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Public service

by Richard Shaw

Since its beginning in 1840 New Zealand’s public service has frequently been restructured. While it has sometimes suffered criticism that it is inefficient, the public service has been involved in shaping the country and providing essential services and politically neutral advice to successive governments.


What is the public service?

Government departments

New Zealand’s public service is made up of the government departments responsible for serving the government of the day. They provide government with advice and deliver services to the public. These government departments are listed in the first schedule to the State Sector Act 1988. Each department is headed by a chief executive who answers to a government minister for that department’s performance. In turn, the minister must account to Parliament for the departments he or she is responsible for.

The exact number of departments has varied over time as different governments reformed the public service. In February 2011 there were 32 departments. The term ‘public service’ is usually used to refer to those employed in these 32 core government institutions (most have ‘ministry’ or ‘department’ in their name).

The wider state sector

In 2011 the wider state sector also included roughly 2,800 Crown entities (including some 2,600 school boards of trustees and 20 district health boards), 17 state-owned enterprises, three officers of Parliament and the Reserve Bank of New Zealand. More broadly still, the public sector includes the 85 city, district and regional councils that make up local government.

Maybe you won’t get paid

In the early days of the New Zealand government it was not unusual for civil servants in separate departments to receive different pay for doing the same or similar work. Sometimes they were not even fully paid. In 1844 the government announced that civil servants earning more than £80 (around $8,000 in 2010 terms) a year would only be paid part of their salary, with payment of the remainder depending on the state of the colony’s finances at the end of the year.

The first civil servants

New Zealand’s first civil servants were Willoughby Shortland (colonial secretary) and George Cooper (colonial treasurer and collector of customs), who was brought from New South Wales by Lieutenant Governor William Hobson at the establishment of the new colony of New Zealand in January 1840.

By the end of 1840 there were 15 civil service departments, all based in Auckland, which employed a total of 39 men. The governor of the colony personally controlled the civil service.

Civil service

The term ‘civil servant’ dates from 1785, when it was coined to describe employees of the East India Company who did not work in either the navy or army. The position of ‘civil servant’ was first recognised in New Zealand law in the Pensions Act 1858, which granted retirement pensions to civil servants who were too old or sick to work. ‘Civil service’ and ‘civil servant’ were commonly used until 1912, when they were officially replaced with ‘public service’ and ‘public servant,’ although some people still use the earlier terms.

Provincial versus central government

In 1846 New Zealand was divided into the provinces of New Munster (the South Island) and New Ulster (the North Island), and in 1852 it was divided into six provinces, each with their own provincial government. This led to a struggle between central and local governments for control over the funding of the civil service. For a time, the provinces more or less took charge of delivering public services. For example, Governor George Grey handed responsibility for sheriffs, coroners, police, sheep inspectors, prisons, works, roads and harbours to the provinces (partly because this reduced costs for central government).

Expansion and centralisation

Through the 1870s Julius Vogel (in various roles including premier and colonial treasurer) borrowed from overseas to promote works and immigration programmes that dramatically increased the role of the state. After the provinces were abolished in 1876 the functions of government departments, and the number of public servants, continued to climb. However, growth stopped abruptly in 1880 and shrank during the economic depression of the 1880s. The public service grew rapidly again in the mid-1890s following the election in 1890 of the Liberal government, and a more buoyant economic climate.

Sanatoriums and asylums

In 1892 there were 48 government departments, including the Lunatic Asylums Department and the Rotorua Sanatorium. In 2011 there were 32 departments. The Lunatic Asylums Department and the Rotorua Sanatorium were not among them.

During these years leading civil servants such as Edward Tregear in the Labour Department and George Hogben in the Education Department were at the forefront of reforms which laid the foundations of modern New Zealand. For example, as secretary for education under the Liberals, Hogben introduced uniform salaries and a superannuation scheme for teachers, and a grants scheme that opened up places in secondary schools for children from low-income backgrounds. Tregear, secretary of the Department of Labour, regulated working conditions in shops and factories.


Political control

The governor’s men

Until the early 1900s the civil service operated on the basis of political patronage. Initially, this meant that the governor had the personal power to hire, fire, promote and discipline civil servants. Until 1856 all civil servants were members of the British Colonial Service, and the governor had to report each appointment to the Colonial Office in England. He also made decisions about civil servants’ terms and conditions of employment, including rates of pay, and directly intervened in the running of departments. After 1856 those powers were transferred to government ministers.

