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 0.2 points 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, with all policy proposals reviewed in cabinet committees.

Impact assessments are mandatory and systematically performed. New RIA guidelines have expanded the scope of assessment. The use of digital tools is highly developed. Societal consultation is not legally required, but is widely practiced. The Labour-led government has delivered on a substantial number of its promises, and the prime minister was praised for her response to the Christchurch shooting.

After some inconsistency of messaging under the current coalition government, communication has become more coherent. While special interests sometimes influence the development of regulations, subsequent enforcement is generally unbiased. A new Public Service Act will give the public administration more flexibility, and clearly establish the principles of an apolitical public service.

Strategic Capacity

#2

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. In addition to this, since 1996, coalition governments and support party arrangements have meant that cabinet government, while still an essential aspect of the system, includes a multiparty dimension that can disrupt collective ministerial responsibility.

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. The DPMC consists of six units: the Cabinet Office, Government House, the Policy Advisory Group, the National Assessments Bureau, the Domestic and External Security Group, and the Corporate Services Unit. The Domestic and External Security Group played a key role in coordinating the government’s response to the Christchurch terrorist attack in March 2019.

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 the 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.

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
8
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 affairs and tertiary education. The NZ Treasury established a critical friends advisory group in advance of delivery the country’s first Well-being budget in 2019; the Commission for Financial Capability has an advisory group made up of academics and civil society experts. In addition, a Data Governance network and an Indigenous Data Sovereignty Network have been established. The network of Science Advisers established under the previous government has been expanded, and the academic science advisers selected since 2017 have included more women, indigenous and Pacific island experts. Thus, the importance of scholarly advice is increasing. Recent significant consultation initiatives include reports by the Welfare Expert Advisory Group in April 2019 (the government accepted a number of recommendations, including an increase of the amount welfare beneficiaries can earn before their benefit is cut), a Mental Health Inquiry, and the Tax Working Group, also published in April 2019 (the Labour-led administration took a number of recommendations forward but rejected others – in particular, a proposed capital gains tax). Indeed, the current government as increased the number of policy design working groups to the point where the opposition has taken to criticizing it for taking too long to make executive decisions. The government also passed legislation to establish a Climate Change Commission, which will have advisory, monitoring and reporting responsibilities under the Zero Carbon Bill – legislation that will codify the reduction of New Zealand’s carbon emissions to net zero by 2050.

Citations:
Ministry for the Environment, Establishing the Climate Change Commission (https://www.mfe.govt.nz/climate-change/climate-change-and-government/establishing-climate-change-commission)
Tax Working Group (https://taxworkinggroup.govt.nz/)
Welfare Expert Advisory Group (http://www.weag.govt.nz/)

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 the Prime Minister and Cabinet (DPMC) currently consists of twelve 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 the Child Well-being and Poverty Reduction Group as a business unit in February 2018. 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 2019 (https://dpmc.govt.nz/publications/annual-report-2019)

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 that 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 2018 to 30 June 2019, the full cabinet met 41 times while cabinet committees met 182 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 2019 (https://dpmc.govt.nz/publications/annual-report-2019)

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 as well as the confidence and supply agreements 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 required processes are 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., Green Party, 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

#3

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 Party 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 policy 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).

In 2019, the Treasury issued new regulatory impact assessment guidelines and requirements for broader impact analysis (NZ Treasury 2019a; NZ Treasury, 2019b).

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
NZ Treasury, 2019a. https://treasury.govt.nz/sites/default/files/2019-12/guide-cabinet-impact-analysis-requirements.pdf
NZ Treasury, 2019b. https://treasury.govt.nz/information-and-services/regulation/impact-analysis-requirements-regulatory-proposals

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” explicitly, 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, whether problems persist 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 2020.

