New Zealand

   

Executive Capacity

#4
Key Findings
With a strong focus on interministerial coordination, New Zealand is rated among the top performers (rank 4) in the area of executive capacity. Its score on this measure has declined by 0.1 point relative to its 2014 level.

Power is concentrated within the cabinet, resulting in a highly cohesive system of cabinet government. The Department of the Prime Minister and the Cabinet (DPMC) has a number of strategic policy-advisory units. Formal and informal coordination between ministries and with the government office is common. The Labour-NZ First government faced some initial challenges due to ministerial inexperience.

Impact assessments are mandatory and systematically performed, with a strong quality-assurance component. Ex post evaluations are not mandatory. The government’s use of digital tools is highly developed. Societal consultation is not legally required, but is widely practiced.

Despite the coalition nature of the current government, its communication coherence has remained strong. While special interests sometimes influence the development of regulations, subsequent enforcement is generally unbiased. The government elected to continue the previous government’s support for a TPP trade agreement even after the United States’ withdrawal.

Strategic Capacity

#5

How much influence do strategic planning units and bodies have on government decision-making?

10
 9

Strategic planning units and bodies take a long-term view of policy challenges and viable solutions, and they exercise strong influence on government decision-making.
 8
 7
 6


Strategic planning units and bodies take a long-term view of policy challenges and viable solutions. Their influence on government decision-making is systematic but limited in issue scope or depth of impact.
 5
 4
 3


Strategic planning units and bodies take a long-term view of policy challenges and viable solutions. Occasionally, they exert some influence on government decision-making.
 2
 1

In practice, there are no units and bodies taking a long-term view of policy challenges and viable solutions.
Strategic Planning
8
New Zealand has unique constitutional arrangements resulting in a significant concentration of power in the cabinet and a highly cohesive system of cabinet government. The core executive in New Zealand is organized according to new public-management approaches and methods. Most importantly, contracts are negotiated between ministers and chief executives. With the large number of government departments and ministers (26, with a further three undersecretaries), most of whom are responsible for several portfolios, taking a whole-of-government approach to policy development can be complex and time-consuming. Recent governments have reacted to concerns about fragmentation by recentralizing the steering capacity of the core executive. The most important government departments involved in strategic planning and policy formation are the central agencies of the Department of the Prime Minister and Cabinet (DPMC), the State Services Commission (SSC) and the Treasury. All contracts (performance agreements and departmental statements of intent) support a cooperative and whole-of-government policy approach, though evaluation of the performance assessment of chief executives has a strong focus on departmental achievements.
The prime minister can draw on only moderate strategic-planning capacity (in the form of a policy-advisory group) vis-à-vis ministers. Ad hoc groups, often including some outside expertise, are increasingly used to complement government agencies’ policy-advisory function.
In 2014, prompted by evidence of widespread inconsistency in the quality of policy advice being produced across agencies, the New Zealand government launched the Policy Project. This deployed analytical tools and frameworks to investigate current practice in policy design to improve the quality of policy advice across the whole of government. Through collaborative methods, the Policy Project identified and codified what quality policy advice looks like and the skills and processes needed to produce it. The Policy Project has produced a number of policy improvement frameworks, which were launched by the prime minister of New Zealand in 2016.
The unprecedented character of the Labour-NZ First coalition, with support from the Green party, constitutes new challenges in terms of strategic capacity because of a lack of experience on the government’s side. Only three of the Labour Party’s ministers and two of the NZ First members of parliament have previously held ministerial office. The Green party, which holds three ministerial positions outside of cabinet, has no member with previous ministerial experience.

Citations:
Department of the Prime Minister and the Cabinet (DPMC). Annual Report 2018. https://dpmc.govt.nz/publications/annual-report-2018

Does the government regularly take into account advice from non-governmental experts during decision-making?

10
 9

In almost all cases, the government transparently consults with non-governmental experts in the early stages of government decision-making.
 8
 7
 6


For major political projects, the government transparently consults with non-governmental experts in the early stages of government decision-making.
 5
 4
 3


In some cases, the government transparently consults with non-governmental experts in the early stages of government decision-making.
 2
 1

The government does not consult with non-governmental experts, or existing consultations lack transparency entirely and/or are exclusively pro forma.
Expert Advice
7
In terms of frequency and intensity of policy advice, the relevance of external academic experts for governmental policymaking depends on the subject area. Non-governmental academics with technical expertise can have a significant role in policy areas such as health, energy, social policy and tertiary education. In general, the importance of scholarly advice is increasing. The most recent initiatives in this regard include the establishment of a Māori Language Advisory Group and an expert panel tasked with overseeing the overhaul of Child, Youth and Family, a service agency subordinate to the Ministry of Social Development. One of the innovations of the Labour-NZ First coalition government was the creation of the Interim Climate Change Committee in April 2018. The ICCC is an independent ministerial advisory body created to explore how New Zealand transitions to a net zero emissions economy by 2050. It will be superseded and replaced by an independent Climate Change Commission under the Zero Carbon Act in May 2019. Another government initiative was the formation of a Tax Working Group, which reported back in support of the introduction of a capital gains tax in February 2019.

Citations:
https://www.mfe.govt.nz/sites/default/files/media/Legislation/Cabinet%20paper/interim-climate-change-committee-tor.pdf

Interministerial Coordination

#2

Does the government office / prime minister’s office (GO / PMO) have the expertise to evaluate ministerial draft bills according to the government’s priorities?