19th-century job descriptions

In 1868 there were 79 different occupations in government departments. They included the posts of arms cleaner, boatman, bugler, Chinese interpreter, coast waiter, coxswain, crier, housekeeper, landing waiter, locker, receiver of gold revenue, searcher, sheriff, sub-collector of customs, stamper, tide surveyor and tide waiter.

Competing departments

Political control was absolute and regarded as appropriate in the 19th century to the extent that ministers even saw themselves as ‘officials’. This system of personal political control created problems. Appointments often depended on the relationship a job applicant had with a minister (or with someone close to the minister), rather than on that person’s skills or merits. Because departments were controlled by individual ministers, they developed their own systems of operating, and it became difficult to coordinate their activities. The Hunt Commission of 1912 noted that this produced ‘a great tendency for each department to magnify and glorify itself.’1

Use shorter words

In the early days government ministers would monitor how much departments spent on sending telegrams. Any ‘diffusely worded’ telegrams were to be reported directly to ministers.

The civil service grows

As civil servants’ jobs became more complex, it became clear that many ministers lacked the skills needed to run their departments. Also, as the number of civil servants grew, ministers struggled to balance the demands of running departments with their parliamentary responsibilities. In 1867, the nine cabinet ministers oversaw 1,600 civil servants, but by 1912 the same number of ministers were responsible for 23,000 departmental employees, although many of these were employees of just two departments – the burgeoning Railways and Post & Telegraph departments.

Soldiers first, women last

In 1906 soldiers who had served in the South African War were given preference over other applicants for civil service positions. Women, even those who passed the competitive entrance examination, were only appointed to ‘such vacancies … as are suitable for girls’.2 Very few women were appointed.

The pressure for reform builds

Dissatisfaction with this state of affairs grew, and governments tried – with limited success – to address the problems and to bring greater uniformity into public service staffing arrangements. Prompted by civil service reform in Victoria, the 1866 royal commission investigated the efficiency of the civil service. It noted that the civil service had ‘no rule as to appointments, no rule as to promotions, no rule as to dismissals’, and called for the introduction of non-competitive exams for entry into the civil service, and a set of standard regulations to cover all departments.3

Too big, too much

Public concerns about the size of government departments and public servants’ pay are not new. On 30 March 1909 the Dominion newspaper criticised ‘increases which have been made in the staffing and … salaries of the Civil Service during the last 15 years, out of all proportion to the increase in the population.’4

The commission’s recommendations were included in the Civil Service Act 1866, which specified that people applying for civil service posts must be between the ages of 17 and 23 years, and had to provide evidence of good health and moral character. Later, the Civil Service Reform Act 1886 introduced competitive examinations for selection into the civil service. However, these requirements were increasingly bypassed by the ‘backdoor’ appointment of ‘temporary’ staff, many of whom were employed for lengthy periods.

Footnotes
  1. Appendices to the Journals of the House of Representatives, 1912, H-34, p.13. Back
  2. Quoted in Alan Henderson, The quest for efficiency: the origins of the State Services Commission. Wellington: State Services Commission, 1990, p. 22. Back
  3. Quoted in Ian Sinclair Ewing, ‘Public service reform in New Zealand, 1866–1912.’ MA thesis, University of Auckland, 1979, p. 1. Back
  4. Quoted in ‘Public service reform in New Zealand,’ p. 236. Back

Reform, 1912 to 1962

The 1912 Hunt Royal Commission

A second royal commission in 1880 was followed, in 1912, by the Hunt Royal Commission on the civil service. It was named after its chairperson William Hunt, a successful businessman. The Hunt Commission recommended major changes to the management of the civil service, including the classification of positions, appointment and promotion on the basis of merit, and the transfer of responsibility for appointing staff from individual ministers to an independent body.

Rural posts

Between 1867 and 1912, during an era of considerable rural population growth, the number of country postmasters grew from 315 to 2,560.

The Public Service Act 1912

The Public Service Act 1912 did most – but not all – of the things the Hunt Commission had called for. Notably, the commission had recommended the establishment of a board of management to oversee government departments, and which would report to cabinet. Instead, the new act set up a Public Service Commission, headed by a public service commissioner, which reported to Parliament.

