IPS Publications

Policy Quarterly Volume 8 Number 2

2012-05-16T20:24:45Z

The eight articles in this issue of Policy Quarterly cover a range of important contemporary policy problems: two are of a broadly constitutional nature (the design of electoral rules, and the use of urgency in the parliamentary process); two are concerned with climate change (the implications of the Durban conference in December 2011, and the control of agricultural emissions in New Zealand); and two address issues of particular relevance to sub-national governments (the National-led administration’s proposals for local government reform, and the options for the delivery of urban water services). The penultimate article explores the funding of tertiary education in New Zealand and presents the results of a small survey of tertiary students on their understanding of the current funding arrangements, while the final article examines some of the current anomalies and inequities concerning overseas pensions policy and recommends various policy changes.

Rather than attempting to summarize the main themes and conclusions in these articles, I will instead focus on just one topic, namely the review of New Zealand’s mixed member proportional (MMP) electoral system. First some background: in a referendum on electoral reform, held on 26 November 2011, voters chose by a clear majority to retain MMP. The question of whether New Zealand should fundamentally change its electoral system has thus been settled for the time being – proportional representation is here to stay. The task now is to decide
what amendments, if any, should be made to the rules governing the MMP system. To this end, the Electoral commission is undertaking an independent review of some of the current electoral arrangements and is due to report to the Minister of Justice by the end of October. At present, the Commission is in the process of receiving submissions. Two of the various matters under review are closely interlinked. The first is whether there should be a change to the party vote threshold (i.e. the proportion of party votes that a party must secure in order to be eligible for an allocation of list seats). Currently, this is 5%. The second issue is whether there should be a change to the electorate seat threshold (i.e. the number of electorate seats that a party must win in order to be eligible for an allocation of list seats). Currently, this is just one seat.

Compared with most other proportional electoral systems (of various types), New Zealand has a relatively high party vote threshold. Elsewhere, the minimum party vote threshold is generally lower – if not much lower – than 5%. For instance, in Norway and Sweden the threshold is 4%, in Denmark and Israel it is 2%, and in Finland, the Netherlands, Portugal and South Africa it is even lower. Against this, compared with other mixed member systems of proportional representation (i.e. where there are both electorate and list seats) the electorate seat threshold in New Zealand is low. Having said this, there are many different systems of proportional representation and even where there is a minimum party vote threshold there are often exceptions (e.g. for ethnic minority parties). As a result, the effective thresholds for parliamentary representation are typically lower than the specified party vote thresholds.

As Jack Nagel highlights in his perceptive and informative analysis in this issue of Policy Quarterly, the low electorate seat threshold in New Zealand has partially offset the high party vote threshold, thereby generating a reasonably high level of proportionality at each of the six MMP elections since 1996. Moreover, as he persuasively argues, “a high degree of proportionality is important not just to serve representational values, but also to achieve majoritarian goals: a government supported by a majority of voters, a governing party that represents the median voter, and specific policies acceptable to majorities that may – and should – differ from issue to issue. The higher the threshold, the less the likelihood that a PR system will actually deliver a high degree of proportionality”. His analysis is important because many people believe that the current low electorate seat threshold is a serious problem. This is partly because it encourages inter-party game playing and tactical voting (with an undue media focus on party leaders having cups of tea or coffee in Auckland cafes!). But worse, it can generate results that are unfair in the sense that the representation of the smaller parties in Parliament bears little relationship to their share of the party vote. For instance, a party with just under 5% of the party vote but no electorate seats will miss out on parliamentary representation, whereas a party with barely 2% of the party vote but at least one electorate seat can secure two seats in the legislature. Accordingly, it is argued that the threshold should either be raised (e.g. to two or three seats) or there should be no provision for a party to receive list seats if it wins less than 5% of the party vote. But as Nagel’s analysis indicates, altering the electorate seat threshold without any corresponding change to the party vote threshold would almost certainly reduce the proportionality of the MMP system and this would be undesirable. On this basis, if the electorate seat threshold is raised (or abolished), there should be a reduction to the party vote threshold;the two changes must go hand in hand. But at what level should the party vote threshold be set? There are several competing considerations, and certainly no correct answer. On the one hand, the principle of proportionality is undoubtedly important. It embodies the desire for electoral fairness for parties and voters; it is also critical for democratic legitimacy. On the other hand, international experience suggests that very low thresholds (e.g. 1-2%) can result in a proliferation of parliamentary parties which can complicate the process of government formation and reduce governmental stability and effectiveness. Such outcomes are not inevitable, but they are certainly a risk. Bearing such considerations in mind, some advocate a 4% threshold, while Nagel proposes 3%. Interestingly, the Parliamentary Assembly for the Council of Europe recommends that any threshold not exceed 3%. My inclination is to support Nagel’s view. After all, a 4% threshold is still relatively high by international standards and would require in the vicinity of 100,000 party votes. This is a reasonably demanding tally. In a country that is becoming increasingly multicultural and pluralistic, we would do well to ensure that significant minority voices are not excluded from our Parliament. At the same time, a 3% threshold is probably sufficient to help deter the splintering of existing parties and avoid a proliferation of very small, and potentially ineffective, parliamentary parties. Three per cent may or may not be a popular option, but I hope that these comments and Nagel’s article contribute usefully to the debate.

