Proposed Amendments Public Service Act (2020): Driving Performance or Tightening Control?

24/05/2025

Paper Two of the Government’s reform package promises to lift performance in the public service by tightening leadership standards, opening up chief executive roles to contestability, and making integrity mandatory. These are overdue corrections, and on the surface they strengthen accountability. But read alongside Paper One, they also signal a centralising turn: pulling authority closer to ministers, narrowing space for diversity, and risking performance becoming a proxy for obedience. The question is whether these reforms will deliver confidence, or simply control.

The government’s reform agenda refocuses attention on performance in the public service, an overdue correction. But what begins as a push for accountability could just as easily become a blueprint for control, and we should all be paying close attention.

If Paper One restored the frame, Paper Two begins to pull the weave tight. Driving Improvements in Performance introduces amendments to the Public Service Act 2020 aimed at sharpening leadership accountability, lifting agency performance, and restoring public confidence in the machinery of government. Contestable chief executive reappointments are designed to be the norm. Ministers will formally contribute to performance expectations. Integrity standards will be mandatory. And oversight, on paper, will be expanded. It is a well-written and argued paper. The set is close to the best I have seen this term.

Individually, the changes in Paper Two appear straightforward. Taken together and read with Paper One, they signal a shift in the governing architecture. Just as Paper One redrew the outer edges of the tukutuku panel, an intricate lattice of interwoven patterns that serves as decoration and as a cultural embodiment of interconnection and balance in Māori tradition, Paper Two pulls its threads toward the centre. In doing so, it risks distorting the pattern: pulling accountability into the centre while unravelling balance at the edges. There is a centralising tendency in these proposals.

What it fixes

Paper Two brings three key reforms to restore performance and accountability in the public service, addressing how performance frameworks have gradually become decoupled from strategy and disconnected from accountability for learning (Ryan & Gill, 2011).

First, it mandates contestability for chief executive appointments. The days when chief executives could expect automatic tenure are over. These crucial constitutional roles will now face competitive reappointment processes. This shift responds to a public appetite for stronger standards at the top. Many will welcome the signal that leadership must be earned, not expected.

Second, formal performance management strengthens the relationship between ministers and chief executives. Ministers will now directly contribute to chief executives’ KPIs and performance assessments, with these expectations published in a formal plan. This also has the effect of tying merit more closely to institutional performance. That is a shift worth noting, and a welcome one.

While removing statutory diversity and inclusion provisions raises concern, it is at least encouraging that merit is no longer treated as a free-floating concept. Instead, it is being grounded in the actual demands of institutional leadership: specifically, what chief executives are required to deliver, how they are expected to lead, and how their performance is reviewed. That anchoring opens space to ask sharper questions about capability, stewardship, and outcomes, not just credentials.

This is a subtle shift and a significant improvement. It will probably get lost in the political debate, but other public management trainspotters will welcome it. It gives the public and Parliament a clearer basis for scrutiny by setting performance expectations out in the open, where they belong. This transparency addresses longstanding concerns that ministerial input on performance was previously inconsistent, informal, and often invisible (DTK and Associates, 2025). It may also help respond to the quiet perception, fair or not, that Wellington has become too closed and self-referential.

Third, it transforms integrity from an option to an obligation. Until now, the Commissioner could set integrity standards but was not required to do so. The reforms convert that discretion into a mandatory responsibility, with agencies now required to report misconduct annually. This change aligns with growing public expectations that integrity is non-negotiable, particularly following recent lapses that have eroded trust in institutions. It also meets what many in the public service already expect of themselves.

In summary, these reforms aim to restore confidence by making performance more visible, leadership more contestable, and integrity non-negotiable. It is a deliberate shift toward clearer expectations and firmer lines of accountability. And in that, at least, the intent is serious.