10
 9

The GO / PMO provides regular, independent evaluations of draft bills for the cabinet / prime minister. These assessments are guided exclusively by the government’s priorities.
 8
 7
 6


The GO / PMO evaluates most draft bills according to the government’s priorities.
 5
 4
 3


The GO / PMO can rely on some sectoral policy expertise but does not evaluate draft bills.
 2
 1

The GO / PMO does not have any sectoral policy expertise. Its role is limited to collecting, registering and circulating documents submitted for cabinet meetings.
GO Expertise
8
The policy-advisory group in the Department of Prime Minister and Cabinet (DPMC) currently consists of 12 staff members covering a broad spectrum of policy expertise. They are in constant contact with the prime minister and provide advice on all cabinet and cabinet committee papers. They also engage in coordinating interministerial cooperation. The policy-advisory group provides direct support to the prime minister on specifically commissioned initiatives. In 2015, a Legislation Design and Advisory Committee (LDAC) was established with the aim of improving the quality and effectiveness of legislation. The LDAC advises departments regarding the design and content of bills while still in the development stage.
To support the prime minister and her government’s priorities, DPMC added two new units in 2018: the Child Poverty Unit (CPU) and the Child Well-being Unit (CWU). DPMC’s wider Policy Advisory Group continues to play a crucial role in aligning the public service’s effort in supporting the government’s priorities and providing free and frank advice to the prime minister on all items of government business.

Citations:
Department of the Prime Minister and Cabinet. Annual Report 2018. https://dpmc.govt.nz/publications/annual-report-2018.

To what extent do line ministries involve the government office/prime minister’s office in the preparation of policy proposals?

10
 9

There are inter-related capacities for coordination between GO/PMO and line ministries.
 8
 7
 6


The GO/PMO is regularly briefed on new developments affecting the preparation of policy proposals.
 5
 4
 3


Consultation is rather formal and focuses on technical and drafting issues.
 2
 1

Consultation occurs only after proposals are fully drafted as laws.
Line Ministries
9
If line ministries prepare a policy proposal, they are obliged to consult other ministries that are affected, as well as the coordinating units, the Department of Prime Minister and Cabinet (DPMC), the Treasury and the State Services Commission. There are clear guidelines which govern the coordination of policy formulation in the core executive.

Citations:
Cabinet Office Circular CO (17) 10, Labour-New Zealand First Coalition, with Confidence and Supply from the Green Party: Consultation and Operating Arrangements. December 17, 2017.https://dpmc.govt.nz/sites/default/files/2017-12/coc-17-10.pdf

How effectively do ministerial or cabinet committees coordinate cabinet proposals?

10
 9

The vast majority of cabinet proposals are reviewed and coordinated first by committees.
 8
 7
 6


Most cabinet proposals are reviewed and coordinated by committees, in particular proposals of political or strategic importance.
 5
 4
 3


There is little review or coordination of cabinet proposals by committees.
 2
 1

There is no review or coordination of cabinet proposals by committees. Or: There is no ministerial or cabinet committee.
Cabinet Committees
9
There are clear guidelines for policy formulation in the New Zealand core executive. All policy proposals are reviewed in cabinet committees. Full cabinet meetings therefore can focus on strategic policy debates and policy conflicts between coalition partners or between the government and its legislative support parties in the House of Representatives. In quantitative terms, from 1 July 2017 to 30 June 2018, the full cabinet met 44 times while cabinet committees met 139 times. A revised cabinet committee structure was implemented in October 2017 following the formation of the government after the general election. The overall number of committees remained ten, but seven out of ten committees were discontinued or superseded. Key committees are now the Cabinet Legislation Committee, the Committee on Economic Development and the Cabinet Environment, Energy and Climate Committee.

Citations:
Department of the Prime Minister and Cabinet. Annual Report 2018. https://dpmc.govt.nz/publications/annual-report-2018.

How effectively do ministry officials/civil servants coordinate policy proposals?

10
 9

Most policy proposals are effectively coordinated by ministry officials/civil servants.
 8
 7
 6


Many policy proposals are effectively coordinated by ministry officials/civil servants.
 5
 4
 3


There is some coordination of policy proposals by ministry officials/civil servants.
 2
 1

There is no or hardly any coordination of policy proposals by ministry officials/civil servants.
Ministerial Bureaucracy
9
The cabinet process is overseen by the cabinet office on the basis of clear guidelines. Under the new Labour-NZ First coalition, the so-called Cabinet Office Circular CO (17) 10 provides practical guidance for ministers and departments on implementing the coalition agreement between Labour and New Zealand First and the confidence and supply agreement between Labour and the Green party. Departmental chief executives typically meet with ministers prior to cabinet meetings to discuss the agenda and clarify matters. The amount and effectiveness of policy proposal coordination varies a great deal depending on the policy field. However, there is clearly coordination in the preparation of cabinet papers and demanding processes specified in cabinet office circulars.

Citations:
Cabinet Office Circular CO (17) 10, Labour-New Zealand First Coalition, with Confidence and Supply from the Green Party: Consultation and Operating Arrangements. December 17, 2017.https://dpmc.govt.nz/sites/default/files/2017-12/coc-17-10.pdf

How effectively do informal coordination mechanisms complement formal mechanisms of interministerial coordination?