Finally, it is my pleasure to welcome on board Bill Ryan as my co-editor. Likewise, I would like to thank retiring Board Member, Mike McGinnis, for his contribution to Policy Quarterly over the past two years. Thanks, also, to David Bromell, Peter Hughes and Valentina Dinica for their continuing service on the Board, and a warm welcome to Guy Beatson (Ministry for the Environment), Don Gray (Ministry of Health), Gerald Minee (The Treasury) and Mike Reid (Local Government New Zealand) for their willingness to join the Editorial Board.

Jonathan Boston
Co-editor

Ocean Governance: The New Zealand Dimension (summary report)

2012-05-02T18:24:56Z

The Oceans Governance project was funded by the Emerging Issues Programme, overseen by the Institute of Policy Studies at Victoria University of Wellington. Its primary goal is to provide interested members of the public and policymakers with a general overview and a description of the types of principles, planning tools and policy instruments that can be used to strengthen and improve marine governance in New Zealand.

The major findings of this study are that the existing marine governance framework in New Zealand emphasises a traditional sector-by-sector approach to management and planning and that this fragmented governance framework contributes to a number of institutional challenges. In addition, the study identifies a number of factors that influence marine planning and decision-making in the country, including but not limited to; the relationships between economic use of marine resources and the maintenance of marine ecosystem services and goods; Māori interests, perspectives and treaty obligations; the role of international treaties and conventions; the synergistic and cumulative impacts of multiple use and climate disturbance on marine ecosystems, and the role of scientists and science in marine planning and decision-making.

The report makes two general recommendations. First, with respect to the territorial sea (which includes the marine area out to 12 nautical miles) the report recommends that regional councils develop integrative marine plans where conflict between users and users-ecosystems is likely to develop in the future. Second, the report recommends the adoption of new role for central government to support an ecosystem-based approach to integrative marine planning and decision-making.

Policy Quarterly Volume 8 Number 1

2012-02-21T16:34:17Z

With the re-election of a National-led (centre-right) government in November 2011, there is now greater clarity over the likely medium-term direction of public policy in New Zealand. The Speech from the Throne highlighted the government’s priorities and objectives, which include building a ‘more competitive and internationally-focused economy, with less debt,more jobs and higher incomes’. Important policy initiatives are likely in relation to the system of welfare benefits, primary health care, housing policy, educational underachievement, tertiary education and training, science funding, accident compensation, the management of fresh water resources, oil and gas exploration, asset sales, and the rebuilding of Christchurch. Fiscal constraints and global economic uncertainty mean that tight expenditure control will be inevitable during the current parliamentary term, as will the quest for more cost-effective public services.

