reported it “has no matters to bring to the attention spatial sector. He has more of the House. The committee recommends that the House take note of than 30 years’ experience its report.” This is as high a rating as anyone might expect. in information technology and general management. In its 2014/15 budget, appropriations fell slightly to $544.702m Defining Moment: How well and fast to take itself and from $550.086m estimated actual expenditure for 2013/14. This other parts of the Govern- reflected small decreases in a number of appropriations, and also ment into the digital age (the the transfer of appropriations for Ministry of Civil Defence and GCIO role). So far some solid progress seems to have Emergency Management functions to Vote Prime Minister and been made, but many worry Cabinet. The decrease is in line with the department’s 2012 and about costs. 2014 Four Year Plans to reduce funding by prioritising and making savings throughout the vote. It has made significant progress in the digital age. Dunne announced in March that for the first time, a majority of New Zealanders’ most common transactions with Government now occur digitally. The average digital uptake in the December 2015 quarter was 52.9%, up 6% over the same quarter in 2014. He said it is evidence the Government is on track to exceed the Result 10 Target that by 2017, an average of 70% of most common transactions with Government will happen online.

42 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. The Minister expects to have legislation restructuring the fire service in the House by midyear. It will be the most comprehensive in 70 years and has already had support and buy-in from rural and urban fire authorities who, in effect, will amalgamate. He has already appointed a new Fire Service Commission board chaired by former Labour Minister and MP Paul Swain. He says the board will lead a new organisation which is flexible, modern and efficient. Next year the department will launch a new constitutional exhibition to open at the National Library. A design has been selected for the new exhibition which will enable greater access to the three most important constitutional documents: the 1835 Declaration of Independence of the Northern Chiefs/He Whakaputanga o te Rangatiratanga o Nu Tireni, the 1840 Treaty of Waitangi and the 1893 Women’s Suffrage Petition. The Minister says the exhibition has been driven by the need to ensure fragile and priceless documentary heritage is preserved for future generations as well as improve access to the documents for all New Zealanders and visitors. It will enhance opportunities for sharing knowledge about the on-going constitutional and cultural significance of the documents, especially for those aged between 10 and 15 years old. The three documents need the highest level of conservation and each presents unique preservation challenges. The Declaration is written on three sides of two pieces of paper, the Treaty is made up of nine different documents – two on parchment (processed animal skin) and seven on paper, and the Women’s Suffrage Petition is more than 500 sheets of paper, all glued together to form one continuous 274 metre-long roll. The Government wants changes in legislation to enable councils change their structures and coordinate infrastructure. A Cabinet paper late last year said reorganisation premised on large- scale amalgamation has failed to deliver change outside Auckland. Alternative options would be studied to integrate and scale-up the delivery of services, reliable infrastructure such water and transport) and regulatory functions across regions outside of Auckland. Large-scale amalgamations are off the table, but not structural changes. The Local Commission’s new priorities include brokering structural changes in Wellington, Northland and West Coast over the next 12-15 months. The aim is to give local Government a broader range of structures to choose from, helping councils focus on region-wide economic growth and making sensible decisions about infrastructure development beyond one boundary. Local authorities can set up council controlled organisations to run shared services and deliver improved value for ratepayers Local Government Minister Peseta Sam Lotu-Iiga says council amalgamations are possible under the reforms. Any amalgamation proposed by the Local Government Commission would go to a public poll before being implemented. If councils themselves propose an amalgamation, they can put the proposal to binding public referenda. With a wide spread of operations and responsibilities, DIA has management team in six branches: Strategy and Governance, Service and System Transformation, Information and Knowledge Services, Policy, Regulatory and Ethnic Affairs, Service Delivery and Operations and Shared Services Branch, each headed by a deputy secretary.

43 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 4.67 4.67 sBudget performance & value for money 4.20 4.21 sThe Department’s quality of service delivery 4.20 4.36 sThe overall performance of the Department 4.50 4.50

Address: 145 Lambton Quay, PO Box 805, Wellington, 6011. Ph: (04): 495-7200. E-mail [email protected]. Web: www.dia.govt.nz Senior Staff: Minister in Charge, Peter Dunne. Chief Executive, Colin MacDonald. Deputy Chief Executive Strategy and Governance, Mervin Singham. Deputy Chief Executive Service and System Transformation, Tim Occleshaw. Government Chief Technology Officer, Peter Murray. Deputy Chief Executive Information and Knowledge Services, Paul James. Deputy Chief Executive Policy, Regulatory and Ethnic Affairs, Maria Robertson. Deputy Chief Executive Service Delivery and Operations, Morag Woodley. Staff: Current: 1,981.

44 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Department Of The Prime Minister And Cabinet

PURPOSE: The Department of the Prime Minister and Cabinet occupies the centre of the Government. It supports the conduct of executive Government by the Prime Minister, the Governor-General and members of the Cabinet. Its principal role is providing daily advice to the Prime Minister and Cabinet on a wide range of issues. It provides impartial advice, through the Clerk of the Executive Council and Government House, to the Governor-General. It coordinates and leads the work of Government departments and agencies and other entities.

„„The department continues to grow and grow with the latest arrival being the core of the Canterbury Earthquake Recovery Authority. „„The first independent review of the intelligence community, conducted by former Labour deputy leader Sir Michael Cullen and Dame Patsy Reddy, made far-reaching recommendations on function and oversight. „„The department oversaw the referenda on the question of a new flag. CEO PROFILE

Scientist Andrew Kibble- Best known as DPMC, the department is comprised of six business white became CEO in 2012. units headed by the Chief Executive, Andrew Kibblewhite. The units He began his career at the are the Cabinet Office, Government House, Policy Advisory Group, Treasury and in 2002 became General Manager Strategic Security Intelligence Group, Ministry of Civil Defence & Emergency Development at the Ministry Management and, from March 1, the Greater Christchurch Group. of Research, Science and Technology. He spent five For most New Zealanders the referenda on the flag and the review of months on secondment to the Security Intelligence Service and Government Communications Industrial Research Ltd as General Manager Research Security Bureau had equal billing in terms of national focus. and Development Operations. The Cullen-Reddy Review is profound and far-reaching. It said the Andrew has a BSc(Hons) from the University of Canterbury, a need to maintain both security and the rights and liberties of New BCA from Victoria University Zealanders was at the forefront of reviewers minds. Given the intrusive and an MBA from Stanford nature of the Agencies’ activities, New Zealanders are understandably University. Over the years he has had his own share of concerned about whether those activities are justifiable. challenges and excitement but retains the confidence of This concern is not helped by the fact the agencies’ activities have the Prime Minister. Defining been kept largely in the shadows. To secure public confidence in Moment: The changing role the modern world, the agencies need to be able to demonstrate of CERA, and the ongoing scrutiny of the intelligence their value to New Zealanders. agencies by Parliament and The legislation governing the Agencies also needs to include the media. appropriate external and independent checks and balances. Because the Agencies cannot always be entirely open about their activities, the public needs to be able to count on oversight and accountability mechanisms to ensure they act lawfully and reasonably. Another important part of the backdrop to our review is the need to ensure the legislation allows for changes in the nature of threats and advances in technology. We are, after

45 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. all, living in a time when change and uncertainty are ever-present. The Agencies must be able to adapt their activities to continue to meet New Zealand’s needs. It quickly became apparent there were a number of deficiencies in the agencies’ current legislative frameworks. The legislation establishing the agencies was not comprehensive, was inconsistent between the two agencies, could be difficult to interpret and had not kept pace with the changing technological environment. This led to some significant problems. The nature of security threats and the methods of communication used by those seeking to harm New Zealand’s interests have changed drastically since the agencies were established. Threats did not respect geographical boundaries. In the modern technological and online environment, even internal threats to security could sometimes only be discovered or investigated using high-end electronic intelligence capabilities. The Agencies needed to be able to combine skills and knowledge to provide the information that the Government requires, and this should be facilitated by legislation. The systems for authorising agencies’ activities were not comprehensive. In the case of the New Zealand Security Intelligence Service in particular, many activities were carried out on the basis of the consent of the person or organisation holding the information (for example, obtaining telephone call metadata from telecommunications providers) or on the basis the activity was not generally unlawful (for example, watching people in public places). The legislation did not provide for or require ministerial or judicial authorisation for these activities. A refreshed New Zealand Cyber Security Strategy, accompanying Action Plan, and a National Plan to Address Cybercrime, were released last December to replace the 2012 strategy. The new Strategy signalled the Government’s commitment to ensuring New Zealand is secure, resilient and prosperous online. It has four principles: partnerships are essential; economic growth is enabled; national security is upheld and human rights are protected online. The National Cyber Policy Office is a unit of the Security and Intelligence Group. It leads development of policy advice for the Government on cyber-security and advises on investing Government resources in cyber-security activities; oversees the development, implementation and review of national strategies and policy on cyber-security; leads international engagement on cyber policy; engages with the private sector on cyber-security issues and manages the Connect Smart partnership and awareness programme. Last year the State Services Commission ran another Performance Improvement Framework (PIF) ruler over DPMC. This gave the department a good result but flagged several areas needing attention. There was room for continued improvement in operating procedures and business systems, especially in the development and implementation of appropriate managerial reporting and oversight processes. DPMC’s role in a number of significant policy and operational change projects and its leadership role in the intelligence and security sector required robust governance processes in place to ensure it effectively managed and minimised risks. Several change projects or studies had been initiated, but the changes required were incomplete or “work-in-progress.” The executive team had to ensure it made better use of the information provided and developed improved project management disciplines. Performance goals for the agency will require revision to reflect the recent role changes.

46 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. DPMC has a clear role in initiating a number of significant changes required to implement new or modified Government policies on national security and emergency management and the next phase of Government support for Canterbury. It needs to develop and implement policy leadership role across the State sector; this would be new and challenging. The leadership has to manage policy and operational changes of a greater magnitude than they have experienced to date. The challenge will be to manage this multi-faceted change programme effectively while maintaining core services. Leaders are skilled and competent policy advisors and specialists, but they will need to call on the wider operational experience of the Executive team and set up new systems to manage the change programme. Rigorous project control and oversight processes are needed to implement the change programme successfully. The leadership and managerial challenges will be different and more complex and demanding. Work is underway transferring recovery responsibilities from the Canterbury Earthquake Recovery Authority to other central and local Government agencies, to ensure the long-term recovery and regeneration of greater Christchurch. The first transition of CERA functions occurred on December 1 when Land Information New Zealand, Ministry of Business, Innovation and Employment and Ministry of Health, working closely with Canterbury District Health Board all inherited responsibilities from CERA. The second phase took place on March 1 when DPMC and the Ministry of Health alongside the Canterbury District Health Board all inherited responsibilities from CERA. The Greater Christchurch Group within the department provides this advice and information to Ministers and Government, including policy advice on the regeneration of greater Christchurch, including the future uses of the Christchurch residential red zone; engaging with local leadership and the local community on regeneration issues; administering new legislation; supporting the ongoing operation of Regenerate Christchurch and Otakaro Limited; monitoring and reporting on the overall progress of recovery; part funding and joint governance of horizontal infrastructure repairs and coordinating agencies involved in the regeneration. The wind-up of CERA under acting CEO John Ombler marked the end of an era. Writing shortly before the event on April 18, he said he wanted to acknowledge his staff for their efforts. What CERA did was without precedent. It learned from the experiences of other countries, but for the most part CERA and staff had to find their own way. Decisions had to be made solutions had to be found in situations where there was no “best practice” or guidebook. They had to write their own. What was achieved in the space of five years is something to be proud of. There were tough decisions and there is still work to do but it is important to recognise the huge amount of progress made and to take the opportunity to celebrate.

47 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 4.69 4.20 sBudget performance & value for money 4.58 4.20 sThe Department’s quality of service delivery 4.58 4.27 sThe overall performance of the Department 4.69 4.47

Address: Level 8, Executive Wing, Parliament Buildings, Wellington. Ph: (04): 817-9700. Fax: (04): 499-2109. Web: www.dpmc.govt.nz Senior Staff: Michael Webster, Secretary of the Cabinet and Clerk of the Executive Council; Jo Fitzgerald, Acting Director, Greater Christchurch Group; Anneliese Parkin, Deputy Chief Executive, Policy; Howard Broad, Deputy Chief Executive, Security & Intelligence; Sarah Stuart-Black, Director, Ministry of Civil Defence & Emergency Management; Anne Shaw, Director, Office of the Chief Executive and Gregory Baughen, Official Secretary, Government House. Staff: Current: 102.

48 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Earthquake Commission

PURPOSE: The Earthquake Commission, EQC, a Crown entity, insures against property damage from earthquakes, landslides, tsunami, volcanic eruptions and hydrothermal activity, flood and storm damage to residential land and fires resulting from these events. EQC extends significant support for research and education on natural disasters and ways of reducing their impact. It administers the Natural Disaster Fund including its investments and reinsurance.

„„EQC is working hard to improve public confidence, to speed up assessments and claims processing, but with little perceived success. „„It moved quickly after this year’s round of earthquakes in Canterbury to expedite claims, drawing lessons from the hard experiences which followed earlier Canterbury, Eketahuna and Cook Strait earthquakes. „„Amending legislation is expected this year to enhance EQC activities.

The EQC has worked hard to lift its performance and improve its image. The most recent raft of Canterbury earthquakes brought a CEO PROFILE rapid EQC response. It has drawn lessons the Commission says, Ian Simpson has worked from earlier events. It plans to speed up assessments where possible hard to lift the EQC’s game and raise staff morale. But by assembling information from customers by telephone to enable his agency is regarded with desk-top assessments without the need for visits by assessors apart suspicion by a majority of from claims involving extensive damage. Cantabrians and he has failed to take the people with him. Late last year, the Minister responsible for the EQC, Gerry Brownlee, Has kept a lower profile re- announced a Treasury-led review of the Commission. Reforms cently. Defining Moment: Managing fallout from the are intended to ensure the scheme remains focused on insuring poor repair quality scandal homes, resolving the difficulties experienced in Canterbury with in Christchurch. the interaction of land and building cover, better integrating EQC and private insurers’ claims handling processes and ensuring the ongoing financial sustainability of the scheme. Brownlee hopes to introduce a new Bill, with a view to passing any changes into law, after the appropriate Select Committee consultation, before the end of 2016. He has also welcomed the Auditor General’s report on progress with the Canterbury Home Repair Programme (CHRP). The report follows a 2013 CAG report recommended improvements in five areas. These included how EQC audits repairs; communicates with customers; measures performance; configures the repair and project management services and identifies lessons learned. The report shows the CHRP repaired almost 68,000 homes, met key Government objectives for the programme, as well as making progress in all areas identified in the 2013 report. The report identifies repair-cost inflation of 14.2% between February 2011 and June 2015 - half the rate for new house builds in Canterbury, despite the sector being affected by similar cost pressures and industry cost structures as home repair work. Annually, EQC contributes $16m for research to build knowledge about NZ’s natural hazards and how to manage them. This

49 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. year’s round of EQC’s Biennial Research Grants Programme attracted 118 applicants. Three of the 15 recipients are Canterbury-based geological researcher. Understanding natural hazard risks and how to manage them is taking another step forward, thanks to $1m of new EQC- funded research projects. Following the February earthquakes, EQC is working out the settlement amounts for around 4,400 customers who were told their properties qualify for Increased Liquefaction Vulnerability (ILV) land damage. EQC Head of Canterbury Land Settlement, Keith Land says the work includes determining pre-quake property valuations and the amount of the reduction in market value for affected properties as the direct result of ILV land damage. It is also investigating whether some properties with ILV land damage can be feasibly repaired. In these cases, a settlement based on repair cost may be available. EQC expects to start settling ILV customers in mid-year. The cash settlement for land damage will be based on one of two approaches: repair cost, or reduction in market value of the property due to ILV land damage – also called Diminution of Value (DOV). In its revised State of Intent for 2014-18, the EQC Board said the Canterbury earthquakes were been the biggest challenge EQC and its Earthquake and War Damage Commission predecessor have faced - much bigger than anything previously envisaged. There have been valid criticisms about the services and information provided by EQC to customers since the Canterbury events. We accept that response has fallen short in several respects. We have been working constantly to improve performance, so we can better meet the expectations of EQC customers and stakeholders. The worth of EQC’s current, core disaster insurance and reinsurance settings and the current Natural Disaster Fund model is notable in terms of delivering financial resources necessary to support individual claimants and their communities to recover from residential property losses while helping to manage the Crown’s risks, including fiscal and financial risks, related to such property losses and helping to sustain affordability of residential property insurance throughout New Zealand. The EQC Board believes a more consistent, coherent and co-ordinated approach to natural hazard risk management at the national level would assist in ensuring future losses are reduced as far as possible and private insurers and global reinsurers can continue to price NZ’s natural hazard risk appropriately and provide ongoing insurance cover. EQC has been encouraged by its most recent stakeholder review. Overall, most expressed a positive view of EQC’s performance with nearly six in ten (59%) rating performance as excellent, very good or good - up slightly from 54% in the previous measure. This may not be an accurate view of how the Commission is viewed in Christchurch, with most distrusting it intensely particularly after a recent court ruling which said it should have been repairing homes to “as new” condition. A majority (61%) reported noticing an improvement in how EQC performed compared with the year before. Verbatim comments suggest that areas where improved performance is evident include listening to the community and support agencies, public engagement and handling of complex issues. The EQC says this result is encouraging as it indicates that improvement has momentum, given that six months ago 73% of respondents had also observed improvement in performance. A majority also rated EQC positively in terms of how it performed each of its three main functions, although ratings of how well EQC performs its educating role are perhaps less positive

50 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. than ratings of providing natural disaster insurance and conducting research. Stakeholders also rate communications from EQC more positively. Six months ago 38% of stakeholders indicated EQC did not communicate with them very well, while in the latest measure this figure has dropped to 21%. In the most recent annual report, CEO Ian Simpson said EQC continued to adapt as it worked towards finalising the remaining Canterbury earthquake claims. The emphasis is shifting from completing the response to the Canterbury earthquakes to applying hard-earned lessons from this event to deal with future natural disasters. EQC contributed to the Treasury-led review of the EQC Act by providing information on the practical application of the Act in responding to the Canterbury earthquakes. We have looked at what worked and what could be improved. These contributions related to legislative interpretation issues, practical application challenges and policy issues identified from the Canterbury response. There is however no one-size-fits-all approach. EQC is also asking wider questions about its future role, and how it might best achieve its objectives. This includes considering the optimal approach for managing and investing the financial resources EQC controls, and defining the leadership role EQC might play in the whole- of-Government approach to the reduction and management of natural disaster risk. Minister Brownlee says NZ absorbed an impact of about 20% of GDP from the Canterbury earthquakes without having to impose additional taxes or levies, and without cutting important public services because of good insurance cover. After the first Canterbury earthquakes when the Government offered to purchase damaged residential red zone land and buildings, it found more than 98% insurance penetration, which meant almost every Canterbury home repair or rebuild had some form of insurance protection. The importance of keeping insurance affordable and available for all by reducing risk is demonstrated by Lloyd’s, the world’s specialist insurance market, which calculated that for every 1% increase in insurance penetration, there is a 22% decrease in the taxpayer contribution required post-disaster. In New Zealand’s case, about 75 to 80% of losses arising from Canterbury are being met from insurer and reinsurer balance sheets.

Address: Level 11, Majestic Centre 100 Willis Street, Wellington, PO Box 790 Wellington 6140. Phone: +64 4 978 6400. Fax: +64 4 978 6431. www.eqc.govt.nz Senior Staff: Minister in Charge, Gerry Brownlee. CEO, Ian Simpson. General Manager Strategy, Bryan Dunne. Policy and Legal & General Manager Information Systems & Transformation, Hugh Cowan. General Manager Reinsurance, Research and Education, Gillian Dudgeon. Chief Risk Officer, Heather Stewart. Staff 1,345

51 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Education Review Office

PURPOSE: The Education Review Office (ERO) advises the Government and the public about the quality of education and care in early childhood services and schools. ERO is one of seven agencies with stewardship of the education system.

„„ERO has been out of the headlines – for all the right reasons. „„It has produced a series of insightful reports, judged by many educators as the best seen in decades. „„It says the lack of equity and excellence for all children is the biggest challenge facing the education system. Strongly related is how the system can configure around children rather than children having to navigate the system. „„ERO is focused on children’s continuous pathways of learning with less emphasis on the institutional arrangements dividing the system.

ERO evaluates and reports on the education and care of students CEO PROFILE in schools and early childhood services. Its reports are used by Iona Holsted was appointed parents, teachers, early childhood education managers, school in July 2014. She worked in principals and trustees, and by Government policy makers. The a range of Government and non-Government organisa- Education Act 1989 gives the Chief Review Officer the power to tions in policy, operational and initiate reviews, investigate, report and publish findings on the corporate roles, starting as a provision of education to all young New Zealanders. teacher then an advocate and researcher for the Public Ser- In her most recent annual report Chief Executive and Chief vice Association. She became general manager of a commu- Review Officer Iona Holsted says ERO has reflected on how it nity-controlled primary health adds greatest value and expressed its purpose as “our evaluation care organisation. In 1995 she insights are a catalyst for change so that every child achieves success became a Senior Advisor for the education sector at the as a lifelong learner.” State Services Commission and in 2001 was appointed The Executive Leadership Team drives this purpose from an “ERO as a Deputy Commissioner. Inc” perspective. The team has endorsed new design principles From 2007 she worked for to align policies, practices, processes and products with purpose. the Ministry of Social Devel- opment in senior manage- ERO published School Evaluation Indicators: Effective Practice ment roles rising to Deputy for Improvement and Learner Success. These describe what Chief Executive responsible matters most in improving schools and outcomes for all students. for services to students and seniors. Defining Moment: They will be used by ERO’s review officers and schools in their It’s all about standards – are evaluation practice. The School Evaluation Indicators are central they improving or not? to the future work of ERO. The Indicators already inform and support the development of review methodologies in Maori medium, notably the development of a review process and indicators for Nga- aaKura-A-a-Iwi, as well as a sharpened focus on Maori student achievement in mainstream schools. ERO is revising its approach to Maori achievement as a foundation for accelerating all student achievement.

52 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. It “will encourage and support schools to be more responsive and unrelenting in the acceleration of Maori progress and achievement. In doing so, we will support schools to improve student achievement for all their children and young people.” Sustained improvement in the education system relies on leaders having the capability and capacity to observe what is happening for children, make sense of it, take action and relentlessly follow up to ensure positive outcomes. ERO and the Ministry of Education have developed an internal evaluation tool for principals, teachers and boards to help build this capability. This year ERO is focusing on two significant strategic work streams to support the School Evaluation Indicators - professional practice within ERO and a study of ERO’s review framework. As these work streams gather momentum, the Indicators will be embedded within the review process and within the wider education system. The knowledge which sits behind the Indicators will continue to inform all aspects of ERO’s work, including future development of our evaluation indicators for early childhood services. Holstead says “we will work at pace to deliver on our purpose. ERO will implement our new approach to accelerating student achievement (Maori) and will complete real-time evaluation of its effectiveness. We will also complete and publish advice about modern learning practice to help the system, parents, whanau and communities better understand what it means and what effective practice looks like.” ERO says its evaluation insights are a catalyst for change so every child achieves success as a lifelong learner. It will maintain and strengthen relationships across the system. It is joining in the development of a four-year excellence horizon and 10-year ambition through the system performance improvement framework. The framework will set the direction of travel and challenge assumptions and expectations of performance. ERO is working with other stewardship board members to check the performance management activities across the whole system are working as intended, to minimise duplication and maximise effectiveness. ERO’s evaluation work supports the Government’s Better Public Services targets by increase participation in early childhood education to 98% this year; increasing the proportion of 18-year-olds with NCEA Level 2 or an equivalent qualification to 85% by 2017, increasing the proportion of 25 to 34-year-olds with advanced trade qualifications, diplomas and degrees (Level 4 or above on the New Zealand Qualifications Framework) to 55% by 2017 and identifying what works, establishes indicators for success, and uses evidence to influence change in individual parts of the system, as well as the system as a whole. ERO evaluations show many children’s learning suffers at points of transition across the education system. ERO has adopted a learner pathway focus in all its work. The Government’s Investing in Educational Success initiative is an example of how a policy has been designed to support collaboration and continuity of learning across the system. ERO works with the new communities of learning by providing information to help the communities identify achievement challenges. ERO runs workshops for interested communities to help bring the groups together. ERO has 150 designated review officers in four regions: Northern-Te Tai Raki, Central-Te Tai Pokapu, Southern-Te Waipounamu, and Te Uepu a-Motu, ERO’s Maori Review Services Unit. The Chief Review Officer formally designates individual review officers to carry out reviews in schools and early childhood centres.

53 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 4.10 4.14 sBudget performance & value for money 4.11 4.00 sThe Department’s quality of service delivery 3.75 4.14 sThe overall performance of the Department 4.18 4.25

Address: Level 1, Tari Matua, 101 Lambton Quay, PO Box 2799, Wellington, 6140. Ph: (04): 499 2489. Fax: (04): 499 2482. E-mail: [email protected] Web: www.ero.govt.nz Senior Staff: Minister in Charge, Hekia Parata. Chief Executive and Chief Review Officer, Iona Holsted. Deputy Chief Executive Evaluation and Policy, Diana Anderson. Deputy Chief Review Officer Maori/Te Uepu-aMotu, Lynda Pura-Watson. Deputy Chief Review Officer Northern/Te Tai Raki, Dale Bailey. Deputy Chief Review Officer Central/Te Tai Pokapu, Joyce Gebbie. Deputy Chief Review Officer Southern/Te Waipounamu, Graham Randell. Deputy Chief Executive Corporate Services, Jeremy France. Staff: Current: 206.

54 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Government Communications Security Bureau & SIS

PURPOSE: The NZSIS provides protective security advice to Government agencies, collects intelligence and advises on national security, conducts inquiries and makes recommendations on security clearances. Primarily a signals intelligence agency, the GCSB ensures the integrity and confidentiality of Government information, investigates and analyses cyber incidents against critical infrastructure, collects foreign intelligence significant to NZ and assists other parts of the Government.

„„The Government’s two principal intelligence agencies are under unrivalled scrutiny inside and out of Parliament. „„Opponents of the two agencies are becoming increasingly vocal – yet NZ faces hitherto unknown challenges from external agencies. „„The Cullen-Reddy Report on security and intel- ligence makes powerful and far-reaching recom- mendations on the functions, conduct and scru- tiny of the agencies.

Few issues excite political parties out of office more than security and intelligence. Some of this is political envy. Labour, when in opposition, had hyper-scepticism but once in office, revelled in the flow of information offered up. Other parties take a more rigid stance. Part of their motivation is a considerable number of New CEO PROFILE

Zealanders still believe the country exists in a benign environment, Rebecca Kitteridge, CVO, far from world trouble-spots and free from threat. was appointed Director of Security in May 2014 after The intelligence and security community believes Sir Michael six years as Secretary of Cullen and Dame Patsy Reddy wrote an excellent review. They the Cabinet and Clerk of the Executive Council, within the particularly appreciated the bluntness of the appreciation of likely Department of the Prime Min- threats and the need to confront them. ister and Cabinet. She served under four Prime Ministers While the Government assesses the report (John Key says he wants and four Governors-General to achieve as broad a consensus as possible on any changes), the two in that role and in earlier agencies battle on. The SIS came under criticism after disclosing roles in DPMC. Rebecca has also worked in the Ministry of one or two New Zealand women had departed to become jihadist Foreign Affairs and Trade. De- brides. Ah ha, said opposition MPs, this is not the case, they had fining Moment: Jihadi brides not actually left from New Zealand, the SIS was wrong and had and related fallout. impugned their community. Not so, said the Government, the fact remained they were NZ citizens and could return at any time. At the outset, Dame Patsy and Sir Michael said the need to maintain both security and the rights and liberties of New Zealanders has been at the forefront of their minds. Given the intrusive nature of the agencies’ activities, New Zealanders are understandably concerned about whether those activities are justifiable. The place of intelligence and security agencies in a free society arouses a wide range of responses and passions, they wrote. For some, the security of the state and of the individuals within it overrides other considerations. For others, the opposite is true: freedom and liberty are so precious any secret

55 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. activity by state agencies must inevitably threaten those human rights, if only through the chilling effect of the fear of surveillance. Most people’s views probably lie somewhere between these two extremes as did theirs. All they heard and read during the review have helped lead to this position. Neither extreme reflects history, experience, or the realities of the modern world, especially with its borderless and rapidly multiplying forms of communication, its ease of fast international mobility and its increasingly complex security challenges. Their review and report arose out of legislation passed in 2013 which CEO PROFILE included a requirement for periodic reviews “of the intelligence and Andrew Hampton was ap- pointed Director of the Gov- security agencies, the legislation governing them, and their oversight ernment Communications legislation.” Their terms of reference were limited to the legislative Security Bureau in March for aspects. Accordingly, they did not review the agencies. a five-year term. He came from the State Services Com- Their central conclusion was there should be a single, integrated mission where he was Gov- and comprehensive Act of Parliament laying out in plain English ernment Chief Talent Officer and Head of Profession for how the agencies are constituted; what their purposes are; how all Human Resources in the state their intelligence and security activities are authorised; and how services. He was Deputy Sec- they are overseen so as to protect those freedoms and liberties that retary Courts for the Ministry of Justice, Deputy Chief Ex- are part of New Zealand as a nation. ecutive of Crown Law, Deputy Secretary for Education and The Act should state clearly its fundamental purpose is the Director of the Office of Treaty protection of New Zealand as a free, open and democratic society. Settlements. He has a BA It then becomes the guiding principle by which the activities of the (Hons) and MA (Dist) from the University of Canterbury and agencies must be undertaken and judged. has attended the Oxford Stra- This concern is not helped by the fact agency activities have been kept tegic Leadership Programme. largely in the shadows. To secure public confidence in the modern world, the agencies need to be able to demonstrate their value to New Zealanders. Their governing legislation also needs to include appropriate external and independent checks and balances. Because agencies could not always be entirely open about their activities, the public needs to be able to count on oversight and accountability mechanisms to ensure they act lawfully and reasonably. Another important part of the backdrop to their review is the need to ensure the legislation allows for changes in the nature of threats and advances in technology. New Zealanders lived in a time when change and uncertainty are ever-present. The agencies must be able to adapt their activities to continue to meet New Zealand’s needs. The nature of security threats and the methods of communication used by those seeking to harm New Zealand’s interests have changed drastically since the Agencies were established. New Zealand lives in an increasingly globalised world where threats do not respect geographical boundaries. In the modern technological and online environment, even internal threats to security can sometimes only be discovered or investigated using high-end electronic intelligence capabilities. The Agencies need to be able to combine their skills and knowledge to provide the information the Government requires, and the legislation should facilitate this. They found the systems for authorising agencies’ activities are not comprehensive. In the case of the NZSIS, in particular, many are carried out on the basis of the consent of the person or organisation holding the

56 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. information (for example, obtaining telephone call metadata from telecommunications providers) or on the basis the activity is not generally unlawful (for example, watching people in public places). The legislation does not provide for or require Ministerial or judicial authorisation for these activities. They recommend consolidating the objectives, functions and powers of the agencies and arrangements for their oversight into a single Intelligence and Security Act. This would provide greater clarity about what they can and cannot do, and what the checks and balances on their activities are. The separate governing Acts of the agencies are creatures of history and incremental reform. This creates inconsistencies and uncertainty in how to interpret the law. This hampers their ability to function effectively. The purpose of the Act should be to protect New Zealand as a free, open and democratic society. This reflects the Agencies’ role in assisting the Government to fulfil its obligation to ensure its citizens can go about their lawful business safely and without undue interference with their human rights. The agencies should also have common functions so they can work together more effectively toward achieving the Government’s priorities. These should include collecting and analysing intelligence in accordance with the Government’s requirements; providing any intelligence collected and any analysis of the intelligence to the Minister, the National Assessments Bureau for assessment; and any person, office holder, entity or class of persons, office holders or entities (whether in New Zealand or overseas) authorised by the Minister to receive the intelligence. They should provide protective security by co-operating with, advising and assisting public authorities (including overseas authorities) and any other person, office holder, entity or class of persons, office holders or entities (whether in New Zealand or overseas) authorised by the Minister on protective security matters. Protective security should be defined to include the Agencies’ current functions in relation to the protection of information, people and assets against security threats (for example, cyber security, information assurance and vetting Government employees). They should cooperate with each other, and with the New Zealand Police and NZ Defence Force, assisting them to carry out their functions in accordance with their governing legislation. Co- operating with and assisting any other Government agency or entity (whether in New Zealand or overseas) where it is necessary to respond to an imminent threat to the life or security of a New Zealander overseas, or any person in New Zealand or on the high seas. In general, the agencies should be able to obtain a warrant to target New Zealand citizens, permanent residents and organisations only for the purpose of protecting national security. Their broader objectives of contributing to New Zealand’s economic and international well- being should only apply in relation to foreign persons and organisations (which might include, in limited circumstances, a New Zealander acting on behalf of a foreign entity such as a Government or terrorist organisation). Protections for New Zealanders should be implemented through a strengthened authorisation framework. If the Agencies wish to carry out any activity for the purpose of targeting a New Zealander, a warrant approved by both the Attorney-General and a judicial commissioner should be required.

57 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. GCSB has approximately 300 staff in a wide range of disciplines, including foreign language experts, communications and cryptography specialists, engineers, technicians, and support staff. The NZSIS has around 200 staff, including intelligence officers, support staff, and specialists including linguists, technicians, legal and accounting staff and information professionals.

INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 4.20 3.64 sBudget performance & value for money 4.10 3.25 sThe Department’s quality of service delivery 4.10 3.33 sThe overall performance of the Department 4.25 3.36

Address: Pipitea House, 1-15 Pipitea Street, PO Box 12209, 6144, Wellington 6011, Ph: (04): 472-6881. Fax: (04): 499-3701. E-mail: [email protected] Web: www.gcsb.govt.nz Senior Staff: Minister in Charge: Chris Finlayson. Director SIS: Rebecca Kitteridge. CEO GCSB, Andrew Hampton Staff: Current: 301.

Budget Update $179m for boosting the work of the intelligence services

58 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Inland Revenue Department

PURPOSE: Inland Revenue Department (IRD) collects 85%, around $60bn, of the Government’s revenue and administers a number of social support programmes.

„„IRD is well advanced on its major, multi-billion, multi-year IT-based Business Transformation Programme. „„Parliament’s watch-dog Finance and Expenditure Select Committee, is pleased with both progress to date and the precautions being taken to avoid other major Government IT debacles.

By anyone’s standards, IRD is big business. The total tax collected over the 12 months to September 2015 by IRD was about 25% of GDP. Finance Minister Bill English likes to talk about how the Government is modernising the way in which it interacts with people. He says how people access services is changing rapidly. We have become used to information, services and products available on demand and accessible anywhere at any time. New Zealanders should expect this from the public sector, just as they would from the private sector. The current pipeline of better public services business work includes the IRD’s Business Transformation (BT) programme. He CEO PROFILE says our tax settings are among the best in the world but IRD’s internal systems are getting old and can be difficult to use. Naomi Ferguson, Commis- sioner and Chief Executive A major part of BT involves replacing many of IRD’s systems, to of Inland Revenue, was ap- enable allow businesses’ accounting software to automatically talk pointed to the role in July 2012. She brings more than to them. Every taxpayer will be able to access their tax and Working 20 years of experience in for Families information through a simple online portal - similar revenue agency management to online banking. to the role, including serving as Deputy Commissioner, In an interim report in March, the Finance and Expenditure Select Service Delivery at Inland Committee examined IRD’s business transformation programme, Revenue from 2003 to 2006. intended to deliver a modern fit-for-purpose revenue system. It Before returning to Inland Revenue Naomi was Direc- will replace the department’s current revenue collection platform, tor, Business Customer and FIRST,1 which is complex and expensive to maintain, and difficult Strategy for Her Majesty’s and costly to change. Revenue and Customs in the UK. Defining Moment: The programme will change the IRD’s business processes, policies, Tax haven issue is starting to and customer services. It is progressing in four stages over 10 years. develop into one - For 2015 it The stages involve the enabling of secure digital services; streamlining was the business transforma- tion process which requires a of income and business tax processes; streamlining social policy billion dollar spend on a new delivery; and completing the transition of all taxes and social policies computer system. Business to the new platform. will welcome a system which reflects reality. In 2013/14 Cabinet approved the programme’s business case and a roadmap for the programme. Detailed design for stage 1 was completed in 2015, along with the high-level design for stages 2, 3, and 4. The project is estimated to cost between $1.3bn and $1.9bn. A business case is now ready for later phases. The IRD told the Select Committee the new figure is expected to be at the lower end of the original estimate of Crown funding required, and at the upper end of the original estimate of expected benefits.

