349. This Part gives a short overview of Aotearoa New Zealand’s system of government, and how the public service was administered during the Inquiry period. This overview explains how government decision-making works and provides a sense of who was responsible for the government departments involved in providing care during the Inquiry period.

350. Aotearoa New Zealand’s system of government is known as a Westminster model, because it is modelled on the United Kingdom’s parliamentary system. Under the Westminster model, government is organised into three distinct branches – legislative, executive and judicial:

• legislature branch – ‘Parliament’ (formerly known as the House of Representatives). It consists of all Members of Parliament that have been elected. The Legislature is responsible for making laws.
• judiciary branch – ‘Courts and Tribunals’. It consists of all judges and judicial officers hearing cases and deciding cases. The Judiciary is responsible for interpreting and applying laws.
• executive branch – ‘Government’. It consists of Ministers of the Crown (both inside and outside of Cabinet) and is chaired by the Prime Minister. The Executive is responsible for developing policy, proposing draft laws to Parliament and administering laws.

351. Each branch of government performs the functions allocated to it and generally does not assume or intrude on the functions of another branch.

352. Aotearoa New Zealand has a Governor-General. The Sovereign King or Queen of Britain is the head of State, and the Governor-General is the Sovereign’s representative in Aotearoa New Zealand. The Governor-General is responsible for:

• granting Royal assent to the bills passed by the House of Representatives, thus passing them into law (Legislative branch)
• appointing judges (Judicial branch)
• appointing the prime minister after each election and appointing all other ministers, making regulations proposed by the Executive Branch, and confirming the appointments of public service chief executives (Executive branch).

353. The Aotearoa New Zealand system of government is based on the separation of powers between the three branches of government. This separation provides checks and balances on the exercise of power.

He turepapa kāwana ā-kupu tā Aotearoa
Aotearoa New Zealand has an unwritten Constitution

354. Aotearoa New Zealand does not have a written constitution like the United States, Canada and Australia. Aotearoa New Zealand’s constitution is made up of a number of documents, constitutional conventions (ways of doing things), principles that have evolved through judicial decisions and Acts of Parliament such as the Constitution Act 1986 and the New Zealand Bill of Rights Act 1990. Aotearoa New Zealand’s constitutional arrangements recognise Te Tiriti o Waitangi / Treaty of Waitangi as a founding document. [447]

355. In Aotearoa New Zealand only a small number of provisions within a few laws (for example, relating to the term of Parliament, the division of Aotearoa New Zealand into general electorates, the minimum voting age of 18 all set out in the Electoral Act 1993) require a super majority (75 percent) of all members of parliament to change those provisions. Otherwise, laws in Aotearoa New Zealand can be changed in a single sitting of Parliament.[448] The change to MMP has not fully addressed concerns about the lack of checks and balances on the power of the Executive.[449]

Pāremata (Te whakature)
Parliament (The Legislature)

356. The Parliament of Aotearoa New Zealand consists of the Sovereign in right of Aotearoa New Zealand and the House of Representatives. The House of Representatives is the popularly elected part of Parliament. During the Inquiry period up until 1996, members of parliament were chosen in the general election to represent electoral districts using the first-past-the-post electoral system. In 1996, Aotearoa New Zealand changed its electoral system to mixed member proportional (MMP). This means that members of parliament are chosen in a general election to represent electoral districts and party list members.

357. The role of members of parliament in the House of Representatives is to represent the people of Aotearoa New Zealand, provide the Government from among its members, make new laws and update old laws, examine and approve Government taxes and spending, and hold the Government to account for its policies and actions through parliamentary questions, debates and select committee inquiries, considering petitions and examining international treaties.[450]

Pūnaha whakawā
Judiciary

358. The Judiciary operates independently of the Executive and the Legislature. The Governor-General appoints members of the judiciary. The role of the Judiciary is to interpret and apply the law. There are two main sources of law: statutes (the laws passed by Parliament) and the ‘common law’. The common law has been developed over time by judges and may be altered by judges from time to time to meet the circumstances of the day.