What it risks

But clarity can also become control. Don’t get me wrong: clarity is key to delivery. But by tightening ministerial influence over appointments and reviews, the reforms risk tipping a delicate balance. What begins as guidance can become dominance. Palmer (2007) reminds us that Aotearoa’s constitutional culture tolerates a pragmatic authoritarianism, but only when counterbalanced by egalitarianism. I would add strategic coherence and practicality to that balance. Paper Two leans hard on the former and leaves the latter assumed.

Three risks in particular deserve close attention.

First, the reshaping of merit. Diversity and inclusion clauses are removed. The rationale appears to be that they were inconsistently applied across the system, and I agree with that. Yes, the clauses created ambiguity. Yes, they sometimes led Crown officials to speak over the community and non-state voices they were meant to include. But that is not a reason to delete the signal; it is a reason to improve it. Rewriting inclusion into the system with clearer expectations would not have weakened performance.

While I understand the politics, my reading of Cole (2020) is that neutrality without diversity is not neutral: it reasserts sameness as the ideal. The Act now assumes that merit alone will suffice, but as Eichbaum and Shaw (2020) have shown, merit is already filtered through prevailing cultural and institutional biases. Roles relating to specific population groups may still require appropriate experience. However, that is not the same as recognising cultural competence as a system-wide expectation. The statutory signal is clear: the pattern is simplified, even if the public service loses some of its colour, interest and flair. So, while the tukutuku becomes neater, it could also become flatter, slightly more beige, and like-for-like.

Second, the extension of ministerial oversight into performance reviews. Ministers will now shape KPIs, request reviews, and influence assessments. While the Commissioner retains formal authority, the space for independent judgement narrows. This is not a hypothetical concern. As Gill and Ryan (2011) noted, overly rigid accountability systems place leaders in a “performance cage”, narrowing their horizons to what is countable, safe, and politically convenient.

Third, there is a broader shift in how performance itself is defined. And performance could become a proxy for obedience. And if that happens, the system will stop surfacing risk, speaking inconvenient truths, or challenging short-termism. It will deliver, but not always wisely, and ministers will not always have all the information they need when making decisions. As Palmer (2007) reminds us, constitutional design cannot rely on good faith alone. It must be built to absorb contention, disagreement, and dissent.

These are not failings so much as trade-offs. The same reforms that promise clarity, contestability, and lifted performance also risk narrowing diversity, reducing independence, and redefining performance too tightly. None of these risks is inevitable, but nor are they abstract. What Paper Two delivers in structural focus, it risks losing in democratic balance. That is why the design matters. The more the system centralises, the more care must be taken to preserve the conditions that make public service both trustworthy and effective: capability, independence, diversity, and dissent. Otherwise, the pattern tightens. But only at the cost of its strength.

And let me be clear: I understand and support the choices. But they must be handled with care.

What Parliament should ask

Parliament now carries the burden of ensuring these reforms strengthen the system without weakening the values that hold it together. That means asking the right questions, not just about what the changes say but how they will likely work in practice. Here are four that matter most.

Where is the boundary between responsiveness and independence now?
Ministers will now contribute directly to chief executive performance plans. That creates welcome clarity. But it also raises a constitutional question: how will the system manage situations where a chief executive’s professional judgement conflicts with a minister’s political direction? This is not a hypothetical tension. The doctrine of public service neutrality depends on public servants being able to offer free and frank advice, even when it is inconvenient. If KPIs become a tool for reinforcing conformity, or performance assessments penalise dissent, independence will quietly erode. Hopefully, the answer is that our system of governance is designed to manage tension, not avoid it. The central agencies and the Prime Minister’s Office should protect the capacity for disagreement within a relationship of trust. Mechanisms for conflict resolution, clear boundaries around political direction, and a public record of how performance expectations are agreed upon will all matter.