59 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. The Select Committee examined the project in March and reports with a high budget over a long running time, high quality risk management is critical if the project is to deliver the desired dividends. The fact it is currently running under budget indicates strong financial disciplines are in place. Mindful of other large IT projects where investment of public money was not well managed, the Committee asked IRD to explain what steps are being taken to identify, monitor, and mitigate risks. IRD said a number of layers of risk management, both internal and external, are built into the system. The Minister is briefed on a monthly basis against a range of indicators, including cost. There is an active risk register which focuses particularly on having the right personnel available throughout the project; and on the need to ensure that staff and customers will be able to operate effectively during the rollout period when two systems will be running at the same time. IRD’s strategy has been to recruit experienced people who have been involved in large-scale transformation projects in the past, including rollouts in Australia, South East Asia, and Europe. Former Deloitte CEO Murray Jack, who headed a technical review of what went wrong with Novopay, is now a member of the IRD’s Governance Committee, steering the transformation project. The Commissioner of Inland Revenue said IRD is consciously trying to learn from previous public IT projects, both successful and less successful. The IRD’s new tax platform is supplied by Fast Enterprises, a United States based company which works solely with Government clients. Its Gen Tax software has been used in a number of other jurisdictions. The procurement process, completed in June 2015, has been robust and has resulted in the choice of a system which provides 87% functionality out of the box. The Committee noted the IRD’s Business Transformation project is being subject to a number of reviews. This is as it should be, given the significant amount of public money which is being expended and the importance to New Zealand and New Zealanders of the infrastructure on which that money is being spent. “We note that KPMG completed an independent quality assurance review of the programme and commented positively on the approach the IRD is taking to its governance and on the strength of its management. Earlier this year our committee considered a report from the Controller and Auditor- General, Inland Revenue Department: Governance of the Business Transformation programme, which was also positive and made recommendations that called for a continuation of the careful monitoring work which was ongoing. The Office of the Auditor-General will make further such reviews on a regular basis.” The Committee said it is critical, with a long-term project such as this, vigilance and risk management remain sharp and focused throughout the life of the project. It was pleased with what it has learned so far about the way it is being managed and looks forward to a further briefing later in the year, once the next stage of the budget has been approved and the next steps in the project have been taken. IRD chose the wholly-owned Spark subsidiary Revera as the preferred supplier for the design and supply of data centre services to support the new tax and social policy system. Deputy Commissioner Change Greg James says the data centres contract is one of the most significant elements of the agency’s programme to modernise the tax and social policy administration. Worth $45-60m over 10 years, it will be one of the programme’s biggest and is certainly the largest contract to date to be awarded to a New Zealand business. The new Revera data centres will host essential services including the new tax system, named START (Simplified Tax and Revenue Technology),

60 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. and the first came online recently. START’s data requirements are variable, and Revera’s design has built in flexibility to cater for these changing needs at any given time. Revera’s solution means if IRD needs fewer servers or less storage, it can use only what is required when needed and not pay for capacity not being used. The current FIRST system will continue to be supported by existing data centres, and during the transition to START, the two data centre systems will co-exist. Revenue Minister Michael Woodhouse points out a good tax system is not just sound tax policy, but also a strong tax administration to implement those policies. IRD will gather the bulk of Crown revenue and administers social policies such as child support and working for families, but how it performs its functions and the way the department sees itself is evolving. In New Zealand total tax collected over the 12 months to September 2015 by IRD was about 25% of GDP. The costs of administering IRD are about 0.3% of GDP. If NZ’s overall compliance costs were similar to those estimated for the United States, it would be 2.5% of GDP. Compliance costs for SMEs is a particular concern so making an improvement could have a substantial benefit for our economy. The Government wants high levels of compliance to be encouraged by good and accurate information and tying in tax reporting and payment with normal business processes. For instance, compliance with tax rules is high for withholding taxes such as PAYE so IRD is exploring what other payments could be subject to withholding taxes. The Government wants the tax system to be fair and seen to be fair, but also wants New Zealand to be a good place to base a business and invest. A key focus is taxing inbound investment. Tax policy officials at IRD and Treasury will be engaging on this issue with officials from MBIE, MFAT and the wider Treasury. This will be followed with a dialogue with the tax community on the tax settings for inbound investment and officials will consider the impact of tax settings for the cost of capital. It says the changes to tax administration will help improve our tax system by making it easier for people to comply. Meanwhile the broad-base, low-rate tax system where taxes are evenly and neutrally applied over a broad range of forms of income and expenditure provides a very good tax policy framework. More taxpayers are filing electronically: 88.8% of income tax was paid in 2014/15 up from 84.1% three years before. For GST the rate was 64% up from 47.6% while 60% of employers monthly schedules came electronically compared with 41.3% in 2012/13. IRD’s operating expenditure for 2014–15 was $704.2m, an increase of $3.7m over the prior year. Expenditure for 2015–16 is forecast to be $764.9m, an increase of $60.7m. Most of the forecast increase relates to expenditure on the Business Transformation programme.

61 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 5.08 4.85 sBudget performance & value for money 4.64 4.64 sThe Department’s quality of service delivery 4.64 4.86 sThe overall performance of the Department 4.92 4.81

Address: 12-22 Hawkestone Street, PO Box 2198, Wellington, 6011. Ph: (04): 891-1500. Fax: (04): 498-5809. E-mail: [email protected] Web: www.ird.govt.nz Senior Staff: Minister In Charge, Michael Woodhouse. Greg James, Deputy Commissioner Change; Mary Craif, Deputy Commissioner Corporate Integrity and Assurance; Mike Cunningham Deputy Commissioner Information, Intelligence and Communications; David Carrigan acting Deputy Commissioner Policy and Strategy; Arlene White Deputy Commissioner Service Delivery; Struan Little Deputy Commissioner; Patrick Goggin, acting Chief Financial Officer; Mark Daldorf Chief People Officer, People and Culture; Martin Smith Chief Tax Counsel and Giles Southwell acting Chief Technology Officer. Staff: Current: 5,681.

62 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Land Information New Zealand

PURPOSE: Land Information New Zealand (LINZ) provides accurate information about where people and places are and confidence in property rights. Responsibilities include managing land titles, geodetic and cadastral survey systems, topographic information, hydrographic information, managing Crown property and supporting Government decision making around foreign ownership.

„„New Land Transfer legislation will brings laws into the 21st century, giving property owners better protection and making easier the registration of property. „„Responsibility for Crown-owned properties in Christchurch’s residential red zones has been moved from the Canterbury Earthquake Recovery Authority to LINZ.

LINZ is one of those departments which resembles a Fabergé egg. Beneath an innocuous surface lies an extraordinary range of activities and responsibilities of enormous value. The more layers are pealed back, the more appear. It creates and manages information about location and position. It encourages the use of location information and runs New Zealand’s survey and title system, which guarantees people’s property rights. CEO PROFILE It manages some of the Government’s land and property on two Peter Mersi has been with million hectares - around 8% of the total land mass - the-second LINZ since September 2012. largest landholding of any Crown agency and supports Government He has worked in the public decision-making on foreign ownership of land. It works with other sector for most of his ca- reer, with the exception of a agencies to control weeds in iconic lakes Karapiro and Wanaka. short period with the Bank of LINZ manages pastoral leases on some 1.6 million hectares of New Zealand. Before joining Crown-owned pastoral land in the South Island high country. LINZ, Peter was the Deputy Commissioner for Business Its role is to make sure New Zealand has a world-class location system, Transformation at Inland Rev- accurate location information, robust property rights and sustainably enue. He has just been ap- pointed CE of the Ministry of managed Crown property. It works with Government agencies, local Transport. Defining Moment: Government, iwi and Maori, surveyors and conveyancers. Role of and resourcing of the OIO, and the recent release It produces official nautical charts for New Zealand waters, the Ross of statistics relation to foreign Sea in Antarctica and the South-West Pacific. It creates and provides house buyers. What was a world class IT system just a the authoritative national record of the country’s physical features few years ago is already look- through topographical maps. LINZ maps cover all of New Zealand, ing outdated. its offshore islands, some Pacific Islands and the Ross Sea region. LINZ works with the Ministry of Justice and Te Puni Kokiri want to improve the performance and productivity of over 27,000 blocks of Maori land under the Te Ture Whenua Maori Act 1993. This comprises 1.4 million hectares, or approximately 5% of the total land, much of which is under-performing. A cross-agency and multi-year programme will establish the Maori Land Service, which will support the retention, management, and utilisation of Maori freehold land. LINZ will manage the technology and infrastructure behind the Maori Land Register. A major development this year is the Land Transfer Bill. This will bring land transfer laws into the

63 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. 21st century, giving property owners better protection and making it easier to register property. It passed It unanimously its first reading in Parliament in March and is due to be reported back to the House by September. Land Information Minister Louise Upston says the Bill replaces the Land Transfer Act which is over 60 years old, with provisions dating back more than a century. It will better protect property owners from the pitfalls faced today. It includes new provisions to prevent mortgage fraud, to protect Maori freehold land, and to extend the Registrar-General’s powers to withhold personal information to protect someone’s personal safety. It also includes some measures to take time and effort out of registering and transferring property. The present Land Transfer Act is focused on paper-based transactions, at odds with today’s electronic land title registration system and with archaic language, is complex and difficult to understand. The Bill retains the core principles of the Torrens system of land registration, and introduces new measures to improve security of property right. In 2010 a Law Commission report showed while the existing Land Transfer legislation is fundamentally sound, it was well overdue for modernisation, simplification and consolidation. New Zealanders are using more Government generated data. Recent figures show another 7,650 users registered to download free Government data from the Land Information New Zealand (LINZ) Data Service in 2015, bringing the service’s total of registered users to more than 20,000. Since its launch in 2011, the LINZ Data Service (www.data.linz.govt.nz) has gone from strength to strength. It has won three international awards and a recent customer survey found that more than half of those surveyed depend on the service, with a further 20% describing it as critical to the success of their business. Christchurch City Council has joined LINZ’s Smart City coalition alongside Wellington and Auckland. The three cities are trialling new technology to gather real-time data on how the cities are functioning. That work, coordinated and funded by LINZ, is called Smart Cities – Smart Nation. Overseas, smart sensors are used to detect everything from traffic to pollution to disturbances in the street. Smart Cities Project Director Haydn Read says it’s relatively new in New Zealand. Using smart sensors enables organisations like councils to look at the life span and use of assets and plan when to repair or replace them. The sensors can be used to monitor traffic and pedestrian movements so the councils can decide how to do the work in the least disruptive way. Ultimately, this type of technology can save rate and tax payers money. LINZ is working alongside the three councils to support trials and gather information about the successes and issues. With that information, LINZ will work out a nation-wide approach to use smart technologies and geographic information to improve life in cities. LINZ resurveyed areas of Christchurch to gain up to date information on the impact of the Valentine’s Day 2016 magnitude 5.7 earthquake. An initial survey of areas affected by the earthquake found the largest horizontal movement was 12cm. The largest vertical movement was 4cm. LINZ is clearing Crown-owned properties it manages in the Port Hills residential red zone after the Valentine’s Day earthquake. Structures have been cleared from 224 out of 606 Crown- owned properties with demolitions currently underway on another 108 properties. LINZ aims to complete all demolitions on Crown-owned properties in the Port Hills by the end of 2018. Last December LINZ assumed responsibility for Crown-owned properties in Christchurch’s residential red zones from CERA. Deputy Chief Executive Crown Property Brian Usherwood

64 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. says transitions will provide certainty for communities about how Crown-owned properties will be managed in the short-to-medium term. The immediate focus is to maintain CERA’s momentum over the last four years and minimise the disruption for red zone residents and neighbours. While LINZ is responsible for completing demolitions and clearances of Crown- owned properties in the flat lands and Port Hills residential red zones and interim management of the land, decisions about long-term use of properties will be made by the Department of Prime Minister and Cabinet. Land Information NZ is taking a leasing approach to a technology upgrade instead of paying for a new system to be built. A new online system is wanted to streamline property transactions and make it easier to link property information held across central and local Govt. LINZ had what was cutting edge technology in the 90s, but it is now ageing. The new system – Advanced Survey and Title Services (ASaTS) – will include an online search so property buyers can get title information without specialist help. LINZ is taking an “as a service” approach to developing ASaTS. Instead of paying a vendor to build a system which LINZ would then own, LINZ will select a vendor which can deliver a suitable system LINZ will pay to use – similar to renting. LINZ will still own property data. It is part of the drive to reduce risk, but success will very much depend on how the contract is structured. It is hoped the new system will give the ability to link property information held across central and local Govt, like ratings valuations and titles. This function is essential to the Govt’s work towards Integrated Property Services.

INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 4.50 4.58 sBudget performance & value for money 4.18 4.55 sThe Department’s quality of service delivery 4.09 4.55 sThe overall performance of the Department 4.33 4.46

Address: Level 7 Radio New Zealand House, 155 The Terrace PO Box 5501, Wellington, 6145. Ph: (04): 460-0110/0800-665-463. Fax: (04): 472-2244. E-mail: [email protected] Web: www.linz.govt.nz Senior Staff: Minister In Charge Louise Upston. CEO Peter Mersi. Deputy Chief Executive Location Information Jan Pierce; Deputy Chief Executive Location System Andrea McDonald; Deputy Chief Executive Crown Property Brian Usherwood; Deputy Chief Executive Property Rights Russell Turner; Deputy Chief Executive Corporate Simon Rice Staff: Current: 487.

65 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Ministry of Business, Innovation and Employment (MBIE)

PURPOSE: MBIE plays a central role in shaping and delivering a strong economy by delivering policy, services, advice and regulation to support business growth

„„Has CEO David Smol finally wrestled the MBIE behemoth to the ground and made it functioning? „„MBIE has started winning points and snaps at the heels of rival Treasury.

MBIE’s reach, scope and intentions stretch the mind. It reaches into most parts of the lives of New Zealanders. It reaches into most aspects of business, from housing to tourism, from IT to building standards and safe workplaces. Its own expectations are high. It builds trusted, competitive and effectively regulated markets; ensures businesses have access to the needed skills now and in the future; ensures safe and fair workplaces; develops and supports high-performing science and innovation; lifts firms’ capability including ideas, access to capital and relationships to succeed internationally. CEO PROFILE David Smol joined MBIE It supports development of efficient infrastructure; enhances the value from the former Ministry of of natural resources and leads work to improve housing affordability, Economic Development, where he was Chief Execu- and provide employment, residential tenancy, and unit titles dispute tive. He joined the Ministry resolution services. of Economic Development in April 2003 as Deputy Sec- It’s also driven by one of Cabinet’s most ambitious and media- retary responsible for the savvy Ministers Steven Joyce. Energy and Communications Branch. Previously he was a From set-up MBIE looked too big to be succeed. Part of the director of an Oxford-based problem lay in the addition of housing and this is compounded by energy consulting firm, with clients in the UK and Europe, Auckland’s perennial housing woes which are vigorously fed and including large energy utilities watered by elements in the media. and transmission companies, renewable energy genera- Is MBIE simply too big to work? This was put by Parliament’s tors, regulatory bodies and Commerce Select Committee: some of us question whether the government departments. Before the UK he was an model of having such a large and diverse agency is working. The analyst and then manager chief executive told us he believes it is. in network industries at the Treasury. Defining Moment: Like any large Government organisation, its milder transgressions Consistently in the head- are seized upon: such as new video displays at the new head office lines for overspending on its office refurbishment and in Wellington and provision of hair styling equipment. While these other small, but controversial generate headlines, whether they detract from actual performance items. But boosting economic is doubtful. CEO David Smol duly informed the Select Committee growth is where it counts. better procedures are in place. However, after years of frustrating team-building and focusing disparate organisations, MBIE is hitting its straps. Most of the problems in preparing an assessment is the sheer size and scope of the Ministry.

66 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. In 2014/15 the Ministry’s total expenditure was just over $582m, up 0.5% from the previous year. Departmental revenue was just over $614m, about 1% more than in 2013/14. Of this revenue, about 44% came from the Crown and the rest from fees, levies and other sources. Immigration fees were the largest component of third-party revenue, totalling $175m. MBIE recorded a surplus of about $32m for 2014/15. This was 12% more than the previous year. As well as its own spending, MBIE administers a large amount of non-departmental expenditure, totalling just under $3.025bn in 2014/15. About a third of this was for the Accident Compensation Corporation. Other major components were broadband investment, immigration services, core funding for Crown research institutes, tourism marketing, international business growth services, and screen production grants. When the Select Committee reviewed the Ministry’s appropriations for the financial year in mid-2015 there was concern about the cost of certain items in the refit of the Wellington premises. Since then the management team has made several changes to the Ministry’s systems, processes, and financial controls. It has also communicated to its staff the importance of prudent expenditure. “The chief executive told us he is confident the Ministry will make good spending decisions overall in the future, although he cannot guarantee a poor decision will never be made.” Writing in the most recent annual report, acting CEO Andrew Crisp says the Ministry’s role is to lead the Government’s microeconomic agenda. This means developing and implementing policies to build a competitive and internationally focused economy and delivering services to businesses and people. He says “we have defined our purpose as being to Grow New Zealand for all.” For New Zealanders, a high quality of life depends on high material living standards and the quality of the society and the environment in which they live. “If the community is confident its society and environment will be protected or enhanced, and the benefits of growth are fairly shared, New Zealand’s business environment will flourish. This means New Zealanders can access the jobs and incomes necessary for the community to meet their aspirations.” Looking inwards, the Ministry is now a well-established organisation which is continually learning. “I am confident we have the strategic direction we need, and are clear about the contributions the Ministry can make to New Zealand’s economic prosperity.” MBIE works to improve Government Procurement practices to ensure Government spending encourages innovation and growth while providing value for money. It takes a living systems approach to the 16 Regulatory Systems for which it has responsibility, to ensure New Zealand continues to have well-regulated and competitive markets that businesses and consumers have confidence in. The multi-agency Better for Business programme is meant to transform how the public sector works to make it easier for business to interact with Government. MBIE is rolling out operational and IT related changes to increase the quality and flexibility, and lower the cost of immigration services. In the digital economy MBIE is rolling out initiatives to enable a successful, knowledge-intensive and productive economy. A key workstream is the roll-out of ultra-fast and rural broadband. Other work includes growing digital participation and ICT skills; and improving firm use of ICT. MBIE is advancing work to ensure Labour Market and Skills systems deliver good outcomes for businesses and workers. Priorities include improving the operations of the employment relations and standards systems; implementing health and safety reforms and ensuring tertiary education system delivers programmes relevant to the economy.

67 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. It wants to maximise the impact and economic returns to New Zealand from Science and Innovation systems. It published the National Statement of Science Investment and it is working to implement National Science Challenges, initiatives to increase business investment in research and development, improving international connections and encouraging development of innovation hubs and precincts. It focuses on ensuring capital markets provide savers and investors with confidence. This includes supporting development of capital markets to ensure they have sufficient depth and diversity to attract investor and entrepreneur migrants, multi-national firms investing in R&D in New Zealand, and high quality foreign direct investment into every part of New Zealand, including our regional and Maori businesses. Well-functioning housing markets are important for an inclusive and growing economy. MBIE is working to improve affordability through freeing up land for residential development; improving building and housing regulations; construction workforce planning; and implementing improvements to rental housing quality. MBIE is leading work to sustainably derive greater value from the petroleum and minerals resource base. This includes work to attract investors and competent operators to New Zealand, and work to ensure safety and environmental protection regulation is fit for purpose and provides assurance for communities. MBIE is working to maintain and advance New Zealand’s competitive position through the productive use of energy, new energy technologies and renewable energy. Priorities include ensuring regulatory and policy settings promote efficient investment in new energy technology and the smart use of energy, and work to address barriers to firms internationalising their renewable resource expertise. Auckland represents a third of the national economy and its ability to grow, attract skilled workers and business investment, and diversify into high value exports is critical for New Zealand as a whole. MBIE is working to ensure the most is made of Auckland’s role in the economy with a particular focus on South Auckland. MBIE is also working to enable more dynamic and better connected regions. This includes completing regional growth studies for selected regions and working with these regions to help them develop Regional Economic Action Plans. MBIE continues to support the regeneration of Canterbury. This includes supporting the Greater Christchurch Transition Recovery Plan. MBIE has a leadership role, alongside Te Puni Kokiri, in enabling Maori economic development. It says this economic sector has great potential to improve outcomes for Maori whanau and business, and the economy as a whole. Priorities include improving Maori businesses’ export performance and innovation, ability to attract capital, and Maori skills and vocational outcomes. MBIE works with industry stakeholders to achieve long-term growth in the economic value of Tourism. Priorities include improving productivity through the Tourism Growth Partnership, leveraging investments in cycle trails, convention centres, and major events; working with others to realise opportunities from the China market; helping the industry to identify and address its medium- to long-term labour and skills needs.

68 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. INDEPENDENT ADVISER’S RANKING 2016 2014 sPerformance of CEO 4.13 4.44 sBudget performance & value for money 3.50 3.38 sThe Department’s quality of service delivery 3.75 3.44 sThe overall performance of the Department 3.60 3.75

Address: 15 Stout Street, PO Box 1473, Wellington, 6140, Ph: (04) 472 0030 Fax: (04): 473 4638. E-mail: [email protected] Web: www.mbie.govt.nz Senior Staff: Minister In Charge Steven Joyce. CEO David Smol. Nigel Bickle, Deputy Chief Executive Immigration New Zealand; Bryan Chapple, Head of the Office of the Chief Executive; Andrew Crisp, Deputy Chief Executive Building, Resources and Markets; Stewart McRobie, Chief Financial Officer; Adrienne Meikle, Deputy Chief Executive Corporate, Governance and Information; Greg Patchell, Deputy Chief Executive Market Services; Paul Stocks, Deputy Chief Executive Labour, Science and Enterprise. Staff: Current: 2,822.

Budget Update $22m invested in New Zealand’s cyber security infrastructure. $761m over four years for an “Innovative New Zealand” package, with a strong focus on science, intended to encourage entrepreneurship, skills and economic growth.

69 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Housing New Zealand Corporation

PURPOSE: Housing New Zealand Corporation is a Crown agent providing “high quality, subsidised rental homes to people in the greatest need for the duration of their need.”

„„The first phase of the Government’s programme to purchase and manage social housing is underway. „„Contamination of HNZ houses by amphetamines is becoming an increasing problem.

The Government’s plan to sell social housing created an uproar among Opposition MPs and various community advocacy groups. In March the Government announced that four respondents, the Pact Group for Invercargill, Accessible Properties, Hapori Connect Tauranga and Kainga Community Housing Partners for Tauranga had been invited to participate in the Request for Proposal stage for the transfer of approximately 1124 Tauranga and 348 Invercargill HNZ properties and tenancies to registered community housing providers. Fully costed proposals were due by May 30 for Invercargill and June 7 for Tauranga. If approved, the next stage would be Preferred CEO PROFILE

Bidder and Close. The Preferred Bidder for each region is expected After almost three years as to be announced in the third quarter of this calendar year. CEO Glen Sowry resigned to become chief executive of There is a new team at the top of HNZ with a new CEO following Metlifecare in March. Greg the departure of the highly-regarded Glen Sowry to Metlife. The Groufsky is acting CEO. board has been rejuvenated with a new chair with Adrienne Young-Cooper stepping up from deputy and a new deputy, Executive Director of the Auckland Investment Office John Duncan. Two additional new Housing New Zealand board members have also been appointed: Managing Director of Castalia, Michael Schur and Former National Party MP Tau Henare. Schur is a public finance, infrastructure finance and procurement specialist with over 20 years’ international experience. Henare is a former Minister of Maori Affairs with a background in community development, early childhood education and union organisation and experience in public policy. HNZ and VisionWest Chief Executive Officer Lisa Woolley were honoured at the Australasian Housing Institute’s 2015 Professional Excellence in Housing Awards held in Perth late last year. HNZC won the Excellence in Social Housing Award for its Canterbury Earthquake Recovery Programme, in which it has repaired 5,000 properties and rebuilt close to 700 in the wake of the devastating earthquakes. Woolley was the winner of the Outstanding Achievement Award, recognising her continued commitment to supporting families and the social housing sector. HNZ is the biggest residential property owner in New Zealand. It owns or manages about 67,000 properties, 1000 fewer than 2013/14. About 46% of properties are in Auckland. These include around 1,500 houses for community groups providing residential services. Nearly 192,500 live in the corporation’s houses or flats compared to 193,000 in 2013/14. Around 95% percent of tenancies attract the Government’s income related rent subsidy.

70 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. The corporation owns about 63,000 of the 67,000 properties. At 30 June 2015, these were worth $20.9bn compared with a portfolio value of $18.7bn at 30 June 2014. Revenue in 2014/15 was $1.2bn ($1.1bn in 2013/14). A total of $1.1bn was rent and income-related rent subsidies. Expenditure was $949m ($924m in the previous year). The operating surplus after tax was $163m ($141m). Housing New Zealand is spending about $150m on repairs to the homes currently occupied and $200m on 700 new homes. In March Parliament’s Social Services Select Committee ran the ruler over HNZ. MPs were told the average age of the corporation’s homes is 43 years. A quarter are more than 60 years old. MPs heard “decades” of under-investment in its properties meant houses became run-down. The corporation said it is now making its houses “fit for purpose, warm, and dry.” In 2014/15, the corporation spent $222m on property maintenance with more than 400,000 maintenance interventions, involving up to 4,000 contractors. Around 3% of the corporation’s homes are vacant at any one time. MPs said they were saddened to learn 350, or 0.5% of homes were vacant because tenants consumed or manufactured methamphetamine in them. Remedial work on these houses costs $12–$13m each year. Five were being demolished because the damage is beyond repair. MPs encouraged HNZ to continue working with police and other social agencies on this issue. HNZ told MPs it would never knowingly sell or rent a home which could possibly have methamphetamine contamination. HNZ wants to reconfigure its portfolio to meet demand, with homes in the right place and of the right size. The corporation intended to complete 2,000 new homes over several years by last December. Only 1,038 were completed with the rest were under construction. In 2014/15, the corporation intended to complete 281 new houses in Christchurch and 549 in the rest of New Zealand. However, only 161 houses (57% of the target) were completed in Christchurch, and 247, or 45% of the target, in the rest of New Zealand. There were several reasons. One was the time to engage with communities about new homes. It took time to move tenants out of the old properties. Other reasons for not meeting the target were consenting delays, and the high demand for building contractors. In the Auckland suburbs of Glenn Innes and Tamaki, over 100 old houses have been removed and sections await new homes. Some sections have been vacant for months. Despite its failure to build houses as fast as intended, HNZ is reasonably pleased with building performance. The corporation administers the HomeStart grants programme providing up to $10,000 for eligible individuals, and up to $20,000 for eligible couples, to help buy their first home. HomeStart was launched in April 2015. HNZ has processed around 19,000 applications, 84% were approved or pre-approved, to a total of $32m. Applications are now being processed in two days. At 30 June 2015, the corporation employed around 1,100 full-time equivalent staff members, in about 26 offices. Ten offices are in the greater Auckland area. The HNZ Board has eight non-executive members appointed for up to three years with the possibility of further reappointment: Adrienne Young-Cooper (Chair), John Duncan (Deputy Chair), Michael Schur, Tau Henare, Jeff Meltzer, Peter Dow, Alick Shaw and Sandra Alofivae.

71 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Address: 80 Boullcott Street, PO Box 2628, Wellington 6011 Ph: (04) 439-3590. Fax: 0800 201 202. E-mail: [email protected] Web www.hnzc.co.nz Senior Staff: Minister In Charge Bill English. CEO (Acting) Greg Groufsky. Sharon Girvan, Acting General Manager Governance; Patrick Dougherty, Acting General Manager Asset Development; Paul Commons, Chief Operations Officer; Bryony Hilless, General Manager Communications & Business Transition; Rowan Macrae, General Manager People Technology and Change; Rose Anne MacLeod, Chief Financial Officer; Neil Adams, Acting General Manager Tenancy Services. Staff: Current: 1,029.

72 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Ministry For Culture And Heritage

PURPOSE: The Ministry of Culture and Heritage (MCH) provide advice on arts, culture, heritage and broadcasting issues in consultation with government ministers. It reviews legislation, major policy proposals and developments that have significance to the sector.

„„With the Gallipoli centenary commemorations over, focus has switched to the Western Front, although there is concern among historians and others attention may be waning. „„MCH is now housed one of the capital’s treasured buildings, the iconic 1909 baroque-style former Public Trust headquarters on Lambton Quay, Wellington.

MCH Chief Executive Paul James says culture and heritage play a vital role in New Zealand’s society and economy. New Zealanders value cultural activities highly and spend more on cultural items than they do on clothing and footwear, healthcare or passenger transport. In the five years to 2014 GDP in the arts and culture sub-set increased by 2.6% a year compared with 1.6% in the total economy. Pukeahu National War Memorial Park, one of MCH’s major achievements, opened in April 2015, and 50,000 people attended the first national dawn service at the Park on Anzac Day. April Over 50,000 visitors saw the Great War Exhibition in its first three months. CEO PROFILE Paul James was appointed in The 2014-2019 WW100 Programme is well underway as the August 2015. He was formerly legacy project, the Nga Tapuwae First World War Heritage the Deputy Chief Executive, Policy, Regulatory and Ethnic Trails, launched its Gallipoli content in March, ready for Anzac Affairs with the Department Day 2015. The project includes a website, phone apps, signage of Internal Affairs. Defining and museum displays and there were 5,000 downloads of the Moment: The commemora- tions of the Anzac centenary Gallipoli app in its first three months. were a highlight. Spreading With the passage of the Heritage New Zealand Pouhere Taonga thin funds around a hungry sector remains a challenge, Bill into statute, the process of establishing the first set of National as does finding an adequate Landmarks Listings is underway. This will identify the most iconic voice amongst the noise. places to protect and promote. With the support of the Cultural Diplomacy International Programme MCH is displaying top New Zealand music, theatre, kapa haka, literature and visual arts at a range of international events, including the 2014 Edinburgh Festivals, the 2015 Taipei International Book Exhibition and in major exhibitions in Santiago and Buenos Aires. The TVNZ archives are now at Nga Taonga Sound & Vision to enable better co-ordination of audio-visual archives, with the aim of making them more accessible to all New Zealanders. In his most recent annual report James says the build of Te Ara - The Encyclopedia of New Zealand had been completed with the launch of the theme Creative and Intellectual Life in October 2014. The knowledge and expertise of staff working on this project have been noteworthy factors in its success.

73 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. There has been a 40% increase in visits to Ministry websites including Te Ara, NZHistory.net.nz and WW100. The Ministry received 11.2m visitors to its websites during the year. Maori performing arts are going from strength to strength. There were more than 30,000 visitors to Te Matatini’s 2015 Kapa Haka Festival with a direct economic impact of $9m in Christchurch. MCH provides strategic leadership of New Zealand’s commemorations of the First World War Centenary, WW100, a shared identity for First World War centenary projects and activities, from official state ceremonies and legacy projects to community initiatives and personal projects. The WW100 Programme office is a partnership linking MCH, New Zealand Defence Force, the Ministry of Foreign Affairs and Trade and the Department of Internal Affairs. MCH says the WW100 programme enables a strategic approach to commemorating the war. The larger amount of activity happening outside central government occurs within a coherent and supported framework. MCH has three major votes: Arts Culture and Heritage Policy Advice, Monitoring of Funded Agencies and Ministerial Servicing; Sport and Recreation Purchase Advice and Monitoring of Sport and Recreation Crown Entities Sport New Zealand and Drug Free Sport New Zealand, including advice in relation to appointments to boards; Arts, Culture and Heritage Services provides management of new memorial projects, national monuments, war and historic graves, promotion of cultural events, administering legislation and grants, research, writing and publication of New Zealand history and reference works including Te Ara - The on-line Encyclopedia of New Zealand. Much of MCH’s work is presently focused on the First World War. Commemorations will remember the Western Front. New Zealand made its most significant contribution to the First World War in France and Belgium with the greatest loss of life. Images of Maori First World War servicemen are being assembled for a new book Whitiki: Maori in the First World War due for publication in 2017, one in a series of books being produced by the Ministry for Culture and Heritage, Massey University, the New Zealand Defence Force and the Royal New Zealand Returned and Services Association. Recent research undertaken with the New Zealand Defence Force indicates more than more 16,000 New Zealand soldiers served at Gallipoli compared with the original 8,556 in the New Zealand official war history of the Gallipoli Campaign in 1919. A new co-production agreement with Israel will have significant benefits for New Zealand’s screen sector. It covers film, television, animation and digital productions and provides official New Zealand-Israel co-productions with access to distribution rights and screen finance in both countries, including the New Zealand Screen Production Grant. Arts and Culture Minister Maggie Barry says the New Zealand Film Commission has developed a close working relationship with its counterpart agency in Israel, and both Israeli and New Zealand films are known for their dry sense of humour. Elsewhere, the New Zealand Symphony Orchestra received a Best Orchestral Performance nomination at this year’s Grammy Awards. It was nominated for Symphony “Humen 1839,” a recording of works by Pulitzer Prize-winning Chinese composer Zhou Long in collaboration with compatriot Chen Yi. Recorded at the Michael Fowler Centre, Wellington, under the baton of Singaporean Darrell Ang.

74 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 4.73 4.45 sBudget performance & value for money 4.80 3.73 sThe Department’s quality of service delivery 4.70 3.73 sThe overall performance of the Department 4.75 4.07

Address: Level 1 131-135 Lambton Quay, 101 The Terrace, 6011. PO Box 5364, Wellington, 6140. Ph: (04): 499-4229. Fax: (04) 499-4490. E-mail: [email protected] Web: www.mch.govt.nz Senior Staff: Minister In Charge Maggie Barry. CEO Paul James. Matt Archer, Corporate Services Branch Manager; Katherine Baxter, Deputy Chief Executive currently on secondment in the office of Minister Maggie Barry; Paul Barker,Acting Cultural Policy Branch Manager on secondment from the Ministry of Education; Ripeka Evans, Pou Arahi Whakahaere; Sarah Ingram, Heritage Services Branch Manager; Sarah Hardy, Finance and Strategic Planning Manager. Staff: Current:101.

75 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Ministry of Defence and NZ Defence Force

PURPOSE: The Ministry of Defence (MOD) provides timely advice about the defence of New Zealand and its interests, conduct audits and assessments of the New Zealand Defence Force and arranges acquisition of significant items of military equipment needed to meet NZDF capability requirements. NZDF secures the country against external threat, to protect sovereign interests including within the Exclusive Economic Zone and to be able to take action to meet likely contingencies in our strategic area of interest. It delivers through “One Force: three services,” the Army, the Royal New Zealand Air Force and the Royal New Zealand Navy.

„„A new Defence White Paper will spell out the strategic environment, risks ahead and what sort of operational capability the tri-service NZDF will require in the next decade. „„Defence has an acquisition programme of around $11bn over the coming decade, including replacements for the NZDF’s air transport and air surveillance fleets and the Anzac frigates. CEO PROFILE

Chief of Defence Force Defence Minister Gerry Brownlee has developed a Sherman Chief of Defence Force: Lieu- tank-like reputation within the defence hierarchy. Many under- tenant General Tim Keating enlisted into the New Zealand estimated or misread him in the early days of his assumption Army as an Officer Cadet of the portfolio. Lessons have been learned after he publicly in 1982. He served in the rebuked the department by giving it only a pass-rating for the Royal New Zealand Infantry quality of advice offered. Regiment and the Special Air Service Group which he later The NZDF called in its own Performance Improvement Framework commanded. He completed the Australian Command and report via the State Services Commission. The report put it bluntly: Staff Course, commanded The NZDF has to be skilled in advising Ministers on broad issues the New Zealand contingent, where risks may be changing rapidly and there may be multiple Multinational Force in the Sinai Peninsula. In 2005 he and sometimes competing perspectives. commanded a 100-strong It needs to adopt a posture which is based on how the world looks contingent supporting in- ternational reconstruction from a strategic, political and a changing world events perspective. efforts in Afghanistan. In Some stakeholders commented that traditionally, NZDF has February 2011 he was ap- provided analysis and advice more from a logistics, traditional pointed Chief of Army as a Major-General and Chief of practice and practical perspective. Defence Force in 2014. In essence, the NZDF needs to be better able to stand in the shoes of others and package their communications in a way that suits the audience. As one commentator stated … “the NZDF needs a greater awareness of how the world looks apart from through a NZDF lens.” Improvements have been made in this area but NZDF recognises further changes are needed. A senior military officer is available to support the Minister’s office but overall, senior military officers do not have significant exposure to working with Ministers or with other Public Service agencies during their careers. Some secondments are in place, such as to the Treasury but other strategies are needed to improve opportunity for military officers

76 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. with high potential to work more closely with Ministers and be exposed to Parliamentary processes and committees. The NZDF also needs to think carefully about how it can enhance its ability to work well across the public sector and operate within public sector practices. Ministers expressed high levels of trust and confidence in the NZDF as their professional military advisors and in the capability of the management of NZDF and Veterans’ Affairs NZ to deliver on the missions assigned to them. There was some concern that performance in some functions CEO PROFILE depended on the people currently in roles and what constituted good performance was not institutionalised. There was a concern Secretary of Defence Helene Quilter was ap- NZDF was on occasions too deferential to others in the External pointed in December 2012. and Security sector. She has over 38 years’ expe- rience in the Public Service. Improving its rating in terms of engagement with Ministers will Before Defence, she was a require NZDF to do more to ensure its voice is heard by Ministers Deputy Commissioner at the and is seen to be heard, and respected by its sector partners. State Services Commission, Defining Moment: One eye The NZDF needs to adapt its modus operandi to be more agile on past policy and purchase in responding in a timely and user friendly way to its Ministers, decisions, the other on recognising the way they like to work. future policy and military purchase decisions. NZDF staff in and engaging with, Ministers’ Offices would benefit from opportunities to develop experience of the workings of the Public Service and the interface between agencies, Ministers and Parliament before being put into those roles. Chief of Defence Force Major-General Tim Keating says NZDF’s core purpose is preparing for combat. In order to ensure a single plan for how to achieve this is driven from the top, steps have taken steps to improve how to generate the Annual Plan. In the past these were formed through a bottom up process, with Services and functions completing their plan and merging these into the NZDF Plan. The PIF Lead Reviewers identified three broad improvement areas to address and keep in the forefront as “A Force Pursuing Excellence.” These broad areas encompass purpose, targets and organisational strategy; the operating model and implementation of change. These improvement areas are being given high priority by the NZDF Leadership Team. This approach gave general alignment to the Future 35 strategy, but often, there were unconnected initiatives and slippage of the plan was inevitable without a strong top-down focus. Recent changes to NZDF’s governance structure will assist it to be more deliberate in planning and more disciplined in delivery. A new organisation committee ensures stewardship of resources, ensures delivery of the change portfolio within the scope of the Annual Plan, and prioritises and makes investment decisions within the scope of the Annual Plan. The most recent PIF report on MOD says it confronts key issues in the defence security environment which have significant implications for all three aspects of its operations: defence policy and engagement with the Government’s security and defence sector, capability and acquisition, and independent evaluation of defence activities. In geopolitical terms, the Ministry, along with other NZ Inc. agencies, operates in an evolving and uncertain strategic context. Longer-

77 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. term trends include a shift in the distribution of power to the Asia-Pacific region, alongside fragility of states in the Pacific, increasing challenges to rules-based international order and the need for a more sophisticated approach to balancing New Zealand’s trade and security interests. These trends imply a strongly multilateral defence environment, an active role in the region and increasing investment in defence and security architecture. They also suggest a need for more dynamic and normalised approaches to ongoing defence assessment. With regard to technology, the Ministry faces a world in which increasing specialisation and sophistication of military hardware and new types of conflict, such as cyber, imply increasingly complex acquisitions, much shorter military capability refresh cycles, more in-life investment and potentially greater co-investment with partners. This places a premium on dynamic and sophisticated portfolio management of defence capability in support of a versatile and interoperable defence force. These trends must be addressed in the context of ongoing fiscal constraints on defence spending. In 2012, PIF reviewers found an agency with unclear strategy in which efforts were episodic and sequential (such as focus on a Defence Assessment for a period, then a break to focus on other things). The Ministry now understood it must produce results consistently across all of its output areas. The Ministry has also identified that doing so will require a very explicit approach to prioritisation and, under current funding settings, trading down depth in some areas to perform across the portfolio. Reviewers also suggested the senior leadership team needed to lift itself out of operational matters and focus on the right things. This team is now focused on strategy, risks, prioritisation and trading off. It feels and behaves like a team, rather than a collection of individuals. Operational business as usual has been appropriately tasked to tier three managers, they said. Important under NZ’s constitutional arrangements for defence, MOD has made a critical shift in its management of the designed tension with NZDF, including power and information asymmetries. From a sometimes marginalised “policy” voice of 70, speaking to an operational giant of 14,000 in NZDF, the Ministry has begun to reposition itself as a respected system player, across the security and defence sectors, which in turn are increasingly coherent, through changes led by DPMC. Its advice as lead civilian advisor on defence and security matters is sought and respected. It has neither negotiated differences of view out to the point of blandness nor been strident or adversarial in pressing its perspectives. The relationship at senior levels between the Ministry and NZDF is strong, as it is with the wider defence and security system. This has required a sophisticated combination of courage and relationship skill, while balancing both directive for pace and results and facilitative for bringing staff and stakeholders along. The PIF reviewers wrote to date the transformation journey within the Ministry has been an extraordinarily courageous, focused and systematic effort. In January, Secretary of Defence Helene Quilter announced the appointment of Air Vice- Marshal Mike Yardley, then Chief of Air Force, as Deputy Secretary Acquisition to lead a new five-member Acquisition Leadership Team.