Kāwanatanga (Te peka whakahaere)
Government (The Executive Branch)

359. The Executive branch of government, or often referred to as the Government, is responsible for governing Aotearoa New Zealand. The Government has decision-making authority and control over the State’s resources. The Government decides policy and proposes laws (which must be approved by the Legislature). The Government is responsible to the House of Representatives for its policies and performance. It can only function with the confidence of the House.[451]

360. The prime minister heads the Executive branch and chooses members to hold office as Ministers of the Crown. Ministers are appointed by the Governor-General to specific portfolios. Ministers carry out the day-to-day work of governing the country. They act individually and collectively, either in Cabinet or as part of the Executive Council.

361. Cabinet is the central decision-making body of executive government. It is made up of senior ministers and is chaired by the prime minister and provides a collective forum for ministers to decide significant government issues.[452]

362. Ministers are also members of Cabinet Committees. Cabinet Committees exist for specific subjects to allow discussion of particular issues before referring decisions to Cabinet for approval.[453] Ministers are accountable to Parliament for the performance of the agencies in their portfolios. Ministers set policy for the government of the day, including policy relating to the care of children, young people and adults in care.[454]

Te rāngai tūmatawhānui
The public service

363. The public service is part of the Executive branch. In 1912, the Aotearoa New Zealand public service was established under the Public Service Act 1912. In 1962, after the Royal Commission of Inquiry into State Services in New Zealand chaired by Justice Thaddeus McCarthy, a new Public Service Act 1962 came into force. It established a Minister for State Services and introduced the State Service Commission as a department of state.[455]

364. The role of the public service is to:

• support constitutional and democratic government
• enable current and successive governments to develop and implement their policies
• deliver high-quality and efficient public services
• support the Government to pursue long-term public interest
• facilitate active citizenship
• act in accordance with the law.[456]

365. The State Services Commission, for most of the Inquiry period (1950–1988), was the employer of all State servants such as drivers, nurses, teachers and heads of department.

366. Aotearoa New Zealand had a highly centralised traditional public administration and rules-based approach and was not well placed to respond to the demands of modern society. The public service went through major changes in the 1980s and 1990s. A new legislative framework was introduced through the State Sector Act 1988 and Public Finance Act 1989, with the aim to reorient the public service towards delivering results for people and to increase its efficiency and transparency.

367. The public service transformed from a single organisation with one employer into separate departments, each with their own chief executive responsible for their department’s performance.

368. In the 1990s, the new public management approach focused on results, people as customers, stronger business disciplines, and opening government to competition. This resulted in an important shift from inputs to outputs.

369. The Government created agencies that were incentivised to work independently as singular agencies rather than collectively across the public service.

370. Along with the State Services Commission, The Treasury and the Department of Prime Minister made up the three central agencies. The Treasury led on overall economic and financial advice and the Department of the Prime Minister led on policy agenda. The State Services Commissioner’s role was to set the ethics and values of the State services, employ heads of departments and ministries, provide advice on industrial relations and the machinery of government.

371. Notably the employment of State servants was transferred to heads of departments and ministries with direct accountability to ministers for the delivery of advice and / or services for the public. This was outlined in a purchase agreement with the minister. All departments and ministries issued a statement of intent and annual report. All departments and ministries had an annual audit. Heads of departments and ministers were required to attend Select Committee (the Parliament) for an annual review.

372. In 1995 and again in 2000, the public service invited Dr Alan Schick to review the changes to the public services. While the level of transparency had grown and there was a clear line of accountability for outputs, the State services were criticised for the lack of focus on achieving outcomes for the country and for individuals.

373. This led to a re-aligning of agencies over time and central agencies asking departments and ministries to work together for the achievement of outcomes (called managing for outcomes) through their statements of intent.

