State boss bonus for hitting targets

ANDREA VANCE
Last updated 05:00 26/06/2012

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Public service bosses can expect a bonus if they meet new targets on the Government's "to-do" list.

Prime Minister John Key and Finance Minister Bill English yesterday announced five-year goals that include reducing the number of beneficiaries and slashing violent crime by 20 per cent.

Mr Key confirmed state service chief executives could net a bonus if they hit the target. It comes after ACC came under fire for paying staff incentives for kicking long-term claimants off the state insurer's books.

"There is nothing wrong with spelling out very clearly to a chief executive what your expectations are and for there being some alignment with achieving that objective and financial performance," Mr Key said. Last year state service bosses received, on average, a salary of $340,000.

Ministers would also be held to account in the twice-yearly reviews Mr Key gives his Cabinet.

"If we are not seeing a decline or an increase in a target area then we will be asking hard questions about why."

The "challenging results" are set among five themes – reducing long-term welfare dependency, supporting vulnerable children, boosting skills and employment, reducing crime and improving interaction in government – which Mr Key signalled in March.

Mr English said they were difficult benchmarks to reach. "What the Government is doing here is digging into some of New Zealand's longest-running, most intractable social problems, and we are not naive about that.

"If gains aren't being made then we have to change what we are doing."

Labour's state services spokesman Chris Hipkins said "the buck will still stop" with ministers.

"These aren't particularly ambitious targets. Rather than kicking people off benefits we should be talking about how we create jobs."

Attaching bonuses to targets will mean executives would "focus on the areas where they are going to get financial reward at the expense of other things. What we have seen in ACC ... is [that] people's welfare can be put at stake if you put the financial incentives in the wrong place."

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- Fairfax Media

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