Putting trust to the test

Rodney Hide is putting trust to the test. Drip by drip he drops his leakers’ corrosive acid on Jim Anderton’s kiwibank, for which you, as captive shareholders, are stumping up $80 million.

The upshot is the loss of the Prime Minister’s trust in a vital state agency, the Crown Company Monitoring Advisory Unit, apparently the source of at least some of the leaks.

That unit needs the trust of state-owned enterprises which must give it commercial secrets so it can monitor them on your behalf. Jim Anderton thinks that trust is now diminished. He worries also that private sector companies may become chary of confidential chats with ministers and bureaucrats.

There is a still deeper matter. The country’s political culture — indeed the constitution — depends on a trust that all players in the system will observe the system’s written and unwritten rules of conduct and probity. Otherwise, what separates us from any rotten South American republic?

Trust can be formal or deep. The first can be generated by contracts, the basis for government-public service dealings since 1988. But for truly effective governance there needs also to be personal trust between ministers and the public service.

This is not yet widely evident in this government. And now State Services Minister Trevor Mallard wants to move beyond the contract system to a more fluid “relationship”-based arrangement, which is more dependent on personal trust.

Ministers see contracts as providing clarity, clear pricing, speed and accountability for day-to-day management. But they want more: to align short-term and medium-term departmental action with ministers’ translations of voters’ long-term preferences.

The Bolger and Shipley governments tried several ways of achieving this, with limited success. Mallard will tomorrow announce a “review of the centre” as his variation on the theme.

The “centre” is not defined in the terms of reference and senior public servants could not be definite to me either. It is not Wellington v the rest. It is not the “core” departments v the myriad orbiting agencies.

The best guess is that the centre is the cabinet, the three central agencies (Prime Minister’s Department, the Treasury and the State Services Commission) and, case-by-case, other agencies close in to the cabinet.

The review is commendably intended to refocus the minister-chief executive relationship on building state agencies’ capability to deliver on long-term programmes.

This will involve some reorganisation, reducing the number of departments and realigning them by portfolio (health, social policy, education and so on) instead of by function (policy, regulation, delivery) — the first example being the merger of the Ministry of Social Policy with the Department of Work and Income.

Mallard insists there will be no wholesale shakeup but the review seems intended to produce a major shift. The cornerstone State Sector and Public Finance Acts may be amended.

What is driving this? A need for control. And a lack of deep trust by ministers in a public service inherited from 15 years of Rogernomics.

More key work is being done in ministers’ offices than in the past. Senior public servants are listened to less. Rationalisation of Crown entities, which are run by boards not readily amenable to direct control by ministers even when political cronies are appointed, has been on hold for a year.

In short, the people at the top of the public service are not Labour’s people. The tribal instincts that hold the left together are by definition absent from the relationship between ministers and their servants.

But there is no one available other than public servants to translate ministers’ high-level policy wishes into detailed prescriptions and actions. Ring-in cronies can go only so far. It doesn’t help that there is also ministerial suspicion of some organisations and enterprising individuals outside the public service: Steve Maharey’s “social inclusion” paper last week saw a role only for “collectives”.

Can the review of the centre develop the necessary trust to substitute for the missing tribal instinct? The special unit, headed by a Treasury official, which is to attempt the mission will need to demonstrate extraordinary powers of innovation.