78 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 4.60 4.27 sBudget performance & value for money 4.50 3.60 sThe Department’s quality of service delivery 4.40 3.80 sThe overall performance of the Department 4.75 4.29

Address: Level 4, Freyberg House, 2-12 Aitken Street, PO Box 12703, Wellington, 6144. Ph: (04): 496-0999. Fax: (04): 496-0859. E-mail: [email protected] Web: www.defence.govt.nz Senior Staff: Minister In Charge Gerry Brownlee. Secretary of Defence Helene Quilter. Deputy Secretary of Defence Policy and Planning Division Tony Lynch; Deputy Secretary Acquisition Mike Yardley; Deputy Secretary Evaluation, Alicia Wright; Chief Financial Officer/Deputy Secretary Finance, Bryan Westbury; Deputy Chief Executive, Strategy, Governance and People, Bryn Gandy; Acquisition Leadership Team: Assistant Secretary Acquisition, Huntley Wright; Programme Director Maritime, Jon Finderup; Programme Director Land, Richard Burn; Programme Director Air, Neil Hygate; Chief Advisor, Command, Control, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR), Hema Sridhar. Staff: Current: 60.

Budget Update $301m for Defence Force to purchase new equipment.

79 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Ministry Of Education

PURPOSE: The Ministry of Education is the steward of the education system, supporting teachers, students and families to raise educational achievement in schools. It administers funding for pre-school services, schools and tertiary providers, provides special education services, licenses early childhood education providers, helps schools function by providing property, transport and information technology services and gathers and analyses data to inform decision-making in the education sector.

„„ A new Education Act is due this year. „„ The first of the controversial ACT-promoted charter schools closed.

Some 750,000 children are at school this year. For more than 10,000 five-year-olds, it will be their first year. Over the year about another 52,000 children will start as they turn five. Almost all of them will have the advantage of having attended early childhood education, which gives them a great head start. Sixteen years ago, 90% of children starting school had attended early childhood education. By the mid 2015 the proportion had risen to 96.2%. Education Minister Hekia Parata says Maori and CEO PROFILE

Pasifika families in particular are seeing the advantages of early Peter Hughes started as Sec- learning, and have the fastest increases in ECE participation. retary for Education: Peter Participation rose 15.4 percentage points for Pasifika children and Hughes in February 2013. He has had a career of more 10.9 percentage points for Maori children between 2000 and 2015. than 30 years across the state sector, and returned from The Government is proud of the recent report by the Paris-based academia to take up the job at Organisation for Economic Cooperation and Development which a time of great difficulty. Trans- ranks New Zealand in the top two OECD countries for expenditure Tasman Magazine named him Government Department CEO on both school and tertiary education as a percentage of total public of the year in 2010 and 2011. expenditure. The annual survey shows 30% of adult New Zealanders In 2012 he was made a Com- aged 25 to 64 have a degree compared with the OECD average of panion of the New Zealand Or- der of Merit for services to the 28% and tertiary qualification rates for women in New Zealand are State and in 2013 was voted among the highest in the countries studied. New Zealand also has Wellingtonian of the Year in high levels of people studying for vocational qualifications. the Government category. His stellar career continues. It says the number of 15 to 19-year-olds staying in secondary school He began as a clerk at the has increased noticeably in recent years and the number of 15 to Department of Social Welfare and his roles have included 19-year-olds not in education, employment or training has declined providing policy advice, work- over the same period. New Zealand posted its lowest-ever level of 15- ing in the field and senior 19 year olds not in education, employment or training. New Zealand executive management. De- fining Moment: Managing is in the top third of OECD countries for early childhood education communications and media participation, funding and teacher-child ratios and is one of only nine relations circuses was the OECD countries where salaries for experienced tertiary-educated biggest public focus. But con- cerns around parents’ cost of teachers compare favourably with salaries for people with equivalent education and whether the qualifications in other occupations. Teacher salaries have risen faster school system remains world in New Zealand than the OECD average since 2005. class bubble away.

80 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Tertiar y Education Minister Steven Joyce said the results demonstrate New Zealand’s commitment to equipping students with the skills needed for the 21st century. Minister Parata said the gains show the Government’s efforts to deliver a quality education to all New Zealanders are bearing fruit. The Government is pushing ahead with school building. Over the Christmas-New Year holidays, work proceeded on around 100 significant projects of over $3m and 23 larger projects, valued at more than $785m. Another 74 projects in the $3-15m range currently underway through the investment of more than $4bn in school property maintenance, growth and modernisation nationwide over the past seven years, a 30% increase on the previous seven years. Associate Minister Nikki Kaye points out when new schools are built or redevelopments carried out, there was an opportunity to create innovative learning environments with the latest IT infrastructure to support digital learning; high quality acoustics, lighting and heating, to help students concentrate on learning; and flexible learning spaces which can provide an open-plan layout or be closed off into traditional classrooms. Ten major redevelopments have been approved and are currently at the planning or design phase, including Western Springs College in Auckland, Aotea College in Porirua and Marlborough Boys’ and Girls’ Colleges in Blenheim. Work began this year. Five new schools opened – Rototuna Junior High School in Hamilton; and Marshland School, Waitakiri School, Rawhiti School and West Rolleston School, all in Canterbury. Kaye says a more comprehensive approach is being put in place to meet the growing demand for land for schools. An additional 107,000 school students expected in Auckland alone by 2040. She says the Ministry of Education is ensuring it has greater flexibility to obtain land for schools. Other areas with sustained growth are Hamilton, Bay of Plenty and Queenstown. In many urban areas there are real pressures on land availability. So the Ministry has looked at how it acquires land for schools and is looking further ahead, 20 to 30 years in some cases. Kaye says it is important the Ministry has a place at the table when local authorities and infrastructure providers carry out planning for high-growth areas. Regional long-term plans haven’t always included planning for schools. The Ministry will seek to work more closely with local councils and other agencies to share forecast and planning data, so they get an earlier picture of where new schools and other infrastructure might be needed. The new policy will enable greater flexibility in the acquisition of land for changing education provision. The Government is committed to being ahead of growth in Auckland and elsewhere. In the last three budgets it has committed funding for six new schools in Auckland and is looking at more over the next 10 years. Charter schools promoted by ACT under its agreement with National, have been broadly attacked by the teaching unions and the Labour Party. The Whangaruru school became the first casualty when Education Minister Hekia Parata terminated Nga Parirau Matauranga Charitable’s agreement to run the school. The Education Review Office said it had concerns over student achievement, poor teaching, and inadequate curriculum leadership. The curriculum did not and had not been consistent with the broad ranging vision articulated in the contract. A lack of basic literacy and numeracy underpinned qualification credits achieved. Even with the resources and support provided, gains in educational outcomes were unlikely to be significant and future prospects were equally small. All 39 students attending the failed charter school found places in other schools or moved on to further study, according to the Ministry of Education.

81 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. In December the Government said it would build and maintain six new schools using a public private partnership. Ministers say the public private procurement model is an innovative and proven way to spend taxpayer money efficiently, offering the significant advantage of having professional facilities managers take care of school property, freeing up schools to focus on teaching and learning. The six schools in this project will be developed to meet population growth in Auckland and Hamilton, or as part of the Christchurch Schools Rebuild programme. The Government says the Ministry of Education is now well versed in the use of PPPs, having already delivered Hobsonville Point Secondary and Primary schools under New Zealand’s first signed PPP contract. The Ministry estimates the up-front cost of building these schools using conventional procurement would be between $150m and $200m. Using PPP could deliver savings of 3 to 8% over the life of the project, compared to the way it usually procures and maintains new schools. Last year the Ministry signed a contract with consortium Future School Partners for a second PPP contract for four schools in Auckland, Canterbury and Queenstown. The contract will save an estimated $27m over the next 25 years, which is enough to build two small primary schools. The Government has launched a major review of legislation governing the education system. Minister Parata said when the Tomorrow’s Schools reforms were introduced in 1989 they transformed the way education was administered with local communities rather a centralised bureaucracy running schools. The proposed update draws on the recommendations of the Taskforce on Regulations Affecting School Performance which reported in 2014 the Act focused on structures and administration. She said these were legally necessary but the real emphasis needs to be on raising the achievement of all students. Last year she called for public submissions. More than 1800 were received over six weeks. Teachers made the most but significant numbers were made by parents, business groups, community organisations and students. A high quality education needed an Act with a clear focus on children and young people, made clear what the system is looking for, enabled collaboration and flexibility, and fully engaged parents, whanau and local communities. The submissions showed New Zealanders want their children to receive a well-rounded education to equip them to play a full part in the modern world. The public believed some changes are necessary to ensure education legislation remained fit for purpose. Student progress was seen by many as the most important indicator of school performance. Proposals to write the goals of education and the roles and responsibilities of Boards of Trustees into the Education Act also received significant support as did proposals to make cohort entry easier, simplify school planning and reporting cycles and make attendance compulsory once a child under the age of six starts school. Another 444 schools have formed themselves into Communities of Learning, taking to 793 the number which has agreed to work systematically together to raise student achievement. The Minister describes it as “a terrific development because it means that one year into the four-year roll out of the programme about a third of our students are in line to benefit from their schools sharing expertise and resources.” There are now 96 communities with more than 250,000 pupils. They are funded through the Government’s $359m “Investing in Educational Success” initiative and are designed to systematically lift the quality of teaching and learning, communities receive additional funding to enable teachers and principals to share expertise and best practice.

82 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Katrina Casey will become the Acting Chief Executive of the Ministry on July 4 when the current top man Peter Hughes becomes State Services Commissioner. Casey has been the Education Ministry’s Deputy Secretary Sector Enablement and Support since 2012. She has previously worked in Corrections, IRD and the old Ministry of Works and Development.

INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 5.93 6.13 sBudget performance & value for money 4.43 4.27 sThe Department’s quality of service delivery 4.32 4.07 sThe overall performance of the Department 4.56 4.29

Address: Matauranga House, Level 1, 33 Bowen St Wellington 6011. PO Box 1666, Wellington, 6140. Ph: (04): 463-8000. Fax: (04): 463-8001. E-mail: [email protected] Web: www.minedu.govt.nz Senior Staff: Minister In Charge Hekia Parata. CEO Peter Hughes. Deputy Secretary Priority Education Assignments: Apryll Parata; Deputy Secretary Sector Enablement and Support, Katrina Casey; Deputy Secretary, Graduate Achievement, Vocations and Careers, Claire Douglas; Deputy Secretary Early Learning and Student Achievement, Lisa Rodgers; Deputy Secretary, Education System Performance, Dr Andrea Schöllmann; Head of Education Infrastructure Service, Kim Shannon; Deputy Secretary People, Capability and Resources, Zoe Griffiths; Deputy Secretary Strategy, Planning and Governance, Ellen MacGregor-Reid and Raukura/Chief Advisor Te Ao Maori - Te Raumawhitu Kupenga. Staff: Current: 2,517.

Budget Update $1.4bn package. $397m for early childhood education funding, $43m to target under- achieving students, $42m for special needs. Nine new schools to be built. Additional teacher aides in schools through new funding worth $15.3m over four years

83 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Ministry For The Environment

PURPOSE: Principal adviser to the Government on the environment at home and on international environmental matters. It is not involved in day-to-day environmental management but provides environmental management systems, including laws, regulations and national environmental standards; national direction through national policy statements and strategies; guidance and training on best practice and information about the health of the environment.

„„Climate change and managing freshwater are the major challenges. „„The internationally-lauded Kermadec Ocean Sanctuary faces problems at home.

Few Ministries or departments have more critical stakeholders than MFE. They range from NGOs, observers, to experts authoritative or otherwise, In part this is because of its range of activities, interests and national concerns. However, in her first few months CEO Vicky Robertson has injected new energy and confidence CEO PROFILE into a Ministry which in recent years has not been at the top of Vicky Robertson, appointed Ministers’ most-favoured lists. She has brought a solid scientific Secretary for the Environ- focus, boosted Maori and public engagement and more closely ment only in April 2015 is aligned MFE’s work with the Government’s business growth one of the rising stars in the public service who has al- agenda while remaining a strong champion for the environment. ready made her mark on what had become something of a MFE also has an energetic Minister in Dr Nick Smith. Some “cranky” organisation. She is colleagues think he has too much focus on the portfolio at the internationally experienced expense of others. This is understandable though, given MFE’s with a background in law and economics and champions broad range of responsibilities - and a vocal opposition inside inclusive growth, transpar- and out of Parliament. Paula Bennett has taken over the climate ency and accountability in change portfolio with the departure of Tim Groser from politics to the state sector. Before MFE, diplomacy as New Zealand’s Ambassador to the US. she was a key member of the Treasury’s senior leader- In her first annual report, CEO Robertson said the focus was on ship team holding positions ranging from Deputy Chief improving the outcomes framework. New environmental outcomes Executive to Chief Operating and targets are being developed to help MFE achieve its mission: Officer. Defining Moment: Environmental stewardship for a prosperous New Zealand and to Managed to keep the Land Water Forum process going make clear what is important over the long term for New Zealand’s despite strains. Emissions economy and environment. These will outline MFE’s view on what it Trading Scheme reform and wants to achieve over the next 15 to 30 years. The new framework will the robustness of National drive the future planning processes, ensuring the work undertaken is Environmental Reports will be a pressure point. of high value, with strategic intentions driving actions. MFE strengthened its scientific credentials by appointing Dr David Wratt, one of New Zealand’s most distinguished scientists with international standing and a 30 year career in climate and meteorology, to the new position of Departmental Science Advisor. A new leadership team has been installed showing need for change with key appointments from outside of the organisation

84 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. MFE’s priorities are wide: seeing New Zealand’s fresh water well governed and sustainably managed to ensure the maximum benefit possible for present and future environmental, cultural, social and economic values; environmental management systems are strengthened and supported to achieve the greatest overall environmental, economic, social and cultural benefits and New Zealand becomes a successful low-carbon society resilient to climate change impacts on its climate, economy and lifestyle. MFE will work closely with Natural Resources Sector Government colleagues, the Land and Water Forum, and other organisations and agencies to achieve its goals. Robertson looks forward to leading MFE as an increasingly outwardly-focused organisation, equipped with a strong evidence base, and well positioned to carry out its role as stewards of the wider environmental management system to deliver better results for all New Zealanders. In March Ministers launched a new road map for scientific research. This will look for answers to important questions about how we care for New Zealand’s natural world according to Environment Minister Nick Smith and Conservation Minister Maggie Barry. Dr Smith said a unified approach to the science will help us make research more efficient, targeted at tangible goals. MFE and Department of Conservation science teams are working together on the proposal, with a draft document for public consultation due in mid-year. Officials are talking to stakeholders and the science community about what they think the big science questions will be, and where research efforts should be focused over the next two decades. An independent Strategic Advisory Group led by the Prime Minister’s chief science advisor, Sir Peter Gluckman, and including representatives from conservation groups, Crown Research Institutes and academia will assist with the draft. Dr Smith said everything is on the table for consideration – including how we care for our land, freshwater and marine environments and protect New Zealand’s biodiversity. MFE is leading work on fresh water policy. Dr Smith and Primary Production Minister Nathan Guy have issued a consultation document outlining steps the Government proposes to improve the management of fresh water. The objectives are better environmental outcomes, enabling sustainable economic growth to support new jobs and exports, and improving Maori involvement in freshwater decision-making. This is part of long-term reforms based on supporting communities to identify and test solutions which meet their own challenges within a national framework. Water quality is generally good but there are problems. Over the 25 years of the Resource Management Act 1991, councils have significantly reduced pollution from point source discharges through pipes for the likes of factories, municipal sewerage schemes, and from dairy sheds. Also a fraught area balancing the desire of NGO’s with the reality of the cost to local Government to clean up historical issues. However, the system has not worked in dealing with more difficult problem of diffuse pollution. This includes nutrients, pathogens and sediments from intensive farming and from stormwater in towns. The Government’s approach has been to work collaboratively with stakeholders, provide clearer national direction, and significantly invest in clean ups and water infrastructure. The lower dairy payout may have more influence in preventing increased pollution than any policy statement. A key aim has been to improve iwi involvement in freshwater decisions. These proposals are the product of intensive and continuing dialogue with the Iwi Leaders Group. Manawhakahono a rohe provides for iwi to enter into agreements with councils on how Maori can better participate

85 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. in decisions on fresh water. Te Mana o te Wai sets overarching principles for the National Policy Statement for Freshwater Management. Ministers will invest $100m to improve water quality in lakes, rivers and aquifers. The proposed funding criteria include ensuring proper measures are in place to prevent any further deterioration, that key stakeholders and iwi are involved, that others are contributing to the work, and that any funding proposal is backed by robust scientific support and advice. Effectively managing natural resources is critically important to New Zealand’s current and future economic, environmental, cultural and social well-being. The development of the resource management reform package, first announced in 2013, continues during with a focus on refinement and non-legislative measures MFE is charged with making improvements to the way fresh water is managed in New Zealand. In August 2014, a framework was introduced into the National Policy Statement for Freshwater Management to enable councils and communities to better manage our freshwater resources. The Ministry continues to work with iwi leaders and the Land and Water Forum to develop options for water allocation, including addressing iwi/hapu rights and interests. Two technical documents have been released to help New Zealanders engage with the second phase of the Emissions Trading Scheme (ETS) review. The Forestry technical note seeks feedback on the way the ETS and forestry sector interacts and how it will contribute to New Zealand meeting its future international targets The second report covers administrative issues including compliance requirements, exemptions under the Climate Change Response Act 2002, and the public’s access to information. Bennett says if New Zealand is to take the next steps to tackle climate change, there has to be more investment in tree planting and big emitters making a greater contribution. The ETS is a key tool to drive these changes, and the second phase of the review will ensure it is fit for purpose to help New Zealand achieve its ambitious 2030 target. In July the Government announced the post-2020 climate change target is to reduce greenhouse gas emissions to 30% below 2005 levels by 2030. The target was tabled with the UN in advance of the Paris meeting in December and will remain provisional until the new international agreement is ratified. At the UN Climate Change Conference in Paris John Key announced New Zealand will commit another $20m to the Global Research Alliance on Agricultural Greenhouse Gases. Half of New Zealand’s emissions are from agriculture where there are not yet cost effective ways of reducing emissions. He said the Alliance is doing great work. The sooner technology becomes available, the sooner farmers can start using it to further reduce emissions of methane. The $20m is on top of New Zealand’s initial investment of $45m. The 620,000 square km Ocean Sanctuary in the Kermadec region will be one of the world’s largest and most significant fully-protected areas, preserving important habitats for seabirds, whales and dolphins, endangered marine turtles and thousands of species of fish and other marine life. It will cover 15% of New Zealand’s Exclusive Economic Zone, an area twice the size of its landmass, and 50 times the size of the largest national park in Fiordland.

86 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 4.58 3.75 sBudget performance & value for money 3.60 3.55 sThe Department’s quality of service delivery 4.91 3.45 sThe overall performance of the Department 3.75 3.60

Address: Environment House, 23 Kate Sheppard Place, PO Box 10362, Wellington, 6143. Ph: (04): 439-7400/0800-499-700. Fax: (04): 439-7700. E-mail: [email protected] Web: www.mfe.govt.nz Senior Staff: Minister In Charge Dr Nick Smith. CEO Vicky Robertson. Cheryl Barnes, Deputy Secretary Organisational Performance & Operations, and Chief Operating Officer; Jane Frances, Deputy Secretary Natural Resources Policy; Penny Nelson, Deputy Secretary Sector Strategy and Che Wilson, Tumuaki. Staff: Current: 302.

Budget Update $100m to clean up New Zealand’s rivers, lakes and aquifers.

87 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Environmental Protection Authority

PURPOSE: The Environmental Protection Authority (EPA) is the national environmental regulator, established as a Crown entity under the Environmental Protection Authority Act 2011. Its objectives are to undertake its functions in ways which contribute to the efficient, effective and transparent management of New Zealand’s environment and natural and physical resources and enable New Zealand to meet its international obligations.

„„The EPA approved release of the genetically modified organism Pexa-Vec, for a clinical trial for the treatment of a type of liver cancer, the first GMO approved as a human medicine since the Act was passed in 1996. „„New Government regulations have been introduced to manage waste and pollution in the Exclusive Economic Zone covering discharges of pollutants and waste from offshore platforms and ships in the six million square kilometres of ocean in the EEZ. „„The first comprehensive, independent and nationwide set of statistics on the environment have been published.

CEO PROFILE When the EPA appointed Dr Allan Freeth as CEO to succeed Rob Dr Allan Freeth became CEO Forlong, there was an outcry from the anti GE brigade. Here, they in September 2015. He has extensive experience of both claimed, was someone who championed genetically modified governance and management, organisms from his days with Wrightsons, a stock and station and is well known across New agent. No matter he has a BSc (1st class Honours) in Zoology, a Zealand’s business, cultural and public sectors. Previous Doctorate in Philosophy in Population Genetics, and a MBA with managerial roles include sev- Distinction, he was the ogre within. en years as Chief Executive of TelstraClear Limited and five But his performance and that of the EPA, has belied the critics. A years as Managing Director of swathe of environmental protection reports have been issued. The Wrightson Limited. He is Chair Government is consulting publicly on changes to regulations on of Triplejump and Chairman of what constitutes a GMO following an EPA discussion paper on the Advisory Board of Global Film Solutions. Dr Freeth was the subject. Environment Minister Dr Nick Smith says defining a Chair of Housing New Zealand GMO is fraught with difficulty. Corporation until July 2015Dr Freeth holds a BSc (1st class There is a spectrum of artificial techniques which change the Honours) degree in Zoology, genetic composition of plants and animals – from selective a Doctorate in Philosophy in breeding, to methods using radiation and chemicals which Population Genetics, and a MBA with Distinction. increase mutations, to quite sophisticated chemicals able to make specific targeted changes. There is no international consensus on where the definition should exist between what is and is not a GMO. Biotechnology has moved on from when the regulations were put in place in 1998. Some argue there should be a broader review of these definitions and new techniques which do not introduce new genetic material and pose minimal risk should also be excluded. The Government decided to take a cautious approach to the proposals in the discussion paper. It wants to make the existing system workable and to take a wait-and-see approach on international developments before making any more significant alterations to the legislative framework.

88 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Dr Smith says there are some who prefer New Zealand is GM-free. The Government’s view is a blanket ban on such technologies would deprive New Zealanders of bio-technologies like those for this potential liver cancer treatment. The Government has confidence in the regulatory system which has these decisions being made on sound scientific grounds. The EPA has a wide range of environmental management responsibilities, covering emissions trading, hazardous substances, new organisms, marine consents and permitted activities in the Exclusive Economic Zone and Continental Shelf (EEZ), and supporting Boards of Inquiry considering proposals of national significance under the Resource Management Act. It administers applications for major infrastructure projects; regulates new organisms (plants, animals, GM organisms) and hazardous substances and chemicals; helps industries work safely with hazardous substances; administers the Emissions Trading Scheme and New Zealand Emission Unit Register and manages the environmental impact of activities in the EEZ, including prospecting for petroleum and minerals, seismic surveying and scientific research. From July 1, new statutory process, brought in under the Government’s simplification of the regime for managing hazardous substances will provide a legal determination about a substance giving certainty about its status, HSNO classification and whether it matches an existing approval. It replaces the present “Status of Substance” (SoS) service provides informal advice about whether a product fits existing approvals. The new service will provide a statutory determination, a formal, legally binding and notified decision. EPA contributes to the economy by managing the environmental and health effects of the applications it processes and ensuring robust environmental and safety standards are in place. This includes managing hazardous substances applications for the health of people and the environment as well as protecting the export industry. The EEZ application process contributes to the offshore exploration and mining sector. EPA’s work also relates to global environmental adversely impacting on New Zealand such as climate change, by reducing greenhouse gas emissions and the use of ozone-depleting chemicals. Chair Kerry Prendergast says the EPA is committed to delivering better public services by taking a joined-up approach to resolving issues and seeking to achieve a more seamless public service overall. In anticipation of the new Health and Safety at Work Act and amendments to the Hazardous Substances and New Organisms Act 1996, the EPA delegated a range of workplace- related hazardous substance functions to WorkSafe New Zealand, to ensure a smooth transition to the workplace safety regime. In Parliament the Government fought off an attempt by the Greens to “correct the defect” in the EPA’s legislation with an amending Bill to insert a new objective the Environmental Protection Agency must aim “to protect, maintain and enhance” New Zealand’s environment. Earlier, the Local Government and Environment Select Committee reported the Bill to be unnecessary.

Address: Level 10, 215 Lambton Quay , Wellington 6011,Private Bag 63002, Wellington 6140. Ph 64 4 916 2426, Fax: 64 4 914 0433. Email: [email protected] Senior Staff: Dr Nick Smith, CEO, Dr Allan Freeth, Acting General Manager, Hazardous Substances and New Organisms, Ray McMillan, General Manager, Policy and Legal, Mark Patchett, Manahautu, Kaupapa Kura Taiao, Doug Jones, Acting General Manager, Climate, Land and Oceans, Richard Johnson, Acting General Manager, Finance and Systems, Liana Lloyd- Simpson. Staff: Current: 54.

89 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Ministry Of Foreign Affairs And Trade

PURPOSE: the principal adviser on foreign and trade policy, New Zealand overseas development assistance programme, providing consular support for New Zealanders offshore, maintaining a global network of embassies, high commissions (in Commonwealth countries) and consulates.

„„Stability, confidence and cohesion has broken out inside MFAT. „„As New Zealand’s term on the UN Security Council winds down, it has a new challenge supporting former PM Helen Clark’s bid to become the UN’s next Secretary-General.

Visitors report a sense of calm and purpose around MFAT. CEO Brook Barrington has unwound many of the controversial changes introduced by his predecessor. He wisely appointed experienced diplomat Bede Corry as deputy CEO to take over much of the policy work while he handles management. He is cautiously rebuilding MFAT’s once-formidable corporate memory and capability. With the departure of Tim Groser to Washington DC as ambassador, his trade portfolio has been assumed by Todd McClay CEO PROFILE who is proving a quick and adept learner. Foreign Minister Murray Dr Brook Barrington is a McCully has returned to his standard workaholic mode after a career diplomat and returned nasty brush with melanoma and a hospital super-bug. Some worry to MFAT after holding deputy- secretary roles in the Minis- about his health. He retains the confidence of the PM. He’s back tries of Justice and Defence. on the treadmill of ceaseless travel - this week the Pacific, next Defining Moment: The Se- week the Middle East. He takes a deep and very personal interest curity Council membership and promoting Helen Clark’s in the development of foreign policy. Secretary General candi- This year there will be a raft of new ambassadorial appointments dacy. TPPA and other deals a priority. announced. This is stretching both MFAT and the fortitude of Minister McCully who takes a close personal interest in the process and the individuals. One consequence of the campaign to secure a non-permanent seat on the UN Security council was a spread of diplomatic posts. For example, we now have a representative to the African Union in Addis Ababa, Ethiopia. Will this be needed post Security Council? Within MFAT the rotational principle of posting has been re-introduced. This means officers cycle through offshore and onshore posts. It also means the end of the hated designation of “affected” for those on overseas postings. Under this regime, if there was no position available back in Wellington at the end of a posting, exit was the only option. It broke the unintended consequence where officers were reluctant to take a posting knowing there might not be anything awaiting on return. At the same time, the ranks of experienced diplomats on home posting has thinned. By some counts, around 40% of those on home postings have been with the Ministry for less than five years. The Minister and by extension the Government has maintained posts offshore for retired (some say expired) politicians. Groser replaced the ailing Mike Moore in Washington. A replacement is

90 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. on the way for Dr Lockwood Smith in London. It is possible a retired Minister may take Canberra when Chris Seed, a career diplomat, finishes his term. If negotiating the Trans-Pacific Partnership Agreement was not hard enough, then selling it at home is proving even more difficult. Unlike any previous free trade agreement, the TPP has been subjected to an orchestrated campaign of criticism led by academics underpinned by NGOs and activists. Some tactics employed have surprised hardened diplomats. There has been talk of death threats. Deliberate disinformation has been spread. Critics have made adroit use of social media. Some think the Government should have done more to sell the TPP in advance. Groser claimed this was difficult as tactics could not disclosed before or during the negotiation. He had a formidable intellectual command of the process and could be dismissive of criticism. Others seek relief mindful of attitudes towards free trade by the principal contenders in the US presidential elections suggests prospects of its being ratified by Congress are remote. Apart from the TPP, negotiations continue on a free trade agreement with the European Union while Minister McCully has been back in the Middle East pushing Gulf leaders on concluding an FTA with NZ, and re-opening trade links with Iran. The Pacific remains a diplomatic and development priority. Promoting stable Government and sustainable economic development are cornerstones. McCully is a frequent visitor. He knows more leaders and key influencers in the region than most. He responds rapidly to the region’s regular cyclones and calamities. He says Asia-Pacific offers boundless opportunities. By 2020 the number of “middle class” consumers in Asia is expected to triple to 1.75bn. This presents a massive opportunity for both New Zealand exporters and also tourism operators. The focus goes beyond trade and extends to political and security considerations. Instability in the region now affects New Zealand’s interests more directly than ever before. Regional organisations designed to build political, security and economic cooperation, such as APEC and the East Asia Summit, are vital for New Zealand. They build the region’s collective sense of well-being, trust, and resolve to address challenges to regional stability and prosperity. Heightened tensions in the South China Sea highlight the intersection between economic and security interests in the region. A particular cause of increased strain has been reclamation and construction activity and deployment of military assets in disputed areas. New Zealand regards all of these activities as unhelpful regardless of the party responsible. While New Zealand does not take a position on the various territorial disputes, it does have a stake in how these disputes are managed. As a country with one the largest EEZs in the world, the UN Convention on the Law of the Sea is particularly important. So are the international legal principles of freedom of navigation and overflight. These are vital for New Zealand’s livelihood. McCully says he is a realist and an optimist on the role and aspirations of China; a realist because the emergence of a huge economic power was always going to come with ambitions and aspirations to match, and some of these inevitably compete with established players and interests. Managing the process is the great challenge facing ASEAN regional diplomacy. The Minister remains optimistic because China has huge domestic challenges to meet. Sustained economic

91 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. growth is critical to bringing about the internal transformation is their key goal. And sustained economic growth can occur only in an environment of peace and stability in this region. McCully has also made the UN and the Security Council a personal mission. He gives credit to the council for its role in the Iran nuclear agreements. The Council is not dealing with the most pressing global security issues of our time. A particular concern is the Middle East peace process. He wants UN Security Council to shoulder its responsibilities on the Middle East Peace Process. It has been seven years since the Council has even passed a resolution on this question. While we wait, the situation on the ground gets worse, violence has escalated, and the viability of the two state solution is disappearing as a consequence of Israeli settlement activity. New Zealand is using its term to encourage a sharper focus on conflict prevention. McCully notes there is something seriously wrong when $8bn a year is spent on peacekeeping and a further $10.5bn providing humanitarian support for victims of conflict, but virtually nothing on the prevention of conflict. He has consistently encouraged his Ministry to aspire to be the world’s centre of excellence in Pacific affairs. It is the greatest comparative advantage that New Zealand offers in the international space: our close relationship with the Pacific. We have recently sought to leverage our experience in the region by applying our skills in small island developing states outside the region, in the Caribbean and Indian Ocean. We used our presidency in the Security Council to hold an event on the security challenges faced by Small Island Developing States to give small island developing states, which constitute nearly a quarter of the UN membership, a chance to have their voices heard in the Council. Security and development challenges can have regional consequences. The most obvious being New Zealand and Australia troops, military assets, police and funding are called upon to help pick up the pieces. And more importantly, the aspirations and quality of life of Pacific peoples are seriously curtailed. In March 2013 New Zealand and the EU co-hosted the Pacific Energy Summit to address energy issues and match donors with the action plans developed by Pacific governments. It resulted in a funding envelope of $635m and kick-started over 50 renewable projects across the region. New Zealand’s Pacific energy portfolio is now in excess of $120m in seven countries. In Tokelau, all three atolls previously wholly dependent upon fossil fuels for electricity are now effectively 100% renewable. The Northern Cooks are 100% and all but one island in Tuvalu. We are supporting further progress in the larger islands in the Cooks, Tuvalu and Samoa and we have renewable energy projects underway in Tonga, Kiribati, the Solomon Islands and Papua New Guinea. New Zealand working with Pacific Island partners to bring new submarine cable connectivity to the region. World class internet is the key, not just to a successful business environment for sectors like tourism, but also in improving health and education outcomes. In terms of economic viability, along with tourism, increasing revenue streams from fisheries is essential if we want to move the Pacific away from a reliance on development assistance. MFAT is funding the new New Zealand Institute for Pacific Research which will work in support of Pacific governments and regional agencies. This will focus on producing hard-headed analysis to support sustainable economic development. He says a need had been identified for more targeted research on the Pacific, to underpin development initiatives and support Pacific decision makers

92 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. The Government has provided a cornerstone investment of $7.5m over five years to establish the Institute and develop an initial programme of research. The NZIPR will be based at the University of Auckland. The research programme will be delivered by a consortium led by the University of Auckland including Otago University and the Auckland University of Technology. It describes itself as “New Zealand’s thought leader in Pacific Research.” The 2014/15 vote foreign affairs and trade was $402.4m and $588.2m on overseas development aid assistance.

INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 4.50 4.31 sBudget performance & value for money 4.14 4.00 sThe Department’s quality of service delivery 4.13 4.36 sThe overall performance of the Department 4.33 4.18

Address: 195 Lambton Quay, Private Bag 18 901, Wellington. Ph: (04): 439-8000. Fax: (04) 472-9596. E-mail: [email protected] Web: www.mfat.govt.nz Senior Staff: Minister In Charge Murray McCully. CEO Brook Barrington. Bede Corry, Deputy Chief Executive; John McArthur, Principal Capability Adviser; Andrea Smith, Deputy Secretary Americas and Asia Group; David Walker, Deputy Secretary Trade and Economic Group; Jeff Langley, Acting Deputy Secretary Australia, Pacific, Europe, Middle East and Africa Group; Jonathan Kings, Acting Deputy Secretary International Development Group; Julie Townley, Group Manager Human Resources; Lucy Duncan, Deputy Secretary Multilateral and Legal Affairs Group; Nigel Prince, Group Manager Services. Staff: Current: 821.