With respect to the latter topic, the opening article in this issue of Policy Quarterly is both timely and relevant. Peter Hughes and James Smart consider how New Zealand’s public management system must change in order to meet public demands not simply for greater efficiency, but also for better social outcomes. In their view, while the managerial reforms of the 1980s and 1990s led to improved responsiveness and innovation, they prioritised ‘bottom-line’ efficiency over a ‘topline’ emphasis on better outcomes, sidelining a larger concern with public value. Moreover, the current public management system restricts the agency collaboration and the organizational arrangements needed to address complex societal problems; the present financial management model is also partially at fault. Accordingly, Hughes and Smart outline various ways to facilitate more flexible and cost-effective modes of service delivery. These include new approaches to accountability, financial management and performance evaluation. More details of the government’s proposed reforms will be available when the report on Building Better Public Services is released. New Zealand, of course, is not alone in its quest for greater public sector efficiency and effectiveness. Recent British governments have given such matters vigorous attention. With this in mind, the second article in this issue of Policy Quarterly, by Catriona Robinson, asks what lessons might be learned from the UK’s efficiency agenda during 2004-2010. She focuses on four main aspects: central control of reform; targets as a performance management tool; the quality of performance data; and issues of leadership. The mixed results of the UK reforms, Robinson concludes, highlight the importance of balancing central oversight with granting agencies freedom to respond to local contexts.

Recent months have underscored the continuing significance of marine policy reform with the grounding of the MV Rena and the associated oil-spill—one of the country’s worst maritime environmental disasters. Noting recent legislative developments and other activities likely to impact on future marine policy, and the inevitable conflict between resource use and biodiversity protection, Mike McGinnis contends that New Zealand currently lacks the institutional capacity and capability to address these challenges. In his article (which draws on a detailed report he is preparing on New Zealand’s ocean governance) McGinnis outlines a new framework for marine policy based on an integrative, ecosystem-based approach to planning and decision-making. Such a framework would incorporate a number of management principles, not least the public trust doctrine, maintaining ecosystem services, and the compatible use criterion.

In the next piece, Omar Aziz and his Treasury co-authors draw on new data to examine the extent to which government policies in New Zealand redistribute from high to low-income households, and how this has changed since 1988. As well as covering market outcomes and the effects of personal income tax and cash benefits on the disposable incomes of households, the authors calculate the distributional impacts of indirect taxes and government expenditure on in-kind social services.Their results – which deserve careful scrutiny – show how government affects the distribution of post-tax income received by households, when income is defined considerably more broadly than usual.

The following two articles both address matters of methodology as well as policy. Susan St John and Claire Dale offer a framework for analysing the appropriateness and limits of using research-based evidence to evaluate social policy. They then employ this framework to assess the Working for Families package, implemented by the former Labour-led government, focussing particularly on the controversial In-Work Tax Credit (IWTC). In short, they conclude that the IWTC is not merely discriminatory, but that such discrimination is harmful and unjustified. On a different tack, Derek Wallace draws on a recently published book to demonstrate the embedded temporality of instruments and techniques of strategic planning, including national conferences, computer modelling, application of free-market theories, and scenario construction. Evaluating the effectiveness of each, he concludes that theuse of such ‘big picture’ tools calls for conscious reflection on the history and temporal commitments of each, and requires their integration into an overall strategy for managing the future.

New technologies, such as ultra-fast broadband, continue to be a major component of government plans for economic growth, often accompanied by claims of significant returns on public investment. Such forecasts, Michael Bourk notes, are often very limited in scope and excessively speculative; he argues that government and state institutions need to factor in complementary assets in consumers and citizens, investing in these according to principles of open innovation, public value, and deliberative democracy.

Sir Frank Holmes, a distinguished economist and a co-founder of the Institute for Policy Studies at Victoria University of Wellington, died on 23 October 2011 aged 87. It is fitting, then, that we close this issue of
Policy Quarterly with a tribute to Sir Frank by Emeritus Professor Gary Hawke (a close friend and colleague). Professor Hawke describes Sir Frank’s extensive and varied career as a university academic, his important role as an economic and financial adviser, his significant contribution to many areas of public policy (not least a closer economic relationship with Australia, and Asia-Pacific trade and development), and his work in the private sector.

Finally, I would like to thank Dr John Dennison for his assistance with the editing of this issue of Policy Quarterly and the preparation of this editorial comment.

Jonathan Boston
Editor

Local Government Strategic Planning in Theory and Practice

2012-01-09T14:51:01Z

Local Government Strategic Planning in Theory and Practice is the second and final monograph of the Local Futures Research Project, a study of strategic policy and planning in local government, funded by the Foundation for Research, Science and Technology and based at the School of Government, Victoria University of Wellington. The book describes and analyses the experiences of a sample of local and regional councils as they worked with their communities to prepare Long-Term Council Community Plans under the Local Government Act 2002. The research project involved collaborations with many councils and included research contributions from both academics and practitioners.

