Peter Hughes and the-then State Services Minister, Chris Hipkins, before a Select Committee before Hipkins became PM.

The announcement yesterday of the retirement of Public Service Commissioner Peter Hughes paves the way for a National-led government to make radical changes to the Wellington bureaucracy.

The retirement announcement was not unexpected and for some time now, senior public servants have been openly speculating who his successor might be.

Whoever gets the job becomes the most powerful public servant in Wellington in charge of everything from senior appointments and salaries to the ethics and culture of departments.

Whoever that is will have to make some of the most significant changes we have ever seen to the public service if National gets to form the next government.

But finding a replacement might not be as simple as it might seem.

Hughes set out to restore the traditional role of the public service as an independent “service” which offered potentially life-long careers for generalists and which placed the power in the Wellington head office.

There is a widespread feeling in Wellington that the current cohort of top public service managers have been too associated with Hughes’ traditional centralist model to fit into the corporate model that both National and Act are talking about.

But there is a suspicion in the right of politics that the public service has become more politicised.

That is evident in an op-ed piece in yesterday’s NZ Herald from the chair of the New Zealand Initiative.

He argues that the appointment process for departmental CEOs which requires Ministers to set out any particular requirements they have for the job and then to appoint one person to the three-person selection panel, politicises the process.


“The idea that a process with such built-in levels of political influence results in politically neutral departmental chief executives is simply fanciful,” he wrote.

“Appointment panels can be expected to appoint chief executives who are on side with the world view of the government of the day.”

But the process has hardly changed since the passage of the Lange Labour government’s substantial public service reforms in 1988, and ironically, Partridge ends up arguing for an appointment process which would be more politicised.

“Incumbent ministers can ensure the appointment of a chief executive whose viewpoints align with government policies,” he wrote.

“Yet incoming ministers with a democratic mandate to bring about policy and operational change cannot.

“Instead, they may be saddled with chief executives who have radically different and potentially conflicting views.”

Ministers do have the power to fire chief executives. They only need to have “just cause or excuse.”

It is, however, a power that is rarely used.

But both National and ACT are talking about a radical upheaval of the public service.

National Leader Christopher Luxon singles out the public service as an example of what he says is Labour’s wasteful spending.

 He told an audience in Feilding last month that if National became the government, it would need to do a “turnaround job.”

 “I’ve done a lot of turnaround jobs in the business sector for businesses around the world and what we need to do in New Zealand and how we get it done is going to be a challenge. 

“We have 14,000 more bureaucrats that have been added into Wellington.”

In fact, his figure is wrong; only about half that number have been added in to Wellington since Labour came to power in 2017; the remainder have been spread around the rest of the country in jobs like corrections officers or health workers.

National has yet to release its public service policies, but there is a hint of how they might point in a frequent comment in his speeches of Luxon that he will want to hold Ministers accountable to actually get things done by drawing up KPIs with each of them.

But the big question is how those Ministers might achieve the $1.6 billion in public sector savings Luxon is promising to be used to pay for the “Backpocket Boost” tax cuts.

Of that $1.6 billion,  $594 million would come from what National calls bureaucracy savings, which presumably means reduced staff, $602 from closing Labour programmes and $400 million from putting a ceiling on the use of consultants.

Those savings are to apply from the beginning of the next Budget year, July 1, 2024.

But before they could begin they would need to appoint a new Public Service Commissioner to preside over the cuts because Hughes departs on February 29.

 That raises a question as to whether a National ACT government might prefer an outside appointment to the role.

That could be someone like the ubiquitous government “Mr Fixit”, Sir Brian Roche or corporate board member Dame Paula Rebstock, who began her career in the public service.

Otherwise among the incumbent CEOs, only a few names stand out, the most notable being  Debbie Power, the current CEO in Hughes’s old department, the Ministry of Social Development.

Hughes has appointed her to be the PSC’s regional lead, focusing on how the public service “organises, aligns, and delivers services in the regions and how the regions stay connected to national priorities.”

If Labour retains government, she would be the favourite.

Other “possibles” might be the Secretary for Justice, Andrew Kibblewhite; the Secretary of Defence, Andrew Bridgman; or the Director General of Primary Industries, Ray Smith. The Deputy Commissioner, Rebecca Kitteridge, might also be a possibility.

But the appointment would very likely be the key component in a National-ACT government attempt to introduce efficiency reforms to the public service.

The fact that they are both promising a radical reform agenda might suggest that the impetus to go beyond the current public service will be strong.