93 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Ministry Of Health

PURPOSE: The Ministry’s core functions are to provide advice to the Minister of Health and the Government on health issues; provide regulatory functions protecting the public; purchase national health and disability support services; provide health sector information and payment services and support the development, consultation, and implementation of legislation.

„„The Government continues to boost health spending. „„Obesity, especially in children, remains a target although the Government remains wary of a sugar tax. „„A budget blow-out on the Ministry’s refurbished head office brought an apology from the Director-General.

Health Minister Dr Jonathon Coleman has confirmed his status as one of the best-performing Ministers in the Key Cabinet. It helps, of course, that he is a GP. It might be a hindrance in lesser hands. CEO PROFILE He is enthusiastic and energetic. He lets the Ministry get on with Chai Chuah was appointed the job. In its turn, the Ministry runs a “no surprises” policy. Director-General of Health in March 2015, after acting Director-General Chai Chua has focused on ramping up the in the role for 16 months. Originally from Malaysia, performance of both the Ministry and District Health Boards. Chai studied Commerce at However, he had to apologise after budgeting miscalculations over Canterbury University before a $24m Wellington head office refurbishment signed off by Cabinet commencing a career with PricewaterhouseCoopers. Ministers in 2014. This was to be funded from cash reserves but other He has been a prominent calls were made on the money, leading to a request for more from figure in the New Zealand the Government. Accountants PriceWaterhouseCoopers reported a health sector for 25 years, lack of documentation relating to the discussions, decisions and first with Canterbury DHB where he was Chief Finan- relevant approvals relating to this project, other capital bids and cial Officer, Chief Operating capital rationing and funding decisions over the time frame of the Manager and acting Chief project. The Ministry said the forecasting error did not affect health Executive. Defining Mo- ment: The Budget problem of service funding and relates only to its accommodation operating not properly planning for the costs. Director-General Chuah said when the issue was brought cost of office changes was an to him he immediately commissioned the PWC report and took embarrassment. Not finding responsibility for fixing the mistakes. The PWC review found there ways to deal with the wider system’s cost pressures will was no single cause for the error, but highlighted financial capability be a major problem. issues within the Ministry, including financial forecasting and the failure to consider all available options for funding the Wellington Accommodation Project. Surprisingly given the size and risks associated with Health funding , the Ministry’s financial officer was only in the third tier of management. Following the PWC report this was amended and the CFO moved up to the second layer. The Director General described this as a “new finance function.” Treasury provided an officer while the Ministry recruited a CFO. He said affordable funding for the Accommodation Project is also being secured via a fiscally neutral leasing agreement, without the need for any additional funding from Government. We anticipate the project will be completed within budget by the end of this year. The Ministry believes these

94 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. steps will increase both capability and accountability for its management of public funds. Dr Coleman says delivering better health services is a top priority for this Government. He claims it has made health its number one funding priority. Despite economic challenges, he says it has increased health funding each year. Claims by critics health funding has been cut are incorrect. Under this Government health expenditure share of GDP has averaged 6.5%. Coleman says the Government obtained $400m extra to grow health services this year. Health received $15.9bn - the largest share of new funding in Budget 2015. The Govt is investing around $1.7bn over the next four years for new initiatives and to meet cost pressures and population growth – including more funding for elective surgery, palliative care, and free doctors’ visits for children under 13. Progress on the updated NZ Health Strategy is a priority. Coleman wants to see more integrated services delivered in the community so people can get the care they need away from hospitals. He wants to ensure speedier access to elective surgery. He’s working to quantify un-met demand to better understand the outcomes of GP referrals to specialists. The health targets remain a key focus. They are about delivering better and quicker access to important health services and not just numbers. The Minister wants continued progress on non-communicable diseases. The largest health burden stems from people suffering chronic conditions. Implementing the Childhood Obesity Plan is a key focus. He is keen on widening access to medicines, and progressing the bowel cancer screening programme. New Zealand is now one of the first countries in the OECD to have a target and a comprehensive plan to tackle childhood obesity. There’s no single solution to fix it, which is why the Government implemented a plan with a range of interventions across Government, the private sector, communities, schools and families. The Government’s position on a sugar tax hasn’t changed. It is not being actively considered. A watching brief is maintained on the emerging evidence, including research from the University of Waikato and University of North Carolina. Clear strategic direction for the health sector is crucial. The Health Strategy update is a good opportunity to develop a more integrated cohesive health system, better able to meet the demands of the future. The draft covers five strategic themes - people-powered, closer to home, value and high performance, one team, and a smart system. These themes signal a focus on prevention and wellbeing, more integrated services, support for innovation, better collaboration, new ways of working to reach our most vulnerable, giving every child a healthy start, and ensuring information and services are more accessible. The Health Strategy has implications for primary care - how services are funded and how performance is measured. With the Health Strategy refresh it was timely to look at moving performance measurement from a transactional approach to one based on outcomes. The Ministry has worked closely with the sector to develop a suite of measures to provide a system- wide view of performance. A number of new measures are proposed for introduction in 2016/17: acute hospital bed days per capita; ambulatory sensitive hospitalisation rates for 0-4 year olds; patient experience of care; amenable mortality; youth access to and utilisation of youth appropriate health services; and the number of babies who live in smoke-free households at six weeks post- natal. Three of these new measures - acute hospital bed days, preventable hospitalisation rates and patient experience of care - will be financially incentivised in 2016/17, along with the two existing primary care national health targets (better help for smokers to quit and increased immunisation).

95 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. The package of performance measures and incentives are supported by a $23m per year investment. The new performance measures and incentives will be negotiated into District Health Board annual plans and Primary Health Organisation Services Agreements. E-Health solutions offer better, safer, more efficient healthcare closer to home. The Government invested $3m to support PHOs to expand the rollout of patient portals. Over 107,000 patients in 280 practices are now using a patient portal to manage aspects of their own healthcare. 16 DHBs now use telehealth to deliver services to patients in remote areas and offer guidance and training support to clinicians in far-off locations. This is supported by the ongoing rural broadband initiative rollout. Last year he launched the New Zealand Telehealth Resource Centre in Christchurch. One million electronic referrals to specialists have been successfully processed in the South Island. The South Island Electronic Request Management System allows general practice teams to submit requests for specialist advice direct to a secure database of over 700 specialists. First launched in Canterbury DHB in 2009, the eReferrals system enables a faster, smoother and more accurate transfer of patient information. Replacing hand-written referrals with eReferrals has also reduced inaccuracies and has saved time for clinicians. There are over 200 different types of referral to over 800 public and private health services South Island wide. The most common referral types are to radiology, acute demand services and orthopaedics. eReferrals were launched through the South Island Alliance, a collaboration of the five South Island DHBs, with support from the National Health IT Board. They are also available in most DHBs in the North Island. The system is being developed further to enable clinicians to track the progress of referrals. In future, clinicians will also be able to make eReferrals externally and within DHBs, for example, between hospital departments. The Government is providing an extra $20 million over the next three years to increase mental health support for people in Canterbury. Supporting the rebuild in Canterbury is a key Government priority. We’re committed to ensuring Cantabrians receive the health services they need. Cabinet has agreed to a package of initiatives to boost current mental health services in Canterbury. This includes an extra 27 FTE primary care and community based mental health workers, as well as further funding for current programmes such as telehealth and workforce wellbeing support. International evidence shows that psychosocial recovery after a major disaster can take five to ten years. Most people will recover over time with the support of their families and communities. However, some people will require more targeted interventions. The Government is also in discussions with Christchurch City Council to establish a Crown-Council Partnership Fund to support community-led psychosocial wellbeing and resilience. The Government has agreed to provide up to $1m a year for the next three years in match funding which could be allocated via the Christchurch Earthquake Mayoral Relief Fund. All DHBs now have plans in place, in partnership with their local communities, to prevent and respond to suicide at a local level. The Government is also working to improve mental health and addiction services through the service development plan, Rising to the Challenge, and the Prime Minister’s Youth Mental Health Project. Funding for mental health and addiction services has increased from $1.1bn in 2008/2009 to over $1.4bn for 2015/16. In 2014/15, the Ministry’s total income was $192.581m and its total expenditure was $193.186m, resulting in a deficit of $605,000. The Office of the Auditor-General noted a deficit was slightly

96 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. unusual for a Government department but the Ministry is generally performing well against other measures. In 2014/15, the Ministry administered $14.828bn of non-departmental appropriations, including $11.444bn to District Health Boards . Good progress in being made on the close to $1bn worth of hospital redevelopment projects underway in Canterbury. The base isolators have been delivered to the site of the Acute Services Building. This is designed to withstand and continue to operate in the event of future earthquakes, ensuring a safe environment for staff, patients and visitors. It is the largest Government project in the Canterbury rebuild. The Ministry says when combined with the new facilities at Burwood, due to open from June, and the new Outpatients facility, due to open in 2018, it represents the largest hospital redevelopment project in New Zealand’s history.

INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 4.29 3.92 sBudget performance & value for money 3.38 3.50 sThe Department’s quality of service delivery 3.54 3.50 sThe overall performance of the Department 3.93 3.80

Address: 1-3 The Terrace, PO Box 5013, Wellington 6140. Ph: (04): 496-2000. Fax: (04): 496-2340. E-mail: [email protected] Web: www.moh.govt.nz Senior Staff: Minister In Charge Dr Jonathan Coleman. CEO Chai Chuah. Bronwyn Croxson, Acting Chief Client Officer; Hamiora Bowkett, Acting Chief Strategy and Policy Officer; Cathy O’Malley, Acting Director, Service Commissioning; Phil Knipe, Acting Director, Protection, Regulation and Assurance; Giles Southwell, Acting Chief Technology and Digital Services Officer; Fergus Welsh, Acting Chief Financial Officer; Rachel Gully, Acting Chief People and Transformation Officer; Jill Bond, Executive Director, Office of the Director-General; Gabrielle Baker: Acting Maori Leadership; Jane O’Malley, Chief Nursing Officer; Andy Simpson: Acting Chief Medical Officer and Paki Ormsby: Acting Director Critical Projects. Staff: Current: 1,120.

Budget Update $2.2bn over four years, with most of that going towards district health boards as they struggle with increased demand and rising populations. There’s also cash to increase the number of elective surgeries, and to roll out a national bowel cancer screening programme. $97m for research, to help New Zealanders live longer lives, and ensure the country’s top scientists remain in this country. The biggest boost to health research funding in NZ history. $39m to give New Zealanders access to medicines through Pharmac. $124m will be provided over the next four years to help New Zealand citizens access new medicines through Pharmac.

97 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Ministry Of Justice

PURPOSE: The Ministry delivers court and tribunal services including collection of fines and reparation, provides policy advice and negotiates Treaty of Waitangi claims on behalf of the Government. It is the lead justice sector agency and also supports the judiciary.

„„The number of young people aged 10 to 16 appearing before the courts has fallen to a 20% year low. „„Total numbers of adults charged and convicted in courts has also fallen to its lowest level since 1980, reflecting the government’s focus on reducing crime and reoffending rates. „„Since 2010, 36% fewer adults and 52% fewer children and young people appeared in court according to Adult Conviction and Sentencing Statistics and Child and Youth Prosecution Statistics.

Justice Minister Amy Adams is proud of the Government’s record on reducing crime. Court statistics for the year ending December 2015 show there were 5,400 fewer adults charged compared to 2014, and 200 fewer young people appeared in court. The decreasing trend of youth appearances can be attributed to support from various bodies like Youth Aid officers, Family Group Conferences and others, who work with young people and their family and whanau. The Minister says “it’s vital we continue to support our young people through CEO PROFILE measures to avoid further offending.” Andrew Bridgman’s cur- rent appointment expires in Justice Sector’s BPS results for the quarter ending September 2015, August. He ranks among the show reductions in the rates of total crime (down 17%), youth best of the current departmen- crime (down 39%), re-offending (down 7.7%) and violent crime tal CEOs. Before Justice he was Deputy Chief Executive, (down 10%) since 2011. The BPS violent crime measures combine Ministry of Health from 2007 family violence and other types of violence. This clouds progress then briefly Acting Chief Ex- and conflates two different crime problems, each requiring a ecutive and Director-General different response. Two new supporting measures of violent crime, of Health. Defining Moment: Modernising courts processes Violent offences in private dwellings (a proxy for family violence) seems to be taking a long time and Violent offences in public places will provide better insight to see results. As the sector’s about the violent crime rate. lead agency must find policies to reduce crime. In Christchurch, work is well advanced on new buildings. Justice and Courts Adams placed the last cement on the Christchurch Justice and Emergency Services Precinct’s rooftop in March. The topping off marked the end of the construction of the major structural steelwork and roof and the beginning of the next phase, which is completing the enclosing of the buildings and beginning work on the interior. The $300m Precinct with 1100 staff will bring court and all justice and emergency services together into one modern building in the CBD. There will be 19 court rooms and a dedicated Emergency Operations Centre for national emergencies. It is the largest multi-agency project in NZ’s history, an important part of the Canterbury rebuild. It is scheduled for completion by early 2017 and to be in use by mid-2017.

98 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. The Ministry has a pivotal role supporting the executive and judicial arms of Government. The maintenance of the separation of powers and the independence of each of the three branches of Government is fundamental to New Zealand’s constitutional arrangements. It occupies a unique role in working for the executive while simultaneously working to support the independent judiciary to administer the courts system. It ensures the judiciary has adequate levels of administrative, technological and human resources support, and funding for judicial training and development. It seeks judicial input into its operations through joint governance and management committees and councils. The Ministry provides policy advice to Ministers across three Votes: Justice, Courts and Treaty Settlements. Briefings and advice are provided to Ministers and Cabinet contributing to development of Government’s policies and the reform and development of legislation. Support and advice is also provided to parliamentary select committees, in particular, Justice and Electoral, Law and Order, and Maori Affairs. The Ministry facilitates public input on the justice system by managing consultation during the reform and development of justice-related legislation, and communicates to the public, on behalf of the Government, the intent and implementation requirements of new legislation. Administration, case management and support services are provided to the Supreme Court, Court of Appeal, High Court, District Court, special jurisdictions, and a range of tribunals and authorities in 103 locations around New Zealand. It runs registry services, claims administration, research services, hearings management, judicial support and report-writing services to the Waitangi Tribunal. The Ministry negotiates for the settlement of historical claims arising from the Treaty of Waitangi, and manages land for use in settlements. It works directly with a range of Non- Governmental organisations in crime prevention and other activities, such as partnerships with local authorities and iwi, and provides funding directly to support local initiatives. It administers parliamentary elections, by-elections and referenda.

INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 3.92 3.93 sBudget performance & value for money 3.82 3.80 sThe Department’s quality of service delivery 3.45 3.67 sThe overall performance of the Department 3.92 3.82

Address: Justice Centre, 19 Aitken Street, SX10088, Wellington. Ph: (04): 918-8800. Fax: (04): 918-8820. E-mail: [email protected] Web: www.justice.govt.nz Senior Staff: Minister In Charge Amy Adams, CEO Andrew Bridgman. Audrey Sonerson, Deputy Chief Executive; Karl Cummins, Deputy Secretary, District Courts and Special Jurisdictions; Nigel Fyfe, Deputy Secretary, Lead Negotiator; Kevin Kelly, Deputy Secretary, Treaty; Rajesh Chhana, Deputy Secretary, Policy; Robert Pigou, Deputy Secretary, Higher Courts; Colin Lynch, Deputy Chief Executive Justice Sector; Suzanne Stew, Deputy Secretary Corporate; Sarah Turner, Deputy Secretary Legal and Operational Services and Tina Wakefield, Chief Information Officer. Staff: Current: 3,383.

Budget Update $837m over the next four years, plus $56m in 2015/16.

99 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Ministry Of Maori Development/Te Puni Kokiri

PURPOSE: Te Puni Kokiri leads Maori Public Policy and advises on policy affecting Maori wellbeing. It is the principal advisor on Government-Maori relationships, monitors policy and legislation.

„„Flagship legislation amending the Maori Language Act 1987, affirms Maori language as a taonga with Maori guardians of the language. „„It establishes an independent entity, Te Matawai to provide leadership on behalf of iwi and Maori on the health of the language and is the first Bill to be enacted in both te reo Maori and English, with the Maori version to prevail in the event of conflict between the two versions. „„The Crown acknowledges it contributed to the decline in Maori language and this has had a CEO PROFILE negative impact on the language and culture. Michelle Hippolite (Waika- to, Rongowhakaata and Te Aitanga-a-Mahaki) has been Last year we reported on hopes of a new dawn at Te Puni Kokiri. Chief Executive of Te Puni This year the sun rides high. Maori Development Minister Te Kokiri since December 2012. Ururoa Flavell had enormous shoes to fill when he replaced the During this time she has led a transformation to a new way of iconic Tariana Turia but in his quiet, modest way he has put a firm working to achieve the organi- mark on Maori development. Likewise chief executive Michelle sation’s long term outcomes. Hippolite has continued to strengthen and stabilise what had been She has had senior roles a troubled Ministry. in the Public Service and wider State sector. A career On the eve of Easter, the Minister said he felt “pretty good” about highlight was providing lead- ership in government on the progress Te Puni Kokiri achieved with the help of iwi, hapu and establishment of the Maori whanau. He launched the Whenua Maori Fund in February. Television Service, and for This is for Maori land owners to explore better returns from strategies around reo Maori. their whenua, either by changing how they utilise the land or by Prior to joining Te Puni Kokiri she was Kaihautu at Te Papa increasing production. The fund can be used to help assess land use Tongarewa, a role she held capability, explore potential productivity and identify improved for more than four years. land management practices. During her time there she enhanced the bicultural repu- The reform of Te Ture Whenua Maori has always been about tation of Te Papa, developing two things: making it easier for Maori land owners to make their international relationships culminating in exhibitions be- own decisions about how their land is governed and used, and ing presented in Europe and protecting the status of whenua Maori as a taonga tuku iho. North America and the repa- triation of koiwi tangata and toi In partnership with the Ministry of Business, Innovation and moko from around the world. Employment, the Treasury, Callaghan Innovation, New Zealand Defining Moment: Getting its voice heard as the political Trade and Enterprise, and the Ministry for Primary Industries, and resource focus moves to Te Puni Kokiri hosted the first of eight regional He Kai Kei Aku Whanau Ora and others. Ringa hui held in Napier. Working alongside Ngati Kahungunu, the partnership organised the hui, “Power up the Takitimu economy.” Presentations included how the national strategy for Maori economic development, He Kai Kei Aku

100 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Ringa can complement regional economic development as well as an opportunity for local people to share their inspirational stories. The Minister says “I was inspired by one such Ngati Kahungunu descendant, Melissa Raharuhi, who spoke about borrowing money to learn web development programming at the Enspiral Dev Academy. This led to her success in securing employment with the country’s biggest ICT company, Datacom.” He says we have come a long way since former Minister of Maori Affairs Hon Koro Wetere introduced the Maori Language Bill in 1987. Minister Wetere opened with a mihi and was interrupted by several points of order. Given the Bill sought to make Te Reo Maori an official language, a mihi to open would be considered appropriate but it was 1987 - the year of the Edgecumbe earthquake, New Zealand was pronounced a nuclear weapon-free zone, and the All Blacks won the inaugural Rugby World Cup. Te Reo Maori then was not part of the ‘kiwi vernacular’ as known today. Te Atiawa opened a new papakainga at Evans Bay/Greta Point, Wellington comprised of 14 new homes. This demonstrated the ability Maori have in creating their own solutions to housing needs. The Maori Housing Network supports whanau by letting them know what funding is available to them, while also offering support. The work of Te Puni Kokiri is underpinned by four outcome areas which support its vision of iwi, hapu, and whanau Maori succeeding as Maori. The first is Whakapapa or Identity with Maori language, culture and values holding a place at the centre of Maori and Aotearoa New Zealand identity. The second is Oranga, wellbeing, where Maori New Zealanders are confident of enjoying both opportunities and outcomes that are equal to those of all New Zealanders. Third is Whairawa, prosperity with High performing people, assets and enterprises creating a thriving Maori economy. The final is Whanaungatanga, relationships where the Crown and iwi Maori experience genuine engagement and productive, enduring relationships. CEO Hippolite says a key challenge is ensuring a small to medium sized Ministry can manage the wide range of issues affecting iwi, hapu and whanau Maori. “To better position ourselves for this challenge the organisation was transformed to clarify purpose, embed a new operating model, identify the skills and knowledge needed to fulfil TPK’s role and strategic functions, and to meet expectations from Ministers, state sector colleagues through to Maori communities.” As an organisation TPK is moving towards being a more valuable partner with Maori and collaborating with some public sector colleagues to achieve better long-term outcomes for iwi, hapu and whanau Maori.

INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 3.77 3.64 sBudget performance & value for money 3.36 2.80 sThe Department’s quality of service delivery 3.36 3.10 sThe overall performance of the Department 3.46 3.14

Address: Te Puni Kokiri House, 143 Lambton Quay, PO Box 3943, Wellington, 6140. Ph: (04): 819-6000. Fax: (04): 819-6299. E-mail: [email protected] Web: www.tpk.govt.nz Senior Staff: Minister In Charge Te Ururoa Flavell. CEO Michelle Hippolite. Deputy Chief Executives, regional partnerships Di Grennell; Deputy Chief Executive, organizational support Fiona McBeath; Deputy Chief Executive, strategy and organisational performance, Guy Beatson. Staff: Current: 267.

101 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Ministry Of Pacific Peoples

PURPOSE: The Ministry for Pacific Peoples is the Crown’s principal adviser on policies and interventions to improve outcomes for Pacific Peoples.

„„The Ministry has a new name and logo. „„ Education and cultural enhancement are primary objectives.

Last December old Ministry of Pacific Island Affairs became the new Ministry of Pacific Peoples. Why the change? The Ministry says the new name and branding “reflect the new and changing story of Pacific New Zealand. The name emphasises to the community and wider New Zealand the Ministry is here to work for Pacific peoples.” It says the Pacific population of New Zealand is changing and its narrative is now less about migration and more about having a firm place in New Zealand. The story of Pacific peoples in New Zealand is also increasingly about young people (46.1% are under 20 and 54.9% under 25) and their place in this country. CEO PROFILE

With a staff of only 48 and a 2015/16 budget of around $8.3m, it is Before joining MPP, Pauline one of the smallest Ministries. Observers note, however, it appears Winter held a number of uniformly energetic and good-humoured. roles including Director of Pasifika Advancement at AUT By 2026 Pacific Peoples will be 10% of the population, compared University, and director of her consultancy INTERPACIFIC with 7.4% in 2013. The ethnic group was the fourth largest in Ltd. She is a former Chief 2013, behind European, Maori and Asian groups. Samoa has Executive of Workbridge Inc 48.7% of the Pacific people’s population of 144,138 followed by and was recognised as Pacific Business Person of the Year Cook Islands Maori 20.9%, Tonga with 20.4% and Niue 8.1%. in 1997. Pauline has held a Pacific Peoples Minister Peseta Sam Lotu-Iiga claims success from number of governance roles. She chaired the National increased resources for Pacific education, starting from early Advisory Council on Employ- childhood education through to trades and training for young ment Issues for Women, was people. Recent figures show the unemployment rate for Pacific Deputy Chief Commissioner for the Transport Accident people has fallen to its lowest point since 2008 and employment Investigation Commission, is at its highest level. and a Commissioner for the Tertiary Education Sector. The December 2015 quarter returns from Statistics New Zealand She has been a long-term indicate the unemployment rate for Pacific people dropped over member of the Pasifika Ad- 2015 to 9.7% down from 11.4% a year earlier. This is the lowest visory group to the Auck- land City Police. Defining rate since December 2008, when the figure was 7.7%. Numbers Moment: Just being heard in employment rose over 2015 by 14,500 to 130,700, a 12.5% and in the public sector noise is represents the highest number of Pacific people employed. a challenge. The Pasifika Education Centre in south Auckland has had a $763,000 funding boost from the Government. Tertiary Education, Skills and Employment Minister Steven Joyce said the centre did not qualify for the full amount of the contestable Adult and Community Education ACE funding for which it applied but he considered the work the centre does around Pacific languages and cultural education boosts Pasifika skills and is in the national interest to be funded.

102 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. He says improving the skills of Pasifika people is crucial to New Zealand’s future, so the funding runs for a year while the centre works with the Tertiary Education Commission to develop a long-term sustainable model to provide community-based Pasifika language and cultural education supporting Pasifika people to develop needed skills. New scholarships are available to attract more Pacific people into science, technology, engineering and mathematics. The Toloa Scholarships aim to encourage Pacific people to study science, technology, engineering and mathematics (STEM) subjects at tertiary level and ultimately increase the number of Pacific people in those fields. The Ministry will fund up to four three-year scholarships of $25,000 each year to first year undergraduate and postgraduate Pacific students studying STEM-related papers. Successful applicants will be offered an industry internship in the final year of study.

INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 3.25 3.82 sBudget performance & value for money 3.40 3.18 sThe Department’s quality of service delivery 3.36 3.18 sThe overall performance of the Department 3.08 3.38

Address: Level 2, ASB Building, 101-103 The Terrace, PO Box 833, Wellington, 6140. Ph: (04): 473-4493. Fax: (04): 473-4301. E-mail: [email protected]. Web: www.mpia.govt.nz Senior Staff: Minister In Charge Peseta Sam Lotu-liga. CEO Pauline Winter. Malo Ah-You, Deputy Chief Executive; Greg Hanlen, Chief Financial Officer; Richard Selave, General Manager - Capability Development and Reno Paotonu, General Manager - Regional Partnerships. Staff: Current: 35.

103 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Ministry for Primary Industries

PURPOSE: Growing and protecting New Zealand by working to maximise export opportunities, improve sector productivity, increase sustainable resource use and protect from biological risk across four systems: biosecurity, food safety, primary production and trade; the Government’s principal advisor across all aspects of the primary industries, including food production and trade-related issues.

„„In recent years MPI’s ability to deal with and respond to several major trade, biosecurity and food safety issues has been tested. „„MPI’s most valuable asset is its capable, strongly committed and highly motivated staff, who have enabled MPI to respond proficiently to the series of biosecurity and food safety challenges.

These two observations have been extracted from the recent lengthy, in-depth review of MPI conducted by the State Services Commission through its Performance Improvement Framework process. By and large, say the reviewers, the Ministry has come out well. Its analysis did produce areas for improvement along with CEO PROFILE those already made following an earlier review. Martyn Dunne became Di- rector-General in November Much of our assessment draws on this comprehensive review. MPI 2013. Before this appoint- is the result of several mergers between 2010 and 2012. It is the ment, he was New Zealand’s High Commissioner to Aus- single Government gateway for the primary sector, with activities tralia. He led the New Zealand spanning the entire length of its value chain from resource Customs Service from 2004 utilisation to production, processing, distribution and marketing. to 2011. Until 2004, he was an officer in the New Zealand Its purpose is to grow and protect New Zealand by working to Army for 27 years, including service with the SAS. He com- maximise export opportunities, improve sector productivity, manded New Zealand Forces increase sustainable resource use and protect from biological risk in East Timor from 1999–2001 across four systems: biosecurity; food safety; primary production; and was subsequently re- sponsible for the establish- and trade. Direction is set across these systems through seven ment of a single New Zealand priorities: smart regulation; operational excellence; international Joint Forces Command in the access; provenance and traceability; precision production and rank of Major General. investment; enduring relationships; and integrated information, He holds a Masters of Arts (Strategic Studies) from La insight and knowledge. It administers several large and complex Trobe University Melbourne regulatory systems protecting New Zealand’s biosecurity, Defining Moment: Biosecurity environment and food supply, while supporting a significant incursions grab the headlines. Ambitious and seemingly un- portion of New Zealand’s economy. achievable export targets could Both the PIF reviewers and inquiries in Wellington and the primary become a litmus test. sector affirm the performance of Martyn Dunne, Director-General and CEO. The reviewers say the former General has brought a disciplined and action-orientated style of leadership to MPI and with almost complete consistency is seen by staff and stakeholders as a strong, resolute and effective leader. “His approach is highly visible and interactive, energetic, communicative and highly connected to the frontline staff. The

104 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Director-General has also crafted the senior leadership team into what was consistently described to them as a more unified and effective group. We received consistent feedback that since his appointment MPI has made sustainable ‘step-change’ shifts in momentum.” MPI employs over 2,300 people across some 70 locations, including offices, ports, mail centres, airports, laboratories and overseas posts, throughout New Zealand and around the world. About half are located in Wellington. A 2015 Engagement Survey reveals close to 85% of staff believe in what MPI is trying to accomplish, which has increased from just over 75% in 2014. MPI is funded under Vote Primary Industries and Food Safety, a combined Vote from 2015/16. Output expenses total $455m, of which $100m is for policy advice, $179m for border and biosecurity functions, $73m for fisheries and forestry and related grants and $103m for food safety work. Since 2013 MPI has been tested by the whole milk powder food safety incident; three separate detections of the Queensland fruit fly and from late 2014, it was the lead Government agency responding to a criminal blackmail threat to release infant and other formula contaminated with 1080 pesticide into the retail market. In response to the review, MPI and its Director-General Martyn Dunne says the Ministry has made significant progress. It strengthened the market access, biosecurity and essential regulatory systems on which the primary sector and the economy depends. It has made important investments in its capability and culture, which have improved performance and positioned the organisation well for the future. The next phase of development requires a further change of pace, in which the Ministry must capitalise on its strong platform, lock in the gains possible from MPI’s current growth programme, build participation in and understanding of its growth programme, and extend it to new territory. MPI has embarked on a suite of initiatives in pursuit of its goal of doubling the value of primary sector exports by 2025. A number of these: Market Access and the Primary Growth Partnership, for instance are well advanced. Earnings are forecast to rise $1.9bn this financial year. Even so, the current programme will require expansion through several further phases of development to achieve our goal, and in a highly changeable operating environment ongoing refinements to established initiatives are essential to be confident of banking benefits. In PIF discussions with MPI the reviewers were unable to discern a clear plan for how the gap on the goal of doubling the value of exports will be addressed. MPI has the lead on certain projects under the workstream and progress is tracked for reporting to Ministers. They were unable to identify a clear “line of sight” for how the shortfall would be met. Having a clear plan to address the shortfall is essential if MPI is to come to grips with achieving the goal of doubling the value of exports as opposed to simply working towards it. To improve its performance MPI will need to play a more active leadership role in the Government’s business growth agenda discussions about building export markets in the primary sector. It will need to develop a clear, coherent and purposeful plan for addressing the shortfall in the goal of doubling the value of exports and this has a high level of buy-in from the primary sector and is accepted by Government stakeholders. It will need to keep the plan under active review and be alert to new opportunities for growing exports. The PIF reviewers said the crucial measure of success will be in four years. MPI has an intentional and credible plan for delivering on its goal of doubling the value of exports and has secured the gains required for the 2025 target to be achieved, while at the same time dealing effectively with any biosecurity incursions and maintaining food safety. This will come about by MPI

105 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. having become proficient in managing the balance between the ‘grow’ and ‘protect’ elements in its purpose and having achieved mastery in both. There will be change of pace in MPI with a much greater sense of commitment and urgency to the goal of growing the value of exports; MPI will develop superior powers of vigilance based on sophisticated intelligence and insight and provide a much stronger leadership role in relation to the primary sector with a much greater emphasis on New Zealand’s national interests, acting as a facilitator and partner and being a highly respected and innovative regulator and promoter of economic activity. The reviewers say while MPI has growth-enhancing initiatives in play, it still has a significant challenge to realise the goal of doubling the value of exports from the primary sector by 2025. This is acknowledged by MPI. Currently, however, MPI does not have a sufficiently clear, coherent and directional plan for achieving this and consequently there is a risk MPI will not achieve its goal. It is vital for New Zealand MPI finds a way to accelerate and elevate its efforts to stimulate increased exports (especially of premium products) from the primary sector, while continuing to maintain New Zealand’s brand as a safe and reliable exporter of food and protect New Zealand from harmful biological incursions. No other Government agency has the technical knowledge, expertise, and range of relevant functions, activities and stakeholder relationships to be able to provide leadership in these areas. MPI’s lead role in Operation Concord (threatened food contamination) demonstrates when MPI is focused it has the ability to lead effectively across different agencies. It must now do so with respect to the goal of doubling the value of exports. MPI has an appropriately low tolerance to risk in managing its protection activities. Managing growth on the other hand, requires MPI to be able to identify and pursue opportunities for improving prospects for growth which, in turn, is reliant on being able to think creatively and make calculated judgements about higher levels of risk in pursuing particular opportunities. Its aversion to risk resulting from its biosecurity and food safety activities has tended to become the default setting for the agency. To put it another way, the shadow of MPI’s strength in managing the protect function is potentially its weakness in managing for growth. The changes required to address this paradox are subtle and essentially come down to creating a different mindset within MPI, one which leads to MPI re-calibrating how it will deliver on its purpose. At its core, MPI’s performance challenge is having a clear view about how it can best facilitate efforts by the primary sector to grow the value of exports, while continuing to deliver strongly on its protect responsibilities. Ministers, central agencies and the primary sector need to consider how they can support MPI make this shift. While the goal of doubling the value of exports requires MPI to take a strong leadership role, it is clear that this goal can only be achieved by all those involved working together closely and purposefully. MPI’s role in facilitating this collaboration may be the elusive ‘tipping-point’ required. This is an exciting time for MPI. It has built its capacity, capability and confidence to achieve the goal of doubling the value of exports by 2025 and now needs to do so. This goal is far too big a prize for New Zealand for MPI not to go all out for it, willingly making the required course corrections recommended. MPI needs to shift its performance. It must become a highly respected thought leader. To become a more influential Ministry it needs deeper analytical capability and the capacity to be more creative thinking. As a thought leader MPI should have a consummate understanding of

106 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. how overseas consumer preferences are evolving and think innovatively about how NZ Inc can put its best foot forward to reach and serve these consumers. It must develop an entrepreneurial and adaptive culture in which MPI staff are comfortable and supported, testing existing boundaries or orthodoxies and tackling issues that are adversely affecting prospects for growth. It must be more strategic and focus business strategy by being more intentional in the follow through. It could adopt New Zealand Trade and Enterprise’s lead to operationalise its strategic priorities through strategic challenges, specific goals and short-term plans, which will help to provide greater clarity of purpose and encourage a bias for both urgency and action. It should move from intelligence to insight. MPI should consider whether it has enough staff with sufficient depth of thinking, ‘big data’ analytic experience, as well as the tacit intelligence to be able to correlate a wide range of variables and to identify the bigger picture. MPI should play a more active role in working across Government and consider establishing communities of practice from which to learn and build consensus. Experienced staff with integrative skills could be brought in on secondment to assist such learning. MPI should also consider whether its policy shop, at both the strategic and operational policy levels, is making the best possible use of the experience of staff in operational areas. The State Service Commission has released a Performance Improvement Framework looking at the Ministry for Primary Industries. It praises much of the work of the Ministry but when it comes to boosting exports says it does not have a “sufficiently clear, coherent and directional plan… and consequently there is a risk MPI will not achieve its goal.” The Ministry is currently weathering a huge storm over management of fisheries and monitoring of catches after a contract to monitor camera feeds from boats fishing in NZ waters was awarded to a company owned by major fishing industry players. The Ministry is also attempting to play down reports the catch in NZ may be triple what is reported. It is an ongoing PR nightmare for the Ministry and will test its mettle.

INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 4.50 4.50 sBudget performance & value for money 4.60 4.14 sThe Department’s quality of service delivery 4.29 4.07 sThe overall performance of the Department 4.13 4.13

Address: Pastoral House, 25 The Terrace, PO Box 2526, Wellington, 6140. Ph: 0800-00-83-83. Fax: (04): 894-0720. E-mail: [email protected] Web: www.mpi.govt.nz Senior Staff: Minister In Charge Nathan Guy. Director General Martyn Dunne. Scott Gallacher, Deputy Director-General Regulation and Assurance; Deborah Roche, Deputy Director-General Policy and Trade; Andrew Coleman, Chief Operations Officer; Ben Dalton, Deputy Director-General Sector Partnerships and Programmes; Roger Smith, Deputy Director- General China Relations; Dan Bolger,Deputy Director-General Office of the Director- General; John Ryan, Deputy Director-General Corporate Services; Staff: Current: 2,277.

107 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Ministry Of Social Development

PURPOSE : MSD advises the Government on social policy; protects vulnerable children and young people; provides employment, income support and superannuation services; funds community service providers and administers student allowances and loans.

„„Cabinet has signed off radical changes for child protection and care. „„A $790 million Child Hardship package announced as part of Budget 2015 came into effect on April 1 representing the first real rise in benefits in 43 years.

