Introduction

Chapter one

Aotearoa New Zealand is caught up in the whirlwind of reform in many sectors of the economy. While these dramatic changes are being driven by Government, they impact people, businesses, and social sector organisations just as much as they affect the public service.

Introduction

Reforms in healthcare, schools, vocational education, housing, resource management, three waters, local government, social welfare, justice, borders, the electricity market, unemployment insurance, taxation, public sector, climate and the environment: these are all either underway or have been actively explored in recent years. By any assessment, this is a quantity of reform we haven't seen for many years — or perhaps ever — in Aotearoa.​

Government also has an obligation to partner with Māori in its endeavours to reform. This partnership and the benefits it brings can create a unique advantage in terms of seeing tangible and enduring outcomes from reform. Most, if not all, of the current reforms in our nation hold a particular interest for Māori, firstly, as a Treaty partner and equally, if not more importantly, as underserved citizens. Where Māori and iwi have a significant and impactful role to play in decision-making, the true benefits of reform are realised.​

The concept of "reform" has for a long time been shorthand for sweeping away what has gone before. Reform has been about establishing a new direction, and shaping structures and services along new lines, due to a fundamental belief that a system needs a step-change to realise and deliver on its potential. There is an implication that reform is required because the system's faults cannot be remedied merely through incremental improvements. ​

While there are many clear benefits to reform, it is also costly and disruptive, time-consuming and distracting. It is easy to think of reforms that have failed to live up to their initial objectives, as well as those that took longer and cost more than originally planned. It is much more difficult to recall successful reforms where outcomes for citizens, businesses, sectors, and Government were exactly as promised.

With so much reform underway or planned, is there something we can do to improve the chances of success, or could alternative approaches be more successful?

Defining reform​

When we talk about "reform", we are referring to large-scale, multi-year changes to the structures, services, people, policies, practices and delivery models used in a particular sector to deliver an improved outcome for the economy, service users or civil society. In a uniquely New Zealand context, it is also underpinned by our Treaty partnership. We call this collection of entities, relationships and interactions the ‘system’. ​

In this context, reforms are large-scale endeavours that often involve significant investment in change and new ways of working. Due to the scale of change, and the high-profile risk of failure, reforms are almost always sponsored by a politician — either a central government Minister, or local government Mayor or Councillor. This gives reforms a strong political flavour, which is often increased even further when its purpose is to change something that was implemented by a previous, opposing government. ​

However, while reforms are politically led, they are not always politically motivated. We have observed a number of reforms that were conceived by officials in public service as responses to fundamental issues within a system of government or a sector of the economy, that were worthy — in their view — of a response such as reform. These are less frequent examples, but as you will see within our report, the resulting reforms are often more successful and enduring than those which first arise in the political realm.​

We also contrast reform, which is a centrally-led process, to the grassroots process of a  "movement" or "revolution", which is initiated by a growing proportion of the population and centred around common perspectives or shared action such as protests. These are also important processes for initiating large-scale and systemic change, as we have seen through the formation of the Māori Women’s Welfare League, Hui Taumata of the 1980s (Māori Economic & Health Summits), Seabed and Foreshore debates, and internationally through the recent Black Lives Matter and School Strike for Climate. Movements such as these may often be a response to a lack of fundamental reform being driven by the established agency or political sources.

Deloitte Partner, David Lovatt, on State of the State.

Identifying the opportunity​

A key challenge for all reformers is to explain the motivation for reform. What is the problem that needs fixing? What is the "better place" we will get to once the reform has been successfully delivered?​

Developing a robust and compelling case for change requires the authors of the change to form both a clear problem statement and a description of the alternative to the status quo. The purpose of this is to garner support in the need to right a wrong, fix something that is broken, take another path, change behaviour, or rebalance rights and obligations. ​

Given the scale of change implied by reform, there is often a high degree of resistance or inertia in the early stages which is why support is so important. To overcome the system's natural resistance, you either need considerable support or large energy input — often in the form of political capital. Some of the current reforms in Aotearoa are a long time coming for Māori and iwi and further delays will have significant consequences. Where reforms are popular or seen as essential, relatively little political capital is required to make the case for change; but if a reform is unpopular or seen as elevating the rights of a minority over a majority, the cost may be greater than the sponsor can afford to invest without an extensive programme of support. ​​

Working the levers​​

Reform also requires a clear understanding and explanation of how we intend to intervene, who needs to be involved, and how a collective effort will result in positive system-level change. Changing systems is not a mechanical process, but a range of levers applied by system players all learning and sharing together in a common vision can produce transformative results. ​

Reformers have a large number of change levers at their disposal: from new governance, ownership and administrative arrangements to legislative and regulatory modifications, organisational restructuring, mandates and funding, services and outputs, statements of policies and performance expectations, innovation and 'nudges', fees and levies, permits and quotas, there are almost too many options to choose from.​

Identifying who needs to be involved and the extent of their involvement is critical to the success of a reform. Reforms which take a strong Treaty stance and engage iwi and Māori early and often are much more likely to reap robust and enduring benefits for all New Zealanders. ​

There is often a tension between wanting to explain quickly and simply what will happen as a result of the reform, and the longer process of selecting appropriate analyses that then inform and justify the choice of change levers. For reform that is intended to address complex or 'wicked' problems — as most reform is — the appropriate theory of change and combination of levers is essential.​

Making reform happen​

Delivering the interconnected set of changes to make reform happen is itself a challenge requiring focus and talent, as well as energy and insight. These are not quick fixes and many reform efforts span years, if not decades. ​