This monograph, authored by Professor Claudia Scott, Dr Mike Reid and Dr Jeff McNeill, critiques the design and implementation of community strategic planning under the Act with a focus on the relationship between theory and practice. They also consider the implications of recent amendments to local government legislation, including the creation of the Auckland Council and modifications to strategic planning and management requirements.

Local Government Strategic Planning in Theory and Practice is a valuable resource for anyone interested in strategic planning, local government and governance, and the interrelationships between councils and communities, central government and the private and community sectors.

IPS WP11/11 - Report on Representation and Development of Women for Top Leadership Roles in the New Zealand Public Service

2011-12-13T15:33:57Z

New Zealand has an enviable international reputation as a country where it is relatively common for women to hold top leadership roles in government and in organisations. Of 36 OECD countries, in 2003 New Zealand had the 4th highest representation of women in senior management with 31% of such positions held by women. However, by 2009 New Zealand had slipped to 17th position with 27%[1] representation.

The New Zealand Public Service in particular has traditionally had higher representation levels of women in senior management with 34% in 2001 climbing to a new high 40% in 2010. The proportion of women in public service [2]chief executive roles averaged 23% per year for the years 2001 to 2006. However, it has declined from a high of 26% (9 out of 35) in 2005 to 14% (5 out of 35) in late 2010.

This paper focuses on appointments to CE positions in the New Zealand Public Service and in particular it examines:

- the extent to which women are applying for, being shortlisted for and being appointed to Public Service chief executive positions over the last decade

- the extent to which women are represented in the potential pool for CE appointments and the previous roles of CE appointees

- what can be done to increase the number of women who apply for and are appointed to Public Service chief executive positions.

Policy Quarterly Volume 7 Number 4

2011-11-10T15:10:24Z

The 1992 Local Agenda 21 adopted at the Rio de Janeiro conference - the United Nations Conference on Environmentand Development - required governments to adopt and implement National Strategies for Sustainable Development. These were meant to offer guidance for the subsequent re-design of their economic and social governance systems basedon a set of four key governance principles for sustainability. The new governance systems were expected to facilitate the coordination of policies and strategies acrossthe three pillars of sustainability – social, environmental and economic, as well as the coordination of such policies acrossgovernmental levels. Two other key governance principles require the incorporation of intergenerational perspectivesand interests into policy-making, and the involvement of citizens and wide range of stakeholders into governanceprocesses, especially decision-making and implementation.

The question that this special issue of Policy Quarterly raises is – to what extent do we see evidence of theincorporation of such principles in the governance of key economic sectors and natural resources? Four contributionsto this issue provide insights by exploring successes and failures, threats and opportunities in two policy domains:tourism development and the management of freshwater resources. Two contributions are from Europe, and two from New Zealand; they explore key intercontinental differences and similarities.

De Boer and colleagues explore the implementation challenges associated with sustainable freshwatermanagement in the Netherlands. In the Dutch context this requires the coordination of interventions in four relevantpolicy domains: recreation, agriculture, nature and flood management. Their case study shows how an inclusivegovernance approach, with wide public and stakeholder participation, improves sustainability outcomes. In addition,an adaptive approach to implementation is crucial: they reveal that governance for sustainability implies finding theright balance between central government leadership and local flexibility to adapt to the complexities and uncertaintiesemerging in various local contexts. But adaptive implementation requires flexible institutions and ‘openended’regulatory structures that enable revisions in the light of learning and new facts. Moreover, it requires an allowancefor policy process phases to interact, rather than conceiving them as linear.

The importance of more integration of policy processes, particularly design and implementation, is also discussed inthe New Zealand context of water management by Fenemor and colleagues. An interactive approach to policymaking isrecommended by the surveyed freshwater stakeholders, as one of the 14 attributes of good governance distilled in theirpaper. The authors discuss how ‘techno-corporatist legal formalism’ dominating New Zealand’s freshwater governancefor decades has resulted in water permits and contracts that fix inefficient and inequitable water allocation systemsfor the long term. The surveyed stakeholders also associate good governance with a holistic approach to planning thatintegrates a wide diversity of values in water management such as landscape, ecological, cultural, and amenity values.