What now protects diversity and cultural competence?
Removing diversity and inclusion provisions from the statute simplifies the framework. However, it also removes an explicit safeguard that signalled diverse leadership and cultural competence as not just nice-to-haves, but core to the legitimacy and effectiveness of public service leadership. If those commitments are no longer statutory, where are they now embedded? What tools remain to ensure that services are delivered in ways that reflect the communities they serve? A good answer would acknowledge that while inclusion clauses may have been inconsistently applied, their purpose remains essential. Parliament should seek evidence that cultural competence is still expected in recruitment, development, and review processes, especially when working with vulnerable and underserved communities, and that this is not left to chance or departmental discretion.

What counts as performance?
The reforms promise better performance. But that only matters if we know what “performance” means. Is it delivery speed? Long-term impact? Institutional resilience? Public trust? Publishing a plan is a start. However, it is not the same as setting a strategy. Parliament should ask how performance expectations are developed, how ministerial priorities are balanced with system stewardship, and how long-term capability is accounted for, not just short-term output. I think the answer lies in the proposals themselves. Hopefully, the Performance Improvement Framework, as designed in 2008, returns. Unlike the capability reviews, the PIF is a tool grounded in outcomes performance. It supports ministers in seeing their priorities implemented and promotes future readiness, adaptive capability, and integrity. If those ideas are no longer used, what has replaced them, and why?

How will capacity meet expectations?
Paper Two expands the Commissioner’s role, strengthens performance oversight, and increases reporting obligations. At the same time, it removes a Deputy Commissioner role and does not mention new resources. That tension matters. Governance reform fails not when ideas are weak, but when execution is underpowered. Parliament should ask what resourcing assumptions underpin these changes, whether capability reviews will remain meaningful, and how the Commission will ensure it can meet new demands without becoming a compliance engine. A good answer would be to be honest about resource constraints and transparent about priorities. Reform does not require perfection. But it does require a credible delivery pathway. Otherwise, the gap between promise and reality will grow, and trust will shrink.

The challenge ahead

These changes reflect a deep frustration with drift, ambiguity, and the creeping perception of swampiness. I have expressed that frustration, not out of cynicism, but because so many international and domestic clients have complex, honest stories to tell. But in the cold light of day, centralising control is a fragile solution. Performance does not come from command. It comes from clarity, shared purpose, sufficient capability, trust, and time to deliver and learn.

Chief executive performance cannot be judged in isolation from agency and institutional performance or context. The people appointed to review individuals and institutions must be respected by ministers, chief executives, and communities who either suffer or benefit from outcomes in that domain. These are not just technical roles. Reviewers must carry real mana. Their credibility will shape how performance frameworks land and how useful they can be. This could be a chance to build an evaluative and review culture grounded in insight, not just oversight, that also improves practice, supports learning, and genuinely lifts confidence in public leadership. I would, somewhat controversially, suggest that former ministers and former chief executives from the public and private sectors be considered. I would also add expertise from other jurisdictions to the reviewer pool. These are serious roles and need serious people.

In addition to carefully selecting reviewers, capability must be judged against results. Institutional strength without delivery is hollow. The system must be honest about whether it is improving lives or just reporting compliance. The current capability reviews are not enough. Walking around with clipboards judging capability has been an inward, navel-gazing, and fruitless exercise. Public service capability exists for a purpose, not in and of itself. And that purpose is to make a difference in the lives of the communities it serves. Full stop.

That said, there is a broader risk that the entire performance system collapses into a compliance exercise. As Onora O’Neill (2002) argues, public performance systems that prioritise outputs, targets, and assurance reports, without attending to accessibility, intelligibility, and actual consequences, produce technocratic outputs that confuse the public and Parliament alike. These systems saturate the environment with data but fail to deliver clarity. If people cannot understand what is being reported, they cannot reasonably place trust or withhold it. They cannot consent to or contest decisions. In that vacuum, authoritarian tendencies grow unchecked, not because citizens agree, but because they cannot engage.

Finally, ministerial input, if unmanaged, could chill dissent. If too narrow, performance indicators could incentivise safe, status quo delivery. Integrity rules, if misused, could be weaponised. These risks are not inevitable. But they are real.