10
 9

Informal coordination mechanisms generally support formal mechanisms of interministerial coordination.
 8
 7
 6


In most cases, informal coordination mechanisms support formal mechanisms of interministerial coordination.
 5
 4
 3


In some cases, informal coordination mechanisms support formal mechanisms of interministerial coordination.
 2
 1

Informal coordination mechanisms tend to undermine rather than complement formal mechanisms of interministerial coordination.
Informal Coordination
9
In addition to formal coordination, there are a number of informal channels between coalition partners, government and legislative support parties (parliamentary rather than extra-parliamentary), and ministers and their parliamentary advisers. Although media commentary tends to not draw a distinction between formal coalitions (e.g., Labour/NZ First 2017-present) and non-coalition support parties (e.g., Greens 2017-present), the Cabinet Manual seeks to at least formally clarify which procedures should be used as a guideline in case of informal coordination. It is important to mention, however, that the coordination process is largely limited to party leadership and excludes the extra-parliamentary wing of the party (i.e., party members, activists and officials).

Citations:
Cabinet Office Circular CO (17) 10, Labour-New Zealand First Coalition, with Confidence and Supply from the Green Party: Consultation and Operating Arrangements. December 17, 2017.https://dpmc.govt.nz/sites/default/files/2017-12/coc-17-10.pdf

How extensively and effectively are digital technologies used to support interministerial coordination (in policy development and monitoring)?

10
 9

The government uses digital technologies extensively and effectively to support interministerial coordination.
 8
 7
 6


The government uses digital technologies in most cases and somewhat effectively to support interministerial coordination.
 5
 4
 3


The government uses digital technologies to a lesser degree and with limited effects to support interministerial coordination.
 2
 1

The government makes no substantial use of digital technologies to support interministerial coordination.
Digitalization for Interministerial C.
9
The New Zealand government has identified a coordinating unit for ICT deployment at the center of government, developed a strategy (2015 ICT strategy) for coordination across government levels in order to improve effectiveness, and introduced new bodies in charge of leading the digital transformation. In 2017, the portfolio of minister for government digital services was created. The government chief digital officer (GCDO) is the government functional lead for developing and improving digital infrastructure across government. The GCDO is supported by the Digital Government Partnership, which is a partnership of stakeholders from agencies across government to support the goal of a coherent, all-of-government digital system. It helps the GCDO and government chief data steward (GCDS) to develop and improve the digital and data system across government; ensures government is aligned with the government ICT strategy; and reviews and informs the strategy. The partnership is made up of a leadership group and four working groups that support the strategy as well as a chairs’ group, which bring together experts from across the different focus areas to provide support and advice to the leadership group. However, it is not absolutely clear how effective the use of digital technologies really is, especially with regard to interministerial coordination.

Citations:
https://www.digital.govt.nz/digital-government/leadership-and-governance/digital-government-partnership/
https://www.digital.govt.nz/dmsdocument/4-government-ict-strategy-2015
https://www.digital.govt.nz/

Evidence-based Instruments

#4

To what extent does the government assess the potential impacts of existing and prepared legal acts (regulatory impact assessments, RIA)?

10
 9

RIA are applied to all new regulations and to existing regulations which are characterized by complex impact paths. RIA methodology is guided by common minimum standards.
 8
 7
 6


RIA are applied systematically to most new regulations. RIA methodology is guided by common minimum standards.
 5
 4
 3


RIA are applied in some cases. There is no common RIA methodology guaranteeing common minimum standards.
 2
 1

RIA are not applied or do not exist.
RIA Application
10
New Zealand introduced a regulatory impact assessment (RIA) regime in the period 1997-2008. The National government introduced guidelines in late 2009, with the effect that RIAs are systematically undertaken for any policy activity involving options that may result in a paper being submitted to the cabinet and may accordingly lead to draft legislation. This aims at restricting new regulations to those that the government sees as necessary, sensible and robust, while avoiding regulations that are ineffective and costly. The Labour-NZ First coalition implemented a number of routine updates and amendments to the legal framework.
Treasury assumes a lead role on regulatory management. It is the national coordinating body on regulatory management, tasked with oversight of regulatory systems, including regulatory impact statements (RISs) and regulatory policy, that reports to the minister of finance and the minister for regulatory reform. The Parliamentary Counsel Office has the statutory function to develop all drafting instructions (other than for tax law). There are five other institutions that play important roles: Legislation Design and Advisory Committee; The Law Commission; The Productivity Commission; the Parliamentary Select Committees; and the Parliamentary Regulatory Review Committee.

Citations:
Cabinet Office Circular CO (09) 8: Regulatory Impact Analysis Requirements: New Guidance (Wellington: Cabinet Office 2009).
Regulatory Impact Analysis Handbook (Wellington: The Treasury 2013).
New Zealand’s Regulatory Management System: http://www.treasury.govt.nz/regulation/system
Gill, Derek 2016. Rgulatory Coherence: The Case of New Zealand. ERIA Discussion Paper Series 2016-12. Wellington: University of Wellington.

Does the RIA process ensure participation, transparency and quality evaluation?

