Stiff bristles for Treasury new broom

01:48, Oct 30 2012

According to newly published papers, the Treasury decided more than a decade ago to define its reason for being as: "To be a world class Treasury working for higher living standards for New Zealanders."

More recently, it has adopted a range of values, including boldness and passion. So far, so corporate branding theory.

Reading between the lines, though, these simple statements of purpose have only recently been subjected to actual attempts to implement them.

As the chief executive of any large corporate knows, vision statements can take months of earnest head-scratching to produce, and just seconds to flee the minds of a workforce accustomed to doing things their way, thank you very much.

It has taken the appointment of former British senior bureaucrat Gabriel Makhlouf as Treasury Secretary to revive the crusade.

Even with a rejuvenated senior leadership, he's finding old habits die hard. Sceptics in the ranks preferred it when the Treasury's job was to tell other departments to jump, and for the targeted agencies to ask: "How high?"


The first review of progress under the Treasury's two-year-old Performance Improvement Framework has found the recent burst of momentum taking time to sink through to the troops.

"Consistently, the review found that frontline delivery, which is devolved in the Treasury operating model, has undergone little or no change from what it has been in the past," the report from a review team chaired by Sue Suckling, the newly appointed chair of the flagship Advanced Technology Institute, concluded.

"Organisations . . . feel they can still get blindsided by the Treasury in a non-timely and ‘costly' manner," the review said. While the traditional role of the Treasury analyst "must change", it has yet to do so.

In other words, Treasury officials' deeply embedded sense of omnipotence, combined with disenchantment among some senior staff with the changes, are a barrier to the Treasury becoming a far smarter, subtler and more nimble driver of not just a better performing economy and public service, but also of a better, fairer, happier New Zealand.

However, the implications are profound for the flinty-faced agency that produced such seismically influential documents as the 1984 manifesto for Rogernomics, the scruffy-looking, yellow-bound Economic Management.

For a start, the definition of what constitutes an improved life is far broader than the "old" Treasury would have countenanced.

Analysis reaching back as far as the Ancient Greek philosophers is used to interpret "happiness" as a fundamental measure of quality of life, along with trustworthy social institutions and freedom of opportunity that deliver choices.

Only in the detail does the Treasury sound like its old self. Equality of opportunity, for example, is advanced by education reform, its pentangular Living Standards Framework suggests. Hence Makhlouf's heavy-weight speeches on the subject earlier this year.

At least on paper and among its leadership, today's Treasury identifies "fairness" across generations as the final piece of a jigsaw it's trying to construct through another ambitious project on long-term fiscal policy options.

The remarkably public process employed seeks to outline the choices that lie ahead for an ageing society that has limited resources, sluggish growth, and a substantial underclass among the generation whose youthful labours are required to pay for the healthcare and pensions of the swelling ranks of codgers.

Makhlouf used the language of corporate euphemism to describe the task ahead. "The Treasury is on a journey," he said.

The department frets as it never has before about the tensions between its legitimate role as a thought leader on every aspect of economic and social policy, and its roles as both political servant and fiscal enforcer.

"Changing its operating model is extremely challenging for the Treasury due to the breadth of its reach (versus depth), its need to be responsive to issues of the day, and the devolved execution of its functions," said the Suckling review. Its current characteristics and modus operandi are "deep in the culture/‘DNA' of the organisation and motivation of its workforce".

At its simplest, the Treasury is being challenged to become an agency that collaborates, rather than commands.

This is difficult new territory. For those who depend on the Treasury to get its advice right, it requires a leap of faith.

The gap between modern management theory, with its promise of the best of intentions, shows every sign of clashing with the day-to-day reality that the Treasury has always been the last line of defence against not only poor policy, but poor policy that costs too much to achieve too little.

There's no doubt the intention is pure, but the jury is out on whether the vision and reality can be made to meet.