MSD is the Government’s biggest department with more than 10,000 staff. It administers Vote Social Development and Vote Senior Citizens amounting $24bn for the 2014/15 year. Its revenue reached $1.392bn, a 10% increase on the previous year. Total expenses accounted for $1.386bn resulting in a surplus of $5.3m. It leads and is responsible for two Better Public Service targets: reducing long-term welfare dependency, and reducing the number of assaults on children. The Ministry contributes to cross-agency work CEO PROFILE towards six other BPS targets. When it reviewed MSD for 2014/15, Brendan Boyle became the Social Services Select Committee reported, “the Ministry told us Chief Executive of the Min- about the importance of governance and leadership for cross-agency istry in October 2011. He is also Chair of the Social Sector work. It also commented on the difficulty of being flexible enough to Board, a formal multi-Govern- contribute to other parts of the social sector while continuing to work ment-agency group reporting towards the Ministry’s key performance indicators and targets.” to Ministers on cross-sector issues. The Social Sector In February 2015, the Government set a new BPS target for Board includes the Vulnerable Children’s Board overseeing reducing welfare dependency. To be achieved by June 2018, this implementation of the Chil- includes reducing the projected liability of the long-term cost of dren’s Action Plan and the benefit dependency by $13bn and reducing the overall number of Joint Venture Board. working-age clients by 25%. He is a former CEO of Internal Affairs and Land Information One strategy is putting more beneficiaries into active, work-focused New Zealand. He was the inaugural director of the e- case management. This is the most intensive of the Ministry’s Government Unit of the State three streams for clients. The number of clients in work-focused Services Commission, charged case management has increased from 80,000 to 120,000. with leading the development of an e-Government strategy In the year under review, 40 children in the custody of the chief and work programme. He has a law degree from Otago Uni- executive were found to have been abused by 34 CYF caregivers. The versity and an MB from the Committee reported “some of us are concerned that this has increased Sloan School of Management since 2010.” The Ministry acknowledged this is a shameful and at the Massachusetts Insti- tute of Technology. Defining unacceptable statistic. However, it said that it is roughly akin to that Moment: The murder of two of the general New Zealand population. Although we accept all New WINZ staff in Ashburton. The Zealanders share responsibility for reducing child abuse, the Ministry response to the Paula Reb- stock report on CYFS. Reduc- has a position of leadership in this area. We note the State is legally ing beneficiary numbers is a responsible for the care of these children. We encourage it to do all it key driver. can to reduce the abuse rate of children in its care.

108 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. By launching the child care and protection review, and overseeing the first overall increase in benefits in 43 year, Social Development Minister Anne Tolley burnished her Cabinet credentials. She and the Government effectively command political territory traditionally occupied by the left. Following the final report by the expert review panel chaired by Dame Paula Rebstock, Cabinet agreed to major state care reforms and a complete overhaul of Child, Youth and Family to improve the long-term life outcomes for New Zealand’s most vulnerable population. Tolley says “the whole system needs to be transformed if we are to give these young people the protection and life opportunities they deserve. A new system will be in place by the end of March 2017 with have high aspirations for all children and address their short and long-term wellbeing and support their transition into adulthood.” A new operating model will create a single point of accountability in one agency responsible for the long term welfare of vulnerable children. Currently funding, strategy and services are scattered across multiple agencies. The new operating model will put children at the centre of the system and will ensure their voice is heard as part of the decision making process. It will have five core services - prevention, intensive intervention, care support, youth justice and transition support. An actuarial valuation model will be developed to ensure interventions are based on evidence of what works and will look at the lifelong outcomes for children and young people. A social investment approach using this actuarial data will identify the best way of targeting early interventions, to ensure that vulnerable children receive the care and support they need, when they need it. Vital services such as health, education and counselling support will be purchased to allow funding to follow the child so young people can gain immediate access to assistance. There will be stronger focus on reducing the over-representation of Maori young people in the system. Currently, six out of ten children in care are Maori. Strategic partnerships will be developed with iwi groups and NGOs, and new ways of working effectively will be developed with qualified academics, social service providers, iwi and Whanau Ora. Legislation will go through Parliament this year to raise the age of state care to 18 with transition support being considered up to the age of 25. Cabinet agreed to investigate raising the youth justice age to include 17 year olds. Legislation will establish an independent youth advocacy service to ensure that the voices of children and young people are heard in the design of systems and services. Caregivers will receive intensive targeted support including some increased financial assistance and better access to support services. For the first time, National Care Standards will be introduced with clear expectation for the standard and quality of care in placement homes. Funding will follow the child. It will ensure any additional support is able to be purchased immediately, from DHBs, education, NGOs and other specialist providers. Children should not have to negotiate with bureaucracies to access the services they need, nor should they be subject to competing priorities in other agencies. The new system will also need a suitably trained workforce, with a requirement for staff with a range of specialist skills, to better prevent harm and trauma. Tolley says we can no longer have a system which sees social workers spending half their time on administration, and less than a quarter of their time actually working with kids and families. The panel found 64% of the 61,000 children notified to CYF in 2014 had a previous notification. By the age of 21, for children with a care placement who were born in the 12 months to June 1991 Almost 90% are on a benefit, around 25% per cent are on a benefit with a child, almost 80% do not have NCEA Level 2, more than 30% have a Youth Justice referral by age 18, almost

109 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. 20% have had a custodial sentence and almost 40% have had a community sentence. Less than 25% of CYF staff - 760 out of 3,176 work directly with children in need of care and protection. Less than 1% per cent of staff have a dedicated professional support role, such as psychologists and therapists. Around 50% of staff time is spent on administrative issues.

INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 5.00 5.14 sBudget performance & value for money 4.62 4.36 sThe Department’s quality of service delivery 4.38 4.50 sThe overall performance of the Department 4.73 4.69

Address: Bowen State Building, Bowen Street, PO Box 1556, Wellington, 6140. Ph: (04): 916-3300. Fax: (04): 918-0099. E-mail: [email protected] Web: www.msd.govt.nz Senior Staff: Minister In Charge Ann Tolley. CEO Brendan Boyle. Ruth Bound, Deputy Chief Executive, Service Delivery; Viv Rickard, Acting Deputy Chief Executive, Child, Youth and Family; Murray Edridge, Deputy Chief Executive, Community Investment; Nic Blakeley, Deputy Chief Executive, Social Policy; Simon MacPherson, Chief Policy Advisor; Nick Pole, Deputy Chief Executive, Organisational Solutions; Carolyn Risk, Deputy Chief Executive, Organisational Strategy; Marc Warner, Deputy Chief Executive, Strategic Change; Emma Speight, Acting Deputy Chief Executive, Social Sector. Staff: Current: 10,078.

Budget Update 3,000 emergency housing places and new grants funded through a commitment of $41.1m over four years. $46m of operating funding over four years to better support victims and prevent sexual violence. $200m to fund another 750 social housing places. $652m over four years including $200m for the Child Youth and Family overhaul and to continue the Government’s Social Investment approach.

110 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Ministry Of Transport

PURPOSE: The Ministry of Transport is the Government’s principal transport adviser. It aims to improve the overall performance of the transport system; improve the performance of transport Crown entities and achieve better value for money for the Government from its investment in the transport system. It represents New Zealand’s transport interests internationally, particularly in aviation and maritime.

„„Central Government will raise and invest $40bn in the transport system over the next ten years. The State highway roading network alone is valued at over $28bn. „„ The Government spends around 1.3% of GDP on transport and over the next 10 years, transport expenditure is expected to increase by 3.3% a year, well above the rate of inflation. Maintenance costs are rising at over 4% a year. „„Transport taxes have increased by 33% over the last five years while New Zealanders make around 165m trips per year using public transport - less than 3% of total transport trips

CEO PROFILE CEO Martin Matthews is positive about the Ministry. It is a small Martin Matthews has been organisation with a budget of $30m a year and 155 full time Secretary for Transport and staff, 25% less than in 2008. He thinks the Ministry is a more the Chief Executive of the capable and effective organisation than then. Recent Performance Ministry of Transport since September 2008. He is well- Improvement Framework reviews confirm the Ministry is a well regarded in the system and performing organisation, and it has come a long way in the last has overseen a solid lift in few years. It advises advising on policy and regulatory settings. It performance, focusing on quality of advice. He was also advises on governance, funding and performance of the New previously the Chief Executive Zealand Transport Agency, Civil Aviation Authority, Maritime New of the Ministry for Culture and Zealand and the Transport Accident Investigation Commission. Heritage and earlier Assistant Auditor-General. Defining The Government’s transport objectives include continuing to Moment: Managing better co- deliver the Roads of National Significance Programme; delivering ordination and redirection of national transport strategies. an accelerated regional roading package of 14 projects around the country worth $212m, using money from the Future Investment Fund; delivering a new fund of up to $90m a year dedicated to priority transport projects in the regions; kick-starting a new urban cycleways fund of $100m and appointing a specialist Urban Cycleway Investment Panel The importance of the transport system to all aspects of daily life, and the changing nature of the transport environment, means it is critical the Ministry focuses on longer term issues for the system. Investment decisions will be made based on assumptions about future levels of demand, but the way people travel may be very different in the future. It says the Government should expect increasing pressure for more funding from both larger cities, especially Auckland, which struggle to pay for investments required by population growth and smaller regional centres which face rising costs with fewer rate-payers to fund them.

111 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Currently, central and local Government invest around $4.4bn annually in the land transport system. About $3.4bn comes from the National Land Transport Fund - revenue collected from road users. This includes fuel excise duty, road user charges and a portion of the fees paid for motor vehicle licensing and registration. The latest census data indicates the population grew at an average of 1.2% a year over the last decade. The population is expected to continue to grow at a slower pace, reaching 5.4m by 2036. By 2036, the number of people in New Zealand over 65 is forecast to double to 1.2m. The ageing population is more pronounced outside of the major urban areas and international data suggests individuals halve their vehicle kilometres travelled when they retire. This is likely to radically change transport demands in the regions and reduce the revenue base available to maintain the transport network and meet social expectations for levels of service. Around 96% of personal travel in New Zealand is by private vehicle. Historically, the total distance travelled by private vehicles has increased consistently over time. This has been driven by an increase in population, the number of vehicles in the fleet and an increase in the distance travelled on a per capita basis. The average distance travelled per-person in light passenger vehicles has fallen by around 8% from 7,600km in 2004, to around 7,000km in 2013. Total distance travelled over the same period has increased marginally from 39.3bn km in 2004 to 40.4bn km in 2013 as a result of population growth. This trend has been observed in a number of developed countries. There is some debate as to whether it is the result of economic factors or a more structural shift in attitudes towards personal transportation. Motor vehicles are and will continue to be the predominant mode of transportation for the foreseeable future. However, the rate of growth in motor vehicle travel seen in the 20th century is unlikely to continue. An ageing population, rising fuel prices, increasing urbanisation, improved mobility and accessibility options, growing health and environmental concerns, and changing consumer preferences all appear to be contributing to reduced per-capita travel in motor vehicles and an increase in demand for alternative transport options. The current model for collecting revenue and distributing it across the transport system works well for now but will come under increasing pressure in the future. There is an opportunity to consider whether the model could be enhanced to deliver better outcomes. New Zealand depends on aviation and maritime links to connect with the global marketplace. The Government has a target of increasing exports from 30% to 40% of GDP. To achieve this unnecessary regulatory barriers have to be removed to promote New Zealand as an attractive destination for airlines and shipping lines. An efficient and cost-effective domestic freight network can also help compensate for the competitive disadvantage of distance from markets. The Government claims success with its liberal policy of air transport regulation. More than 70 air services agreements are in place with 17 new air routes announced in the past year. Each year, the domestic freight system moves over 236m tonnes of freight by land, about 50 tonnes for each member of the population. The National Freight Demand Study forecasts the total domestic freight task will increase by around 58% over the next 30 years by tonnage and 48% in terms of tonne kilometres. The volume of freight going through ports is expected to

112 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. increase, putting pressure on transport links. Port growth will be uneven. Some are likely to have significantly higher growth as a result of trends in the international shipping industry. The global trend towards larger ships is likely to increase the gap between larger and smaller ports. Ports handle ships with a capacity of up to 5,000 twenty-foot equivalent units but 22% of global ships and 53% of global shipping capacity are larger than 5,000 TEU, too large to dock in New Zealand’s ports. Forward orders indicate 81% of new capacity will be in vessels over 7,500 TEU. Not all ports will be able to justify the expense of investing to accommodate these larger ships. Over the last four years, KiwiRail has received $1.04bn in taxpayer funding as an investment in its 10-year turnaround plan. The plan’s objective is to transition KiwiRail’s freight business into a sustainable business able to fund its ongoing operating and capital expenditure solely from customer revenue. Rail faces a number of significant challenges. KiwiRail is responsible for managing a large network of track expensive to maintain, while low freight and passenger volumes make revenue generation difficult to become commercially sustainable. However, rail is an important strategic asset, providing substantial freight capacity on a number of routes, frees up otherwise congested routes and reduces the wear and tear on roads. It is suited to bulk and lower-value freight and volumes are expected to grow significantly over the next 30 years. Achieving a sustainable and self-funding rail network will be a continuing challenge for KiwiRail and the Government. The focus will need to be on increasing volumes and reducing costs on the parts of the network that are most likely to deliver a commercial return. The transport system generates 18% of New Zealand’s greenhouse gas emissions with 89% from road transport. Transport is the highest emitting sector after agriculture. The average CO2 emissions of light vehicles entering the fleet has reduced by around 10% over the last six years. However, the overall improvement in average vehicle emissions across the entire vehicle fleet has been much smaller. The Ministry says it is becoming increasingly clear the actual on-road efficiency of many new vehicles can vary considerably from advertised efficiency rates. Improvements in vehicle efficiency are also being held back by strong consumer demand for large, high-emissions vehicles. Alternative fuel vehicles including electric cars could have a big impact on emissions, particularly as more than three-quarters of the energy supply is derived from renewable sources. However, the uptake of alternative fuel vehicles been low. The Ministry says it may be many years before they are widely adopted, given the relatively slow turnover of the vehicle fleet. Barriers to uptake include high initial investment cost, the lack of available second-hand imports, and anxiety over limited range and lack of recharging infrastructure. Auckland accounts for more than one third of New Zealand’s GDP. Over the next 30 years, Auckland’s transport system will come under increasing pressure as its population rises to more than two million. Auckland’s transport issues claim much of the Ministry’s workload. A recent report on the Auckland Transport Alignment project says the Government and the Auckland Council recognise the importance of Auckland’s economic success to the national economy. As joint transport investors, they have a shared interest to ensure value for money from transport investments. They agree on the need to improve alignment on a long-term strategic approach to transport. Over the past decade there has been a significant increase in transport investment by both. Large parts of the motorway network have been expanded or improved and other major projects are nearing completion. Significant investment in public transport has also taken place, including electrification

113 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. of the rail network with a new fleet of electric trains, substantial bus service improvements and the introduction of a single electronic ticketing system across the public transport network. They say these investments have yielded positive results. While Auckland’s population has grown by nearly 300,000 since 2003, traffic surveys indicate peak period congestion has not increased over the period although inter-peak congestion has become more serious. Public transport use has increased substantially over the past decade, from 50m to over 80m annual boardings. Public transport can play a role in reducing congestion and improving overall transport efficiency. Improved operating models for Auckland and Wellington metro rail, as well as for the bus and ferry sectors, will help improve the quality and value for money obtained from public transport services. Latest: Peter Mersi has been appointed as Secretary for Transport and Chief Executive of the Ministry of Transport. Mersi is currently Chief Executive of Land Information NZ (LINZ).

INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 4.67 4.27 sBudget performance & value for money 4.33 4.27 sThe Department’s quality of service delivery 4.25 4.09 sThe overall performance of the Department 4.33 4.07

Address: Level 6, 89 The Terrace, PO Box 3175, Wellington, 6140. Ph: (04): 439-9000. Fax: (04): 439-9001. E-mail: [email protected] Web: www.transport.govt.nz Senior Staff: Minister in Charge Simon Bridges. CEO Martin Matthews. Andrew Jackson, Deputy Chief Executive, Specialist Advice and Strategy Group; Nick Brown, General Manager, Aviation and Maritime; Mike James, General Manager, Road and Rail and Gareth Chaplin, General Manager, Sector Performance. Staff: Current: 134.

Budget Update $115m for regional roading projects and $190m in new capital funding for KiwiRail.

The Following Four Entries sCivil Aviation Authority of New Zealand sMaritime New Zealand sTransport Accident Investigation Commission sAirways Corporation are grouped here because of their relevance to the Transport sector.

114 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Civil Aviation Authority of New Zealand

„„Chairman: Nigel Gould „„Director: Graeme Harris

PURPOSE: CAANZ regulates civil aviation in New Zealand with rules aligned with safety standards set by the International Civil Aviation Organisation.

CAANZ is in two parts: one is the agency overseeing aviation safety and its rules led by the Director of Civil Aviation. This is based in Wellington with small teams in Auckland and Christchurch, and aviation safety advisers travelling the country. Most staff are technical specialists responsible for certificating and monitoring aviation people and organisations holding an aviation document, for example, a licence to fly. The other is the Aviation Security Service, Avsec. It is also based in Wellington but most staff work at airports screening passengers and their carry-on baggage, checked baggage and controlling access to airports. Avsec screens airport workers and manages the identity card scheme for people wanting access to restricted areas. CAANZ is consulting on funding for 2016-19. Its proposals including hourly-based charges, a broader base for safety levies on commercial operations, standard passenger safety levies have raised controversy, notably from aerial topdressing companies. In the December 31 quarter, there 31 accidents, down slightly from 32 in the same period in 2014. One was the accident at Fox Glacier, resulting in seven fatalities in the Airline Operations - Helicopter group (Public Air Transport sector). There were two serious and two minor injuries in the Adventure Aviation Sector (Sport Transport), with one serious injury in a balloon, and one serious injury and two minor injuries in Part 115 parachute operations. There was one accident, involving an agricultural helicopter, which resulted in a serious injury. The airline and other commercial sectors had six non-injury accidents. There were also three serious and five minor injuries in the Private Operations - Sport group (including three serious and four minor injuries in hang gliders, paragliders and parachutes). The Private Operations sector had a further 10 non-injury accidents. CAANZ says this distribution of accidents, with a large number of relatively minor accidents in the private operations sector and a few more serious accidents in commercial operations, is not unusual. To a certain extent it reflects the volume and type of activity in these sectors. By comparison the loss of seven people in a helicopter on air transport and two serious injuries to passengers represents a greater threat to public safety in a sector where the acceptance of risk is inherently lower. These sectors are likely to receive on going scrutiny from the CAA and industry groups. The overall accident rate over January 2011 to December 2015 has decreased to 4.5 accidents per 100,000 hours flown, which is below the average of approximately 5.0 accidents per 100,000 hours flown over the previous four years. There were 31 accidents in the December quarter - 7 fatal, 6 serious and 10 involving minor injuries.

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„„Chairman: David Ledson, a former Chief of the Navy. „„Chief Executive Officer Keith Manch.

PURPOSE: Maritime NZ was established to promote a safe, secure and clean maritime environment for all commercial and recreational activities on the water, and to minimise the impact of maritime incidents and accidents on New Zealand’s land, waters and people.

MNZ is the national regulatory, compliance and response agency for the safety, security and environmental protection of coastal and inland waterways. It is governed by a five-member Board appointed by the Minister of Transport under the Maritime Transport Act 1994. It has around 190 staff at located 10 regional offices and Wellington head office, at the Marine Pollution Response Centre in Auckland and the Rescue Coordination Centre New Zealand in Lower Hutt. MNZ provides a national land, sea and air search and rescue coordination service covering 30m square km, from the Pacific Islands in the north to Antarctica in the south. It maintains coastal navigation aids to shipping, principally coastal lights and lighthouses, the national maritime distress and safety radio service, and an emergency distress beacon detection network for land, sea and air. It administers the Crown’s obligations under international maritime and marine environment protection agreements and treaties and represents New Zealand’s interests at the UN International Maritime Organisation. Maritime NZ provides technical support to the Government’s Pacific Maritime Safety Programme with the primary focus on Tonga, Kiribati and the Cook Islands. This involves a mix of initiatives, from providing safety infrastructure and equipment to training of key staff and the development of more effective safety administrations. In an average year, it has oversight of 6m passengers on the Cook Strait ferries; 1.3m people in 960,000 recreational craft; 30 cruise ships making 70 port calls and more than 800 foreign vessels making 5,700 port calls transporting 99% of New Zealand’s trade by volume; the millions of tonnes of oil moving around the coast; the 1500 fishing boats at work around the coast and 250 land, sea and air rescues requiring a co-ordinated response. In the 2014/15 its main effort was raising standards to improve safety performance in the domestic commercial maritime sector, through the introduction of the Maritime Operator Safety System and the Seafarer Certification framework. These new regimes represent the most substantial overhaul of the domestic maritime regulatory system in 15 years. In 2014/15, revenues reached $5.8m but expenditures hit $7.4m.

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„„Chief Commissioner: Helen Cull QC, acting, who replaced John Marshall QC in March.

PURPOSE: TAIC determines the circumstances and causes of accidents and incidents with a view to avoiding similar occurrences in future, rather than to ascribe blame to any person. TAIC investigates significant aviation, rail, and marine accidents and incidents. It does not investigate road events except when the circumstances may have significant implications for rail safety, for example. TAIC is a standing Commission of Inquiry and an independent Crown entity.

TAIC has been under fire from elements in the media over its handling of the Fox glacier sky- diving crash in September 2010 with the loss of nine lives and the loss of an Iroquois helicopter in June 2001 when three died. Much of this arises from a misunderstanding of TAIC’s role and those of the police and the coroner. Most countries experience this conflict and accident investigators have to defend their primary role. Increasingly survivors, next of kin and interested parties demand instant answers and penalties. Social media magnifies the complaints. TAIC has around 10 air investigations underway at any one time, while CAANZ receives between 6000 and 7000 air safety occurrence notifications a year. The International Civil Aviation Organisation began auditing investigation systems in 2005. TAIC’s next audit will be held in December. Its functions are governed by commissioners. The current Chief Commissioner is Helen Cull QC. The Chief Executive, Lois Hutchinson, has 12 investigators (including the Chief Investigator of Accidents) and 9 corporate support staff. The Commission is structured into two main units; Investigation Services and Business Services. Investigation Services is led by the Chief Investigator of Accidents and consists of teams of investigators responsible for investigating rail, maritime and aviation occurrences. Business Services performs a range of corporate functions. In 2014/15 its revenue was $4.03m and expenditure $4.08m

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„„Chair: Susan Paterson. „„Chief Executive Officer: Ed Sims. Airways controls all domestic and international air traffic travelling within New Zealand’s Flight Information Region covering 30m square km and one of the largest areas of airspace in the world. The NZ domestic FIR covers the country and surrounding coastline with both “controlled” and “uncontrolled” airspace. The Auckland Oceanic FIR extends over 26m square km of the Pacific and Tasman Oceans, extending from the South Pole to five degrees south of the equator. It is responsible for aircraft flying between 24,500 feet and 46,000 feet. Within the FIRs, there are areas of uncontrolled airspace, where light aircraft are not separated by a controller but receive information and advice to conduct flights safely. Airways New Zealand reported an interim net profit after tax of $11.5m for the six months ended December 31, an improvement on the prior year’s $6.6m result. It says it has delivered consistently high safety and operational outcomes and provided excellent results for its customers. Airways has reported no near collision incidents and achieved technical service availability of 99.98% during the first six months of the year. Airways’ investment of $14.6m in key capital projects over the first half will contribute to a move from ground to satellite-based navigation. CEO Ed Sims says this is the culmination of a three-year $94m investment programme into future-proofing New Zealand’s aviation safety infrastructure and improving air traffic management for the long term. Prices charged to Airways’ customers over the six-month period included a price reduction of 0.5% from those agreed in the last pricing round. This has been achieved from higher than expected air traffic volumes in the previous year. Airways is currently undertaking a public consultation on its prices for the next three years and these will be finalised in early June. Airways’ international businesses are ahead of the same period last year, achieving a half-year NOPAT of $1.0m. Ambitious sales targets continue to challenge some of the global start-ups, and the expected full year result is expected to be below budget. Significant progress has been made in extending Airways’ support of neighbouring Pacific nations. In October Airways signed a multi-year contract with the Ministry of Foreign Affairs and Trade (MFAT) to deliver a range of navigation, surveillance and procedural design services into the region. Sims expects continued cost management, improving traffic volumes and Airways’ global businesses to contribute to a full year NOPAT forecast of $18.2 million. Airways provides air navigation and air traffic management consultancy and training services in over 65 countries, and partners with some of the industry’s best to deliver world-leading aviation solutions and innovations through leading edge thinking, nimble execution and strong collaboration. Airways’ Performance Based Navigation (PBN) procedures effectively redesign the airspace. They improve air traffic flow and efficiency, double airspace capacity, and vastly simplify controllers’ workloads. Airways was the first provider in the world to receive ICAO endorsement as an instrument procedure design organisation for Performance Based Navigation and conventional designs.

118 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Aircraft and trained crew using Required Navigation Performance authorisation procedures can fly precise paths with a high level of accuracy improving both efficiency and safety. This system enables jet operations to continue in a range of weather conditions, and in some of the most challenging terrain in the world. Airways launched PBN at Queenstown. The system is now in place at Christchurch, Wellington and Auckland airports. It says the operating benefits to airlines have been significant, through shortened tracks between departure point and destination. As a result, both passengers and airlines have saved valuable time and money. Queenstown now handles up to 12 aircraft an hour, compared with the previous five per hour in poor weather in mountainous terrain. Airlines are benefiting from dramatically reduced delays – down from around 40 hours a month to just over 5 hours a month. Reworked departures have provided a large increase in take–off payload. Airways can safely manage more than double the traffic with no requirement to tactically separate arrivals from departures. On time performance has improved, and there have been significant reductions in holding delays, fuel burn, and CO2 emissions. Airways has established training partnerships with aviation universities in Puerto Rico, China and the Emirates using high instructor-to-trainee ratios and the use of high-tech real world simulators. With the InterAmerican University of Puerto Rico it has a training campus at the university’s School of Aeronautics. The first course began in March. It works with the Civil Aviation Management Institute of China in Beijing and has a partnership with the Emirates Aviation University in Dubai.

119 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Ministry Of Women’s Affairs

PURPOSE: The Ministry is the Government’s principal adviser on achieving better outcomes for women.

„„64% of university graduates are women and 35% of women work part-time. „„There are only 14.75% of women directors on the NZX top 100 listed companies but 41.7% of women on state sector boards and committees. „„ New Zealand ranks 13th out of 142 countries in the Global Gender Gap Report 2014.

The battle to improve the overall standing of women in the community continues. Chief executive officer Dr Jo Cribb says women continue to be under-utilised in the workforce with only 213,200 in the June 2015 quarter, are under-represented in leadership roles and are more likely than men to be victims of violence. After uncertain years, the Ministry has regained ground and confidence. Its users report overall satisfaction, the Minister says she is satisfied with 68% of advice received. Possibly the new name, from Women’s Affairs to simply Women, has helped bring a new focus on the Ministry as it works to improve education and training, CEO PROFILE employment, representation in management and boards and Dr Jo Cribb became chief greater protection for women from violence. It has tackled sensitive executive in November 2012. areas such as violence in New Zealand’s Samoan community and She was previously Deputy Children’s Commissioner at continues to work on improving the lot of Maori women. the Office of the Children’s The New Zealand gender pay gap is 11.8% measured by median Commission. She has more than 10 years’ experience as hourly earnings as at June 2015 from the New Zealand Income a senior manager and policy Survey. In dollar terms men’s median hourly earnings increased leader in the Children’s Com- by $1.06 while women’s earnings went up only 50c. The Ministry mission and the Department of Internal Affairs. Defining says the gender pay gap has been reducing over time. However, any Moment: Pay equity, a con- gap is unacceptable and improving women’s economic outcomes, cern for all women, but an issue the ministry seems shy which includes reducing the gender pay gap, is a priority. to talk about. Equal pay for equal work is already provided for in New Zealand legislation. However, the causes of the remaining gender pay gap are complex and there are no straight-forward solutions. Closing the gap requires sustained action over time, and collective action from a range of players including workers, employers, careers advisers, business leaders and employee groups as well as the Government. Employers and unions have agreed to a Government proposal to set up a Joint Working Group to develop principles for dealing with claims of pay equity under the Equal Pay Act. Minister for Women Louise Upston says she is pleased gender equality issues are on the table and this is another way the Government is taking proactive steps to look at how the gender pay gap can be closed. She says until women have equal rights, equal choice, equal opportunities, equal expectations and are valued equally there is more work to be done. These constructive conversations are a big step in the right direction, and I am confident that we can reach an outcome beneficial for all parties involved.

120 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. State Services Minister Paula Bennett and Minister for Workplace Relations and Safety Michael Woodhouse say the group will recommend agreed principles on pay equity which could be applied in all sectors of the economy. In February the Ministry ran the inaugural Women in the Public Sector Summit 2016 to gain an insight to navigating the Context, Connections and Challenges involved in fulfilling their career aspirations. The Ministry replaced its old name last year. Writing in her most recent annual report, Dr Crib says the Ministry (it changed its name from Ministry of Women’s Affairs last year) is focused on those areas where it can make the most difference: women’s education and employment; increasing women in leadership; and increasing women’s safety from violence. In economic independence women’s career and employment opportunities are increasing, particularly in jobs with high growth and demand. By working with employers, training groups and training organisations in Canterbury, the number of women in trades and in trades training in Canterbury has grown to levels not seen before. Women are much more visible in construction, more women in trades training, from 50 in 2011 to 431 in 2014 and more employed in construction in Canterbury, from 3,600 in 2013 to 8,600 in 2015. It has assisted in raising the number of Maori and Pacific women enrolled in the Maori and Pacific Trades Training programme. In women in leadership its goal is to have more women take up leadership roles. It works with public and private sector leaders to take action within their areas. To keep women safe, it works with agencies especially the Accident Compensation Commission, Ministry for Social Development, Ministry of Justice and the Police alongside whanau to achieve practical results for women. Reviewing New Zealand’s results at the UN earlier this year, Dr Crib said while the legacy of gender equality relies on our ability to do better for all New Zealand women, now and into the future. Women play a pivotal role in the political, social and economic life of the country. Women are gaining tertiary qualifications at a higher rate than men and are increasingly studying and working in traditionally male-dominated and high growth sectors. At last September New Zealand had close to the highest proportion of women in the workforce ever seen. New Zealand has a National Action Plan for the implementation of the UN Security Council Resolutions, including 1325, on Women, Peace and Security. This focuses on participation of women in peacekeeping and assistance missions overseas. It also includes initiatives to eliminate violence against women and girls in conflict affected countries. New Zealand will participate in the recently established Informal Expert Group on women, peace and security. Recognition of women’s rights and perspectives must be an integral part of any programmes and policies for conflict resolution and post conflict development. Support for sustainable development in the Pacific, where 60% of New Zealand’s development budget is spent, will continue to be a priority. Increasing the participation and leadership of women in the Pacific through the aid programme is one way of taking practical steps to empower women in the Pacific region. New Zealand also supports the Pacific Prevention of Domestic Violence Programme which aims to reduce the incidence of domestic violence and increase access to justice for victims.

121 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. The Government is committed to addressing family and sexual violence, most of which is committed against women. The Ministry brings gender expertise to this work, and has produced ground-breaking research on violence against Samoan and Maori women. An important finding from this research was the link between safety, education and employment. Women told researchers there is a strong correlation between being safe, and having an education and paid work. Work arrangements with limited flexibility are barriers to women’s career advancement. The Government has introduced legislation to make it easier for all employees to work flexibly. This brings employment law more in line with modern lifestyles and expectations. To ensure maximum impact, the ministry has been working with small and medium business owners to promote the benefits of flexible and diverse workplaces. It is encouraging aspiring women leaders, by connecting them to practical resources to support them to take the next step in their careers. It runs a nominations service for recruiting women on to state sector boards and committees.

INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 3.31 3.30 sBudget performance & value for money 2.85 3.30 sThe Department’s quality of service delivery 2.92 3.00 sThe overall performance of the Department 3.21 3.34

Address: Level 9, Qual IT House, 22 The Terrace Wellington 6011. PO Box 10-049, Wellington 6143. Ph: (04): 915-7112. Fax: (04): 916-1604. E-mail: [email protected] Web: www.mwa.govt.nz Senior Staff: Minister In Charge Louise Upston. CEO Dr Jo Cribb. Margaret Retter, Director, Policy; Lynette Dixon, Director, Business Support. Staff: Current: 24.

122 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. New Zealand Customs Service

PURPOSE: The New Zealand Customs Service ensures the security of our borders. It protects the economy from illegal imports and exports. It promotes New Zealand’s international trade. We collect revenues, investigates illegal activity and prosecutes where necessary. It ensures lawful travellers and goods can move across borders as smoothly and efficiently as possible.

„„Customs processed a record 11.8m travellers in 2014/15, while effectively managing associated risks. This included visitors for the 2015 Cricket World Cup and the FIFA Under-20 World Cup. „„In 2014/15 Customs collected $12.486bn in Crown revenue. „„Customs was rated highly by the public in the inaugural Colmar Brunton Public Sector Reputation Index. This identified Customs as outperforming other agencies particularly on trustworthiness, responsible use of taxpayer money, and providing effective services. Customs rated second overall in the public rankings for 2015/2016. „„Stakeholder surveys showed 92% of travellers CEO PROFILE and 88% of commercial customers (importers Carolyn Tremain continues and exporters) are satisfied or very satisfied with her impressive run. She has Customs’ service. worked hard to improve staff morale, hard-pressed by the Customs 2020 change pro- gramme. Most dissatisfaction Customs works hard to provide visitors with a good first impression has come from support staff. of New Zealand. Comptroller of Customs and Chief Executive Officer Defining Moment: The pres- sure is on to reduce costs and Carolyn Tremain says Customs continues to look to provide a better increasing efficiency while service for customers and improve our efficiency through increased maintain security. GST on imported goods an ongoing use of technology, including the SmartGate automated passenger issue for the Department. processing system and the Joint Border Management System (JBMS). Under the Customs 2020 Transformation Strategy, Customs aims to be intelligence-led, modernise its border operations, enhance its services with a customer focus, and develop its people and culture. In 2014/15, Customs’ total income was $168.827m. Its total expenditure was $168.295m, resulting in a surplus of $532,000. Customs continues to develop the Trade Single Window and the enhanced risk and intelligence capability offered by JBMS. By the end of June 2015 over 2m transactions submitted by industry had been processed through the Trade Single Window since its launch, and self-service online registration was made available to all brokers from early July 2015. The Foreign Affairs, Defence and Trade Select Committee has been following closely the JBMS. This will now cost $104.1m to complete, an increase on the 2011 estimate of $75m. The final version of the JBMS is expected to be released in the first half of 2016. In a report the Committee said “we understand that the higher cost is because of a change in 2012 from the JBMS having a single implementation date to it having a modular, staged

123 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. delivery. This change was made to reduce the risk to traders and to enable more testing and increased functionality of the system. “The modular delivery of the system has taken longer and incurred higher costs, which Customs and the Ministry for Primary Industries have met. We were told that no additional funding has been received. We heard that the JBMS was originally intended to be implemented in two tranches and that tranche two has not gone ahead. “However, elements of tranche two have been put in place using existing funding. For example, a mobility programme has been funded from Custom’s IT budget allowance for normal capital replacement. This initiative involves staff using 300 mobile devices connected to the main system. We heard that the old system, CusMod, which was intended to be phased out, is continuing to run alongside the JBMS. This is because CusMod contains large amounts of useful information, including passenger and revenue information. Server and software upgrades mean CusMod can continue to be used.” The Committee also questioned Customs over its failure to meet its target of providing resources to 80% percent or more of New Zealand’s high-risk marine areas, those assessed in the highest 5%. Customs said although it does not have any evidence to suggest borders are more porous because it provides resources to only 57.6% percent of these areas. The risk is seasonal rather than consistently high, peaking at certain times. At times, it has no assets available to service the inshore and offshore high-risk marine areas. To mitigate the risk, Customs works closely with the New Zealand Police and New Zealand Defence Force. It works with Fiji, Samoa, Tonga, Niue, and Australia to gather intelligence. Technology allows the National Maritime Coordination Centre to electronically survey approaching ships rather than having to send craft out. Flying is also easier than despatching ships to cover expansive areas of water. Intercepting illicit drugs at the border remains a primary focus for Customs. It stays vigilant to respond to constantly changing importation methods and works with local and international partners to address this threat. There appears to have been a shift to importing methamphetamine rather than its precursors, with a significant increase in the amount of methamphetamine intercepted over the last couple of years. Customs says its detector dogs have been a great tool. They have been so successful now other countries have asked for help in developing their own detector dog capabilities. Customs and the Police has helped Fiji to develop drug detector dogs. They have also assisted the customs administrations in China and Hong Kong to develop cash detector dog teams. It has worked with Police and the Department of Internal Affairs to carry out joint operations and investigations targeting child exploitation, including an agreed protocol to enable a fast, coordinated approach. Elements in the travel trade were annoyed when a Border Clearance Levy was introduced in January. It is paid at the purchase of air or cruise tickets for travel overseas or on arrival in New Zealand on a private aircraft or yacht. Customs says the new levy was required to meet additional border protection costs. Customs Minister Nicky Wagner says the 2015-2016 summer season was the busiest so far for Customs, with a record number of travellers crossing the border and a record number using SmartGate. Passenger numbers reached record highs with almost 3.38m people passing through international airports over summer, an increase of around 10% on last summer. SmartGate use also increased with 1.15m passengers using the gates between December and February – a 15% increase

124 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. on the previous year. She says the Government’s $6.6m investment to more than double the number of SmartGates is already paying off, with more capacity in Auckland and the programme rolling out at other airports. Border checks at the new integrated gates take on average around 20 seconds. Travel is easier, she says and Customs officers are better able to focus on high-risk travellers. This approach has seen more drugs seized at the border during the summer period than ever before. Customs seized 855 drug packages compared to 771 last summer. A total of 74kg of meth was seized, plus a quarter tonne of precursors - almost double the amount seized last year. New Zealand and its Asia Pacific neighbours are better prepared to respond to a potential threat from the trafficking of weapons of mass destruction after a multinational exercise involving 21 Asia-Pacific governments. They took part in Proliferation Security Initiative (PSI) Exercise Maru and discussed and tested systems. The Asia Pacific region is an important trading hub and is home to many leading producers of legitimate goods that could be used to make weapons of mass destruction, such as chemicals in cleaning agents and medical products. It’s important that countries and agencies work together to be vigilant against any threat. New Zealand Customs and the Australian Border Force signed a Statement of Intent in Canberra to support supply chain security and enhance trade facilitation between the two countries. Both agencies are working towards a Mutual Recognition Arrangement, a formal arrangement between customs agencies which recognises each other’s supply chain security programmes. Members of these programmes enjoy a commercial advantage, with fewer border checks and speed to market for export products. An MRA will allow traders meeting the required standards to access the trade facilitation benefits of both programmes. This also provides border agencies greater end-to-end assurance over the imports and exports. The MRA will underpin the trusted trader programmes in the two countries. Recognition will benefit trusted trans-Tasman traders by reducing clearance times and making customs processes easier. Work is expected to conclude by midyear and it will come into effect shortly after. Trade in goods between the two countries totals approximately $18bn per annum. Australia is usually one of New Zealand’s top two trading partners, and New Zealand is currently Australia’s ninth largest trading partner. New Zealand has MRAs with the United States, Japan, and Republic of Korea.

INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 5.21 5.21 sBudget performance & value for money 5.00 4.79 sThe Department’s quality of service delivery 5.00 4.79 sThe overall performance of the Department 5.38 4.76

Address: The Customhouse, 1 Hinemoa Street, Harbour Quays, Wellington. PO Box 2218 Wellington 6140 Ph: (04) 901-4500. (04) 901-4555 Fax: (04): 473-7370. E-mail: [email protected] Web: www.customs.govt.nz Senior Staff: Minister In Charge Nicky Wagner. Comptroller (CEO) Carolyn Tremain. Bill Perry, Deputy Comptroller operations; Michael Paspesch, Group Manager policy, legal and governance; Anne Marie Taggart, Group Manager people and accountability; Kevin Martin, Group Manager finance, strategy and performance; Murray Young, Chief Information officer, information services; Debbie Briggs, acting Programme Director Customs 2020. Staff: Current: 1,067.

125 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. New Zealand Trade And Enterprise

PURPOSE: NZTE is the Government’s international business development agency. Its purpose is to help New Zealand businesses grow bigger, better, faster in international markets. It works with around 4,000 New Zealand businesses, and focuses intensively on around 700 of these customers.

„„Backed by NZTE, New Zealand’s wine industry has made a record $1.54bn in exports in 2015, up 14% on 2014. „„New Zealand’s top 200 ICT companies are taking the “bigger better faster” message to heart, with a record $609m (7.3%) surge in total revenues over the last year.

Not so long ago, more than a few in the private and public sectors viewed NZTE as little more than a bunch of moonshine experts and yearned for the good old days of trade commissioners. Today this image has gone. After hard-graft rethinking, NZTE is hitting its straps. Its most-recent annual report says it is now focused on developing and expanding its underlying operating model while delivering results for customers. As part of the Business Growth Agenda, in 2014 the Government committed an additional investment of $69m CEO PROFILE over four years targeted at increasing the number of companies Peter Chrisp spent 23 years NZTE works with and growing its international network. in the engineering, manufac- turing, and Pulp and Paper The BGA also aims to diversify both products and markets. industries, including roles in human resources, opera- Accordingly, NZTE efforts have been weighted towards the value tions, logistics, supply chain, added part of the economy, specifically added value food and business Improvement and beverage, ICT and services, and specialised manufacturing, as well general management. He was as attracting investment which benefits New Zealand. General Manager of Tasman Paper in Kawerau before be- NZTE has continued to refine its underlying operating model coming Senior Vice President for Norske Skog International “The Customer Way.” It segments customers, discover their needs, in Norway covering business plan for delivery, deliver services in both in New Zealand and in South America, Asia, Mid- internationally, and measure results. dle East, and Europe – then Regional President Norske It ramped up its efforts to grow its intensively managed portfolio, Skog Australasia, manu- the Focus 700 (F700) from 500 to 700. At June 2015 it reached 621 facturing newsprint for NZ, Australia and Asia markets. companies, with a goal of 700 by this June. NZTE has boosted its Defining Moment: The focus presence in South America, Australia, Saudi Arabia and China to better has been on narrowing priori- serve customers, with further resources being rolled out this year. ties, future question is will it deliver results or come near It is evolving the way it works with groups of companies or ambitious targets. “coalitions.” At June 2015, it was working with 24 coalitions, across sectors such as ICT and services, F&B and agritech. It has stepped up its role in facilitating capital flows from both domestic and international investors into targeted sectors and regions. The underlying operating model, “The Capital Way,” is designed to match willing investors with qualified investment opportunities and measure both deal flow and results.

126 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. In 2014/15, international revenue for customers in its F700 portfolio was $34bn, up $6.7bn from last year, with a portfolio growth rate of 8.7%. It worked with customers to generate $1.1bn in new export deals, over $300m more than the previous year, and 91% of customers said NZTE added value to their business. To support growth, it helped deploy $866m of capital, with a potential direct economic impact for New Zealand of $1.45b.n It works in partnership with other “NZ Inc” agencies including MFAT. Together they established G2G Know-How, a joint venture to take NZ government skills, systems and know-how to market on a commercial basis. G2G generated $9.37m in its first year of operation. The internal journey also continues, with intensity. In the last year, it has increased the capability of its staff in customer-facing roles and continues to lift business acumen and competence. Employee engagement has again lifted to 81%, up from 69% in 2011. The agency says it continues to believe the stronger the employee engagement, the better the customer experience. Last year NZTE emerged from a rigorous State Services Commission performance improvement framework review with reviewers noting, “NZTE has enabled a focused, fast-paced and very effective transformation involving every aspect of the business.” It also gave a clear view of what the agency needed to do to lift its game to the next level of performance. Chairman Andrew Ferrier, board member Charles Finny and chief executive officer Peter Chrisp, wrote in the report, “we believe that our results to date and feedback from our customers tell us we are on the right track. We are confident in our operating models of The Customer Way and The Capital Way and believe that staying true to these methodologies will deliver the greatest impact for our customers. In this coming year, we will continue our improvement journey and climb to the next level of performance. We will continue to weight our efforts to support the BGA’s strategy to diversify the economy and develop greater value-add in New Zealand’s products and services. To achieve this success, we need to execute our NZTE strategy with tight focus, detailed discipline, energy and passion.” NZTE groups its clients into three. Most resources go where it can make the greatest impact, its F700 coalition. The F700 is a portfolio of value-adding companies with strong international growth ambitions, which are keen to work with it and to which it can add significant value. It works intensively with groups of companies. These business-led coalitions of the willing have a shared international growth objective and collaborate to compete internationally. Foundation customers are a diverse group of companies at various stages of growth. NZTE provides access to a variety of services and a light touch engagement with Foundation customer managers. Foundation customers which have high growth potential form the pipeline to the F700. NZTE aims to strengthen the pipeline of future exporting businesses across New Zealand. Through its Regional Business Partner Network it supports small to medium businesses with advice and training to lift management capability and to support business growth. It will have a new presence in Colombia when the newest New Zealand embassy opens in south America. Currently the country is served from Chile. Foreign Minister Murray McCully says having a dedicated New Zealand presence on the ground in Bogota will help to support the development of strong business links, particularly investment in Colombia’s agri-business and dairy sectors. NZTE has launched new FernMark embedded with augmented reality and including a global trademark monitoring programme, to help exporters market their products internationally. Any New Zealand company currently exporting goods can now apply to carry the FernMark on

127 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. their products. Previous programmes were open by invitation only. To be granted a FernMark licence companies have to meet eligibility criteria, including an assessment of the ‘New Zealandness’ of the company and product. A licence costs between $1,500 and $5,000 annually. NZTE has two Ministers, Hon Steven Joyce, Minister for Economic Development, Minister of Science and Innovation, Minister for Tertiary Education, Skills and Employment, and Associate Minister of Finance – and Hon Todd McClay, Minister of Trade, Minister for State Owned Enterprises and Associate Minister of Foreign Affairs.

Address: The Majestic Centre, Level 24, 100 Willis Street, Wellington 6011; PO Box 2878, Wellington 6140. Ph: (04) 816 8100; Fax: (04) 816 8101. Web: www.nzte.govt.nz Senior Staff: Minister In Charge Todd McClay, CEO Peter Chrisp. Peter Fenton, General Manager, International ; Tim Green, General Manager, Customer; Suzie Marsden, General Manager Services; Richard Laverty, General Manager Strategy; David Downs, General Manager, Internal Partners; Quentin Quin, General Manager, Capital. Staff: Current: 546.

128 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. New Zealand Transport Agency

PURPOSE: NZTA looks after most aspects of land transport from funding highways to issuing licences, collecting revenue, undertaking research and providing road traffic information.

„„Massive funding is dedicated to the Auckland transport system. „„But as election year approaches the regions have been forgotten.

Roading is big business. The NZTA has oversight of the $14bn national land transport plan. Millions are going on highway and motorway improvements across the country. Around 92% by weight of all freight within New Zealand is moved by road. State highways continue to play a key role in the economic wellbeing of New Zealand through freight movement and predictable journey times. More than $4bn is earmarked for improvements to trunk and regional road network and in the major cities. NZTA points out an efficient freight industry with access to cost effective transport is vital to the competitiveness of businesses. Industries critical to New Zealand’s economy such as dairy processing, forestry and tourism are the key beneficiaries of better roads.

The roads of national significance programme is a key element CEO PROFILE of the Government’s National Infrastructure Plan and the Fergus Gammie is a former Government’s policy statement on land transport. This policy Chief Executive of Auckland direction is the basis of the investment priorities outlined in the Regional Transport Authority, National Land Transport Programme. Chief Operating Officer of Auckland Transport, Deputy Seven RoNS projects are based around the five largest population Director General Transport centres: Auckland, Hamilton, Tauranga, Wellington and Services of Transport for New South Wales and was Christchurch. The focus is on moving people and freight between Deputy Secretary Infrastruc- and within these centres more safely and efficiently. The RoNS are ture & Services with the same “lead infrastructure” projects enabling economic growth rather organisation. In this latter ca- pacity he was responsible for than responding to it. More may be added. leading a team of 1,450 staff, All seven RoNS have been identified through regional land use and managing an annual operat- ing budget of $A5bn. Defin- transport studies as being strategically significant investment needs. ing Moment: Juggling the Identifying and labelling these corridors as RoNS signaled their Govt’s priorities, resources importance, priority and certainty. and a huge budget. Auckland accounts for 34% New Zealand‘s population and generates 35% percent of GDP. Therefore the performance of the transport network has implications for the whole economy. Over the next 30 years, Auckland’s population is expected to increase by more than 700,000 people, and freight volumes are expected to rise 78%. This growth will put significant pressure on the city’s transport system. The Foundation Report is the first of three reports to be produced as part of the Auckland Transport Alignment Project, which aims to achieve an agreed strategic approach for developing Auckland’s transport system over the next 30 years, sets out a framework to determine options for how the Government and Council can collaborate to tackle current and likely future transport issues.

129 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. A core part of the report will look at how travel demands and technologies may change over the period. Transport technology will have an obvious benefit in a city like Auckland and can play a role in solving the city’s transport problems, especially reducing congestion. NZ Transport Agency is a Crown entity governed by a statutory board. It is comprised of experienced people drawn from an expansive range of skills, including planners and policy analysts, engineers, business advisors, contract specialists, IT, legal, property and financial professionals. It allocates funds from the National Land Transport Fund to activities on local roads and state highways including passenger transport services. It operates and improves the state highway network, issues driver licences and transport service licences, manages vehicle certification, registration and licensing, collects road user charges and other revenue, develops land transport rules and the official New Zealand road code, manages driver testing services, manages national advertising and education programmes, administers a fund for land transport research and provides information about travel times and traffic conditions. NZTA works closely with local councils across all regions to deliver transport solutions with six business groups. Strategy, Communications and Performance maps and sets the organisation’s destination, makes sure it is aligned with the government’s direction, and monitors NZTA is on the right track. Planning and Investment works with local government on planning and investing in an integrated transport system. Highways and Network Operations builds, maintains and operates the state highway network. Access and Use provides services such as driver licences and motor vehicle registration, and regulates transport operators. Organisational Support provides information services, finance, legal, assurance and risk, and corporate support services. A principal focus is the National Land Transport Programme 2015-18. The next two years will see the fund’s investment aimed at improving economic growth and productivity, safety, and value for money. This reflects the strategic direction set by the 2015 Government Policy Statement on Land Transport. The $13.9bn forecast expenditure for up to 2018 marks a 15% increase compared to the previous NLTP and includes more than $10bn from the National Land Transport Fund. It has two significant developments providing the foundation for better transport investment and decision making. Firstly, funding assistance rates for local government transport activities were reviewed to target higher rates for rural and provincial areas with most need and to make the system fairer between the different types of transport activity. Secondly, NZTA worked with local government to establish consistent, fit-for-purpose levels of service for all roads in every part of the country. This system, the One Network Road Classification, enables consistent and fair investment decision-making in partnership with local councils. The strong level of investment in local road and highway maintenance and renewals in this NLTP ensures that the road network continues to meet the needs of users. The 2015–18 programme also includes the implementation of the new Regional Improvements Programme. A number of road improvement projects outside the major metropolitan areas are being developed, alongside the government-funded Accelerated Regional State Highway Programme announced last year.

130 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. As part of its strategy to introduce more efficient trucks and buses, the Land Transport Rule: Vehicle Dimensions and Mass amendments expand on changes which went into force in urban areas last October. Transport operators have more choices when purchasing vehicles, and high- capacity buses already operating between our towns and cities will be able to increase their capacity. These changes open the door to new tourism opportunities in the regions, and may also enable a greater uptake of hybrid and electric buses, which are generally heavier than diesel vehicles. In Auckland, higher axle mass limits have already enabled double-decker buses to operate on key public transport routes, offering more seats at peak times. Safety is a key consideration. Vehicles will not be issued with permits in excess of their design limits, or beyond their Certificate of Loading, and road controlling authorities will be able to specify routes to ensure heavier vehicles travel on suitable and safe roads. Heavier vehicles will also be subject to higher road user charges to cover the extra maintenance costs. The Government is looking at further increases in axle mass and size limits for heavy vehicles through the broader Vehicle Dimensions and Mass Review and this involves the NZTA and Ministry of Transport.

INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 4.17 4.92 sBudget performance & value for money 4.58 4.31 sThe Department’s quality of service delivery 4.58 4.69 sThe overall performance of the Department 4.69 4.40

Address: Victoria Arcade, 50 Victoria Street, Private Bag 6995, Wellington 6141. Ph: (04) 894 5400 Fax: (04) 894 6100 Email: [email protected]. Senior Staff: Minister In Charge Simon Bridges CEO Fergus Gammie. Jenny Chetwynd, Group Manager Strategy, Communications and Performance; Celia Patrick, Group Manager Access and Use; Allan Frost, Group Manager Organisational Support; Tommy Parker, Group Manager Highways and Network Operations; Dave Brash, Group Manager Planning and Investment; Cathy De Jongh, Acting Group Manager People and Capability; Ernst Zöllner, Regional Director Auckland/Northland; Raewyn Bleakley, Regional Director Central; Jim Harland, Regional Director Southern; Harry Wilson, Regional Director Waikato/Bay of Plenty. Staff: Current: 1,343.

131 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. New Zealand Police

PURPOSE: To maintain law and order, detect and apprehend offenders, work to prevent crime before it happens and build safer communities.

„„A new Integrated Safety Response pilot will bring together a team of Police, CYF, Corrections, Health, specialist family violence NGOs and Maori service providers to support victims and their families will be piloted in Christchurch from July 1. „„Cash and assets worth around $382m have been seized under the 2009 Criminal Proceeds (Recovery) Act which enables Police to confiscate the proceeds of crime. „„The new multi-agency Gang Intelligence Centre, one of four initiatives in the Government’s Gang Action Plan, provides an intelligence-led response to gangs, bringing together information held by MSD, Customs, Corrections, Internal Affairs, Immigration and Police.

Confidence in the Police remains high. Last year the rating reached CEO PROFILE 78% putting them among the most trusted professions in New Zealand. Yet as Police Minister Judith Collins, back in the job since Mike Bush is Commissioner late last year, puts it, no organisation can rest on its achievements. of NZ Police and Chief Con- stable, with responsibility for The Police have an obligation to the public to be constantly operational matters. As Chief evaluating how they can do things better and respond to new and Executive he is responsible existing crime trends more effectively. for assets and budgeting. The Commissioner is account- She says this doesn’t mean just catching criminals, although this able to the Police Minister for the administration of Police will always be the Police’s main priority, but also a strong focus on services, but acts indepen- crime prevention and community policing. dently in law enforcement matters. He began a three- Since 2011, fundamental changes have been made to transform year appointment in April the business of policing through the Policing Excellence change 2014. He joined Police in programme and the operating strategy Prevention First. Much 1978. Operational and admin- istrative positions included has been achieved over the last four years. Those living in and South East Asia liaison officer, visiting New Zealand report being and feeling safer; Police based in Bangkok. He was retain world-leading levels of public trust and confidence; and awarded the MNZM for his achievements after the 2004 the organisation itself has managed its resources intelligently, Asian tsunami. As Counties- continues to reflect a diverse face to the various communities it Manukau district commander he oversaw deployment of an serves, and is in good heart. additional 300 officers into Most crime is carried out against a very small proportion of the NZ’s busiest Police district. Defining Moment: Is the thin population. The 2015 New Zealand Crime and Safety Survey blue line too thinly spread? estimates 3% of the population experiences 53% of crime. Not achieving targets set in Working with partner organisations Police seek to reduce the the Commission of Inquiry into Police Conduct. level of repeat victimisation. Many of those amongst this small group are victims of family violence, which is why Safer Families is one of the key themes of Policing Excellence: the Future.

132 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. With nearly 12,000 staff, it provides policing services 24 hours a day, every day. It operates by land, sea and air, manages over 770,000 emergency calls a year and is always actively preventing crime and crashes. In 2014/15, the Police received revenue of $1,527m, up $16m from the previous year. Total expenditure was $1,524m, up $33m from the previous year. The Police reported a surplus of $2.7m in 2014/15. At June 2015, the Police employed 11,980 full time staff, consisting of 9,048 constabulary staff and 2,932 other employees. On an average day Police will conduct around 384 foot patrols, in excess of 894 bail checks, 161 licensed premises monitoring visits, stop around of 1,700 vehicles, administer more than 7,000 breath screening tests, respond to more than 2,100 emergency calls, answer around 3,000 non- emergency calls including approximately 540 traffic-related *555 calls and 1000 crime reporting line calls, attend 17 sudden deaths, respond to 123 emergency traffic events, help manage more than 40 people in mental distress and take 270 prosecutions. Police are developing a new Human Resources Management Information System (HRMIS) payroll to replace the existing system, which is becoming increasingly fragile. Police confirmed to Parliament’s law and order select committee the project would not be delivered in April as had been expected. It is due July with a final go-live date in September. The delays have incurred costs and the police told the committee the project’s costs will be more than $11m over the budgeted amount during the project’s 10-year life. Some MPs noted their wider concerns about the Police’s IT projects. Of the 35 IT projects the Police completed last year, 28 were more than a month late. Sixteen were more than six months late. This year, 15 of 31 current IT projects are already six months late. Police said they have an excellent IT team and good project management in their organisation. Although any programme behind schedule is of concern, the IT programme involves challenging work. The Independent Police Complaints Authority (IPCA) upheld 283 complaints against the Police in the past year, compared with 190 in 2013/14. In response, the Police explained to the committee the largest increase was in the “failure to investigate” category. This was often because the Police failed to communicate with the people they were investigating for. Often, these complaints could be reconciled and not upheld. Complaints made about Police language and attitude have also increased. Police indicated these were lower-level complaints and the Police self-reported 7% of complaints to the IPCA. The Turning of the Tide is a joint strategy between Police and Iwi/Maori aiming to reduce the level of Maori representation in victimisation, crime and crash statistics. It was launched in 2012 and has six specific targets for achievement over a six year period. The targets are spread across first time offenders, repeat offenders, repeat victims, and fatal and serious crash fatalities. Police are making best-use of innovation and technology to meet the real-world challenges of modern policing and supporting the broader police strategy. Information Communication Technology is at the forefront of helping Police be “more street than station.” Through the Enterprise Services programme police are gaining access to a modern, portable, centrally supported computer set-up that allows them to do their jobs without being tied to a particular location. Front-line staff have updated iPhone 6+ devices with enhanced features and more functionality. Mobile tools such as operational tasking application “OnDuty” are being developed with direct

133 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. input from uniformed staff and the Police’s strategic partners though our Mobile Innovation Lab and Agile Development Centre. NZ Police is the lead technical agency for the Whole of Government Radio Network (WGRN). This oversees the operation of a radio network providing mission-critical communication services for New Zealand public protection and disaster relief agencies. Work is managed by the WRGN Governance Board which reports directly to the Ministers of Finance, Economic Development, Communications and Police. Increasingly the Government is adopting new cross-agency programmes. One addresses family violence. Justice Minister Amy Adams says the new Integrated Safety Response pilot programme is a better way of handling reported family violence, including daily assessment meetings involving all relevant agencies and is a critical part of improving the Government’s response to family violence. Another cross-agency operation is the Gang Intelligence Centre. This collects intelligence on gang activity and is one of the four initiatives in the Government’s Gang Action Plan. It provides an intelligence-led response to gangs, bringing together information held by MSD, Customs, Corrections, Internal Affairs, Immigration and Police. A new disclosure scheme makes it easier for Police to disclose a person’s violent criminal past to a concerned partner or friend. Justice Minister Adams says there have been too many cases where concerned family and friends haven’t been able to find out whether someone they know or live with has a history of family violence The new National Cybercrime Plan provides new training to help Police deal more effectively with cyber-crime at the frontline. It will check relevant aspects of Crimes Act 1961 and other legislation to test whether they are fit for purpose in addressing cybercrime. It will work more effectively with other countries and the private sector to help stop crime from offshore, Improve use of Police information to better understand the nature and impact of cybercrime on New Zealanders. The Financial Intelligence Unit, part of the Police Financial Crime Group, produces quarterly reports. The unit came from the 2009 Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act and aims to assist in detecting and deterring money laundering, contributing to public confidence in the financial system and achieving compliance with the Financial Action Task Force recommendations. The quarterly reviews provide an accurate picture of current, emerging and longer term factors. It examines money laundering and terrorist financing methods used in New Zealand and overseas. It provides indicators of money laundering and terrorist financing techniques, highlights emerging trends and topics and share information in relation to AML/CFT and financial crime in general, provides typology case studies and updates suspicious transaction reporting and Asset Recovery Unit activity Police are enthusiastic use of modern social media. Commissioner Mike Bush blogs sometimes daily on current events. It has installed a modern media management system that provides information on most police activity, from crime to road accidents in real time. Police continue to pursue initiatives designed to boost the gender balance of the organisation. The minimum recruiting target was refined to 35–40% women for 2014/15, which is considered sustainable. Retention rates for women increased significantly last year, remaining slightly lower than males. However, in the last six months the rates have been higher for females. The rolling 12-month number is expected to be higher for females than males within the next quarter.

134 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 4.92 4.69 sBudget performance & value for money 4.85 4.50 sThe Department’s quality of service delivery 5.00 4.56 sThe overall performance of the Department 5.08 4.65

Address: 180 Molesworth Street, PO Box 3017, Wellington. Ph: (04): 474-9499. Fax: (04): 498-7400. Web: www.police.govt.nz Senior Staff: Minister In Charge Judith Collins. Commissioner Mike Bush. Deputy Commissioner District Operations (Acting), Grant Nicholls, Deputy Commissioner National Operations, Mike Clement, Deputy Chief Executive Public Affairs, Karen Jones, Deputy Chief Executive People (Acting), Kaye Ryan; Deputy Chief Executive Finance, John Bole; Deputy Chief Executive Maori, Superintendent Wallace Haumaha; Deputy Chief Executive Strategy, R. Mark Evans; Assistant Commissioner Districts, Allan Boreham; Assistant Commissioner Response and Operations, Mike Rusbatch; Assistant Commissioner Prevention and Road Policing (Acting), David Trappitt; Assistant Commissioner Investigations, NATSEC & International, Malcolm Burgess; Assistant Commissioner Strategy & Transformation, Andrew Coster. Staff: Current: 8,796.

Budget Update $299m to maintain, and boost services.

135 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Offices Of Parliament Parliamentary Services It has been a year of consolidation for Parliamentary Services under General Manager David Stevenson after the upheavals in recent years. Writing in his most recent annual report, he says it has been a particularly rewarding year and a period of re-building for the Service with many highlights to end a very positive year. Staff could be proud of what was achieved together. The Service has commenced its journey towards its 2020 vision of “being recognised for excellence and innovation.” The service has taken on board the State Services Commission’s 2014 Performance Improvement Framework and works hard on the performance challenges identified by the review. It provides administrative and support services to the House of Representatives and members of Parliament. It manage the Crown’s buildings within the Parliamentary area and provides tours, education and information services for the public. It is the largest of the agencies housed in the Parliamentary complex. At June 30, 2015, the Service employed 705 staff, equivalent to 581 full time equivalent staff (FTEs) compared with 727 staff equivalent to 602 FTEs at June 30, 2014. 61% employed to support members of Parliament or Party Political offices (member support staff and 39% provide corporate support services and advice on behalf of the General Manager of the Parliamentary Service. Stevenson says throughout the year the Parliament sector partnership approach with the Office of the Clerk continued to evolve. Both organisations have worked closely together to facilitate a smooth transition between Parliaments. There is a strong focus on promoting a more accessible Parliament for New Zealanders and ensuring elected representatives are provided with the support required to carry out their duties in Wellington and around the country. A significant achievement was the reorganisation of appropriations brought about by changes to the Speaker’s Directions. These were implemented and training provided to members. The introduction of the Members of Parliament (Remuneration and Services) Act 2013 and additional responsibilities of the Remuneration Authority in determining various accommodation and travel entitlements added a further complexity to the rules. In response to the PIF review, the service launched a significant people and change programme for the core staff workforce. This has resulted in new agreed remuneration, performance and behavioural frameworks. This was accomplished by building a stronger partnership with the Public Service Association and driving a consultative approach with staff to deliver the new frameworks, he says. The three people projects set the foundations of a robust strategy to address concerns of staff highlighted by a 2013 staff culture survey. An important focus for the Service over the next four years is to ensure staff feel valued, understand required behaviour, provide the best service to elected representatives and others and are constantly recognised for so doing. The Service also introduced some significant changes for support staff managed by members of Parliament and employees of the Service. These changes have included the implementation of new job families and a remuneration structure for the 51st Parliament, and the launch of a new performance framework along with a specific learning and development system.

136 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Parliamentary Service reports its MP customers appear happy. Members’ satisfaction levels equal or exceed 80% relating to the transition between each parliamentary term. Targets relating to key service delivery points such as HR and Finance, have been met. New members’ satisfaction with services provided during the parliamentary transition rated 94%. However, returning members were not so happy and their satisfaction rating reached only 48%. Parliamentary Service says this was due largely to the quality and content of communications not meeting expectations. This is being address in preparation for the next transition. Overall 69% new and returning members were satisfied with services provided relating to the transition between the 50th and 51st Parliaments. Customer satisfaction with HR and Finance service provision was 70% and 73% respectively. This reflects the substantial change and impact that took place for members with the changes to the Speaker’s Directions and the Members of Parliament (Remuneration and Services) Act 2013. Future actions planned to improve satisfaction levels include stronger learning and development opportunities to member support staff, and a review of financial services to members and support staff after a year of the new Speaker’s Directions. Parliamentary Service contributed to the Wellington City Council project to regenerate the Cenotaph by making land and funding available to connect the Cenotaph to the Parliament grounds forecourt by way of a new set of steps. The British Government gave a bronze plaque commemorating the 18 New Zealand soldiers who earned the Victoria Cross in World War. In September 2014 work commenced on replacing ageing grout between all the marble exterior panels on Parliament House as water had started to seep into the interior of the heritage listed building. Grout joints around the entire exterior of the building are being replaced to ensure preservation for another 100 years. In A new membrane roof has been applied over the top of the existing roof. Improvements have been made for access by the less abled including toilet facilities for seeing-eye dogs. Security of the Parliamentary precinct has been improved with more access control hardware, more CCTV coverage, software programming to enable the systems to respond to changing threat levels, and development of improved training plans and procedures for the security officers. Work is underway to implement the Government’s 29 Protective Security Requirements with the other four Parliamentary precinct agencies, Office of the Clerk, Parliamentary Counsel Office, Department of Prime Minister and Cabinet, Ministerial and Secretariat Services Department of Internal Affairs.

Address: Parliament Buildings, Private Bag 18041, Wellington, 6140. Ph: (04): 817-9999. Fax: (04): 471-2551. Web: www.parliament.nz

Senior Staff: Reports to the Speaker of the House of Representatives, David Carter. General Manager, David Stevenson. Staff: Current: 717.

137 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Office Of The Auditor-General The Office of the Auditor-General has maintained its high standards in making sure public sector organisations are spending public resources well and making good decisions. Behind the cheerful disposition of Controller and Auditor-General Lyn Provost lies a steely mind and an equally-hard-nosed organisation. In April she issued a thoughtful account entitled “Reflections from our audits: Governance and accountability.” High standards of public sector governance and accountability are essential to healthy democracies at both a national and local level. She wrote they enable the effective and efficient use of public resources in CEO PROFILE the wide range of entities making up New Zealand’s public sector. Lyn Provost became Con- troller and Auditor-General in Accountability requires public entities to report useful and timely October 2009. She joined the information about what they have achieved with the resources Audit Office as an Assistant they have used, so Parliament, taxpayers, and ratepayers can hold Auditor in 1978 before a stint in the United Kingdom and them to account for their performance. South Africa. She returned in 1985 as the Director of Profes- Most public entities exercise the powers of the state and/or sional Services, and became use public resources. If people are to continue to support the an Assistant Auditor-General democratic process, they must trust the institutions of the state. in 1990. Her career included senior roles within the State The private sector also depends on good public sector governance Services Commission and Archives New Zealand, before and accountability. She notes our economy is based on international eight years as the Deputy trade - our reputation for being largely free from corruption and Commissioner of Police (Re- an easy country to do business with is a competitive advantage. In source Management). my opinion, the quality of governance in the public sector can be improved. It is not working as well as it should in some entities and problems have occurred and will continue to do so, unless the standard is raised, she wrote. In New Zealand, there is an expectation of accountability and transparency. Fortunately, New Zealand has a well-established public management system with strong accountability foundations. However, we should not take this for granted or be complacent. Our recent fall from second to fourth in Transparency International’s Corruption Perceptions Index 2015 gives us an opportunity to pause and ask what we can do better. Provost says in our view, the quality of governance in the public sector can be improved. It is not working as well as it should in some entities and problems have occurred and will continue to do so, unless the standard is raised. One matter for improvement is the clarity of role definition between the responsibilities of governance and management at both an organisational and project level. A second matter for improvement is risk management. Top-class examples of good practice are hard to find. The changing public sector landscape, fiscal pressures, demographic changes, and new ways of working all demand effective governance. Cross-agency and cross-sector developments, public private partnerships, and increasing third-party service delivery are all driving changes to governance and accountability arrangements in central and local Government. We often hear about examples of collaboration which are working well. One such example is where Canterbury

138 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. District Health Board and West Coast District Health Board set up an alliancing arrangement. The two organisations have come together with a shared vision and put people at the centre of it. As a result, there is a strong service-delivery focus to how the district health boards work. There should be a direct benefit to the West Coast residents who should now receive better access to health services in their own community. She says we have also found examples where collaboration has not been as effective. In our audit of the Whanau Ora programme, we found that the relationships between the agencies involved had not fully matured at the time of our audit. This was a barrier to achieving the full potential of Whanau Ora. There is an increasing focus on collaboration between Government agencies and between local and central Government, for example in relation to Canterbury’s earthquake recovery and tackling housing and transport issues in Auckland. Increasingly, this collaboration is seen as the most effective way to solve complex problems and to ensure that entities are using public assets effectively and efficiently. This could lead to different organisational models or structures. There is a need for governance and accountability systems to keep up with the changes arising from this collaboration. Cross- sector governing bodies need to ensure that they remain focused throughout the delivery phases of work programmes that implement strategy. These governing bodies play an important role in unblocking systemic obstacles to delivery, such as the challenges organisations face in sharing data and information due to privacy or security concerns. Working collaboratively is not “all or nothing.” Agencies still need to deliver their core business. Collaboration should be for a purpose and agencies should be deliberate about identifying those areas or topics or initiatives where collaboration is necessary, and those where they just need to get on with their own job. This is a balancing act and prioritisation is required. The quality of governance in local Government is coming under increasing scrutiny. Local Government New Zealand has a programme on leadership and governance. We consider that improved governance will aid better decision-making and outcomes for communities. It should also assist in enabling better accountability. The nature and style of governance in local Government is not static. It has been continually tested through structures such as the introduction of local boards in Auckland. Similarly, events have tested the strength of existing governance arrangements. Every year the OAG audits public entities required to publicly report (about 3700) and prepares 20-30 in-depth reports on specific matters. This year there have been hard nuts to crack in local and central Government. When the OAG reported to Parliament’s Finance and Expenditure Select Committee on the review of Government spending 2014/15 one focus was on the consequences of the Canterbury earthquakes. The OAG identified a number of uncertainties seen some five years after the Canterbury earthquakes impacting on the Government’s financial statements. The Committee asked the Auditor-General whether these had been reflected as well as they could have been in the statements and whether the entities involved could have done better with their estimates of liabilities. The Committee reported “we were told that the audit confirmed that the effects of the earthquakes had been appropriately accounted for. In the view of the Auditor-General, the estimates were the best that could have been done at that point in time. The situation has been complicated because there was not just one event to be taken into account, but multiple, ongoing events. No one who was

139 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. involved at the time immediately understood the complexity of the factors that would be relevant, or the extent of their impacts.” The Auditor-General checks Government agencies do not spend more money than Parliament has approved and they have spent money for its intended purposes. In her report on 2014/15 she indicated the process of how appropriation and supply Bills work and their implications is not widely well-understood. However, the amount of unappropriated expenditure (spending without proper authority) tends to be relatively small. It was less than 0.1% of the Government’s total budget in 2014/15 and the year before less than 1%. In 2013/14 unappropriated expenditure was starting to increase, to $213m but in the most recent year it reduced again, to $55.8m. The Kaipara District Council and the Auditor-General agreed to settle the claim by the Council against the Auditor-General in connection with audit issues identified in the Auditor-General’s report Inquiry into the Mangawhai community wastewater scheme tabled in Parliament in December 2013. The Inquiry established the Council failed to adequately perform its responsibilities to the community in connection with the wastewater scheme. The Council’s claim alleged the Auditor- General failed to identify these failings in a timely manner and take appropriate steps to bring them to the attention of the Council. Some of the poor decisions made by the Council in this period could have been averted if the Auditor-General’s office had performed its responsibilities appropriately. In the inquiry report, the Auditor-General offered an unreserved apology to the Kaipara District community for the failings in some audit work carried out by her office. However, the Auditor- General disputed the Council’s claim for damages arising out of the failings. In particular, the Auditor-General considered it was the Council that had the responsibility to comply with its statutory obligations, and its failure to do so is not attributable to the Auditor-General’s office. The parties agreed to participate in mediation conducted by Hon Rodney Hansen QC, a retired High Court Judge. They agreed to settle the dispute without any admission of liability, $5,375,000 paid to the Council on behalf of the Auditor-General and the parties bearing their own costs in the litigation. The mediator confirmed to the parties the settlement is reasonable for the parties in his opinion. The Auditor-General is an Officer of Parliament. Her mandate and responsibilities are set out in the Public Audit Act 2001.She is independent of executive Government and Parliament in discharging the functions of the statutory office, but is answerable to Parliament for her stewardship of the public resources entrusted to her. Local authorities are accountable to the public for the activities they fund through locally raised revenue. As an Officer of Parliament, the Auditor-General provides this independent assurance to both Parliament and the public.

Address: Level 2, State Services Commission Building, 100 Molesworth Street, PO Box 3928, Wellington, 6140. Ph: (04) 917-1500. Fax: (04) 917-1549. E-mail: [email protected] Web: www.oag.govt.nz Senior Staff: Controller & Auditor General, Lyn Provost, Deputy Controller & Auditor-General, Greg Schollum; Assistant Auditors-General, Accounting & Auditing Policy, Todd Beardsworth; Legal, Melanie Webb; Local Government, Andrea Reeves; Parliamentary Group, Gareth Ellis; Corporate Services, Peter Grant; Performance Audit Group, Mike Scott; Research and Development, Anne Webster. Staff: Current: 362.

140 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Parliamentary Commissioner For The Environment PURPOSE: The Parliamentary Commissioner for the Environment investigates environmental concerns independently of the Government. The Commissioner reports to Parliament through the Speaker of the House and the Officers of Parliament Committee. The Commissioner is separate from the Ministry for the Environment.

