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Peter Wilson: Government Is On The Move With Its Reform Programmes

Peter Wilson
Peter Wilson

When Rodney Hide complained last year that the Government "wasn't doing anything" the point he was trying to make was that it hadn't set a course for the sort of economic reform it had talked about before the election.

His sweeping statement got him into trouble, but there was an element of truth in it. The Government spent most of its first year dealing with the recession and, apart from enacting its "first 100 days" promises, didn't do much about starting to put in place the big picture programmes designed to improve the economy and standards of living.

That situation has changed quite dramatically in the last few weeks. It is now most definitely setting a course to achieve its objectives, and significant changes are being implemented.

Among Prime Minister John Key's previously identified priorities are reforming the tax system, getting a better performance from the public service, improving education and tackling what is called the infrastructure deficit.

Tax changes were unveiled last month -- an increase in GST and cuts to personal income tax -- with details to come in the May 20 budget. Changes to the public service have started, in small ways that are almost certainly the tip of a big iceberg. The big issue is how many staff are going to be left out in the cold, and decisions which were expected to be made this week have been delayed while more work is done.

But no one thinks shifting the Food Safety Authority into MAF and putting National Archives into the Department of Internal Affairs is the end of the story. There are much bigger things to come.

Within ministries, cost saving and efficiency moves have been or are being carried out. They are the results of last year's line-by-line examination of how the money is spent and the aim is to move back office resources into the front line. Finance Minister Bill English has left public sector chief executives in no doubt about having to do more with less.

As for education, it is now evident that giving responsibility for the tertiary sector to Steven Joyce was motivated by more than just relieving Anne Tolley of the portfolio so she could focus on national standards in schools.

Joyce, who has shown he can handle big decisions with minimum fuss or fallout, quickly announced he was going to trim the number of qualifications available -- an astonishing 6000 at present -- and partially link funding to course completion levels.

The Government, from the start, has been concerned about matching qualifications with what is needed to enhance growth. In other words, fit the graduates with the skilled job requirements of a modern economy.

Joyce's other responsibilities are also central to the Government's drive towards its "brighter future" election campaign promise. He is dealing with the fast broadband rollout when he wears his communications and information technology hat, and building new highways under his transport portfolio.

Joyce, in fact, has become one of the most important ministers in cabinet and that has happened because he is its quiet achiever.

Key has never been enthusiastic about "big bang" changes, as was evident in the way he dealt with the impact of the recession, and he isn't going to start now with the public service or tertiary education.

The reason may be that he doesn't want to start fires which would be difficult to put out, such as job cuts which would see the Government under heavy attack from unions and the Labour Party.

He probably won't be able to avoid that, if the changes do lead down the redundancy track, but by doing it through incremental change he spreads antagonism over a long period. Small fires are easier to deal with than big ones.

Joyce is managing tertiary education changes in the same way. Trim off a few courses, for now, with the justification that completion rates are low and they aren't much use anyway. The Dominion Post has reported, for example, that New Zealand is turning out twice as many graduates as are needed in sport, fitness and recreation and just an eighth of those required for the food industry and a third of those needed in infrastructure construction.

There will almost certainly be more, higher impact changes before the next election. Opposition to these changes will become more vehement, and the Government will have to tread carefully. Labour and the Maori Party are already muttering about the effect on students with poor qualifications but who want to get ahead through tertiary study.

Key and his ministers are soon going to have to start answering questions about the pace and the extent of the reforms they have in mind. It isn't even clear at the moment whether a blueprint actually exists, and the situation is creating what may be a false impression that the Government is feeling its way along a dark tunnel without being sure what is at the end.

Much of this uncertainty could be cleared up in the budget, which is now expected to have much more in it than an increase in GST and cuts to income tax. Finance Minister Bill English could use it to clearly chart the Government's direction between now and the 2011 election, with firm indications of just how far the Government is prepared to go in its restructuring of the public service and its reform of tertiary education.

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