10
 9

RIA analyses consistently involve stakeholders by means of consultation or collaboration, results are transparently communicated to the public and assessments are effectively evaluated by an independent body on a regular basis.
 8
 7
 6


The RIA process displays deficiencies with regard to one of the three objectives.
 5
 4
 3


The RIA process displays deficiencies with regard to two of the three objectives.
 2
 1

RIA analyses do not exist or the RIA process fails to achieve any of the three objectives of process quality.
Quality of RIA Process
8
The New Zealand Treasury periodically commissions independent reviews of the quality of RIA. Based on these reviews, the RIA system has been refined over time. The approach adopted has a strong emphasis on a regulatory impact statement (RIS) being embedded as part of a good polcy development process rather than being a compliance requirement to be hurdled at the end of the policy development process. RIS are now produced for all substantive government bills and are widely accepted by departments, although systematic evidence on their use by ministers and parliamentarians is lacking.
The major development in the period after 2008 was the introduction of statutory expectations for departmental chief executives concerning regulatory stewardship. Treasury has been proactive in developing guidance for the new regulatory stewardship provisions applying to departmental chief executives. Moreover as part of the government’s response in 2015 to the Productivity Commission Inquiry, departments are now required to publicly disclose their strategies and systems for meeting their regulatory stewardship expectations. These requirements are works in process.

The quality of RISs, while improving, remains unclear. The Treasury’s RIS on the proposed Regulatory Responsibility Act commented “We all know that the analysis we see in Regulatory Impact Statements (RISs) is often not of the highest standard and as a consequence is little used or valued” (Ayto 2011). The Treasury estimates that in 2012 only 62% of RIAs fully met cabinet requirements and subsequent reviews “suggest that the quality of RISs has not improved” (Sapere Research Group 2015).

Citations:
Gill, Derek 2016. Regulatory Coherence: The Case of New Zealand. ERIA Discussion Paper Series 2016-12. Wellington: University of Wellington.
Ayto, Jonathan 2011. Regulatory Impact Statement: Regulating for Better legislation – What is the Potential of a Regulatory Responsibility Act? https://treasury.govt.nz/sites/default/files/2011-03/ris-tsy-rbr-mar11.pdf
Sapere Research Group. 2015. Regulatory Impact Analysis Evaluation 2015. Report Prepared for the Treasury. http://www.srgexpert.com/publications/our-people-publicat-547/
OECD Regulatory Policy Outlook 2015 Country profile New Zealand. https://www.oecd.org/gov/regulatory-policy/New%20Zealand-web.pdf

Does the government conduct effective sustainability checks within the framework of RIA?

10
 9

Sustainability checks are an integral part of every RIA; they draw on an exhaustive set of indicators (including social, economic, and environmental aspects of sustainability) and track impacts from the short- to long-term.
 8
 7
 6


Sustainability checks lack one of the three criteria.
 5
 4
 3


Sustainability checks lack two of the three criteria.
 2
 1

Sustainability checks do not exist or lack all three criteria.
Sustainability Check
9
Without using the term “sustainability,” the regulatory impact assessment (RIA) process includes major aspects of this concept. Part of the quality-assurance monitoring process is to check whether all substantive economic, social and environmental impacts have been identified (and quantified where feasible). In addition, it is an integral part of RIAs to plan for regulatory-instrument reviews that consider, among others, if if there is still a problem and if objectives are being met.

Citations:
Regulatory Impact Analysis Handbook (Wellington: The Treasury 2013).

To what extent do government ministries regularly evaluate the effectiveness and/or efficiency of public policies and use results of evaluations for the revision of existing policies or development of new policies?

10
 9

Ex post evaluations are carried out for all significant policies and are generally used for the revision of existing policies or the development of new policies.
 8
 7
 6


Ex post evaluations are carried out for most significant policies and are used for the revision of existing policies or the development of new policies.
 5
 4
 3


Ex post evaluations are rarely carried out for significant policies and are rarely used for the revision of existing policies or the development of new policies.
 2
 1

Ex post evaluations are generally not carried out and do not play any relevant role for the revision of existing policies or the development of new policies.
Quality of Ex Post Evaluation
6
Despite the dominant role of ex-ante RIAs, steps are also taken to implement ex-post RIAs. However, the quality of ex-post-evaluation of public policies remains unclear. They are not mandatory and there is no established methodology for conducting them. Introducing systematic reviews of regulation could potentially help strengthen the policymaking process. There is little evidence to assume that this has changed in the review period of the SGI 2019.

Citations:
https://treasury.govt.nz/publications/legislation/regulatory-impact-assessments
Gill, Derek 2016. Rgulatory Coherence: The Case of New Zealand. ERIA Discussion Paper Series 2016-12. Wellington: University of Wellington.
OECD Regulatory Policy Outlook 2015 Country profile New Zealand. https://www.oecd.org/gov/regulatory-policy/New%20Zealand-web.pdf
Kupiec, Tomasz 2015. Regulatory Impact Analysis Practice in New Zealand in the Light of Models of Evaluation Use – Inspiration for the Polish Government. „Management and Business Administration. Central Europe” 23(2), pp. 109–128.

Societal Consultation

#4

Does the government consult with societal actors in a fair and pluralistic manner?