Next Paper

Together, Papers One and Two redraw the tukutuku panel. The outer frame is sharper. The vertical threads are taut. The pattern is plainer. What comes next will determine whether the system breathes or cracks. Paper Three focuses on delivery, specifically, integrating functions across agencies. The question it raises is critical: can this next phase restore space for discretion, learning, and partnership? Or will it entrench the logic of control under the banner of stewardship? The answer will tell us whether the system is being reformed to enable public service or to appear accountable.

As I will explore in my next piece, I believe the Paper Three proposals offer a pathway toward genuine stewardship. But the greater threat to that goal lies elsewhere. The Regulatory Standards Bill, as currently drafted, it risks introducing a layer of confusion that could undermine the coherence of this entire reform programme. If passed, it would impose an inconsistent set of obligations on ministers and chief executives, blur lines of responsibility, and slow implementation across policy and regulatory systems. We have been here before. There is a real danger we are heading back to the efficiency clipboards and milk monitors of the late 1980s: obsessed with cost, blind to where those costs land, and confused about who is ultimately accountable for regulatory policy.

The Regulatory Standards Bill, in its current form, could disconnect rules from regulations, regulations from regulatory policy, and regulatory policy from public value. That is not a technical flaw. It is a governance and institutional performance risk. A strong select committee process will be needed to clarify the trade-offs and protect against this risk. The next post will cover that very question: in a distributed and devolved system, who now owns regulatory policy? Is it the portfolio minister and their chief executive, or the Ministry for Regulation and its new Board? That issue, and its constitutional implications, will be the focus of my next post.

As with any real tukutuku, strength lies not in tension, but in balance. What is at stake is not just organisational efficiency. It is whether our public institutions can still contribute to ministerial decision-making while delivering for communities. That remains both possible and worth fighting for.

*A postscript: Credit where it’s due. These are thoughtful proposals, conceptually strong and tightly argued. However difficult the terrain, the advisors have moved quickly and with care. It shows.

References

Cabinet Office. (2025). Amendments to the Public Service Act 2020: Paper Two – Driving Improvements in Performance. Te Kawa Mataaho Public Service Commission.

Cole, R. (2020). Maintaining neutrality in the Minister’s office. Australian Journal of Public Administration, 79(4), 495–513.

Cole, R. (2021). Non-partisan advisors in the Minister’s office—Ghosts in the core executive machine? Parliamentary Affairs, 76(2), 251–269.

DTK and Associates. (2025). Analysis of Cabinet Paper Two: Driving Improvements in Performance. Unpublished report.

Eichbaum, C., & Shaw, R. (2007). Ministerial advisers, politicization and the retreat from Westminster: The case of New Zealand. Public Administration, 85(3), 609–640.

Eichbaum, C., & Shaw, R. (2008). Revisiting politicization: Political advisers and public servants in Westminster systems. Governance, 21(3), 337–363.

Eichbaum, C., & Shaw, R. (2020). Still friends? Revisiting New Zealand public servants’ perceptions of ministerial advisers. Political Science, 72(1), 3–22.

Gill, D., & Ryan, B. (2011). Reflections on the state sector reforms. In B. Ryan & D. Gill (Eds.), Future State: Directions for Public Management in New Zealand (pp. 23–42). Victoria University Press.

Gill, D., & Lodge, M. (2011). Toward a new era of administrative reform? The myth of post-NPM in New Zealand. Governance, 24(1), 141–166.

O’Neill, O. (2002). A question of trust: The BBC Reith Lectures 2002. Cambridge University Press.

Palmer, M. S. R. (2007). New Zealand constitutional culture. New Zealand Universities Law Review, 22, 565–596.

Ryan, B. (2006). Beyond Westminster: Thinking the Aotearoa/New Zealand way of governing. Policy Quarterly, 2(3), 40–47.

State Services Commission. (2018). Performance Improvement Framework: Review Findings. https://www.publicservice.govt.nz/resources/performance-improvement-framework/