The Commissioner’s role is unique and different to the roles of Government environmental agencies, such as the Ministry for the Environment, the Environmental Protection Authority, and the Department of Conservation. Decisions to change environmental law, policy and institutional arrangements are the responsibility of Parliament, central Government, and local Government. Implementing these decisions, and monitoring their impact on the environment, is the responsibility of Government agencies. Dr Jan Wright investigates environmental matters of her own CEO PROFILE choosing. Supported by staff with a wide range of expertise, she Dr Jan Wright was sworn in as Parliamentary Commis- judges evidence gathered from many sources. Her work is known sioner for the Environment for for being clear, fact-based and pragmatic. a five-year term on 5 March 2007 and reappointed for a All of the Commissioner’s work is directed towards a single second term in 2012 She output, independent reports and advice on environmental has a multidisciplinary back- issues, and a mission to maintain or improve the quality of the ground with a Physics degree from Canterbury, a Master’s New Zealand environment. degree in Energy and Re- sources from Berkeley in By and large, the Commissioner is getting on rather better with California, and a PhD in Pub- Ministers. Not through any act of hers, more a case of Ministers lic Policy from Harvard. In have a better appreciation of the role of the office. A good example 2012 she was awarded an Honorary Doctorate of Sci- is her support for the new Kermadec ocean sanctuary and ence from Lincoln University protected marine areas legislation providing Treaty and Maori and was made a Companion fisheries rights are protected. of the Royal Society of New Zealand in 2015. Before her Another was her support for Environment Minister Nick Smith’s present role she worked as proposed national regulations for pest control rather at local an independent policy and economic consultant for many authority level. Government agencies and as a member of various Crown She has urged people to heed a report showing electric cars help Entity Boards. combat climate change, but solar panels do little. If we are serious about tackling climate change, we must keep crunching the numbers. She said sometimes the results will be surprising. Electric cars are a “no-brainer.” Carbon dioxide emissions from vehicles are a big problem and getting worse. Electric cars must be part of our future. In contrast, report showed solar panels do little to help in New Zealand. In winter the carbon dioxide emissions from generating electricity are at their highest. But solar panels are most effective in summer. She said solar makes a lot of sense in many countries, but we need to play to our strengths. Wind farms, geothermal power plants, and electric cars will help us all year round.

141 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. In her briefing to MPs at the start of the year, she said the first quarter would bring opportunities to provide advice to the House on proposed changes to three key areas of environmental policy: the Emissions Trading Scheme, the Resource Management Act, and marine protection legislation. She intends to make a submission on each. Since the release of her 2013 report on the plight of the longfin eel, she has been encouraged by the Government’s response. It was imperative to all to ensure the survival of the extraordinary species. She gave strong support to a proposal from the Ministry for Primary Industries to separate the South Island eel stocks, a welcome step in the right direction. Work is underway analysing Environment Aotearoa 2015 - the first ‘synthesis’ state of the environment report to be released following the passing of the Environmental Reporting Act. Investigations into agricultural greenhouse gases, cadmium accumulation in soil, and the future of New Zealand’s native birds, continue. At the end of last year, she released a report on rising sea levels - one of the consequences of climate change. New Zealand needs to better prepare for the impacts of a rising sea on its coastal towns and cities. “I am pleased to see that my report is being used by councils and communities as they grapple with this critical issue, which will be with us for a long time to come.” The Commissioner handles essentially existential matters - preparing New Zealand for rising seas: certainty and uncertainty; managing water quality - an examination of current reporting and the state of air quality in New Zealand. Providing independent advice to MPs was her highest priority. She is keeping a close eye on amendments to the Resource Management Act and recently sounded a cautionary note on proposed amendments. Acknowledging the concern about housing lying behind many of the proposed changes to the RMA, she warned some went too far. Making planning processes faster and simpler in some situations is a good thing but the Bill went too far in stopping people having their say on important environmental matters. Sometimes Government intervention is the right thing to do. But more checks and balances are needed. The powers granted to the Minister would be too wide-ranging. The RMA is 25 years old and has been amended many times. She made the point it may be time for a fundamental rethink about how we protect our environment and plan cities. The housing problem was spreading beyond Auckland. Climate change meant cities must be made more compact and prepared for rising seas and more intense rainfall. Forthcoming studies include transport, the largest source of New Zealand’s carbon dioxide emissions, so the use of electricity for transport (electric cars) is of particular interest. It holds potential for significantly reducing the country’s greenhouse gas emissions and improving the management of peak electricity demand. Pest plants or weeds have long been a problem. Auckland has been called “the weediest city in the world.” The potential for an investigation into weeds is being scoped. Wilding trees have long been a concern of the Commissioner. Soil is an important resource to New Zealand, forming the basis of the agricultural economy. An investigation into the potential significance of cadmium in soil is underway. A second soil-related topic with potential for investigation is the ongoing sedimentation of waterways from erosion. She has around 22 staff and her office functions on modest resources. Forecast revenues for 2016 are $3.19m which matches expenditure at $3.1m.

142 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Address: 4th Floor, Reserve Bank Building, 2 The Terrace, PO Box 10 241, Wellington, 6143. Ph: (04): 471-1669. Fax: (04): 495-8350. E-mail: [email protected] Web: www.pce.parliament.nz Senior Staff: Reports to the Speaker of the House of Representatives: David Carter. Commissioner: Dr. Jan Wright.

Budget: Vote Parliamentary Commissioner for the Environment: Current: $2.44m (2013: 2.4m; 2012: 2.340m; 2009: $2.5m; 2008: $2.5m; 2003: $2.3m). Staff: Current: 17.

143 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Office Of The Ombudsman Judge Peter Boshier has made a brisk start to his five-year term as Chief Ombudsman. Outgoing, affable, he has shown an early commitment to openness. A lengthy career at the bar and on the bench has given him a particular facility for identifying obfuscation and evasion. He has already ruffled some Ministerial feathers. He has served notice on departments, agencies and Ministers that he is on watch. An early focus has been on making sure everyone understands the implications and obligations of the Official Information Act. Fresh guidelines have been issued and he has threatened to name the tardy ones. Staff report a new sense of CEO PROFILE urgency and interest in their work. He is strong on teamwork with Before starting his appoint- a lawyer’s eye for detail but a judge’s view of a wider world. ment in December, Peter Boshier was a Law Commis- Professor Ron Paterson was appointed an Ombudsman in June 2013. sioner with the New Zealand Law Commission and was Before this he was a Professor of Law at the University of Auckland also a Family Court Judge. and New Zealand Health and Disability Commissioner from 2000- Born and educated in Gis- 2010. With law degrees from Auckland and Oxford Universities, Ron borne, he attended Victoria University of Wellington, ob- has held Fulbright and Harkness Fellowships. He has researched taining a Bachelor of Laws and lectured in the United Kingdom, the United States, Canada and with Honours Degree in 1975. Australia, and is an international expert on complaints, healthcare After a period of practice in Wellington he was appointed quality and the regulation of health professions. Previous positions as a District Court Judge with include Chairman of the New Zealand Banking Ombudsman a specialist Family Court war- Scheme and a member of the Board of the Royal Australasian rant in 1988. He has a long association with Pacific judi- College of Physicians. cial issues. In 2002 and 2003 Judge Boshier set out his stall earlier this year, writing the end he was seconded to under- take judicial training, based of Dame Beverley’s tenure was marked by the release of her in Suva. He travels regularly investigation into the operation of the Official Information Act, to Pacific Island countries to with the catchy title “Not A Game Of Hide And Seek.” He said the undertake workshops on the subject of family violence and real importance of Dame Beverley’s work here and the legacy she youth justice. He holds the leaves, is we now have a very clear platform from which to achieve Samoan Matai title of Misa, better practice under the Official Information Act. We owe you bestowed in 2000. much, Dame Beverley. Addressing resourcing issues, he said we do have a problem in how we are handling our work. It is taking us too long to deal with complaints under the Ombudsmen Act and official information legislation and we have unacceptable delays. “We know it, and my number one priority is to achieve change in this respect. How do we do that? Firstly, we must excise our backlog, and arrive at a management process which never permits this sort of situation to develop again. I recognise that we will need some additional resource to enable us to clear our backlog. Secondly, I think we must place more importance on early resolution and reserve our heavy duty work for cases that demonstrably need it. By concerted triage, we will try and address peoples’ concerns promptly but efficiently. Thirdly, we often end up as recourse for relief in the first instance rather than later on when we really should be used. Many agencies have inbuilt dispute resolution proceedings which I want used to the full. In a number of respects, I want our Office to push back and not just encourage but require agencies to resolve disputes with effective internal processes, and for us to then

144 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. intervene only if it is clearly required. The fourth thing that I am very keen on, and it flows from the Not a game of hide and seek report, is having dedicated teams to conduct agency information and education, and also audit on performance. My intention is that we will publish performance compliance reports so as to enable good benchmarking across government to occur.” Judge Boshier and Professor Paterson are backed by two Deputy Ombudsmen, Leo Donnelly and Bridget Hewson, a General Counsel, John Pohl and 68 staff divided into 13 teams located in Auckland, Wellington and Christchurch. The Intake and Assessment Team receives and assesses complaints and enquiries. The Early Assistance and Early Resolution Teams handle the large number of complaints and enquiries that can be addressed without a formal investigation. There are Investigation and Resolution teams in Auckland, Wellington and Christchurch which assist the Ombudsmen with investigations or otherwise resolving complaints. The COTA Team headed by Chief Inspector Jacki Jones assists the Ombudsmen with their function of monitoring places of detention under the Crimes of Torture Act. The Investigations and Inspections teams are complemented and supported by the Strategic Services Group which advises on policy and professional practice initiatives, wider systemic and administrative improvement investigation along with support in the areas of information management, human resources and information and communications technology. The Policy and Professional Practice Advisory Group headed by Assistant Ombudsman Emma Leach comprises Principal Advisers responsible for providing internal and external advice, guidance and training on policy and professional practice matters, international relations, knowledge management, research, and the Ombudsman’s communications including resources, publications and outreach activities. The Wider Administrative Improvements investigations assess and scope opportunities for investigations aimed at achieving broader improvements. Operations are supported by the Finance and Business Services Team. One interesting new case note was published recently setting out the reasons for sustaining a decision by the Department of Prime Minister and Cabinet to withhold information concerning the award of a knighthood to Sir Paul Collins. Former Chief Ombudsman Dame Beverley Wakem formed the opinion that while there was a public interest in disclosure of certain information concerning the process by which nominations were considered, this interest could be met by release of a summary of that particular information as well as the investiture information already in the public domain. No public interest was considered to exist sufficient to outweigh the interest to be protected (privacy, maintenance of constitutional conventions on confidentiality of communications and advice and free and frank expression of opinion). Another case note by Ombudsman Paterson concerned the decision of the Health and Disability Commissioner to withhold the names of DHBs from a table showing the rate of complaints to HDC about DHBs over a six-month period. The case note outlines the reasons for making this information publicly available and notes HDC’s agreement to release it. Ombudsman Ron Paterson has today published a case note about the decision of the Health and Disability Commissioner to withhold the names of DHBs from a table showing the rate of complaints to HDC about DHBs over a six-month period. The case note outlines the reasons for making this information publicly available and notes HDC’s agreement to release it.

145 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Access to health information takes much time. In another note Chief Ombudsman Boshier found the decision by the Ministry of Health to refuse a request from a senior researcher at the University of Auckland for copies of two legal opinions. These opinions concerned the interpretation of a crucial statutory term in the Human Assisted Reproductive Technology Act 2004. He formed the opinion that the very high public interest in protection of legal professional privilege, which undoubtedly applied to the information at issue, was exceptionally outweighed in this particular case by the significant public interest in release of the information. Of wider news media interest was the question of “off the record” information. This revolved around a request for a text message sent to the Prime Minister relating to pony tail pulling incidents at Rosie Cafe. The Chief Ombudsman formed the opinion there is no blanket protection for the ‘off the record’ communications and, even if confidentiality had applied, the public interest in release in this instance outweighed any need to withhold the information under the OIA. The Office works hard. The most recent annual report says it received 12,151 complaints and other work, the second highest amount ever received and 10% higher than the work received in 2013/14. It completed 11,964 complaints and other work, 4% more than the work completed in 2013/14 and finished the year with 1,787 complaints and other work on hand It obtained remedies for the benefit of individuals and public administration in 504 cases but was unable to meet current timeliness targets for completed complaints, given the volume of work on hand. However, the age profile of work completed improved with 92% of complaints and other contacts completed within 6 months or less, compared with 88% the previous year. Latest: Ron Paterson has resigned as Ombudsman effective from June 30. He will be returning to his role as Law Professor at Auckland University.

Address: Level 7, 70 The Terrace, PO Box 10 152, Wellington, 6143. Ph: (04): 473- 9533. Fax: (04): 471-2254. E-mail: offi[email protected] Web: www.ombudsmen.parliament.nz Senior Staff: Ombudsmen: Judge Peter Boshier, Professor Ron Paterson. Staff: Current 77.

146 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Reserve Bank Of New Zealand

PURPOSE: The Reserve Bank manages monetary policy to maintain price stability, promotes the maintenance of a sound and efficient financial system, and supplies New Zealand bank notes and coins.

„„Abuse Reserve Bank facilities at your peril, so journalists and analysts have learned. „„The Bank maintains its strongly independent station, above the cut and thrust of Auckland housing politics.

When sensitive official cash rate information was leaked from a supposedly confidential lock up on April 14, Governor Graeme Wheeler moved quickly and shut down the lock-up process. Some felt this was over-kill and a better step might have been to exclude the journalist and his employer from future occasions. No, said Governor Graeme Wheeler. The leak was a serious and disappointing breach of many years of trust. It created the opportunity for improper gain on financial markets and damage to the integrity of the Bank’s communications - not that any was CEO PROFILE detected. He was extremely disappointed the information was Graeme Wheeler was ap- leaked initially and then communicated more widely. pointed Governor of the Re- serve Bank of New Zealand An independent investigation confirmed the leak of highly in September 2012. He was at the World Bank from 1997 un- sensitive and valuable market information on the March OCR til 2010 and his roles included cut decision ahead of the official release. The Bank tightened managing director operations its procedures for the release of confidential information and from 2006 to 2010 and vice- president and treasurer be- discontinued embargoed lock-ups for news media and analysts tween 2001 and 2006. He led ahead of announcements of interest rate decisions, Monetary the World Bank’s interactions with the IMF on the Global Policy Statements and Financial Stability Reports. Financial Crisis, and repre- Deloitte’s forensic unit conducted the investigation. It was sented the World Bank at the G8, G20, Development Com- helped by Mediaworks’ legal team which undertook an internal mittee, International Monetary investigation and uncovered emails confirming the leak, and and Financial Committee, and Financial Stability Forum. reported these to Deloitte. The inquiries found contrary to the Defining Moment: Absorbing rules of the lock-up, information was supplied by a reporter to public scrutiny over interest several people in the Newshub office. rates while dealing with de- flationary pressures and the This information was then passed on by another person in strength of the dollar. Having to deal with areas beyond the Newshub Mediaworks, well before the MPS official release, to an usual remit such as housing. economics blogger. The blogger alerted the Bank to the leak only after the MPS was officially released. The bank said the fact several people outside the Bank, who had access to the information improperly, failed to alert the Bank immediately, was irresponsible and left open a significant risk that the Bank could have closed down quickly with an immediate official release.

147 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Like most central banks, the Reserve Bank is primarily a policy organisation with its main functions of operating monetary policy to maintain price stability, promoting the maintenance of a sound and efficient financial system and meeting currency needs. These functions are specified in the Reserve Bank Act 1989, which also gives the Reserve Bank statutory independence to carry them out. Aspects have since been refined by a variety of amendment acts. The Governor is accountable to the Government for the bank’s performance, but in most other areas has statutory independence about how outcomes are achieved. New Zealand’s monetary policy framework is conventional by current international standards, designed around an overall goal of price stability. The Reserve Bank Act requires price stability be defined in a specific and public contract, negotiated between the Government and the Bank. The current policy targets agreement was signed in September 2012. Price stability is defined by the PTA which at present requires the Bank to keep CPI inflation between 1 and 3% on average over the medium term, with a focus on keeping future average inflation near the 2% target midpoint. The Bank operates New Zealand’s wholesale payment and settlement systems, used by the registered banks use to complete transactions with each other involving some $40bn in transactions per day. These systems are vital to the economy and allow the Bank to implement monetary policy settings. The Bank is one of three supervisors tasked with ensuring firms comply with new obligations designed to detect and deter money laundering and terrorism financing. Taking action is important, it says, because of the social harm caused by illegal activities and the damage illegal activities can do to the stability and reputation of a nation’s financial system. The Bank has a carefully-calibrated public information programme aimed at ensuring business, markets and the wider community knows what is happening. A recent speech by Deputy Governor Geoff Bascand is typical. To an Otago University audience he said we have seen some extraordinary developments in the New Zealand labour market over the past three years and these pose challenges to our modelling of inflation pressures. Employment in New Zealand increased by 180,000 or 8.3% over the past three years. In previous periods of very strong employment growth, such as the mid-2000s and the mid-1990s, wage growth accelerated. In the current cycle it has remained moderate. Even in Canterbury, with the demand pressures from rebuilding Christchurch and unemployment falling to around 3% percent last year, wage growth has been modest. Over the same period, he noted we have experienced the largest recorded surge in immigration in more than 100 years, but without the generalised inflation pressures which accompanied the previous migration wave. The proportion of the population participating in the labour force reached record levels in 2015 and labour force growth has averaged about 2% per year since 2012, well above expectation. Bascand said recent low consumer price inflation can be mostly explained by falls in commodity prices and the high New Zealand dollar. However, the higher productive capacity of the economy from rapid growth in the labour force, much of which was unexpected three years ago, explains some of the remaining weakness in inflation. Strong labour force growth has had a moderating influence on wage inflation, and the migration cycle, in particular, has had lower inflationary impact than expected. The Reserve Bank is reviewing the Insurance (Prudential Supervision) Act (IPSA). This provided the first comprehensive framework for the prudential regulation and supervision of insurers in New Zealand.

148 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Head of Prudential Supervision Toby Fiennes said the Bank believes IPSA has had a positive effect on the soundness of the insurance industry in New Zealand and the legislation has generally worked well. However, it is over five years since IPSA came into force and the review will examine whether the legislation and associated regulations are working as intended. The review wants to ensure IPSA provides for a supervisory regime which is cost effective, risk- based and promotes the soundness and efficiency of the insurance sector. The Bank has selected Numerix as its strategic partner for trade valuation and risk management analytics. It will use the Numerix Oneview system for risk pricing and risk analytics, market standard trade valuation, and position and collateral management. Numerix Oneview will initially provide consistency of analytics across the Reserve Bank’s trading book, before being extended to provide enhanced liquidity management, collateral management and trade management. New Series 7 $20, $50 and $100 notes went circulation from May. Governor Wheeler said the bank notes and their ability to include sophisticated anti-counterfeiting technology are notable. The policy tension between the independence of the Reserve Bank and Ministers’ desire to keep an eye on performance has been highlighted by the release of Bill English’s letter of expectations for the Reserve Bank Board. Reserve Bank Governors have jealously protected their independence and often resented Treasury poking into the Bank’s operation. Now English and Treasury have found a new tool to add belts and braces to their monitoring through using a “letter of expectation” to the Board, which is answerable to him. Ministers typically send letters of expectation to the Boards of entities in their portfolio, but it’s a bit of a new thing for the Bank. English says “this letter was prepared after The Treasury identified an opportunity to bring the accountability framework into line with other Crown agencies. This change reflects the Government’s focus on good public sector practice and has not been driven by any concerns with the Reserve Bank’s performance.” The letter makes clear English wants “constant review” of the Bank’s activities including its relationship with Treasury and assessment of the Governor’s performance. English also asked for the Bank to release more information about its operations and the Board to meet with him more regularly and “sharing” more documentation ahead of these meetings.

INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 4.23 4.88 sBudget performance & value for money 3.92 4.81 sThe Department’s quality of service delivery 4.00 4.94 sThe overall performance of the Department 4.15 4.82

Address: 2 The Terrace, PO Box 2498, Wellington, 6011. Ph: (04): 472-2029. Fax: (04): 473-8554. E-mail: [email protected] Web: www.rbnz.govt.nz Senior Staff: Minister In Charge Bill English. Governor Graeme Wheeler. Grant Spencer, Deputy Governor and Head of Financial Stability; Geoff Bascand, Deputy Governor and Head of Operations; Dr John McDermott, Assistant Governor and Head of Economics; Stephen Gordon, Head of Currency, Property and Security; Toby Fiennes,Head of Prudential Supervision; Bernard Hodgetts, Head of Macro-Financial Stability; Mark Perry, Head of Financial Markets; Mike Hannah, Head of Communications, Board Secretary; Tanya Harris, Chief Information Officer, Knowledge Services; Lindsay Jenkin, Head of Human Resources and Mike Wolyncewicz, Chief Financial Officer, Financial Services. Staff: Current: 272.

149 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Serious Fraud Office

PURPOSE: Lead law enforcement agency for detecting and prosecuting serious or complex financial crime including corruption and bribery.

„„Global fraud rates continue to increase and New Zealand’s 2014 rate of 33% is only slightly below the international average, according to the latest PwC Global Economic Crime Survey. „„There is no room for complacency, says the SFO.

SFO Director Julie Read says bribery and corruption is fast becoming one of the biggest items on the international business agenda, as evidenced by the importance placed on specific UN and CEO PROFILE OECD conventions. Julie Read Chief Executive The cost to business and society is estimated by Transparency and Director joined the SFO International at $US2.6 trillion a year. Organised crime and anti- in October 2013. She is a lawyer and after seven years corruption legislation before Parliament helps align New Zealand in private practice joined the with international conventions. International cooperation with Australian Government So- multiple law enforcement agencies is part of the SFO mandate licitor in 1989 which then conducted Commonwealth and is providing an increasingly robust cross-border enforcement prosecutions on behalf of environment to combat illegal activities the Commonwealth Director of Public Prosecutions. She The SFO is a specialised law enforcement agency which detects, was appointed Manager of investigates, and prosecutes serious or complex financial crimes. the criminal practice in 1992 and transferred to the CDPP In 2014/15 it had total revenue of $9.098m, down $288,000 from as Assistant Director in 1997 the previous year. Total expenditure was $8.945m, resulting in a when the CDPP established surplus of $153,000. The Government Minister responsible for its own office in Tasmania. In 2002 she became Regional the SFO is the Minister of Police. However, under the Serious Commissioner for Tasmania Fraud Office Act 1990, the Director of the SFO has complete for the Australian Securities independence when it comes to operational decisions. and Investments Commis- sion. She has wide experi- Priority cases for the SFO include multi-victim investment fraud, ence in relation to interna- fraud involving those in important positions of trust such as tional criminal law. Defining Moment: Managing work- lawyers, bribery and corruption and any other case which could load, priorities and funding significantly damage New Zealand’s reputation for fair and free in a post GFC world. Biggest financial markets minus corruption. issue is out of SFO’s hands – sentences handed down for Writing in the most recent report, Director Julie Read said the serious fraud. darker side of connectivity is increasingly sophisticated cyber- crime. Technology is equally the repository of evidence of such crime. The ongoing success of the SFO relies on maintaining a technical edge in electronic search, seizure and analysis. We have a significant focus on, and we maintain our edge, through training and networks in this area to ensure that our capacity to investigate keeps pace with developments. Criminals also take advantage of the interstices between agencies. A recommendation of the 2014 Performance Improvement Framework report was the need to strengthen sector connections at a senior level. The SFO is joining up sub-sets of knowledge into a web of intelligence and

150 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. information sharing, from successful joint investigations such as Operation Edit, to Government networks, international conferences and with the private sector to better understand emerging risks. It is developing a business case for a system-wide intelligence strategy. Parliament’s Law and Order Select Committee reviewed the SFO recently. In its report it said some noted allegations made in the book Dirty Politics suggesting individuals were deliberately undermining the work of the SFO and asked whether Police had interviewed any SFO staff about the allegations. SFO Director Read said the alleged activities of the individuals had not undermined the SFO investigations in any way. The SFO has noted a rising tide of corruption around the world which will undoubtedly affect New Zealand through its various trading relationships and connections with other countries. MPs asked why the number of SFO prosecutions appeared to have decreased by more than half from previous years. This year, the SFO received 536 complaints. Of these, 46 were taken forward to either preliminary or substantive investigations. The office brought six cases to prosecution, down on the eight it had last year. The Director said the number of prosecutions could be easily skewed by one case taking a long time to go through the courts. This then slowed its capacity to investigate and commence new prosecutions. The SFO has changed the way it records its statistics. It can conduct investigations as either a Part 1 or a Part 2 investigation. Part 1 is limited in scope and intended to determine whether there is enough basis to conduct a full investigation which is designated as a Part 2. Previously, the office counted both together. Now they are counted and reported separately. At the time of the review, 31 Part 1 enquiries and 15 Part 2 investigations were open, consistent with previous years. The SFO also referred 30 complaints to other law enforcement or regulatory agencies during the 2014/15 year. It has so far referred nine complaints in the current year. MPs noted the frequency of custodial sentences from SFO convictions has been declining from 95% in 2011/12 to only 69% last year, below the SFO’s target of 75%. Given the high deterrence value custodial sentences have for white collar criminals, why this was occurring? The Director noted sentences were a matter for the courts to impose, and whether a person’s offending will warrant imprisonment is one of the criteria the SFO weighs up when it begins a prosecution. Read pointed out the remaining 31% of convictions had received home detention. She did not believe the declining trend of custodial sentences warrants a legislative amendment to provide for more custodial sentences. The SFO will try to collaborate more with referring agencies to provide more information to the courts on the seriousness of the offences. However if the current trend did not show signs of improving, the SFO may seek the assistance of the Ministry of Justice. New Zealand’s international ranking for very low levels of bribery and corruption has fallen to fourth in the world according to Transparency International. In previous years, the country had been rated as first equal. PwC had also assessed the incidence of bribery and corruption increased from 11% in 2012 to 15% in 2014. MPs asked the Director what she thought the reasons were for the decline. The Transparency International Corruption Index works according to a scoring system, which allows a country to slip back if its anti-corruption systems are not as robust as they were previously. This also allows other countries to move ahead if they put additional protections in place, which is what happened this year.

151 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. New Zealand has recently taken steps the Index takes into account, such as making amendments to foreign bribery provisions in the Organised Crime and Anti-corruption Legislation Bill. These steps were not picked up in the last survey. Immigration brings different cultures to New Zealand. Conduct amounting to corruption in this country is not considered corrupt in those countries from which some immigrants have come. The report concluded there is a need to work to educate new arrivals so those corrupt practices do not become established.

INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 4.27 3.63 sBudget performance & value for money 4.20 4.00 sThe Department’s quality of service delivery 4.30 3.50 sThe overall performance of the Department 4.00 3.82

Address: Level 6, 21 Queen Street, PO Box 7124, Auckland, 1141. Ph: (09): 303-0121/0800-109-800. Fax: (09): 303-0142. E-mail: [email protected] Web: www.sfo.govt.nz Senior Staff: Minister In Charge Chris Finlayson. CEO and Director Julie Read. Rebecca Rolls, General Manager, Investigations; Nick Paterson, General Manager, Investigations; Graham Gill, General Manager, Evaluation & Intelligence; Carol Palmer, General Manager, Corporate Services and Mark Williams, General Counsel. Staff: Current: 44.

152 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. State Services Commission

PURPOSE: The office of State Services Commissioner (the Commissioner) is central to New Zealand’s politically neutral, professional and permanent Public Service. It maintains oversight of Departments, Ministries and Agencies to ensure Government policies are carried out. It maintains professional standards and hires chief executives.

„„There’s widespread relief at the appointment of Peter Hughes as State Services Commissioner. „„He has a sizeable task, though, to restore the confidence of state sector CEOs – and vindicate retention of the SSC itself. „„SSC close to a last chance warning. If it cannot boost its performance it is in danger of being rolled up and put under the auspices of the Department of Prime Minister and Cabinet.

When Public Service Association president Mike Tana praises the appointment of the new State Services Commissioner something must be right. Peter Hughes’ appointment has generated across the CEO PROFILE board acclaim. Iain Rennie steps down on June 30. There are two principal reasons: first the man himself - universally liked, he’s competent and listens; he eschews flair and style for substance; he has a sound reputation. Second - he is probably the only one in the public service pantheon who can restore confidence in the Commission from below and above. Across the service there’s a perception the SSC has drifted, seems more focused on pleasing ministers and less on defending departments and agencies. There is also resistance to having various SSC models and mantras imposed. The Performance Improvement Framework mechanism is attracting increasing criticism. As one CEO tells us, the concept is sound but how many times do we have to be told to focus on our vision, to browbeat staff into reciting the mission when most see mission statements for what they are - simply statements - and prefer to get on with the job. There’s no doubt the job of the public servant is becoming more difficult by the day. New Zealanders are becoming more litigious, more willing to resort to social media as the first step in resolving - and a compliant mainstream media only too willing to “expose” sins real or imagined. Commissioner Iain Rennie departs in June after eight years. Too long at the top? Most recruiters and personnel consultants feel a term of such length is no longer viable. Inevitably enthusiasm and creativity wane. There was another element in play. For better or worse he no longer enjoyed the whole-hearted confidence of much of the senior public service ranks. Some of the CE appointments during his tenure have been questioned and his other missteps, most notably over the departure of CERA CEO Roger Sutton, dismayed as they seemed out of character. The SSC itself has become something of a training ground for new CEOs. The State Services Commissioner is a statutory appointment, made by the Governor-General on the recommendation of the Prime Minister under the State Sector Act 1988. It was noteworthy

153 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. the Minister of State Services Paula Bennett said she would oversee the recruitment process when Rennie announced he would not seek a further term. One litmus test of a Department’s success is how it fares under the annual review by the Government Administration Select Committee. This is a hard-nosed assemblage of MPs. In its 2014/15 review the committee simply noted it had nothing to report - an A+ Pass. The Committee was simply marking time. At the core of SSC’s work is the Better Public Services programme. This has 10 targets: reducing long-term welfare dependence, supporting vulnerable children, boosting skills and employment, reducing crime, and improving public and business interaction with government. Admirable though these targets might be, they are regarded in some public service quarters as simply paper objectives. Once you reach them, what next? How relevant are they to public policy? The most recent BPS update indicated improvements in student achievement while welfare dependence continued to fall, immunisation rates are growing and child abuse rates are stabilising. Provisional 2015 NCEA Level 2 achievement results show the proportion of 18-year olds who achieve a NCEA Level 2 qualification has increased to 84.4%, from 74.3% in 2011. This means the target of 85% per cent by 2017 almost has been meet, two years ahead of schedule. Numbers of benefit recipients have decreased by 7,245 in a year, largely driven by falls in Sole Parent Support and Job Seeker support numbers. The most recent results show since the targets were introduced the proportion of immunised 8-month olds has increased from 82% to 93.7%; there’s been a 45% decrease in people being hospitalised for the first time with rheumatic fever, a disease of poverty; and the trend in the number of children and young people experiencing substantiated physical abuse has flattened, after previously being on an upward trajectory. Total crime, violent crime and youth crime have dropped 17%, 10% and 39% respectively while 52.9% of Government service transactions with citizens are now completed digitally, up from 29.9% in 2012 The Government has maintained a tight grip on numbers. Bennett says the last count of the bureaucrats confirmed ongoing restraint and a focus on better frontline services has seen a further reduction in the number of core Government employees. The June 2015 update of the Core Government Administration revealed 35,632 Full Time Equivalent staff, a reduction of 474 from December 2014. This is 843 under the cap set by the Government in 2012, and the lowest since it was introduced. Bennett said the Government has made it a focus to cut unnecessary bureaucracy and waste and target expenditure where it will deliver measurable results. Ministers have set clear expectations for their Chief Executives Departments and Agencies must be innovative and find better ways of delivering the outstanding public services hardworking New Zealanders pay for. Back office staff numbers climbed by close to 10,000 to over 45,000 under the previous Government. The cap on Core Government Administration staff was first introduced by this Government in 2009, and reset at the current lower level in 2012. At the same time, the Government has its eye on office accommodation for the public service. More efficient use of office space and the sharing of facilities by government agencies has saved taxpayers $57m over the past financial year. The fifth Crown Office Estate

154 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Report released by the Property Management Centre of Expertise indicates the Government continues to reduce the Crown’s property footprint while ensuring its employees are in modern, safe and healthy work environments. In the year to 30 June 2015, the Crown estate footprint was reduced by 30,997sq m. Bennett says this takes the total reduction to 152,293sq m since 2011, a saving of $132m to taxpayers.. The Christchurch Integrated Government Property programme has delivered its first building, supporting the revitalisation of the business centre and creating a more collaborative relationship between government agencies. Questions will still remain until there is clarity over the convention centre and metro sports centre are resolved and there is a clear timeline. The PMCoE’s focus on helping agencies work together more closely is an important part of delivering Better Public Services. This collaboration and the modernisation of workplaces also supports greater productivity, resulting in better services for the public. By reducing Crown office space coupled with more efficient use of current space, the Government is on track to save about $110m annually by 2023. The SSC has a new talent management system designed to provide the tools and approaches to help leaders and people reach their full potential. This builds leadership and talent across the State services by strengthening leadership across the system, encouraging and supporting leaders to step into more challenging and complex roles, supporting a move away from a Wellington- centric view, encouraging diversity within the Public Service and identifying the most talented people, developing them and placing them where they are most needed. It’s clearly working, as two recent SSC senior staffers have stepped up to run departments and agencies - Defence and the GCSB where the new director is Andrew Hamilton who was SSC’s Chief Government Talent Officer, a title generating mirth around senior ranks. Over 2014/15 the public service saw the first full year of a new approach to CE performance management. This clarified and standardised CE performance expectations and introduced new system stewardship obligations. These require CEs to contribute to the collective leadership of the State Services and deliver results over the medium term. Their remuneration is linked to achieving good performance against these goals. Mindful of how the public views its performance, the SSC measures attitudes through its Kiwis Count survey. Trust in public services has increased over time while the numbers of those expressing distrust has decreased. The most recent annual survey, for 2015, showed levels of trust based on experience rose 2% points over the year to 79%. This is 12% higher than 2007. However, the perception of trust declined 2% over the year to 43%. Perception of trust results have fluctuated since 2012 but are trending upwards with the 2015 result being 14 percentage points higher than 2007. Since 2013, perception of trust in the public sector has overtaken the private sector. Demographic analysis shows females report higher levels of trust than males by experience but not by perception. Trust by experience and perception is higher among those of NZ European, Asian and Other ethnicities than Maori and Pacific ethnicities. Perception of trust among those of Asian ethnicities is significantly higher than for all other ethnicities. Trust within the 65+ age group is highest of any age group, based on both

155 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. The Commission’s high level “Direction and Priorities for System Stewardship” has been released with an emphasis on greater co-operation between Departments and better use of data. The document says the past years have been dominated by the State Services Commissioner being mandated as Head of State Services, the CE group collectively taking responsibility for system stewardship and the use of Four Year Plans to improve planning, direction setting and system change. The coming years will include extending collaborative leadership to Crown entities and CEs collectively leading system development with demonstrable benefits for services to NZers. Over the next year priorities will include building leadership capability and diversity across the system. There will also be a need to know how the system can protect data privacy, build public confidence in this, and use data more effectively in designing better services

INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 2.29 2.07 sBudget performance & value for money 2.79 2.20 sThe Department’s quality of service delivery 2.85 2.27 sThe overall performance of the Department 2.93 2.41

Address: Level 10, Reserve Bank Building 2 The Terrace, PO Box 329, Wellington, 6140. Ph: (04): 495-6600, Fax: (04): 495-6686. E-mail: [email protected] Web: www.ssc.govt.nz Senior Staff: Minister In Charge Paula Bennett. Commissioner Iain Rennie. Office of the Head of State Services, Deputy State Services Commissioner: Debbie Power; Executive Management and Policy Group, Deputy Commissioner: Dallas Welch; State Sector Reform, Deputy Commissioner: Al Morrison; Leadership and Talent Hub, Government Chief Talent Officer: Andrew Hampton (departing to become Director of the GCSB); Performance Improvement Programmes Group,Deputy Commissioner: Alison McDonald; Auckland, Deputy Commissioner Lewis Holden; Organisational Strategy and Performance Group, General Manager, Corporate Services: Rachel Bruce. Staff: Current: 114.

156 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Statistics New Zealand

PURPOSE: To provide statistics and data for the Government and other interested parties. It administers the Statistics Act 1975, and leads the official statistics system.

„„Statistics has launched a new website providing faster access to available Government data. „„A new Census Transformation paper will provide better information, planners and the community. „„The Data Futures Partnership aims to drive greater trusted data sharing.

