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| Dr Bryce Wilkinson | Senior Fellow | bryce.wilkinson@nzinitiative.org.nz | ||||||||||||
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Those are the main conclusions in my research note “Are Flying Kiwis Fleeing?” that the New Zealand Initiative published this week. Australia is a serious competitor for New Zealand talent. There has been a net loss of New Zealand citizens to Australia in 64 of the 69 years from 1950 to 2018. Provisional Australian statistics for 2023 put the number of New Zealand-born residents of Australia at 598,000. While the net outflow likely incorporates an element of ‘bounce-back’ from the Covid-induced travel disruption in 2020 and 2021, it has accelerated in recent months. This is something to be watched. The outflow is a reminder that New Zealand faces real problems in the provision of infrastructure, housing, health, education and employment for New Zealand residents. The government needs to make significant progress on multiple fronts to improve New Zealanders' prospects and perceptions of their future at home. The outflow is not a red light because New Zealand attracted net arrivals of 142,900 non-New Zealand citizens in the year to May 2024. The overall net gain of 82,800 migrants in that year added 1.6% to the resident population. Neither is there a red light from a brain drain perspective. Visa requirements for entry to New Zealand have a skill focus. Immigrants to New Zealand tend to have higher educational qualifications than the native-born population, and they outnumber those leaving. Comparable statistics for outflows are lacking. Nor does the age distribution of those recently migrating flash a red light. It is consistent with long-term trends. Even so, the scale of the recent net inflow could be putting pressure on housing and other infrastructure. It makes the government’s measures to free up the supply of housing even more important. In addition, research has found little evidence of significant negative impacts on employment or wages for native-born New Zealanders due to immigration. These migration flows highlight the importance of effective action to improve infrastructure, housing, health, education and employment for New Zealand residents. Those improvements would help attract global skills and capital while retaining some New Zealanders who might otherwise leave. Dr Bryce Wilkinson's research note, Are flying Kiwi's fleeing?, was published on 23 July. |
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| Max Salmon | Research Fellow | max.salmon@nzinitiative.org.nz | ||||||||||||
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The role of Commissioner comes with considerable power to shape the face of the public service. The Commissioner is responsible for finding and hiring candidates for the Chief Executives of the public service. The Commissioner can shuffle Chief Executives between ministries, an ability that allows those candidates to avoid an open and competitive hiring process. The Commissioner is also charged with the development of senior leadership in the public service, and the enforcement of its standards. It would not be a stretch to label the role the most powerful unelected job in Wellington. This matters because governments are elected to implement policy programmes. However, policy creation, reform, and implementation are not straightforward. Contrary to the beliefs of some, it is not as simple as a Minister issuing a directive from the Beehive. The Minister for Transport cannot fill potholes with the stroke of a pen. In reality, the delivery of policy hinges on the public service and its many ministries. At a Minister’s directive, it is public servants who are responsible for drafting, implementing, and regulating the government’s policy programme. As such, the 38 Chief Executives who sit atop these ministries wield considerable power. These are the same individuals who are hired and employed by the Commissioner. No one in Wellington would dispute that the last Public Services Commissioner left an indelible mark on our public service. For instance, previously he was Chief Executive of the Ministry for Social Development. During his time as Public Services Commissioner, nine of his former employees from the Ministry were elevated to CE-equivalent roles across the public sector. Therefore, for any government serious about enacting change, especially the current coalition government with its espoused focus on reforming the public sector, the Commissioner is a critical player. Whether this system is the best we could have, is another discussion. What matters is that it is the system we do have, and it is the system that the coalition government knew it was going to inherit. It is concerning to see that the government did not move to immediately fill the position. It is more concerning still to see the position remain vacant for close to nine months. If the coalition is serious about making change in Wellington, and throughout the nation, they must fill the role swiftly. |
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| Dr Michael Johnston | Senior Fellow | michael.johnston@nzinitiative.org.nz | ||||||||||||
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I don’t mean ‘economical’ in the fiscal sense, of course. This is the public sector we’re talking about. No, like any good government agency, Health NZ has been spending like a drunken sailor on shore leave. Indeed, when it comes to financial extravagance, the organisation is an overachiever. Health NZ has been racking up deficits of about $130 million a month. If not for the intervention of its Minister, the agency may well have achieved $1.4 billion in red ink by the end of the 2024/25 financial year. Pulling that off would have been a truly impressive feat, even by public service standards. Unfortunately for Health NZ, though, Minister Shane Reti is not impressed. Like a curmudgeonly Dad arriving home to find his teenage kids and their mates wrecking the joint, Reti has called time on the party. He has called in Professor Lester Levy as commissioner to supervise the clean-up. The Professor is tasked with sorting out Health NZ’s financial and governance messes. But what has Dr Reti so upset you may ask. Sure, Health NZ has accumulated a bit of debt, but the real problem seems to be that its escalating fiscal disaster took the Minister by surprise. If there’s one thing Ministers hate, it’s nasty surprises. According to Dr Reti, “Health NZ first reported a deteriorating financial position to me in March 2024, despite earlier repeated assurances by the organisation that it was on target to make savings in 2023/24.” That brings us back to Health NZ’s concept of economy. If what Reti says is so, then Health NZ has been rather more economical with the truth than with its spending. To cut Health NZ some slack, its Board may have been unaware that its finances were spiraling into the abyss. Dr Reti commented that “limited oversight of financial and non-financial performance” left the Board “unable to identify risks until it was too late.” So, Hanlon's razor may apply. Even so, the Board’s assurances to the Minister were honest in the manner of a blindfolded driver in charge of a speeding car with dodgy brakes and wonky steering promising not to crash. Other government organisations would do well to take heed of this cautionary tale. The spending party of recent years is over. Those failing to take note may find themselves being prescribed some of the good doctor's medicine. |
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