Traditionally undertaken through programmes and projects, the shape of reform  implementation is now changing as government agencies embrace Treaty-based partnerships, organisational agility, and greater product and service orientation. Digital and cloud technologies make it easier to implement more flexible rules, service delivery models, indigenous approaches and collaborative structures.​

Change is inevitable, and we can either be commanders of that change, or mere recipients. Change capacity, of both the public service and the sectors undergoing reform, is often raised as a barrier to the current pace of reform, and there is a balance to be struck between reforms which are fast and high impact, and those which are slow and long-lasting. Building the leadership and delivery capability for reform in Aotearoa will be an important success factor if we are to achieve long-term lasting outcomes from reform.​

Making space for the people​

Reform is not a mechanistic process, it is organic and importantly, must make space for the people it serves. A strong public sector reaffirms our collective identity as a democratic nation and a fair and just society. When it comes to reform, the stakes are high and the balance between political viability, economies of scale and the view of the majority are not always consistent with the conventions and aspirations of all communities within our society.

Fundamentally, societies and sectors are products of human systems, and government's role is to govern in ways that maximise societal wellbeing and distribute it equitably according to the needs and desires of the people. Reform is one of the ways we can achieve step-changes to ensure that wellbeing is maximised and distributed across society. If reform does not engage and enjoy the support of the people, and deliver promised outcomes, people may tire of so much change.​

Political ideologies and one-dimensional concepts of progress and development are problematic, especially when Māori assert a level of autonomy relating to Treaty rights that go beyond the state and the public sector itself. Are there tried and true ways of partnering with iwi and Māori that strengthen our collective resolve and provide opportunities for better outcomes for all New Zealanders?​

Increasingly, we are seeing that people want to be more engaged in the process of reform, and in the active governance of public resources, rather than delegating to politicians and public servants an exclusive right to oversee important decisions that could be tested with more than information or consultation. Questions are being asked about the next evolution of reform, so we are seeing greater consideration of representation, participation and co-governance models that would not have been part of the plan, even just a few years ago.​

Delivering successful outcomes​

Reforms are judged by the outcomes they create, as much as they are judged by the process of delivering what was promised. ​

There can be a gap between the vision that is stated when the reform is announced, and the outcome that is realised once the reform is declared complete. But often the time between the two is so long that memories of the original intent have faded and in practice, reforms rarely end; rather they disappear as organised programmes.​

Accountability for successful reform can be hard to pin down, partly due to long timeframes which allow people to move on to different roles, even as economies, sectors and organisations change significantly. Capturing lessons learned from what did and did not work during the reform is often not possible, unless a formal review or inquiry is held — which is usually when something has gone very wrong.​

If outcomes are the reason for the reform in the first place, shouldn’t we be better at holding ourselves to account for successfully delivering them?​

A Māori perspective​

As a sub-population, statistically Māori and Pacific people have worse outcomes than all other New Zealanders on almost all health, social and economic measures. For the most part, this inequity has not been remediated by previous government policy or public sector action for several decades. 

Speaking on outcomes, Professor Sir Mason Durie says: “Ultimately the impacts of public sector reforms on Māori must be measured. Firstly, as citizens of New Zealand, Māori performance should be assessed according to universal outcomes (such as life expectancy, educational achievement, employment). There should not be wide disparities between groups. This aim is not necessarily a consequence of the Te Tiriti o Waitangi but of the goals of a fair and just society. Secondly, as an indigenous people, Māori performance should be measured against Māori specific outcome indicators that are derived from Māori culture and traditional physical resources such as land. Best outcomes for Māori are the product of universal and Māori specific outcomes."1

Māori have at least two specific interests in the reformation of the public sector players. The first derived from their rights as individual citizens and secondly those rights derived from their relationship to the Te Tiriti o Waitangi as the founding document of Aotearoa New Zealand. The reality of the Māori and the Pacific position is that the political clout generally lies with the majority and any assertion of indigenous rights or perceived special treatment of Māori or Pacific people is often met with vitriol and sometimes seen as contrary to the democratic principle of equality by some New Zealanders. All this aside the unequal, longstanding poor outcomes speak for themselves. ​

The following equation touted by Durie et al. “Māori specific outcomes and indicators, a report prepared for Te Puni Kokiri, 2002” clearly shows what constitutes best outcomes for Māori.​

Formulae for successful outcomes for Māori: ​
Universal outcomes + Māori specific outcomes = Best outcomes for Māori
Universal outcomes – Māori specific outcomes ≠ Best outcomes for Māori

About this report​

In this year's Deloitte New Zealand State of the State, we explore perspectives on reform and share our views on its role in a modern public sector. What is reform and how does it sit within current day Aotearoa New Zealand? What motivates us to call for reform? Are there alternatives to reform that offer a better path for the public sector? Are there ways of better carrying out reform to deliver the best outcomes and maximise the chances of success?​

In recent years, our New Zealand State of the State reports have explored the state’s role to catalyse social impact through:​

Following a pause in these reports due to the global COVID-19 pandemic, we have turned our focus to the impact the state can have on people, Māori-Crown relationships, sectors and the economy, through its ability to shape system behaviour by reforming structures and policies, choices and actions. What can and should the public sector do in its role as civil government, in order to deliver value from its investment in reform? ​

Our report is informed by interviews with over 20 senior politicians, public servants, Māori, business and social sector leaders, academics and researchers. Their insights have been invaluable as we have built a picture of reform in Aotearoa, and developed recommendations for potential reformers.​

“Best outcomes for Māori are the product of universal and Māori specific outcomes."  ​

Professor Sir Mason Durie