Statistics NZ impresses with its vision and readiness to provide new products for an increasingly critical market. Writing in her most recent annual report, Government Statistician Liz MacPherson says Statistics has a refreshed vision and purpose and reflects the fact the environment Statistics NZ operates within has changed dramatically, and statistics are only one way to enhance value from data for New Zealanders. The changes in the world provide Statistics NZ with a “once in a generational opportunity” to add value. The new approach allows the department to remain relevant by helping to shape that future. CEO PROFILE

Statistics has widened its focus from statistics to data. Liz MacPherson was ap- The new Statistics NZ innovation website is about creating pointed to the role of Govern- ment Statistician and Chief more opportunities for New Zealanders to find and benefit from Executive of Statistics NZ information held by the Government. in August 2013. She has 24 years’ experience, including It is a test bed for users to look at information, play with it and a decade working at senior provide feedback on how it can be improved. This feedback will leadership level in the public sector. Defining Moment: indicate what datasets matter most to individuals and businesses. Making considerable changes It has three elements: Datafinder, a data service tool allowing users to the collection and presen- tation of national collections to find data within a small area, down to as little as 120 people; of statistics in a quiet but Social Investment Insights, a data mapping application for the sustainable way. A longer Government’s social investment work programme and a prototype gap between censuses wor- ries some. Indicators Dashboard. The Indicators Dashboard features 16 graphs, allowing users to see a range of figures at a glance. The graphs range from how many building consents were issued each month in the last decade to the unemployment rate. Social Investment Insights includes data on the risk factors which indicate children are likely to lead difficult lives. The tool allows users to point and click to drill down into the data by location. Statistics NZ and the Treasury developed the tool in partnership to make the complex data behind the Government’s social investment goals more easily accessible and understandable for all New Zealanders. It has also published a Census Transformation paper backed by a Cabinet paper of the appointments made to the Data Futures Partnership Working Group. The paper will be used by communities to plan for schools, health needs and roads.

157 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. For well over a hundred years, the census has been the only way to get this, but the transformation paper indicates Statistics NZ is looking at a raft of options for the future after the next census in 2018. The Data Futures Partnership aims to drive greater trusted data sharing and use across citizens, consumers, businesses, Maori, non-governmental organisations, and Government. Statistics has also begun publishing online its responses to requests received under the Official Information Act. This is similar to the process that Treasury follows, aiming to increase the accessibility and availability of information to help enrich and promote informed debate. A leap forward in the use of existing tax data means Statistics NZ has been able to halve the number of businesses being surveyed for important economic information. Until recently 1800 businesses around the country were surveyed for manufacturing, wholesale trade, and services information. An improved survey design made possible by better use of existing tax data means the number has been trimmed to 900. It means mainly small and medium-sized businesses won’t have to provide information and Statistics NZ estimates the changes will save businesses a total of over 1000 hours a year. As well as reducing the number of businesses surveyed, Statistics NZ’s changes mean an improvement in the quality of the information as tax data means a much wider view of business than is possible with surveys. Statistics NZ is reviewing its Statistical Standard for Geographic Areas (SSGA) for the first time in over 20 years. The review aims to improve how statistical geographies are defined and used in statistical data. Statistical geographies have become outdated. The increasing demand for small area statistics and advancements in geographic information system (GIS) technologies is driving the need to ensure data is accessible and meaningful to the people who use it. The Environmental Reporting Act passed by Parliament in September requires fair and accurate reports on the state of the environment. This means the country’s “brand” will be assessed against authoritative and independent data across five domains. The Act requires the Secretary for the Environment and Statistics NZ to publish a report every six months on air, freshwater, land, marine, atmosphere and climate beginning with freshwater this year. A synthesis report with analysis of all five domains will be published every three years. The topics for future reports will be set in regulations under the Act. The Government Statistician decides on the statistics used to measure the topics. Environment Minister Dr Nick Smith and Statistics Minister Craig Foss say publication of the first comprehensive, independent and nationwide set of statistics on the environment today is an important step in strengthening the integrity of New Zealand’s clean green brand. Statistics NZ’s 2015 operating budget was $119m.

158 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 5.07 4.93 sBudget performance & value for money 5.08 4.64 sThe Department’s quality of service delivery 4.92 4.71 sThe overall performance of the Department 4.93 4.80

Address: Statistics House, The Boulevard, Harbour Quays, PO Box 2922, Wellington, 6140. Ph: (04): 931-4600/0508-525-525. Fax: (04) 931-4049. E-mail: [email protected] Web: www.stats.govt.nz Senior Staff: Minister In Charge Craig Foss. Government Statistician and CEO Liz MacPherson. Teresa Dickinson, Deputy Government Statistician and Deputy Chief Executive Partnership and Design; Bridget Hamilton-Seymour, Director, Office of the Government Statistician and Chief Executive; Mark Sowden, Deputy Government Statistician and Deputy Chief Executive Customer Strategy and Delivery; Carol Slappendel, Deputy Government Statistician and Deputy Chief Executive Operations and Kelvin Watson, Deputy Chief Executive Organisation Capability and Services. Staff: Current: 848.

159 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Tertiary Education Commission

PURPOSE: The TEC supports tertiary education organisations to be accountable, self-improving and self-managing, to give effect to the Government’s requirements for tertiary education as outlined in the Tertiary Education Strategy, act in accordance with their role and responsibilities as set out in the Education Act 1989. All forms of post-secondary school education and training come under its umbrella.

Each year TEC invests approximately $2.8bn in tertiary education. Most of this funding is provided in the Government’s Budget via Vote: Tertiary Education. Occasionally it administers funding on behalf of other Government agencies such as Immigration New Zealand. The Tertiary Education Strategy guides funding decisions, ensuring that funding supports tertiary education organisations to deliver on the Government’s six priorities for tertiary education. The strategy reflects its expectations for tertiary education and describes how a high-performing tertiary education system CEO PROFILE can contribute to improved outcomes for individuals and New Tim Fowler became Chief Ex- Zealand as a whole. ecutive of the Tertiary Educa- tion Commission in April 2013. The Tertiary Education Commission gives effect to the Tertiary He was previously Deputy Education Strategy 2014-19. It invests Government funding Chief Executive, Quality As- surance at the New Zealand through investment plans and contracts with tertiary education Qualifications Authority. He organisations; providing information and advice to the has held management posi- Government (including ownership monitoring advice) about tions in Australia and New Zealand in both the private and tertiary education organisations and the tertiary education university sectors. Defining sector and monitoring and managing the performance of tertiary Moment: Managing quality education organisations. and outright fraud has been an issue. Big question remains As a Crown entity it is jointly monitored by the Ministry can NZ support so many ter- tiary education institutions and of Education and the Ministry of Business, Innovation and still maintain quality. Employment. This arrangement reflects its role in contributing to education and the economy. It invests in all forms of post-secondary school education and training, including foundation education, adult and community education and research. It funds programmes linking schools with tertiary education, including Gateway and Trades Academies. Tertiary education organisations include eight universities, 18 institutes of technology and polytechnics, three wananga, 271 TEC-funded private training establishments, 12 industry training organisations and over 400 other organisations, adult and community education providers, Government training establishments and secondary schools. In 2015/16 its income is $41.8m and expenses $40.5m leaving $1.2m to be transferred to the reserves. As the tertiary education institutions are Crown entities, TEC monitors them on behalf of the Crown. TEC has three key operational output classes, managing the Government’s investment

160 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. in the Tertiary Education Sector, ownership Monitoring of Tertiary Education Institutions and tertiary education and training advice. Introducing TEC’s 2017 and 18 plan guidance for 2017 and 2018, Chief Executive Tim Fowler says it represents the first step change in the way TEC looks at how and where it makes investment decisions. It has to anticipate changes and future-proof the system. It is working in a changing environment. Demographic and economic forces are driving change. Tertiary enrolments are reducing because of a drop-off in the number of students at school and more young people are choosing to go directly from school to work. The education system will become increasingly internationally competitive and technology- enabled over the next decade and the system will need to respond to greater learner diversity as our population changes. It will simplify the plan system to move away from unnecessary administrative compliance and toward activities that make a difference for learners and tertiary education organisations. TEC will use its range of data to better understand the links between learners, the performance of tertiary education organisations, and educational and career success. This will give an opportunity to adapt performance metrics and funding incentives to improve decision-making by students, employers and tertiary education providers. It will be able to better target investments so all New Zealanders are equipped with the knowledge and skills they need for lifelong success, while also reducing social cost to Government and individuals. Parliament’s Education Select Committee reviewed the 2014/15 Tertiary Education estimates and reported: The appropriations decrease to $3.036bn in 2014/15, from an estimated actual expenditure of $3.039bn in 2013/14. Increased funding for sciences Budget 2014 included increased science investment, including an additional $67.9m in tuition subsidies for science, $8.5m for agriculture, and $20.2m for some health sciences. Tertiary Education Minister Steven Joyce said these areas have historically been underfunded relative to the cost of provision, and have also been assessed by the Tertiary Education Commission as underfunded compared with humanities and commerce courses, and with their counterparts in Australia. The subsidy increase is designed to encourage universities to invest in these areas, and boost the low numbers of graduates in these fields. Course fees are not expected to be affected. The Government has committed $28.6m over four years to the establishment of three ICT graduate schools to be located alongside ICT firms in the main centres to strengthen the connections between businesses and education providers. The first school was established last year, and all three will be running by 2018. They are intended to ensure students about to enter the workforce are “work ready.” Part of the training is expected to take the form of internships. The Centres of Research Excellence fund was established in 2001 to encourage the development of excellent tertiary education research. There are six centres. The Government intends funding four additional centres from this year towards an eventual total of 10. Three will be new funding with the fourth funded from existing allocations. One will be dedicated to Maori development research; the focus of the others will be determined through a closed tender process.

161 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Careers NZ is to be wound into the Tertiary Education Commission as the latest shake-up of the public sector. The Govt started reviewing Careers NZ in 2014 and has now decided the TEC will take over all training and career advice. Legislation is needed for the changes and Ministers hope to pass this in early 2017. A six month transition period will then follow. All 121 Careers NZ staff, with the exception of the Chief Executive, will be offered employment by the TEC on equivalent terms and conditions. Over time, the resources supporting schools to offer careers advice currently delivered by Careers NZ will be transferred to the schooling sector. The Ministry will engage with the schooling sector to work out how best to utilise these resources to support the provision of careers services in schools and Communities of Learning. The TEC will work through a transition process to align its resources, including staffing, to its new business functions. The Careers NZ brand will continue to operate within the TEC.

INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 4.00 4.11 sBudget performance & value for money 3.10 3.33 sThe Department’s quality of service delivery 3.30 3.44 sThe overall performance of the Department 3.50 3.92

Address: Level 9, 44 The Terrace, Wellington 6011, Freephone: 0800 601 301, Telephone: +64 4 462 5201 (for international callers), Email: [email protected], Fax: +64 4 462 5401 Senior Staff: Minister In Charge Steven Joyce. CEO Tim Fowler. Gerard Gilmore, Deputy Chief Executive Operations; Lara Ariell, Deputy Chief Executive Finance; Brendan Kelly, Deputy Chief Executive Information and Paula Collins, Chief Advisor Maori. Staff: Current: 200.

162 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. The Treasury

PURPOSE: The Treasury is New Zealand’s lead adviser to the Government on economic, financial and regulatory policy. It is committed to helping achieve higher living standards for New Zealanders by providing expert advice and sound management of the financial affairs of the Crown.

„„Treasury has lifted its game as the Government’s economic strategist. „„But a newly-empowered MBIE is snapping at its heels. „„Made a pro active decision to release position papers to improve the debate.

Treasury still holds the high ground as the Government’s economic powerhouse and strategist but its position is being challenged by CEO PROFILE the Ministry of Business, Investment and Employment. It’s a moot Gabriel Makhlouf is the point around Wellington who will succeed. Much depends on the Treasury Secretary and Chief political skills of their Ministers. While Finance Minister Bill English Executive. He is the Govern- remains in charge, Treasury will remain at the top of pyramid. ment’s chief economic and financial adviser. His career One of three central agencies working to provide leadership within was previously in the UK civil the State sector, Treasury is the key agency to support Ministers in service where his responsi- bilities ranged from policy balancing priorities through the Budget process and also provides development on domestic and insight into the efficiency and effectiveness of Government international tax and welfare agencies and their actions. policy issues through to large- scale, customer-focused, It has a clear vision: to provide strategic policy advice on the operational delivery. New Zealand economy and produce a range of publications and He was Chair of the world’s main tax rule-making body, the economic data. It monitors and manages the financial affairs of the Committee on Fiscal Affairs, at Government; assesses public sector proposals which have economic the OECD in Paris between and financial implications and delivers operational services through 2000-2004 and was also re- the Debt Management Office, and the Export Credit Office. sponsible for the UK’s Govern- ment Banking Service. He led Treasury works towards three outcomes: raising living standards: the UK team that negotiated the current US/UK double tax improving economic performance, macroeconomic stability and a treaty and served as Principal higher performing State sector. It is critical for Treasury to continue Private Secretary to the Chan- to advise effectively on policies and strategies important for New cellor of the Exchequer. Zealand’s long-term economic performance, which help maintain He has a Bachelor’s degree in economics from the Univer- a stable and sustainable economy and support Government sity of Exeter and a Master’s agencies to better-build capability. degree in industrial relations from the University of Bath. Treasury recognises living standards are affected by physical and Defining Moment: Dealing financial resources including infrastructure, housing, income and with concern over whether savings; people’s health, education and skills; social institutions and Treasury staff still retain the intellectual clout of past years conventions; and natural resources such as quality water, a stable as it diversifies views. After climate and biodiversity. This thinking is at the heart of its Living the collapse of Solid Energy Standards Framework, a tool used to assess the contributions its oversight of SOEs an ongo- ing issue. day-to-day work makes towards its vision.

163 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. In a recent speech Treasury Secretary Gabriel Makhlouf put the question squarely. The Crown manages over $263bn in assets and almost $184bn in liabilities. In a given year, we spend around $73bn and bring in revenue of a similar amount. For Government, money is a means to an end. The “end” being to raise living standards for New Zealanders. As well as managing significant and valuable assets, the Government also has a role as a regulator and responsibility for delivery of a range of services. This set of roles; managing Government finances on behalf of New Zealanders, delivery of services to New Zealanders and managing the regulatory system for New Zealanders has a critical interdependence. This is why Treasury’s stewardship role in all three is so vital. The stewardship role requires a high degree of trust. Maintaining this trust is dependent on being transparent. In relation to being transparent about the state of the nation’s finances in the most recent global survey on Open Budgeting, New Zealand ranked first out of the 102 countries surveyed. Owning the right assets: schools, hospitals, roads, IT, managing them well, funding their maintenance sustainably, and managing risks to the Crown’s balance sheet are all critical to the ongoing provision of high-quality, cost-effective public services. “A modern and trusted state sector, one able to operate effectively in these changing times, is crucial to improving outcomes for the people we serve. As a sector we must deliver value. And the policy advice we make to the Government underpins this.” In the past, the policy making world has had some degree of separation, in tangible and intangible ways. There has been a significant shift in this. The State Sector has always known the advice Treasury gives to the Government cannot be made in a vacuum. There will always be trade-offs and the need to balance specific needs with national impacts. What Treasury does can either help or hinder New Zealand’s progress. This means asking some challenging questions. What might the state sector look like if it took a different approach and developed services and policies with rather than simply for citizens? Or what might policy and budget making look like with better, even real time, data to inform the decisions Ministers need to make? The digital revolution means we know more about the world around us than before. Connections between people can be tracked, there is real-time information about water, temperature, transport, animal behaviour, even power use. The NZ Infrastructure Development Plan is the jewel in Treasury’s crown. The ability to manage an infrastructure asset base worth billions and give visibility over the stock, state and progress of New Zealand’s infrastructure is vital, he says. There also needs to be a strong comfort level these assets are being managed with a long-term view. To achieve this, Treasury needed a more sophisticated way of being able to analyse demand, population, efficiency and growth for infrastructure trends. A key difficulty with this is the Government is only one player in the infrastructure world and local Government and the private sector are equally important in providing the infrastructure underpinning the economy and society. The solution to this need lies in the collaborative development of a New Zealand Infrastructure Plan which will take a long-term view and help meet infrastructure challenges and opportunities for the next 30 years.

164 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. The plan cuts across public sector, local Government and private sector ownership. Developing such a plan needed true partnerships - partnerships based on high trust and absolute transparency. It was developed closely with a series of strategic partners across the different infrastructure sectors and the net result is a plan which will enable New Zealand to get more out of existing assets and make better decisions about the allocation of new investment. In Auckland another 716,000 people are expected over the next 30 years. The Council alone has planned around $65bn of capital investment. Simply providing the bulk infrastructure estimated needed for the next 30 years of greenfield growth is projected to cost over $14bn. The City Rail Link at $2.5bn is the largest single infrastructure project in New Zealand since Motonui in the early 1980s and the mooted second Waitemata Harbour Crossing is likely to be the largest infrastructure project ever in this country. The way the National Infrastructure Plan was developed, its new approach and the large programme of work captured, leaves New Zealand in a good place. There is high trust and productive relationships to ensure the best utilisation of existing investments and the best value from the next investments. A whole-of-Government, inter-agency approach is being developed to replaced the old “them and us” approach. One example is the new Major Projects Performance Report. The projects span 22 agencies and are assessed using a five-point scale ranging from Red through to Amber and then Green. The report advises on how well they are delivering on expectations. The latest, for July-October 2015 provides a comprehensive update on the Government’s 41 biggest projects which have a whole of life cost of $18.5bn. The performance of the portfolio has improved since the last period, 54% are now Green or Amber/ Green compared to 42% in the previous period, an increase from 16 to 22 of the 41 projects. Monitoring detects early warning signs of any potential trouble to help decision-makers make changes to keep the project on track. Finance Minister Bill English says the value in providing this information to the public is it offers transparency on how tax-payer funded projects are progressing. The reports are released four months after being considered by the Cabinet to allow time for commercial sensitivities to pass. The number of Red or Amber/Red projects has reduced from six in the last period to four in this period, with just one rated as Red. Thirty-five are rated Amber or Amber/Green which is to be expected as the report covers the most complex and expensive investments across Government and an Amber rating indicates that successful delivery of the project is feasible, but issues exist that require management attention. Given the nature of the projects, a Green rating is only given when delivery is nearing completion, he says. With this information the Government can be responsive. Although the report still shows the Christchurch Central Delivery Programme as Red rated, the follow-up report for the November- February period (to be released in the coming months) will show the project shifting from Red to Amber/Red and further improvements are expected.

165 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 4.67 4.63 sBudget performance & value for money 4.42 4.19 sThe Department’s quality of service delivery 4.33 4.13 sThe overall performance of the Department 4.58 4.47

Address: 1 The Terrace, PO Box 3724, Wellington, 6140. Ph: (04): 472-2733. Fax: (04): 473-0982. E-mail: [email protected] Web: www.treasury.govt.nz Senior Staff: Minister In Charge Bill English. Secretary to the Treasury and CEO Gabriel Makhlouf. Dr Girol Karacaoglu, Chief Economist; Bill Moran, Chief Operating Officer and Deputy Secretary, Strategy, Performance & Engagement; Cath Atkins, Deputy Secretary, Macroeconomics & Growth; Fiona Ross, Deputy Secretary, Budget & Public Services; Brendon Doyle, Deputy Secretary, Financial & Commercial Operations. Staff: Current: 456.

166 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. WorkSafe New Zealand

PURPOSE: WorkSafe is the work health and safety regulator. It monitors and enforces compliance with work health and safety legislation; it provides guidance, advice and information on work health and safety; fosters a co-operative and consultative relationship between those with management, work forces and unions.

„„New workplace safety laws are in place. „„The Government is committed to reducing workplace death and injuries by 25% by 2020.

It’s early days for WorkSafe, formed only in December 2013. It emerged in the wake of the Pike River coal mine disaster and its subsequent Royal Commission. It’s headed by a gritty CEO whose vocal timbre conveys a real sense of confidence and commitment underpinned by hard-nosed experience in some of the world’s most challenging workplace environments. Unfortunately he is CEO PROFILE returning to the UK but will remain until a successor is recruited. Gordon MacDonald is the Chief Executive of WorkSafe It has taken pains to distance itself from the old “ ‘elf and safety” New Zealand. Until recently, structures of the past. It sees itself as the glue binding owners, he was Acting Deputy Chief Executive of the UK’s Health managers, work forces and unions. Confrontation has been and Safety Executive where replaced by education, engagement then enforcement. he had a 35-year career. He joined as an inspector Early signs are promising. In part this is due to a change of tack responsible for inspections, by unions and employers, away from exchanging blame to a co- investigations and enforce- ment across a wide range operative, shared responsibility approach. In part it is also due to of industry sectors. During obligations under the new WorkSafe New Zealand Act which came his career he worked in all of into force on April 4. For the first time, all elements of a working HSE’s operational and policy areas. These included: policy environment, from factory to farm, carry obligations. Managing work developing major haz- directors and farmers, for example, can be held to account. ards legislation to implement European Union Directives The objective of the WorkSafe New Zealand Act 2013, is to and leading strategic and “promote and contribute to securing the health and safety of workers research functions in the and workplaces.” It had a difficult and contentious birth. Was nuclear industry. Defining Moment: Building Worksafe worm farming more dangerous than agriculture in general? Now from a very low base is an it’s in place and Workplace Relations and Safety Minister Michael achievement in itself. Bottom Woodhouse says it represents the start of the journey towards better line is will workplace acci- dents fall or rise? health and safety practices in the workplace. But he says it is not a silver bullet for New Zealand’s health and safety challenges. Lasting change requires leadership and a change in attitude from businesses and workers alike. It represents the first major reform of workplace health and safety in more than 20 years. He says it strikes a balance between ensuring workplaces are safe without imposing unnecessary red tape on business, and recognises the complexity of 21st century workplaces by encouraging more communication and co-operation, both within and between businesses. The Minister is at pains to point out the Act does not require business to eliminate all risks

167 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. in the workplace at any cost. It does however, require risks are dealt with in a sensible and proportionate way by those who are best placed to influence or control work. Businesses need to identify work-related risks and do what is “reasonably practicable” to eliminate or manage them. Everyone from company directors to casual labourers have health and safety responsibilities reflecting their ability to influence or control work. There is a new requirement for all businesses to have effective worker engagement and participation processes for health and safety matters. Company officers have a duty to exercise due diligence when it comes to health and safety. Forestry remains a dangerous industry and Woodhouse applauds the new Forest Industry Safety Council (FISC) Charter. He says it is an important milestone for improved health and safety outcomes and operational excellence in the forestry industry. WorkSafe New Zealand data shows in 2015 three forestry workers died on the job, compared with 10 in 2013. There were also half the number of serious accidents last year at 79. The industry was overhauled in 2014 after an investigation into its accident record. This found forestry was the most dangerous industry with more than 1000 serious injuries and 32 deaths between 2008 and 2013. Forest Industry Contractors chief executive John Stulen said with the help of new technology, forest managers and contractors have led positive safety changes. Production has gone from 19m cubic metres in 2008 to over 30 million cubic metres, so the rate of serious harm is actually now a third of what it was in 2008. However, by March there had been four deaths this year. CEO Gordon McDonald says this is a tragedy. In 2015 WorkSafe made nearly 2200 visits to forestry work sites to review practices, provide advice where needed, and enforce the law if necessary. The Charter commits the industry to a mission of “Together Towards Zero” as the driver for achieving safe outcomes for all forestry industry workers and is a demonstration of a connected, collaborative approach to drive effective health and safety initiatives in the forestry industry, which will help contribute to the Government’s goal of at least a 25% reduction in workplace fatalities and injuries by 2020. Woodhouse describes 2013 as the industry’s “annus horribilis” with 10 deaths. Now the industry is taking responsibility and control for ensuring workers return home safely at the end of each day. The Charter was signed by the Government and WorkSafe New Zealand, as supporters of its principles. WorkSafe has introduced a range of tools to boost safety. One covers workplace bullying. This is a significant hazard, it says. It affects people physically and mentally, can disrupt workplaces and reduce productivity. Employers who do not deal with it risk breaching legislation, such as the Health and Safety in Employment Act 1992, the Employment Relations Act 2000 and the Human Rights Act 1993. A review of WorkSafe NZ by Doug Martin has found, overall, it is performing well. Amongst the areas it needs to do more work on is working with other agencies on health and safety issues. Another areas needing work is a review of the operation of the call centre including, but not limited to, the effectiveness of the after-hours service.

168 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. INDEPENDENT ADVISER’S RANKING 2016 2015 sPerformance of CEO 4.79 NA sBudget performance & value for money 4.43 NA sThe Department’s quality of service delivery 4.57 NA sThe overall performance of the Department 4.73 NA

Address: Level 6. 86 Customhouse Quay, Wellington, 6011, PO Box 165, Wellington, 6140. Ph: (04): 897 7699. Fax: (04): 914 6866. E-mail: [email protected] Web: worksafe.govt.nz Senior Staff: Minister in Charge, Michael Woodhouse; Mike Hargreaves, Chief Legal Adviser; Janine Hearn, General Manager Human Resources; Kirstie Hewlett, General Manager, Strategy and Stakeholder Engagement; Phillip Jacques, Chief Financial Officer/General Manager Corporate Services; Brett Murray, General Manager, Operations and Support; Phil Parkes, General Manager, Operational Policy; John Tulloch, General Manager Communications; Jo Pugh, Deputy General Manager, Assessments, Operations and Support (Acting) and Wayne Vernon – General Manager, High Hazards and Energy Safety (Acting). Staff: Current: 550.

169 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. Rising Stars: Some Officials To Keep An Eye On

In the next couple of years, several of today’s leading public service managers will end their terms and possibly or probably retire. Identifying the Chief Executives of tomorrow can be a challenge, but already some are beginning to appear. The following all have the potential to become leaders in their own right. Taha MacPherson: DPMC. The PM’s Foreign Policy advisor role is a stepping stone to the top of the public service. Previous occupants include Brook Barrington, Andrea Smith, and Tony Lynch. All are either CEOs or Deputy CEOs. Usually these people go off to get head of mission experience before promotion to Deputy Secretary. The incumbent Taha MacPherson is doing a great job but has already been an Ambassador. Expect to see him move into a very significant and more senior role when his time in DPMC is up. John Capper: Ministry of Foreign Affairs and Trade. He has been running the policy side of Foreign Minister Murray McCully’s office since his return from Santiago as Ambassador. He has risen very quickly up the MFAT ranks and clearly has the potential to move into a senior role in the wider public service or private sector when he finishes with McCully. He has an interesting private sector past – unusual for MFAT staff. Bruce Parkes: Department of Conservation. He is bringing some long overdue robust cost- benefit evaluation to the Department. He has previously received plaudits for his handling of the Canterbury Earthquake work role for MBIE Nigel Bickel: MBIE. He is head of immigration at the Ministry. He impresses with his strong commercial approach and willingness to openly engage with stakeholders. He is taking a leadership role in trying to break down the silo’s operating within MBIE. He recognises there is a problem and is prepared to put his head up to try to fix it. Immigration has gone through a significant technology upgrade without hitting the media as another Government tech disaster. Raewyn Bleakley: NZ Transport Agency. She is Central Regional Manager. She is bringing a fresh business focus approach to the role. While new to the public sector her stakeholder management skills are being seen as NZTA try to repair the damage post Wellington’s Basin Flyover debacle. Yet to prove herself, but one to watch. She is a former Board of Adviser for this publication while in her role as CE of the Wellington Employers Chamber of Commerce. Clive Nelson: Health Promotion Agency. He is expertly leading a medium-sized agency. Ready to lead a much larger organisation within the public service. Scott Gallagher: Ministry for Primary Industries. Deftly handles each primary industry challenge and a good second-in-command to Martyn Dunne. Definite CEO material.

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Department 2011 2012 2013 2014 Current

Accident Compensation $580,000 - 570,000- 550,000- 600,000- 760,000- Corporation $589,999 579,000 559,999 609,999 769,999 Crown Law Office $540,000 - 540,000- 540,000- 580,000- 600,000- $549,999 549,000 549,999 589,999 609,999 Department Of $350,000 - 360,000- 370,000- 280,000- 360,000- Conservation $359,999 369,999 379,999 289,999 389,999 Department Of $180,000 - 420,000- 430,000- 460,000 450,000 Corrections $189,999 429,999 439,999 469,999 459,999 Department Of Internal $430,000 - 430,000- 470,000- 510,000- 520,000- Affairs $439,999 439,999 479,999 519,999 529,999 Department Of The $510,000 - 580,000- 680,000- 550,000- 530,000- Prime Minister And $519,999 589,999 699,999 559,999 539,999 Cabinet Education Review $330,000 - 320,000- 330,000- 150,00- 300,00- Office $339,999 329,999 399,999 159,999 309,999 Government $130,000 - 130,000- 350,000- 360,000 390,000 Communications $139,999 139,999 359,999 369,999 399,999 Security Bureau Inland Revenue $420,000 - 430,000- 490,000- 520,000 520,000 Department $429,999 439,999 509,999 529,999 529,999 Land Information New $360,000 - 350,000- 550,000 - 360,000- 350,000- Zealand $369,999 359,999 559,999 369,999 359,999

Ministry of Business, N/A N/A 520,000- 620,000- 580,000- Innovation and 539,999 629,999 589,999 Employment (MBIE) Ministry For Culture $330,000 - 350,000- 350,000- 380,000- 340,000- And Heritage $339,999 359,999 359,999 389,999 349,999 Ministry Of Defence $350,000 - 390,000- 590,000- 390,000- 400,000- $359,999 399,999 609,999 399,999 409,999 Ministry Of Education $660,000 - 660,000- 660,000- 550,000- 620,000- $669,999 669,999 679,999 559,999 629,999 Ministry For The $340,000 - 370,000- 400,000- 440,000- 380,000- Environment $349,999 379,999 409,000 449,999 389,999 Ministry Of Foreign $580,000 - 620,000- 600,000- 640,000- 490,000- Affairs And Trade $589,999 629,999 609,999 649,999 499,999 Ministry Of Health $220,000 - 530,000- 540,000- 250,000- 330,000- $229,999 539,999 549,999 259,999 339,999 Ministry Of Justice Under 600,000- 510,000- 540,000- 540,000- $100,000 609,999 519,999 549,999 549,999

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Ministry Of Maori $390,000 - 470,000- 350,000- 400,000- 390,000- Development $399,999 479,999 369,999 409,999 399,999 Ministry Of Pacific $240,000- 320,000- 260,000- 270,000- 260,000- Island Affairs $249,999 329,999 269,999 279,999 269,999 Ministry For $220,000 - 460,000- 510,000- 280,000- 520,000- Primary Industries $229,999 469,999 519,999 289,999 529,999 Ministry Of Social $590,000- 590,000- 550,000- 590,000- 580,000- Development $599,999 599,999 559,999 599,999 589,999 Ministry Of Transport $370,000 - 390,000- 400,000- 400,000- 400,000- $379,999 399,999 409,999 409,999 409,999 Ministry Of Women’s $200,000- 250,000- 240,000- 240,000- 240,000- Affairs $209,999 259,999 259,998 249,999 249,999 New Zealand Customs Under 390,000- 400,000- 410,000- 410,000- Service $100,000 399,999 409,999 419,999 419,999 Police Department $140,000 - 570,000- 640,000- 520,000- 680,000- $149,999 579,999 649,999 529,999 689,999

Reserve Bank $590,000- 600,000- 470,000- 620,000- 620,000- $599,999 609,999 479,999 629,999 629,999 Serious Fraud Office $340,000 340,000- 310,000- 200,000- 320,000- $349,999 349,999 329,999 209,999 329,999

State Services $480,000 - 520,000- 560,000- 610,000- 650,000- Commission $489,999 529,999 569,999 619,999 659,999 Statistics New Zealand $290,000 - 330,000- 380,000- 270,000- 350,000- $299,999 399,999 389,999 279,999 359,999 The Treasury $960,000 - 540,000- 600,000- 650,000- 610,000- $969,999 549,999 609,999 659,999 619,999

Source: Remuneration of public service and state sector personnel section, State Services Commission Annual Reports.

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2015/16 2016/17 Budgeted Estimated Departmental Non- Total Actual Transactions Departmental Budget Budget Transactions Budget VOTE $000 $000 $000 $000 $000 Arts, Culture and Heritage 278,184 276,084 17,026 279,226 296,252

Attorney-General 65,811 61,461 71,104 - 71,104

Audit 88,758 87,942 88,695 - 88,695

Building and Housing 322,186 298,673 100,325 246,443 346,768

Business, Science and 2,186,159 2,112,576 304,171 1,904,440 2,208,611 Innovation Canterbury Earthquake 221,132 221,132 - - - Recovery Communications Security 143,568 143,568 137,225 - 137,225 and Intelligence Conservation 471,932 428,677 392,949 37,241 430,190

Corrections 1,620,130 1,620,130 1,764,979 - 1,764,979

Courts 695,537 683,469 458,547 241,941 700,488

Customs 206,606 206,606 205,964 8,060 214,024

Defence 235,798 233,990 18,365 260,529 278,894

Defence Force 3,017,011 2,881,530 3,289,198 127,481 3,416,679

Education 10,792,273 10,786,852 2,995,689 8,048,909 11,044,598

Education Review Office 30,990 30,561 28,808 - 28,808

Environment 442,600 338,588 60,698 339,683 400,381

Finance 8,096,866 7,208,427 102,978 4,880,064 4,983,042

Foreign Affairs and Trade 485,246 432,660 438,760 83,489 522,249

Health 15,484,899 15,407,235 210,687 15,931,119 16,141,806

Internal Affairs 569,366 560,389 450,465 142,858 593,323

Justice 560,171 553,929 304,690 249,785 554,475

Labour Market 1,551,384 1,540,234 362,127 1,334,164 1,696,291

Lands 347,017 267,522 149,592 308,660 458,252

Maori Development 255,003 255,003 69,295 226,100 295,395

Office of the Clerk 20,657 20,657 23,982 - 23,982

Official Development 589,326 589,326 67,164 592,253 659,417 Assistance

173 ©Trans Tasman Media Ltd: Photocopying or distributing this Report electronically is prohibited by international copyright laws and treaties, and would subject the purchaser to penalties of up to $100,000 PER COPY distributed. 2015/16 2016/17 Budgeted Estimated Departmental Non- Total Actual Transactions Departmental Budget Budget Transactions Budget VOTE $000 $000 $000 $000 $000 Ombudsmen 12,741 12,741 15,129 - 15,129

Pacific Peoples 9,267 9,267 7,104 2,817 9,921

Parliamentary 3,285 3,285 3,385 - 3,385 Commissioner for the Environment Parliamentary Counsel 21,501 19,657 23,555 - 23,555

Parliamentary Service 157,217 157,217 61,812 94,289 156,101

Police 1,651,965 1,644,992 1,691,391 100 1,691,491

Primary Industries and 770,973 770,973 533,674 359,349 893,023 Food Safety Prime Minister and Cabinet 68,670 65,710 64,705 12,737 77,442

Revenue 6,409,167 6,132,256 1,089,534 5,662,117 6,751,651

Security Intelligence 51,050 51,050 64,236 - 64,236

Serious Fraud 9,773 9,773 9,440 - 9,440

Social Development 24,314,133 24,146,283 1,578,888 23,362,732 24,941,620

Sport and Recreation 84,239 84,239 319 88,876 89,195

State Services 43,715 42,918 27,442 14,147 41,589

Statistics 150,728 150,728 150,616 - 150,616

Tertiary Education 3,038,214 3,038,214 12,141 3,005,641 3,017,782

Transport 4,096,113 4,096,113 34,240 4,230,778 4,265,018

Treaty Negotiations 436,460 529,027 29,201 378,302 407,503

Women 4,995 4,858 5,017 - 5,017

Total Appropriations 90,112,816 88,216,522 17,515,312 72,454,330 89,969,642

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Department 2011 2012 2013 2014 Current

Accident Compensation 2,720 2,669 2,967 3,135 3,220 Corporation Crown Law Office 184 186 164 147 152 CERA N/A 106 300 322 N/A Department Of 2,039 1,831 1,880 1,951 1,942 Conservation Department Of 7,290 7,509 7,593 7,500 7,571 Corrections Department Of 1,964 1,924 2,013 1,981 2,030 Internal Affairs Department Of The 108 102 102 102 102 Prime Minister And Cabinet Education Review 216 210 211 208 206 Office Government 282 294 305 315 301 Communications Security Bureau Inland Revenue 5,646 5,301 5,475 5,640 5,681 Department Land Information 425 427 473 469 487 New Zealand Ministry of Business, N/A 3,009 2,859 2,806 2,822 Innovation and Employment (MBIE) Ministry For Culture 115 122 118 105 101 And Heritage Ministry Of Defence 61 59 62 60 60 Ministry Of Education 2,467 2,334 2,570 2,663 2,517 Ministry For The 306 258 270 299 302 Environment Ministry Of Foreign 841 797 761 798 821 Affairs And Trade Ministry Of Health 1,122 1,078 1,089 1,130 1,120 Ministry Of Justice 3,068 3,473 3,450 3,540 3,383 Housing NZ N/A N/A N/A 1,029 211 Corporation Ministry Of Maori 336 310 306 287 207 Development

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Ministry Of Pacific 42 39 35 35 34 Island Affairs Ministry For 1,696 1,962 2,070 2,176 2,277 Primary Industries Ministry Of Social 9,210 9,193 9,567 10,000 10,078 Development Ministry Of Transport 151 140 142 160 134 Ministry Of 20 23 24 24 24 Women’s Affairs New Zealand Customs 1,161 1,140 1,118 1,069 1,067 Service New Zealand Trade 518 497 523 546 565 And Enterprise New Zealand Transport 1,293 1,347 1,379 1,343 1,322 Agency New Zealand Police 11,984 11,979 8,796 11,980 Reserve Bank 250 250 223 272 272 Serious Fraud Office 30 28 50 44 48

State Services 108 105 112 110 114 Commission Statistics New Zealand 853 965 1,074 864 848 The Treasury 363 378 401 426 456

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