Less booze, more output

William Hunt, who chaired the 1912 Royal Commission, went on to become a prominent member of the Businessmen’s Efficiency League, which supported prohibition on the basis that it led to greater efficiency in business.

Public Service Commission

The new law was a major break with the past. The hiring, firing and promotion of public servants became the responsibility of the public service commissioner (not individual ministers), who would appoint people on their merits. The Public Service Commission also standardised conditions of employment and rates of pay across all government departments.

A job for life?

Referring to the changes of 1912, Leslie Lipson, Victoria University of Wellington’s first professor of political science, observed: ‘with the political parties the modern public service has struck a mutually beneficial bargain. By guaranteeing to public servants a life’s career and a pension, parties have foresworn the use of patronage and have guaranteed to the state’s employees their tenure of jobs. In return the parties expect, and the public servants owe, equal loyalty to any government which the people have placed in office’.1

The Public Service Act 1912 marked the end of the slow transition from a system based on political patronage to one run according to statutory rules, regulations and procedures. Departments, which had long been controlled by individual ministers, were gathered together in a unified public service. The legislation also set up a professional career public service. All public servants were to be managed and employed by a permanent commission that was independent of political control.

The public service did not grow much during the 1920s and into the economic depression of the 1930s. Expansion occurred from 1936, following the election of the first Labour government in 1935. There was further growth during the Second World War which, like the First World War, also provided more opportunities for women to enter the public service as many men were away fighting.

The McCarthy Commission of 1962

The reforms introduced in 1912 remained largely in place until the 1950s. By 1961 the economy had been booming for 20 years and the state’s activities had expanded enormously. Prime Minister Keith Holyoake felt it was time that the state services were reviewed again.

A lot of waffle

The typed record of the evidence heard by the McCarthy Commission in 1962 was 5,524 pages long.

The royal commission appointed in mid-1961 was chaired by Justice Thaddeus McCarthy. Fifty years earlier the Hunt Commission had emphasised the need for ‘consistent, service-wide personnel management’,2 tackled political patronage, and stopped the process of ‘backdoor’ appointments to public service posts. The McCarthy Commission, however, was tasked with promoting ‘efficiency, economy and improved service in the discharge of public business.’3

The State Services Commission

While recommending no major changes in structure, organisation or staffing, the McCarthy Commission saw the need for a new organisation. Its principal recommendation was to replace the Public Service Commission with a new State Services Commission (SSC). The new body would have wider powers than the old one, and would be responsible for the overall efficiency and economy of government administration. The McCarthy Commission recommended that the SSC should report directly to the prime minister, to boost the status of the new organisation, and to ensure support for it at the highest level of government. Because the Public Service Commission had reported to Parliament as a whole, it had had no one to fight its corner in cabinet, and its prestige and influence had diminished over time.

However, the subsequent State Services Act 1962 differed from the McCarthy Commission’s report in some respects. The SSC reported to the minister of state services, rather than the prime minister, and had up to four members, rather than one. The SSC did, however, remain independent in personnel matters relating to individual staff.

Footnotes
  1. Leslie Lipson, The politics of equality: New Zealand’s adventures in democracy. Chicago: Chicago University Press, 1948, p. 479. Back
  2. Alan Henderson, The quest for efficiency: the origins of the State Services Commission. Wellington: State Services Commission, 1990, p. 47 Back
  3. The state services in New Zealand: report of the royal commission of inquiry, Wellington, June 1962. Wellington: Government Printer, 1962, p. 1. Back

Revolution, 1980s and 1990s

Public service reformed

The election of the fourth Labour government in 1984 ushered in a revolution in the public service. Influenced by the idea that free markets were preferable to government intervention, and determined to make departments more responsive to citizens and ministers, the government set about overhauling the public service, especially departments involved in trading activities.

‘Glide time’

By the 1970s the public service had a reputation for being large and inefficient. This became the subject matter of a 1976 play, Glide time, by Roger Hall. It became the basis of a popular television series Gliding on, which screened from 1981 to 1985.

State-owned enterprises

The first significant reform involved corporatising many of the government’s trading activities. The State-Owned Enterprises Act 1986 turned a number of government departments – such as those involved in mining, rail, shipping, banking, electricity, post and telecommunications – into state-owned enterprises. Some, though not all, of these new organisations were later privatised.