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) and describe how the proposal has been altered to address these concerns (and if not, why not). If no consultation has been undertaken, the reasons must be presented. While parliamentary select committees hold hearings on proposed legislation once it has been introduced in parliament, which gives individuals and organizations the opportunity to make written or oral submissions, the incidence of bypassing 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 a tradition of highly coherent and cohesive cabinets. The current government (2017–2020) is somewhat unusual, however, in that it is a minority coalition of two parties with quite disparate policy objectives (Labour, New Zealand First), supported by a third party with no history of government experience. And, in fact, political commentators described the first few months of the coalition government as “chaotic”: while Labour tried to rush through an ambitious “100-day plan,” New Zealand First and the Greens – worried about getting “swallowed” by Labour in the 2020 elections – made a conscious effort to communicate differentiated policy positions. For example, coalition parties publicly clashed over Labour proposals to abolish the 90-day trial period for new workers, repeal the Three Strikes law (increases the prison sentences of persons convicted of a felony who have been previously convicted of two or more violent crimes), and introduce a capital gains tax. However, over time, communication among coalition partners became significantly more coherent – in line with previous governments. In addition, the government has invested heavily in public relations: between 2017 and 2018, the number of government communications staff doubled.

Citations:
Patterson (2018) “One Year On: Rating the government’s performance.” Radio New Zealand (https://www.rnz.co.nz/news/on-the-inside/369348/one-year-on-rating-the-government-s-performance)
Pennington (2019) “Government’s public relations teams rapidly expanding.” Radio New Zealand (https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12252394)

Implementation

#8

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
8
Labour came to power in 2017 – albeit needing the support of two minor parties, NZ First and the Green Party – on the back of pledges to “a fairer country for all New Zealanders” and the popularity of its leading candidate, Jacinda Ardern – the youngest prime minister in over 150 years. The Labour-led government has certainly delivered on a number of its campaign promises, which include raising the legal minimum wage, allocating more money to public health, and passing measures designed to tackle child poverty and domestic violence. Jacinda Ardern was also widely praised for her response to the Christchurch mosque shooting in March 2019. However, in the second half of 2019, Labour’s support in opinion polls was still behind the major opposition party, and Ardern’s personal rating had dropped to 41% favorability (down from 50%). The government’s falling approval ratings are due in part to policy objectives not being met. In particular, the government vowed to cool down New Zealand’s overheated property market, which ranks among the most “unaffordable” in terms of income-to-housing-costs ratios. However, KiwiBuild – the government’s scheme to build 100,000 affordable homes between 2017 and 2027 – was axed after only eighteen months and a ban on foreign home buyers (implemented in October 2018) does not seem to have had a significant effect on property prices. In addition, Labour had promised fee-free tertiary education for first-year students, with plans for the policy to be extended to three years’ free fees. However, the government saw itself forced to limit the expansion program in 2019 after it was found that overall enrollment figures had actually dropped. However, a first-year “fees free” for all higher education students remains in place.

Citations:
Church, Has the buyer ban worked?, New Zealand Herald (https://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=12229858)
Rutherford, Low enrolments sees $200m clawed back from fees-free scheme, Stuff (https://www.stuff.co.nz/business/112710129/low-enrolments-sees-200m-clawed-back -from-fees-free-scheme)
Walls, KiwiBuild reset: Government axes its 100,000 homes over 10 years target, New Zealand Herald (https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12264757)

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 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 regarding the legislative agenda but also procedures to ensure coalition discipline. There are also procedures for dealing with a minority government.
Coalition partners are not bound by collective responsibility. Rather, they are brought into cabinet meetings only to discuss their own portfolio issues, so that they may retain the freedom to disagree with the lead party in the government should they so wish.

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, on the one side, and line ministries, ministers and chief executives, on the other side, 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 governments 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 (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 Party-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, a comprehensive reform program (“Better Local Government”) culminated 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 governments’ 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 the limited standards and enforcement has 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

#4

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 follows the Westminster model of democracy, which is characterized by a low number of institutional veto players and centralizes political decision-making power in the executive. New Zealand’s political system thus gives the government – at least in principle – the ability to respond to international challenges promptly and effectively. Probably best known is New Zealand’s response to global economic headwinds in the 1980s, when – triggered by oil shocks in the 1970s and Britain shifting its trade to Europe – successive governments carried out radical neoliberal reforms that turned the country into a poster child of free-market globalization.