Te Kawa Mataaho
The Public Service Commission

374. The public service was led by the Public Service Commissioner (previously the State Services Commissioner) as the head of Te Kawa Mataaho Public Service Commission (before 2020, the State Services Commission). The Public Service Act 2020 replaced the State Sector Act 1988.[457] Te Kawa Mataaho Public Service Commission is responsible for overseeing, managing, and improving the performance of the Aotearoa New Zealand public service.[458] It plays a leadership role in reviewing and supporting performance in the public service. [459]

375. The following paragraphs cover four further Departments and an office of Parliament whose work sits across the public sector. Departments responsible for parts of the care system during the Inquiry period are covered in Chapter 10.

Te Tai Ōhanga
The Treasury

376. The Treasury administers the Public Finance Act 1989, which sets out the legal structure governing government borrowing and expenditure.[460]

377. The Treasury’s core statutory and operational responsibilities include:

• being the lead economic and financial advisor to the Government and steward of the public service’s financial management system
• supporting the management of State services and public finances
• providing leadership for the public service alongside the Department of the Prime Minister and Cabinet and Te Kawa Mataaho Public Service Commission.[461]

Te tari o te Pirimia me te Komiti Matua
Department of the Prime Minister and Cabinet

378. The Department of the Prime Minister and Cabinet (DPMC) was set up on 1 January 1990 by merging several separate offices including the Cabinet Office.

379. DPMC provides advice and support to the government of the day, supporting the effective functioning of executive government and co-ordinating the national security and risk systems. DPMC is focused on meeting the prime minister’s priorities and from time to time will be responsible for shaping and progressing emerging high-priority issues.[462]

380. The Cabinet Office as part of the DPMC plays a central role in government decision-making by offering impartial secretariat services to bodies like Cabinet. It advises the Governor-General, the prime minister and ministers on constitutional, policy, and procedural matters.[463]

Te Tari o te Tumuaki o te Mana Arotake
The Office of the Auditor General

381. Under the Public Audit Act 2001, the Controller and Auditor-General undertakes annual audits, performance audits, assurance services, and inquiries. The Auditor-General is an independent Officer of Parliament and operates through two units: the Office of the Auditor-General and Audit New Zealand. Their role is to provide Parliament and the public with an impartial perspective on how public organisations are functioning.[464]

382. The Auditor-General reports to Parliament annually. They have extensive information-gathering powers, including the authority to enter premises and obtain information under oath. Protections are in place for individuals providing information to the Auditor-General.[465]

Te whakahaerenga Kāwanatanga 1950–1999
State administration 1950–1999

383. State administration changed during the Inquiry period. Reforms through the 1980s into the 1990s meant the way departments were organised and run changed in the last decade of the Inquiry period.

Ngā tau 1950–1980: Mai i te waeture ki te whakahou
1950–1980s: From regulation to reform

384. From 1950 to the late 1980s, Aotearoa New Zealand had a highly centralised, rules-based approach to how government and the public service were run. The economy was heavily regulated by the State. The public sector, overseen by the State Services Commission, had an integrated career structure, strong preference for internal appointees over outsiders, and a promise of lifelong employment.[466]

385. Ministers were the link between the Government and agencies. Ministers were collectively accountable for the performance of the Government as a whole, and individually accountable for the performance of their particular agencies.

386. The public service had two major responsibilities to the Government:

• to advise it objectively and rigorously on the policy issues of the day, and
• to implement decisions in the most effective way possible.[467]

387. The State Services Commission employed almost all public servants and set service wide terms and conditions of employment, training and development.[468]

388. The Treasury was the State’s financial advisor, including advising the Minister of Finance on departmental spending proposals,[469] and was responsible for the control of expenditure appropriated by Parliament in the annual budget cycle.[470] Before the Public Finance Act 1989, the financial aspects of each department’s work was controlled by The Treasury through its administration of the Public Revenues Act 1953, the Treasury Regulations 1953 and the Treasury Instructions 1953, which covered the use of public money down to details such as morning tea for visitors and parking fees.[471]

389. The Audit Department monitored departmental expenditure and ensured it aligned with the spending authority given by Parliament. The focus was mainly on regulating inputs, particularly the amount of labour used, while outputs and performance in achieving objectives received less attention.[472]

390. Departments were overseen by permanent heads (now called chief executives), accountable to the State Services Commission and ministers for the efficient management of their departments. Permanent heads had limited influence over salary or terms of employment for their staff, and restricted ability to manage staff performance. They also had little scope to recruit skilled and experienced staff from outside the public service above basic grade positions.[473] Instead, these functions sat with the State Services Commission.