The State Sector Act 1988

The State Sector Act 1988 was another crucial piece of legislation. Since 1912 all public servants had been employed by the Public Services Commission, and then the State Services Commission, and government departments had been managed by permanent heads. In 1988 the permanent heads made way for chief executives employed on fixed-term contracts. These chief executives then employed all staff in their departments, and took on responsibility for the efficient and effective management of their departments. The 1988 act also removed the career security of public service employment, abolished compulsory industrial arbitration in the public sector, and introduced labour relations law in the public sector that had previously applied only in the private sector.

The way departments managed their finances was also radically changed. Previously, each department had been funded for the cost of their inputs, such as overheads and salaries. The Public Finance Act 1989 turned that arrangement on its head, focusing on outputs and outcomes, meaning departments became funded according to the cost of the goods and services they produced.

Shrinkage and growth

In 1984 the public service employed 66,160 people. By the end of the 1990s that number had fallen to 30,000. It grew again over the 2000s and stood at 44,554 in 2010.

Devolving functions

Other reforms were also introduced. Some large departments were restructured and divided, with their different activities – such as providing policy advice, delivering services and monitoring the operations of other agencies – allocated to separate organisations. A lot of work previously done by the public service was devolved to organisations outside of the public service.

Merging functions and cuts

From the late 1990s the reform process changed course. In response to the 1996 Schick Report, which criticised some of the changes of the 1980s and early 1990s, attempts were made to coordinate the activities of different departments, respond to the different social and economic needs of regions and achieve more effective results for citizens. After the global recession of the early 2000s, jobs and other costs were cut in most, if not all government departments.


The public service in the 2000s

How departments are run

A civil servant from the late-19th century might struggle to recognise the public service of 2011. Public servants support the government of the day, rather than the party or parties that make up the government. They are appointed by their department, rather than by a central body or a minister. They offer ministers free and frank advice, which sometimes means telling ministers what they need to hear, rather than what they might want to hear, and they do not lose their jobs when there is a change of government.

While chief executives must manage the day-to-day affairs of their departments so that they contribute to the government’s policy aims, government ministers are the political heads of departments. Ministers are responsible for deciding which policies their departments must support, and must answer to Parliament for the performance of departments.

Types of workers

In 1913 the public service contained 17 arts graduates, 22 accountants, 47 lawyers, 155 engineers and scientists, and 33 officers with miscellaneous qualifications. In 2011 there were 5,105 managers, 2,626 policy analysts, 3,411 information professionals, and 2,129 legal, human resources and finance professionals in government departments.

Diverse departments

Departments vary considerably in size and role. Some are much larger than others. In mid-2010, for example, the Ministry of Pacific Island Affairs had 38 staff, while the Inland Revenue Department employed 5,512 people.

Some departments, including the Treasury and the Ministry for the Environment, focus mainly on providing policy advice to ministers. Others, such as the Conservation and Corrections departments, and the Ministry of Social Development, mainly deliver goods and services to citizens. Many departments combine both policy advice and service delivery. Others also purchase services from other organisations, or regulate and monitor the performance of other agencies.

The three most powerful

Some departments are more influential than others. The three ‘central agencies’ are the most powerful of all.

  • Treasury is the government’s main adviser on financial and economic policy. It manages the Crown’s finances, and assesses the costs of what other departments wish to do.
  • The Department of the Prime Minister and Cabinet supports cabinet (and the governor-general), and serves as the ‘eyes and ears’ of the prime minister.
  • The State Services Commission advises government on the structure of the state sector, while the State Services Commissioner appoints and reviews the performance of departments’ chief executives, and is responsible for leadership skills, and the ethics, values and standards of behaviour right across the state sector.

The public service in the 2000s

In June 2010 there were 35 government departments employing 44,554 people. Nearly 59% of all public servants were women (compared with 47% in the wider labour force), although women only occupied just over a third (37.8%) of senior management positions. More than 16% of the public service workforce was Māori, while people of Pacific (7.6%) and Asian (7.4%) ethnicities were also represented.

Acknowledgements to John Martin


Hononga, rauemi nō waho

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How to cite this page: Richard Shaw, 'Public service', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/mi/public-service/print (accessed 18 September 2019)

Story by Richard Shaw, published 20 Jun 2012