10
 9

The government always consults with societal actors in a fair and pluralistic manner.
 8
 7
 6


The government in most cases consults with societal actors in a fair and pluralistic manner.
 5
 4
 3


The government does consult with societal actors, but mostly in an unfair and clientelistic manner.
 2
 1

The government rarely consults with any societal actors.
Public Consultation
8
New Zealand has a strong tradition of broad policy consultation with interest groups and with its citizens, both at the national and the local levels, and consultation is mandated in many cases under the Local Government Act 2002. Consultation is also commonly used by central government agencies with respect to new policy initiatives. There is no general legal requirement for consultation in the regulatory process, but consultation is an explicit policy of the government, embedded within New Zealand’s policymaking processes, provides information for cabinet discussions, and is one of the key quality assurance criteria. When a consultation has taken place, the details of any consultations, internal and external, are set out in regulatory impact statements (RIS). RISs must explain who has been consulted and what form the consultation took, outline key feedback received, with particular emphasis on any significant concerns that were raised about the preferred option, how the proposal has been altered to address these concerns (and if not, why not). If there is no consultation undertaken, the reasons must be presented. While parliamentary select committees hold hearings on proposed legislation once it has been introduced in parliament, giving individuals and organizations the opportunity to make written or oral submissions, the incidence of by-passing select committees by introducing bills under urgency is growing. In addition to the aforementioned tools for measuring public opinion, both the government and organizations that are likely to be affected by policy outcomes make increasing use of opinion polls, media and online comment and focus groups.

Citations:
Local Government Act 2002: http://www.legislation.govt.nz/act/public/2002/0084/latest/DLM172326.html (accessed October 9, 2014).
OECD Regulatory Policy Outlook 2015 Country profile New Zealand. https://www.oecd.org/gov/regulatory-policy/New%20Zealand-web.pdf

Policy Communication

#10

To what extent does the government achieve coherent communication?

10
 9

Ministries are highly successful in aligning their communication with government strategy.
 8
 7
 6


Ministries most of the time are highly successful in aligning their communication with government strategy.
 5
 4
 3


Ministries occasionally issue public statements that contradict the public communication of other ministries or the government strategy.
 2
 1

Strategic communication planning does not exist; individual ministry statements regularly contradict each other. Messages are often not factually consistent with the government’s strategy.
Coherent Communication
7
New Zealand has an unusual tradition of highly coherent and cohesive cabinets. The fact that the current government is a minority coalition of two parties with quite disparate policy objectives, supported by a third party with no history of government experience, means that there is a higher risk of incoherent communication among ministers and cabinet members (inside and outside of the government). That said, there is no systematic empirical evidence to suggest that the current government is less coherent in its communication compared to the previous one.

Implementation

#6

To what extent can the government achieve its own policy objectives?

10
 9

The government can largely implement its own policy objectives.
 8
 7
 6


The government is partly successful in implementing its policy objectives or can implement some of its policy objectives.
 5
 4
 3


The government partly fails to implement its objectives or fails to implement several policy objectives.
 2
 1

The government largely fails to implement its policy objectives.
Government Effectiveness
9
Throughout the review period, the Labour-NZ First government held minority status, though the Green party gave support and confidence to the 55 seat minority-coalition government. This resulted in a 63 majority in parliament, enough to ensure that Prime Minister Ardern (Labour party) maintained the confidence of the unicameral legislature.
Minority status implies that the government has to anticipate the policy preferences of other parties in parliament and needs to seek legislative support on an issue-by-issue basis. Nevertheless, the minority-coalition governments has been relatively successful at implementing its agenda. The focus of the government’s policy priorities included: climate change; building a strong and competitive zero carbon economy; funding major health policy projects and educational and housing reforms; reducing the incidences of child poverty and domestic violence; strenghtening relations with the EU, supporting TPP-11 and recalibrating NZ’s relations with South Pacific island states through a more proactive and more partner-oriented developmental cooperation policy.

To what extent does the organization of government provide mechanisms to ensure that ministers implement the government’s program?

10
 9

The organization of government successfully provides strong mechanisms for ministers to implement the government’s program.
 8
 7
 6


The organization of government provides some mechanisms for ministers to implement the government’s program.
 5
 4
 3


The organization of government provides weak mechanisms for ministers to implement the government’s program.
 2
 1

The organization of government does not provide any mechanisms for ministers to implement the government’s program.
Ministerial Compliance
9
There is a strong tradition of a highly cohesive system of cabinet government. Ministers are allowed to disagree over policy initiatives, even in public, but once a decision has been made in cabinet they must follow the collective will. The prime minister has the power to appoint and dismiss ministers (formally it is the governor-general who does this on the advice of the prime minister). Labour party ministers are appointed through a process of election by all of the party’s parliamentarians, with the prime minister’s direct power being largely limited to the ranking of ministers and allocation of portfolios. Naturally, in coalition governments or minority governments with support agreements with other parties, the prime minister’s power over the personnel of another party is somewhat restricted, although the actual number of cabinet positions assigned to each small party is largely a matter for the prime minister.
Collective responsibility within a formal coalition arrangement is strengthened by an extensive list of coalition management instruments, based on a comprehensive coalition agreement with regard to the legislative agenda but also procedures to ensure coalition discipline. There are also procedures for dealing with a minority government.

Citations:
Cabinet Office Circular CO (15) 1 (Wellington: Cabinet Office 2015).

How effectively does the government office/prime minister’s office monitor line ministry activities with regard to implementation?

10
 9

The GO / PMO effectively monitors the implementation activities of all line ministries.
 8
 7
 6


The GO / PMO monitors the implementation activities of most line ministries.
 5
 4
 3


The GO / PMO monitors the implementation activities of some line ministries.
 2
 1

The GO / PMO does not monitor the implementation activities of line ministries.
Monitoring Ministries
9
Following the experience of fragmented policymaking in vertically integrated networks, recent governments have strengthened the steering capacity of the core executive. All contracts between cabinet and line ministries and ministers and chief executives are based on a whole-of-government policy approach.