391. In 1962, Aotearoa New Zealand was the fourth country in the world to appoint an ombudsman under the Parliamentary Commissioner (Ombudsman) Act. At that time, the ombudsman was restricted to investigating complaints about central government departments and organisations.[474]

392. In 1984 the new Labour Government began restructuring the economy and transforming how the State sector was run. This restructure was influenced by neoliberal ideas and was an attempt to address long-standing issues with the structure and performance of Aotearoa New Zealand’s economy.[475]

393. The 1980s’ State sector reforms were shaped by two sets of concepts, one stemming from management principles and the other from economic theories. Managerial reform was based on the idea that managers could only be held accountable for outcomes if they were given the freedom to make decisions, allocate resources and manage their organisations within established budgets.[476] The Treasury’s brief to the incoming minister in 1984 stated that the way departments had been organised and run meant that departmental management had little freedom to change the way their departments operated to meet their goals, to use their judgement to produce the best outcome or to address poor performance in senior management.[477]

Mai i te tau 1989: Te whakaurunga o te whāomo me te kirimana 
From 1989: the introduction of efficiency and contracting

394. Under the State Sector Act 1988 and the Public Finance Act 1989, heads of government departments (now called chief executives) were no longer lifelong career public servants. Instead, the State Services Commission contracted them for specific outputs as part of their performance agreements.[478]

395. Accountability for resources and results was now maintained through contract-like arrangements within government. Performance agreements between ministers and chief executives set out standards and expectations for department heads; purchase agreements between ministers and departments specified the outputs to be produced during the year.[479]

Te tiaki kōrero me te tuari mōhiotanga
Record keeping and information sharing

396. Information and record keeping requirements evolved through the Inquiry period. The sections below cover some of the legislation and agencies with a role in record keeping and information requirements. These are Archives New Zealand, the Official Information Act and the Privacy Act.

Te Rua Mahara o te Kāwanatanga
Archives New Zealand

397. As discussed in the Inquiry’s redress report, He Purapura Ora, he Māra Tipu: From Redress to Puretumu Torowhānui and in Part 4 of this report, the Inquiry heard evidence from many parties about how historical data and record keeping by the State was inadequate.

398. Formal requirements around public record keeping evolved from 1950 to 1999. The Archives Act 1957 established the National Archives within the Department of Internal Affairs.[480] There had been an increasing focus on government records management since the beginning of the century, and the final trigger for creating a nationwide service occurred with the fire at the Hope Gibbons building in 1952 that destroyed many State records.[481]

399. The Act established a framework for public records management, including the requirement that all public records ‘of sufficient value’ had to be deposited within the archives 25 years after their creation. This included records relevant to the ‘organisation, functions, and transactions’ of the government office where they were created or received. The Act allowed the chief archivist to give instructions to government offices about the efficient and economic management, and safe preservation of public records and public archives.[482]

400. The Act also gave the chief archivist sole power to approve the disposal of official records (including their destruction).[483] Two Records Advisory Officers were appointed in 1961 to assist government departments with records management practice.[484] However, the Archives Act of 1957 did not include a statutory obligation on public offices to create and maintain full, accurate and accessible records, which was not established until the Public Records Act 2005. The State Services Commission also used its mandate to establish records management expectations within government.[485]

401. In 1984, National Archives criticised the state of records management in the public service, leading to the first comprehensive review of Aotearoa New Zealand recordkeeping since 1913. The resulting 1987 report revealed outdated classification systems, lack of emphasis on records management, and a shortage of qualified staff.