The recent formation of the Land and Water Forum suggests a political willingness to experiment with new governancearrangements based on the participatory principle. There are also signs of regulatory innovations and improvedcoordination across governmental levels. Dishearteningly such signs are not yet to be seen in the governance of tourism in New Zealand. Lovelock examines the institutional and policy frameworks relevant for tourism development at regional and local levels. He finds little evidence of a genuine concern with sustainability issues among policy-makers and the business community. Despitethe rhetoric in the national and subnational strategies for tourism, policy legitimacy emerges as a major obstaclefor incorporating sustainability in the governance of local tourism. Two destinations are more closely examined: Catlins,which is an emerging destination for which a preventive regulatory approach to sustainability should apply; andQueenstown, an established destination where a recovery approach is needed, as the unplanned intensive growth overthe past decades has already generated negative social and environmental impacts. These case studies reveal thatthe 1991 Resource Management Act does not provide an adequate regulatory approach to tourism permitting. Thelegal and institutional frameworks relevant for sustainable development are weak, which lies at the heart of thelegitimacy problem for a sustainability-based tourism governance in New Zealand.

The Member States of the European Union (EU) seem to have the opposite problem: too many policy andlegislative tools and many levels of governance affecting tourism development locally. However, from this thickpolicy soup something meaningful still seems to emerge, as Anastasiadou explains. For decades, tourism was excludedfrom the economic sectors for which EU Treaties gave European political authorities competencies to adopt policies,and enforce them on Member States. In this context, the EU tried to steer tourism towards sustainability through softinstruments, such as guidelines and recommendations, and by means of generic tools such as the Lisbon Strategy,the Cohesion Policy and the Sustainable Development Strategy. Many financial schemes also target sustainabilitygoals at project level. Although the impact of these multiple interacting top-down tools is yet to be rigorously evaluated,signs are emerging that the EU approach warmed hearts and opened minds among both local public authorities and thebusiness community, in established and emerging tourism destinations.

Such behavioural change, underpinned by significant policy and governance innovations, is what numerousparticipants to the recent symposium on biophysical limits in Wellington advocate (‘Biophysical Limits and their PolicyImplications’, 8-9 June 2011). Jonathan Boston reviews the key themes explored during this symposium. He explainsthat the earth’s resources are typically categorized as nonrenewable, conditionally renewable and inexhaustible. Thesustainability debate is connected to the normative debate on which – and whether – the first two types of resources are substitutable. Here lies a key difference between ‘weak’ and ‘strong sustainability’. Such conceptualizations are importantas they underpin policies and institutions that should move societies towards a greener type of development, respectingthe physical boundaries of planet Earth – its resource, sink and thermodynamic boundaries. Boston reflects further onthe policy design and political challenges ahead to enable a safer, sustainable development.

Aside from the five articles on sustainability issues, this issue of Policy Quarterly contains four other contributions.These canvass a diverse range of topics: David Penman, Andrew Pearce and Missy Morton reflect on one of the keychallenges facing New Zealand science, namely how to embrace a more collaborative mode of inter-institutionalworking; related to this, Jo Cribb, Robbie Lane, Heather Penny, Kylie van Delden and Kathie Irwin explore the lessonsfor cross agency, cross-sector working arising out of a recent governmental project designed to improve outcomes forvulnerable children; Mike Reid reviews recent and impending changes in English local government and their lessons forNew Zealand; Paul Barber explores how New Zealand might reduce its current high level of income inequality; and PaulCallister and Judith Galtry critically assess an article by Maureen Baker on paid parental leave which appeared inthe August issue of this journal. Hopefully, there will be something here to excite the interest to all readers.

Valentina Dinica
Guest Editor

The New New Zealand Tax System

2011-11-06T15:11:33Z

Perhaps the most prominent political debate in New Zealand is about tax. This book provides a new perspective on this critical subject, examining what we know about our tax system, and showing how that falls short of what we should know.

It details how tax works in the countries New Zealanders normally look to for policy comparison. It shows New Zealand has a tax system of extremes. We charge less tax than almost any comparable country on high incomes, dividends, and capital gains. Our GST however, is bigger than most, both as a proportion of taxes and as a proportion of the economy as a whole. And our goal of aligning top personal and company tax rates is not one that other rich democracies seem to share.

