There was an ongoing theme from the 2017 – 20 governments when National questioned one of their Ministers about spending.
Almost always, the response was that more was more.
It was there at Chris Hipkins’s first Question Time as Prime Minister, facing Opposition Leader Christopher Luxon.
Could Hipkins confirm that spending on consultants had blown out to more than $1.7 billion a year?
Hipkins replied, saying it was partly a reflection of the fact that the government was doing a lot more in the areas dominated by contractors and consultants spending.
“Like capital investment—something the last Government woefully under-invested in, which is why we had classrooms that were falling down, hospitals with excrement in the walls, and roads full of potholes,” he said.
Question Time is no place for sustained analysis or questioning of a Minister; it’s about headlines, not content, so Luxon did not attempt to unpick Hipkins’ claims.
What school and hospital buildings had been repaired? How many potholes had been filled in? Those were questions left hanging, unanswered, and given the way Parliament has been running itself, unlikely to be answered.
Luxon himself recognised the problem, and throughout the election campaign, his stump speeches were peppered with calls for the executive to be focused on accountability and outcomes.
This was often accompanied with claims about the numbers of extra bureaucrats employed under Labour. The claims were only sometimes strictly accurate, but the message was clear nevertheless.
“People working in the Ministry for Education have gone from 2600 to 4000 public servants, and I think the outcomes have got worse,” he told a meeting in Feilding.
“So what we’re going to do is, first and foremost, we’re going to go back and set the public service targets.
“So almost every one of those ministries to know why they’re going to work this morning.”
His comments struck a chord with questioners wanting more detail.
At a meeting in the Auckland suburban electorate of Upper Harbour, he appealed to the many small business people in the audience.
“We need to move more money from the centre and the bureaucracy out to the frontline,” he said.
“We need to make sure we have targets in place, that everyone is crystal clear about what we’re going to do around targets.”
But that is the bit he didn’t elaborate on.
In business, an executive who fails to meet their target might get redeployed, have their salary docked or possibly, in a worst-case scenario, get sacked.
The Prime Minister can sack a Cabinet Minister, but their powers over agency CEOs are somewhat more limited.
The CEOs are responsible to the Public Service Commissioner, currently Peter Hughes, but he is required to act independently of the Minister in reviewing their performance.
However he can sack them for “just cause”.
The usual practice is for a CEO to be subtly forced out, as appears to have been done at the end of last year when Donovan Clarke, the foundation chief executive of health and social services education council Toitū te Waiora, left after revelations that he had incurred large credit card bills.
Even so, litigation over his departure cost over half a million dollars.
The other part of accountability, making sure the organisation remedies its faults, is easier.
The Auditor General, John Ryan, in 2021, found that four of five members of a panel which considered the bids to provide saliva testing kits for Covid had potential conflicts through having worked for respondents or associated laboratories or through extensive contact with staff and organisations that might respond.
“Overall, because of the way conflicts of interest were managed, the Ministry left itself open to a perception of bias,” he concluded.
But rather than adopt a punitive approach, Ryan’s Office worked with the Ministry to develop protocols and systems to ensure that similar conflicts would not happen in the future.
But behind all this is a fundamental constitutional issue.
Though CEOs are accountable to the Public Service Commissioner, ultimately, Ministers themselves and their departments are accountable to Parliament.
When it votes on a confidence issue or when it approves a Budget, Parliament is really giving power to the executive to undertake the day-to-day functions of government.
And that takes us back to Question Time.
As the primary platform for the Opposition to test the government, it fails. The habit of Opposition members persistently asking whether a Minister stands by their policies or statements is the giveaway. The intention is to produce a “gotcha” moment.
The real venue should be Select Committees.
But as a Standing Order Select Committee report last year showed, even they take their accountability role lightly.
One of their tasks is to conduct an annual review of every Government agency.
The Foreign Affairs, Defence and Trade Committee, for example, conducted a review of both the Ministry of Defence and the Defence Force, which between them spend nearly $6 billion a year.
The Committee held a public hearing from 11.15 to 12.30 on December 12 to conduct its annual review of this expenditure.
Their Australian counterpart, the Senate Foreign Affairs, Defence and Trade Legislation Committee, reviewed Australia’s defence expenditure for two days last May. They began each day at 9.00 a.m. and ended at 11.00 p.m.
The Australians spent 23 hours (allowing for tea and meal breaks) grilling Defence officials, while their New Zealand counterparts spent an hour and a quarter doing the same thing, albeit with a much smaller defence force.
