Rob Stock: How coalition Government is resetting Crown entities to end Labour’s social agenda

Former finance minister Grant Robertson’s Enduring Letter of Expectations embedding the former Government’s vision of Māori-Crown relations in the operations of the Government’s myriad commercial entities endures no longer.

In the 2019 letter, Robertson set out how Crown entities ranging from the NZ Lotteries Commission to Air New Zealand to the Commerce Commission should operate to help the Government reshape the country.

It told them to prioritise safe, diverse, inclusive workplaces, and to embody “the Government’s good-faith and collaborative approach to Māori Crown relationships”, Robertson wrote.

That included building staff Māori cultural capability, and “improving the Treaty-consistency of policy and practices”, as well as supporting the revitalisation of te Reo Māori.

It was, one academic says, a moment in which the Crown entities were politicised, with the past focus on efficiency and good governance no longer being the sole focus.

But the 2019 Crown entity reset by the Labour, Green, and NZ First coalition Government, has now been reset.

Robertson’s enduring letter has now been superseded by a new one from Finance Minister Nicola Willis.

Enduring letters of expectation are a little-publicised, and little-studied, mechanism by which government policy is rolled out through Crown entities.

They stand behind and over the individual letters of expectation ministers send to the Crown entities they are responsible for, which echo the current enduring letter of expectations.

Dr Karl Löfgren, head of the school of government at Victoria University of Wellington has studied policy implementation, organisational changes, reforms in public sector organisations.

He analysed the letters of expectations for the New Zealand Transport Agency Waka Kotahi several years ago to see how they changed character from 2012 to 2022.

All the letters started by insisting the agency maintained a good regulatory standard, however 2020 marked a change, he said.

Gone were short, concise letters, to be replaced by much longer ones with additional focuses for Crown entity boards.

“It was all about the Treaty, about climate change, about sustainability, sustainability development goals. It was pretty hefty. It was a sign of a bit of politicisation of Crown entities,” Löfgren said.

Willis’ reset letter turned the clock back to a focus on better performance, greater value, and accountability for Crown entity boards.

“The letter was needed to make clear the priorities of the new Government, which centre on delivering better results and improved public services for New Zealanders, while managing within tight fiscal constraints,” Willis told the Sunday Star-Times.

But it also reminded Crown entity board members not to play politics.

Willis’ letter, dated April 23, stressed that Crown entities’ boards must remain politically neutral, which was required under the code of conduct for Crown entity board members.

Willis’ letter made no reference to any of the Treaty, diversity, or inclusion priorities of Robertson’s 2019 letter, or his requirement Crown entities work effectively and productively with unions.

Nor did it mention Robertson’s expectation that they work to close gender and equity pay gaps, if they had them.

Instead, Willis promised the boards of Crown-owned entities and companies, “enhanced scrutiny”.

She also reminded them of their duty under the 2012 Owner’s Expectations Manual from the Treasury, which included the famous Sir John Key “no surprises” policy, under which crown companies and entities were required to tell their controlling ministers of anything that that had the potential to embarrass or surprise the government of the day.

Robertson’s 2019 letter was introduced to the boards of Crown entities through the annual letters of expectation ministers send to Crown entities.

Jan Tinetti’s 2022 letter to the Lottery Commission referenced Robertson’s letter, and reiterated the demand the commission support “future-focussed Māori Crown relations”, and specifically called for it to do better in reducing gambling harm across the community, but particularly for Māori.

At the time, the commission had already been working to cut the density of Lotto merchants in the poorest parts of the country to less than the national average.

Lotteries Commission Minister Brooke van Velden released her new letter of expectations to the lottery operator to The Post.

It showed consistency with Willis’ reset.

Van Velden told the commission’s board that they were expected to “act in a politically impartial manner and conduct themselves in a way that enables them to act effectively under current and future governments.

“This includes not making political statements, engaging in political activity in relation to the functions of Lotto NZ, and acting in ways that places Ministers or entities they are responsible for in a position of embarrassment.”

However, van Velden’s letter did continue some of the themes of Tinetti’s.

It called for a continuation of the monitoring and reduction of Lotto’s gambling products on high-risk communities, and the wider public, but the reference made no reference to ethnicity.

Similarly, the letter of expectations from Commerce and Consumer Affairs Minister Andrew Bayly to Jane Wrightson, head of Te Ara Ahunga Ora the Retirement Commission, starts out by saying: “The National/ACT/New Zealand First Coalition Government has agreed a policy programme of work over the next three years which will contribute to the Government’s overarching aim to improve outcomes for all New Zealanders.”

Willis’ reset letter delivered on the policies the National-NZ First and National-ACT coalition agreements, which promised to “uphold the principles of liberal democracy, including equal citizenship and parliamentary sovereignty”.

Under them the Government would remove co-governance from the delivery of public services and that public services should be prioritised on the basis of need, not race.

Labour was approached for comment on the coalition reset, but did not respond.

While letters of expectation are one mechanism for transmitting Government policy to Crown entities, they are complemented by others.

Crown entities are monitored, with monitors working closely with Crown agency boards, Löfgren said.

“It is a way of maintaining some amount of control.”

“Then there are these principles like ‘no surprises’,” he said, and ministers can deliver “verbal instruments” to the Crown entities they control.

Governments could also transmit their policy through hiring, appointing people who they have confidence in to deliver on their policies.

Under the last two governments there had been a focus on building diversity and equity in Crown entities through the appointment process, Löfgren said.

“Now it’s turning more to becoming more merit-based,” he said.

The international jury was still out on whether board diversity generated better decision-making and performance, Löfgren said....The full article is published HERE

Rob Stock is a Stuff business reporter specialising in money and consumer affairs issues.