Citations:
Statement of Intent 2014-2018 (Wellington: State Services Commission 2014).

How effectively do federal and subnational ministries monitor the activities of bureaucracies/executive agencies with regard to implementation?

10
 9

The ministries effectively monitor the implementation activities of all bureaucracies/executive agencies.
 8
 7
 6


The ministries monitor the implementation activities of most bureaucracies/executive agencies.
 5
 4
 3


The ministries monitor the implementation activities of some bureaucracies/executive agencies.
 2
 1

The ministries do not monitor the implementation activities of bureaucracies/executive agencies.
Monitoring Agencies|Bureaucracies
9
The monitoring of executive agencies is based on the same procedures governing line ministries.

Citations:
State Services Commission: Annual Report for the Year Ended 30 June 2015 (Wellington: States Services Commission 2015).

To what extent does the central government ensure that tasks delegated to subnational self-governments are adequately funded?

10
 9

The central government enables subnational self-governments to fulfill all their delegated tasks by funding these tasks sufficiently and/or by providing adequate revenue-raising powers.
 8
 7
 6


The central government enables subnational governments to fulfill most of their delegated tasks by funding these tasks sufficiently and/or by providing adequate revenue-raising powers.
 5
 4
 3


The central government sometimes and deliberately shifts unfunded mandates to subnational governments.
 2
 1

The central government often and deliberately shifts unfunded mandates to subnational self-governments.
Task Funding
9
New Zealand is one of the most centralized jurisdictions in the OECD. More than 90% of government workers are employed by central government organizations, and almost all citizen-facing public services – including policing, fire services, education and health – are central government activities. Almost all local regulation is undertaken by an agent of central government, with little locally initiated regulation. In addition to their relatively narrow task profile, local govenrments are not permitted to tap into other commonly used sources of subnational revenue such as sales and/or income taxes. Local governments therefore raise a relatively large proportion of revenue from rates, which are taxes on real-estate holdings, and charges; they have full discretion to set rates, subject to a general balanced budget requirement. Other revenue sources include user charges, such as vehicle fuel charges (since 2018), and fees. Local government officials have been lobbying central government for the right to raise revenue from additional sources, including road tolls. To date, their lobbying has been largely unsuccessful. There are no block grants from central to local government, but the central government contributes funding to specific local government functions, in particular transportation as well as road construction and maintenance. The previous National-led government reformed the Local Government Act with the aim of limiting local services to their core tasks to keep costs under control.

Citations:
The New Zealand Productivity Commission 2018. Local government funding and financingIssues paper -November 2018. https://www.productivity.govt.nz/sites/default/files/Local%20government%20funding%20and%20financing%20issues%20paper_FINAL.pdf

To what extent does central government ensure that subnational self-governments may use their constitutional scope of discretion with regard to implementation?

10
 9

The central government enables subnational self-governments to make full use of their constitutional scope of discretion with regard to implementation.
 8
 7
 6


Central government policies inadvertently limit the subnational self-governments’ scope of discretion with regard to implementation.
 5
 4
 3


The central government formally respects the constitutional autonomy of subnational self-governments, but de facto narrows their scope of discretion with regard to implementation.
 2
 1

The central government deliberately precludes subnational self-governments from making use of their constitutionally provided implementation autonomy.
Constitutional Discretion
6
Local governments do not enjoy constitutional status, as they are creatures of statute. There is a clear legal framework for local government autonomy, consisting of the Local Government Act 2002, the Local Electoral Act 2001 and the Local Government (Rating) Act 2002. In addition, the comprehensive reform program, “Better Local Government,” was enacted during the review period, culminating in the Local Government Act 2002 Amendment Act 2014.
According to the Department of Internal Affairs, the act includes: changes in regard to what development contributions can be used for; more collaboration and shared services between local authorities; new requirements for infrastructure strategies and asset management planning; elected members to use technology to participate in council meetings rather than attending in person; local councils to disclose information about their rating bases in long-term plans, annual plans and annual reports; and the disclosure of risk management arrangements for physical assets in annual reports. In addition, the act includes provisions that enable the Local Government Commission to establish local boards as part of new unitary authorities, and in existing unitary authorities.

Citations:
Department of Internal Affairs, Better Local Government: http://www.dia.govt.nz/better-local-government (accessed November 30, 2015).
Local Electoral Act 2001 (Wellington: The Government of New Zealand 2012).
Local Government Act 2002 (Wellington: The Government of New Zealand 2012).
Local Government Act 2002 Amendment Act 2014 (Wellington: The Government of New Zealand 2014).
Local Government (Rating) Act 2002 (Wellington: The Government of New Zealand 2011).

To what extent does central government ensure that subnational self-governments realize national standards of public services?