402. The capacity of the Records Management Branch to run training and advisory initiatives was increased. However, there was a loss of institutional knowledge about records in departments after sector-wide restructuring, including the Department of Social Welfare in 1992, and a shortage of staff within departments meant these functions stopped in 1993.[486]

403. The earlier reforms of the State Sector Act 1988 had placed responsibility for recordkeeping with chief executives. The Privacy Act 1993 added protections for personal information but agencies’ recordkeeping duties and an explicit regulatory role for the Chief Archivist were not in place until 2005.

Te Ture Kōrero Muna Ōkawa 1957 me Te Ture Mōhiotanga Ōkawa 1982
The Official Secrets Act 1957 and the Official Information Act 1982

404. Until 1982 the provision of State information was governed by the Official Secrets Act 1951. Under the Act, official information was the property of the State and could not be shared without good reason.[487] Unauthorised disclosure of State information carried fines and prison terms under the Act.[488] Public servants had to sign a declaration when they started employment confirming they were aware of the Act’s requirements.[489]

405. By 1978 attitudes had changed in favour of more openness with official information.[490] In 1978, the Government established a Committee on Official Information to review the availability of official information to the public. The committee reported back in 1980 recommending the Official Secrets Act be replaced with a more open Official Information Act. [491]

406. The Official Information Act was passed in 1982. It is built around the principle that official information should be made available unless there are good reasons to withhold it. These reasons include the interests of the country as a whole, the interests of individuals and organisations, and the interests of effective government and administration.[492]

407. The types of agencies covered by the Act include:

• ministers of the Crown
• government departments and organisations, including the Police
• crown entities and some state-owned enterprises
• district health boards
• boards of trustees of State schools
• information produced by third parties as a result of being contracted by agencies to do work on their behalf.[493]

Te Ture Tūmataiti 1993
The Privacy Act 1993

408. Concerns around privacy grew during the Inquiry period, linked to the growth of computer technology and implications for individual’s privacy.[494] Aotearoa New Zealand passed the Privacy Act in 1993, creating the role of the privacy commissioner and establishing information privacy principles.[495] These principles, applicable to public and private agencies, governed the collection, use, and disclosure of personal information.[496]

409. The Privacy Act gave individuals rights, including access to and correction of personal information (although this release could not include information that would reveal information about other individuals)[497], with redress options for privacy violations.[498] The Act aligned with Aotearoa New Zealand's human rights obligations.[499]

410. The Act introduced a simple complaints mechanism with ombudsman-like investigations. Among other things the Act included the ability for New Zealanders to access their own medical records, the requirement for businesses and agencies to be transparent about personal data use,[500] and provided that outsourcing and privatisation did not diminish people’s privacy rights around data previously held by government agencies.[501]

Overview of Governments: Timeline of Prime Ministers 1949-2023

• 1949 to 1957: National, 3 Terms, PM Sidney Holland (1949 to 1957)
• 1957 to 1960: Labour, 1 Term, PM: Walter Nash (1957-1960)
• 1960 to 1972: National, 4 Terms, PM: Keith Holyoake (1960-1972)
• 1972 to 1975: Labour, 1 Term, PM: Norman Kirk (1972 to 1974); PM: Bill Rowling (1974 to 1975)
• 1975 to 1984: National, 3 Terms, PM: Robert Muldoon (1975-1984)
• 1984 to 1989: Labour, 2 Terms, PM: David Lange (1984 to 1989); PM: Geoffrey Palmer (1989 to 1990); PM: Mike Moore (1990)
• 1990 to 1999: National, 3 Terms, PM: Jim Bolger (1990 to 1997); PM: Jenny Shipley (1997 to 1999)
• 1999 to 2008: Labour, 3 Terms, PM: Helen Clark (1999 to 2008)
• 2008 to 2017: National, 3 Terms, PM: John Key (2008 to 2016); PM: Bill English (2016 to 2017)
• 2017 to 2023: Labour, 2 Terms, PM: Jacinda Ardern (2017 to 2023); Chris Hipkins (2023)
• 2023 to current: National, PM: Christopher Luxon (2023 - )
  
  

Footnotes