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