10
 9

Central government effectively ensures that subnational self-governments realize national standards of public services.
 8
 7
 6


Central government largely ensures that subnational self-governments realize national standards of public services.
 5
 4
 3


Central government ensures that subnational self-governments realize national minimum standards of public services.
 2
 1

Central government does not ensure that subnational self-governments realize national standards of public services.
National Standards
7
There is a dense network of agencies that are involved with the development and monitoring of local government, including the minister of local government, the Department of Internal Affairs, the Local Government Commission, Local Government New Zealand (representing local councils on the national level), the Office of the Controller and Auditor General, the Office of the Ombudsman and the parliamentary commissioner for the environment. Their roles range from strategic development, policy formulation, regulation and monitoring, to handling complaints about the activities and operation of local government. At the end of 2013 a comprehensive reform program, “Better Local Government” was introduced, whose provisions form part of the Local Government Act 2002 Amendment Act 2014. In June 2017, the Local Government Act 2002 Amendment Bill (No 2) passed its second parliamentary reading, which includes the Better Local Services reforms. The bill would have continued the general trend of increasing central government scrutiny and control over local government. The bill was the subject of criticism, especially in Auckland with its relatively new “super-city” structure and population of 1.4 million. However, smaller municipalities had also been critical of the reforms, describing them as being undemocratic, especially the “draconian” powers granted to the Local Government Commission. Following the September 2017 election and the change of government, the bill was not moved forward to the third reading. Tensions between central and local government over the allocation of responsibility continue to be felt in areas such as housing, especially over local government’s perceived slowness in granting building permits and in maintaining environmental standards.

Citations:
New Zealand Parliament 2018. Local Government Act 2002 Amendment Bill (No 2). https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/document/00DBHOH_BILL69266_1/local-government-act-2002-amendment-bill-no-2.
Woolf, Amber-Leigh, 2016. Minister says Better Local Services reforms not a ‘threat to democracy’ or forced amalgamation. Stuff.co.nz. 3 August 2016 http://www.stuff.co.nz/national/politics/82752225/Minister-says-Better-Local-Services-reforms-not-a-threat-to-democracy-or-forced-amalgamation.

To what extent is government enforcing regulations in an effective and unbiased way, also against vested interests?

10
 9

Government agencies enforce regulations effectively and without bias.
 8
 7
 6


Government agencies, for the most part, enforce regulations effectively and without bias.
 5
 4
 3


Government agencies enforce regulations, but ineffectively and with bias.
 2
 1

Government agencies enforce regulations ineffectively, inconsistently and with bias.
Regulatory Enforcement
6
The enforcement of regulations is generally effective and unbiased. As in other democracies, regulations themselves (particularly those specific to an industry) are heavily influenced by powerful vested interests. Regulatory capture – a situation in which an industry has the power to determine the activity of a government agency tasked with regulating the industry certainly occurs and can result in the weak enforcement of regulations. Examples include the fishing and mining industries. The conclusions of the Pike River inquiry show that the regulation of occupational health and safety in mining had in effect been subject to regulatory capture by employers. Critics argue that the state of the electricity sector displays many symptoms of regulatory capture. There was also widespread criticism of the Securities Commission for its failure to control unacceptable behavior among investors and companies, contributing to a lack of confidence in the share market and other forms of investment. There was continuing opposition to greater regulation from some powerful and vocal parties, such as the Business Roundtable. It is difficult to distinguish the effects of weak legislation, weak regulator and regulatory capture, but the outcome of feeble standards and enforcement certainly suited some interests despite being to New Zealand’s long-term detriment.

Citations:
OECD Regulatory Policy Outlook 2015 Country profile New Zealand. https://www.oecd.org/gov/regulatory-policy/New%20Zealand-web.pdf.
New Zealand Council of Trade Unions. 2013. Submission of theNewZealandCouncil of Trade UnionsTe Kauae Kaimahito theNew Zealand Productivity Commissionon its inquiry intoRegulatory Institutions and Practices. https://www.union.org.nz/wp-content/uploads/2017/10/131025-Productivity-Commission-Regulatory-Institutions-Practices.pdf

Adaptability

#3

To what extent does the government respond to international and supranational developments by adapting domestic government structures?

10
 9

The government has appropriately and effectively adapted domestic government structures to international and supranational developments.
 8
 7
 6


In many cases, the government has adapted domestic government structures to international and supranational developments.
 5
 4
 3


In some cases, the government has adapted domestic government structures to international and supranational developments.
 2
 1

The government has not adapted domestic government structures, no matter how beneficial adaptation might be.
Domestic Adaptability
8
New Zealand has ample experience in drastically restructuring its public sector and reforming policymaking to adapt to new challenges. Major reforms were accomplished from the mid-1980s to the mid-1990s. However, this was done under a majoritarian regime, based on a first-past-the-post electoral system. Part of the reform package involved the change to a proportional electoral system, a move that was initiated by the voting public rather than the governing elite. Today, given the existence of a multiparty system and minority government, radical reform is much more difficult to achieve. In retrospect, institutional reforms delivered somewhat less than expected and have at times been disruptive. The government at the time of writing was concerned with hardwiring efficiency and performance improvements into the system, and was seeking to accomplish this with relatively limited emphasis on a major restructuring of government agencies.

To what extent is the government able to collaborate effectively with international efforts to foster global public goods?

10
 9

The government can take a leading role in shaping and implementing collective efforts to provide global public goods. It is able to ensure coherence in national policies affecting progress.
 8
 7
 6


The government is largely able to shape and implement collective efforts to provide global public goods. Existing processes enabling the government to ensure coherence in national policies affecting progress are, for the most part, effective.
 5
 4
 3


The government is partially able to shape and implement collective efforts to provide global public goods. Processes designed to ensure coherence in national policies affecting progress show deficiencies.
 2
 1