With the implementation of a mixed-member electoral system in 1996, the institutional capacity to meet new international demands has somewhat declined – not least because single-party majority governments (which used to be the typical outcome under the old first-past-the-post system) have been replaced by multiparty coalition and minority governments. Still, the political system has again and again proven its ability to innovate and adapt in response to international challenges. Of particular note are reforms implemented in the wake of the 2008/09 global financial crisis, which prompted the government to tighten expenditures and reconsider how to deliver improved citizen-centered services at reduced cost. The 2014 “Better Local Government” reforms were designed to (1) clarify the core responsibilities of local councils, (2) set clear fiscal responsibility requirements, and (3) give councils more tools to better manage costs. The 2015 amendment to the Government ICT Strategy aims at rationalizing public service delivery by strengthening coordination across different government agencies and by establishing a digital platform for federated services.

Citations:
Department of Internal Affairs (2015) ICT Strategy 2015. (https://snapshot.ict.govt.nz/resources/digital-ict-archive/static/localhost_8000/strategy-and-action-plan/strategy/index.html)
Department of Internal Affairs (2014) Better Local Government. (https://www.dia.govt.nz/Better-Local-Government)

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
8
In general, New Zealand’s political system stands out for its capacity to coordinate among different government agencies and enforcing policies effectively. However, when it comes to tackling global challenges and implementing multilateral frameworks, the picture is mixed. This suggests that, in some policy areas, it is political will – rather than institutional capacity – that poses the main obstacle. For example, New Zealand performs relatively well in terms of working toward inclusive economic development at the global level. The country is a signatory to a number of multilateral free-trade agreements with developing countries, and – crucially – these agreements have been transposed into domestic law and their implementation is effectively coordinated across different ministries, such as the Ministry of Foreign Affairs and Trade and the Ministry for Primary Industries. In November 2019, the country passed the Climate Change Response (Zero Carbon) Amendment Act. However, the success of its implementation remains to be seen.

Citations:
Climate Action Tracker, New Zealand (https://climateactiontracker.org/countries/new-zealand/)
New Zealand Trade and Enterprise, Market access: International agreements and non-tariff barriers (https://www.nzte.govt.nz/common/market-access-international-agreements)

Organizational Reform

#1

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
While New Zealand’s political system does not provide codified mechanisms for routine reviews of its institutional arrangements, both National Party and Labour governments have repeatedly surveyed the system’s performance in the past – through a number of different devices. For example, governments have used referendums to consult citizens directly on institutional issues, including on the electoral system (1993 and 2011), and established expert/stakeholder advisory groups in a number of areas, such as Open Government Partnership (OGP) processes (2016-) and data ethics (2019-).

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
9
New Zealand’s strategic-planning capacity is already relatively high. There is thus little space for further improvement. Nevertheless, governments have shown commitment to coordinate and streamline the relations between different institutional actors at the core of government. In particular, the Cabinet Manual – the primary authority on regulating the conduct of ministers and their offices – has served as a framework through which to improve strategic capacity. For example, The Manual includes a “no surprises” convention, whereby departments are required to inform ministers promptly of matters of significance within their portfolio responsibilities, particularly where matters may be controversial or may become the subject of public debate. In November 2019, new public sector reform legislation was introduced into parliament. The proposed legislation will repeal the State Sector Act 1988 will be repealed and replace with the Public Service Act. The new act will give the public service more flexibility in its response to specific priorities or events, allow public servants to move between agencies more easily, and clearly establish the principles of an apolitical public service. Chief executive boards, or joint ventures, could also be set up to tackle very difficult issues; they would be accountable to one minister and receive a direct budget appropriation. Submissions on the bill closed in January 2020 and the bill is expected to pass mid-2020.

Citations:
Department of the Prime Minister and Cabinet, Cabinet Manual (https://dpmc.govt.nz/our-business-units/cabinet-office/supporting-work-cabinet/cabinet-manual).
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