They say that in order to change tomorrow, first you must understand today. This book helps everyone, tax experts and interested laypeople alike, understand our tax system today.

IPS WP11/10 - Financial abuse of older people in New Zealand

2011-11-02T18:59:17Z

There is no single internationally accepted definition of elder abuse. This inhibits meaningful comparison of data. New Zealand generally uses the definition adopted by the World Health Organisation:

“A single or repeated act or lack of appropriate action, occurring within any relationship where there is an expectation of trust, which causes harm or distress to an older person”.

Within this definition, financial elder abuse (FEA) is defined as the “illegal or improper exploitation or use of funds or resources of the older person” (Wolf, Daichman and Bennett, 2002, p. 127).

This working paper is linked to a workshop hosted by the Institute of Policy Studies, Victoria University of Wellington, in June 2011. Following discussion of definitional issues and exploration of what we know about FEA, we identify strategies to prevent and reduce FEA in New Zealand. Our purpose is to promote discussion and development of policies which ensure a multi-faceted response to this issue. This will help to ensure that older people are free from elder abuse in all its forms.

The Costs of Crime - Towards Fiscal Responsibility

2011-10-19T17:58:57Z

In 2012 the New Zealand government spent $3.4 billion, or nearly $800 per person, on responses to crime via the justice system. Research shows that much of this spending does little to reduce the changes of re-offending. Relatively little money is spent on victims, the rehabilitation of offenders or to support the families of offenders.

This book is based on papers presented at the Costs of Crime forum held by the Institute of Policy Studies in February 2011. It presents lessons from what is happening in Australia, Britain and the United States and focuses on how best to manage crime, respond to victims, and reduce offending in a cost-effective manner in a New Zealand context.

It is clear that strategies are needed that are based on better research and a more informed approach to policy development. Such strategies must assist victims constructively while also reducing offending. Using public resources to lock as many people in our prisons as possible cannot be justified by the evidence and is fiscally unsustainable; nor does such an approach make society safer. To reduce the costs of crime we need to reinvest resources in effective strategies to build positive futures for those at risk and the communities needed to sustain them.

IPS WP 11/06 - Restructuring � an over-used lever for change in New Zealand�s state sector?

2011-10-10T18:40:14Z

Is restructuring the hammer of organisational change in New Zealand’s state sector? A State Services Commission (SSC) survey of state sector employees in 2010 identified that 65 per cent of the 4,600 staff sampled had been involved in a merger or restructure during the previous two years, a sharp contrast with a similar survey of the federal government of the United States, which found that only 18 per cent were affected. These statistics raise questions which form the basis of this paper: why, how and to what effect are state sector organisations restructured in New Zealand?

Our research started with a review of empirical data on restructuring and of perspectives from the literature on restructuring in the public and private sectors. We then explored these perspectives in three separate focus groups in May 2011, with chief executives, human resource managers and Public Service Association (PSA) delegates and organisers. Not surprisingly, chief executives (CEs) who initiate restructuring have a considerably more optimistic view about its role and impact than those who are affected by it. Annex One is a reflection piece written by one of the most experienced New Zealand public service chief executives, Christopher Blake, Chief Executive of the Department of Labour, (and Chief Executive of the New Zealand Symphony Orchestra from 2012), provides a balance to the more sceptical argument presented in this paper.

We conclude that restructuring has indeed become the ‘hammer’ of organisational change in New Zealand, a result of the ‘freedom to manage’ formula adopted in the late 1980s to break up a unified and ‘career for life’ bureaucracy that was seen to respond to slowly to the economic crises of the 1980s. Restructuring has become almost an addiction, reinforced by short, fixed term contracts for chief executives and a belief by those chief executives that their employer, the State Services Commission, expects them to be seen to be ‘taking charge’. Restructuring is a symbol and sometimes and substitute for action. It treats organisations as though they are mechanical objects with interchangeable parts rather than as living systems of people who have choices about the extent to which they will commit to their work. Organisational change receives considerably less scrutiny than funding proposals for major capital works. We advocate that restructuring should be subject to such scrutiny and chief executives need to act more like stewards of their organisations and less like owners.