The government does not have sufficient institutional capacities to shape and implement collective efforts to provide global public goods. It does not have effective processes to ensure coherence in national policies affecting progress.
International Coordination
9
Given New Zealand’s small population and geopolitical isolation, it has been surprisingly successful at participating proactively in many international organizations and in the international coordination of joint reform initiatives. Major areas include issues regarding the antarctic region, disarmament and proliferation, environmental protection and human rights. New Zealand is a member of the Asia-Pacific Economic Cooperation (APEC) forum, the Commonwealth, the OECD, the United Nations and the World Trade Organization. Free trade is a central preoccupation within foreign relations, especially in the Asian region. Having signed the Association of Southeast Asian Nations (ASEAN)-Australia-New Zealand agreement and a bilateral agreement with Malaysia and Korea in recent years, current efforts are directed at deepening its “comprehensive strategic partnership” with China and continuing negotiations with India and Russia. In June 2017, New Zealand launched free trade agreement negotiations with the Pacific Alliance (Chile, Colombia, Mexico and Peru). New Zealand has been an enthusiastic supporter of the Trans-Pacific Partnership (TPP) Agreement. The newly elected Labour-led government was immediately faced with how it should respond to efforts to create TPP-11 out of the ruins of the TPP. The choice was between ill-informed statements to the electorate and continuity with the policy analysis that had informed the previous government. The latter prevailed, which implies that continuity will be characteristic of policy choices in general. In March 2018, Trade Minister Parker stated her government’s intention of ratifying the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, an amended version of the TPP (TPP-11). New Zealand First’s preference for a free trade agreement (FTA) with Russia has been quietly marginalized as Prime Minister Ardern and Trade Minister David Parker have talked up a potential FTA with the European Union. New Zealand has been very active in campaigning for a humanitarian response to the situation in Syria and has signed the UN Migration Pact.

Citations:
Editorial: Brexit begins and NZ has work to do. New Zealand Herald. 30 March 2017 (http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=11827847) (accessed January 16, 2018).
Hawke, Gary 2018. New rhetoric but old policy for New Zealand. http://www.eastasiaforum.org/2018/02/07/new-rhetoric-but-old-policy-for-new-zealand/
Ayson, Robert 2018. New Zealand’s unusual coalition survives in a febrile world. http://www.eastasiaforum.org/2018/12/28/new-zealands-unusual-coalition-survives-in-a-febrile-world/

Organizational Reform

#2

To what extent do actors within the government monitor whether institutional arrangements of governing are appropriate?

10
 9

The institutional arrangements of governing are monitored regularly and effectively.
 8
 7
 6


The institutional arrangements of governing are monitored regularly.
 5
 4
 3


The institutional arrangements of governing are selectively and sporadically monitored.
 2
 1

There is no monitoring.
Self-monitoring
9
In contrast to the previous National government, the new Labour/NZ First government is based on more genuine power-sharing, with Labour holding 16 of 20 cabinet seats, including the positions of prime minister and finance minister, and NZ First holding four, including deputy prime minister. To ensure it has a legislative majority, the new government secured a confidence and supply agreement with the eight-member Greens. In return, the Greens received three ministerial posts outside of cabinet.
One area of particular interest is the performance of the reformed electoral system. The Electoral Commission regularly commissions surveys to ascertain satisfaction with the way elections are organized, what the barriers to voting are and how to address these barriers. In the context of the general election in 2011, a referendum was held on whether to retain or replace the proportional electoral system. A majority of 56% opted to keep the mixed-member proportional (MMP) system. Nonetheless, the reform of the MMP system remains on the political agenda.

Citations:
Colmar Brunton, Voter and non-voter survey report, Auckland and Wellington: Colmar Brunton New Zealand 2012.
Elections New Zealand: Results of the Referendum: http://www.elections.org.nz/events/past-events-0/2011-referendum-voting-system/results-referendum (accessed October 9, 2014).
Ministerial List: http://www.dpmc.govt.nz/cabinet/ministers/ministerial-list (accessed October 24, 2015).

To what extent does the government improve its strategic capacity by changing the institutional arrangements of governing?

10
 9

The government improves its strategic capacity considerably by changing its institutional arrangements.
 8
 7
 6


The government improves its strategic capacity by changing its institutional arrangements.
 5
 4
 3


The government does not improve its strategic capacity by changing its institutional arrangements.
 2
 1

The government loses strategic capacity by changing its institutional arrangements.
Institutional Reform
8
In the past, New Zealand’s governments have demonstrated an ability to improve strategic capacity by changing institutional arrangements of governing. Major adaptations to the multiparty system and coalition government occurred in the mid-to-late 1990s. An effective framework is in place with the Cabinet Manual, which has begun to attract more and more interest from other jurisdictions. Cabinet office circulars are used for minor changes. Particularly after the change of government in 2008, a number of such modifications were made. One area of institutional change that has been largely neglected has been the reform of parliament’s conventions and opportunities for public engagement.
However, the Productivity Commission in its Regulatory Institutions and Practices report of 2014 found a litany of shortcomings with regulatory agencies in New Zealand. The report concluded that the governance arrangements of many regulators were ad hoc rather than based on sound governance principles, that there were problems with how the agencies were monitored, and that appointment processes for governance roles were of variable quality.

Citations:
Cabinet Manual: http://www.cabinetmanual.cabinetoffice.govt.nz/3.28 (accessed October 30, 2015).
Grant Duncan, 2014: New Zealand’s Cabinet Manual: How Does It Shape Constitutional Conventions?, Parliamentary Affairs 2015, 68:4, 737-756.
New Zealand Productivity Commission 2014. Regulatory Institutions and Practices. https://www.productivity.govt.nz/sites/default/files/regulatory-institutions-and-practices-final-report.pdf
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