Furthermore, the New Zealand committees generally do not sit during Parliamentary recesses.
Parliament this year was scheduled to sit for 90 days — that left 275 days for Select Committees to sit.
Some did; the Environment Committee, for example, sat through recesses to consider the two Bills to replace the Resource Management Act.
But former Speaker Trevor Mallard got so frustrated with Committees asking for extensions of time to complete reports on legislation that he refused to grant them unless the Committee was willing to sit through a recess.
The former Prime Minister and Constitutional lawyer, Professor Sir Geoffrey Palmer, sets out the role of Select Committees very simply.
“The whole of the Westminster system says that the system of accountability is based on this, that ministers are responsible to the House,” he told POLITIK.
“That means they’re accountable to it, and the accountability has to have scrutiny, and the scrutiny is done by select committees.
“You hold the executive to account, and people don’t understand in New Zealand the difference between the executive and the Parliament.
“The House of Representatives is the instrument of accountability of the executive.”
But he argues that making that work is easier said than done.
“We’ve got an enormous system of government here.
“The system of government, if you take the whole of the state sector, is enormous, and the Parliament really can’t effectively audit what is going on there and doesn’t.
“The scrutiny is inadequate.”
In a submission to the Parliament’s regular review of Standing Orders last year, Palmer argued that one reason for the inadequacy of Select Committee scrutiny of government agencies was that there were too few MPs.
“The essence of the problem at present is that there are 28 MPs who hold executive office and the Speaker making 29,” he said.
“They cannot, therefore, be part of the accountability that the principles of representative democracy call for.
“Add to the issue that government MPs’ interest in accountability is lessened, many would say, because of their natural interest in the political health of the government and stopping controversy.
“This can damage accountability.
“The natural consequence of the situation is that the Select Committee system is under strain due to a lack of MPs whose primary interest lies in scrutiny.
The relatively obscure Governance and Administration Select Committee, chaired by now-retired National MP Ian McKelvie, however, went to Australia to look at the Senate Estimates system and wrote to the Standing Orders Committee recommending something similar here.
McKelvie’s Committee noted that the scrutiny of budget estimates carried out by the Australian Senate could involve days-long hearings of evidence.
He considered that New Zealand select committees could consider finding a balance between the status quo and the Australian approach.
And so the Standing Orders Committee has approved a proposal which would see Parliament’s sitting days reduced by two weeks and that time applied to the scrutiny of estimates for agencies or annual reviews.
Palmer described the report as one of the most useful he had seen in a long time.
But McKelvie added one further recommendation in his letter; “ New Zealand select committees should consider how they can best use the expertise of the Office of the Auditor-General when they are planning their scrutiny of government.”
That is possibly one of the most far-reaching aspects of the proposal in that it brings the Auditor General even more closely into the Select Committee proposal.
The Office of the Auditor General already briefs Committees before they undertake annual reviews of agencies and on other matters, but the new Scrutiny Committee system is likely to see the Office called on even more for advice.
But the Auditor General, John Ryan, shares Sir Geoffrey’s enthusiasm.
“They’re a good step, and we welcome the changes,” he told POLITIK.
“They are responding to some of the concerns we’ve raised in the past about the time in front of committees that large agencies get and the ability for committees to fully consider the activities of those agencies.
“I think there’s a couple of things that sit beside that as well.
“One is the quality of the information that agencies provide. And we’ve been on the record for some time talking about the performance reporting of agencies and how well they actually do account for their performance and the money that’s given to them.
“So I think that the new rules will allow those agencies to have an extended time in front of the committees, will allow us to do more to brief those committees.
“But it will also depend on the agencies, I think, turning their minds to their performance information and improving that as well.”
Ryan believes that the Standing Orders Committee report pointed to Parliament placing a greater priority on scrutiny and accountability for the spending of public money.
“The government is ultimately accountable to Parliament for its use of public resources, and I think that Parliament is in its mind to want accountability needs to be able to hold the government to account is a really positive proposal.
“I think it would give an opportunity for the Parliament to look at the system that currently exists, to consider whether that actually gives them sufficient information so that they can track spending, understand what results they’re getting for it, and ultimately how the government of the day to account for its performance against that money.”
So, though Luxon made that accountability a central feature of his election campaign, in reality, it is an idea whose time has come.
The question, of course, is just how keen he will be on accountability after three years in the Beehive and three years of stroppy Select Committee hearings into the performance of government agencies.
