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Government in New Zealand

5 — The Public Service

page 72

The Public Service

The Attitude of the British peoples to the permanent officials of the State is compounded of striking contradictions. The strength of their democratic institutions is in a large measure due to their success in creating civil services which have made state actions democratic in quality as well as in intention and have supplied the continuity of administration without which the party system of government leads to chaos. Yet the anti-authoritarian bias in their political thinking makes them peculiarly susceptible to catch-cries about bureaucratic interference; they are incapable of using such terms as 'paid official' or 'government inspector' without imparting to them a faintly pejorative flavour; they seldom think seriously about the problems of civil service organisation unless spurred to do so by the belief that officialdom has become an excessive burden on the state revenues; and they are outraged if an official publicly expresses his opinions or demonstrates his powers. The result is that, in British page 73countries, the vast and intricate mechanism whereby the will of the State is made effective upon individual citizens is little understood and is seldom the subject of analytic thought. It is only in recent years that writers on British constitutional and political problems have begun to pay adequate attention to the civil service. Lord Bryce's great work Modern Democracies is brief and superficial in its references to civil services; Andre Siegfried's Democracy in New Zealand has nothing at all to say about the history or organisation of the New Zealand public service. It could be said without much distortion that the remarkable efficiency and integrity of civil services in British countries are due, not to general appreciation of the importance of permanent officials in the processes of government, but to a deeply-rooted mistrust of officials which compels them to set for themselves high standards of efficiency and to exercise their powers with a cautious regard for popular liberties.

The first English settlers in New Zealand brought with them this attitude to state functionaries; and it has remained a powerful influence on political development. But the first attempts to systematise the the New Zealand civil service were influenced not merely by this background of ideas but also by contemporary English practice. The establishment of representative government in New Zealand coincided with the first great reform of the English civil page 74service. In 1854 the first colonial Parliament met in Auckland; in the same year Macaulay wrote the report which was responsible for the establishment of the competitive examination as a method of selecting Indian civil servants; and in the previous year Sir Charles Trevelyan and Sir Stafford Northcote recommended the use of the same device—which Graham Wallas has called the most important political invention of the nineteenth century—to the home civil service. In the next two decades the British Parliament proceeded reluctantly and piecemeal to create a civil service based on the principles of open competition and classification of duties. Since New Zealand was at this time also engaged upon the problem of organising its public service, it was natural that English precedents should be fairly closely followed.

But although the ideas which moulded civil service development in England and New Zealand in the second half of the nineteenth century were approximately the same, the terms of the problem were fundamentally different. In the first place, resistance to the extension of state activity was much feebler in New Zealand than in England, where for many centuries most of the functions of government had been discharged by the organs of society and not of the State. The parishes, the municipal corporations, and the county magistracy were capable, after a fashion, of caring for the poor, maintaining roads, and administering justice. The paid permanent page 75official had to justify himself against the sentimental attachment of a majority of Englishmen to these ancient institutions of self-government. In a young country, without a leisured class and so sparsely populated that local community spirit was slow to develop, the State had to govern through its own agents. In the second place, it is important to remember that in England the need for an efficient corps of permanent officials was understood only by an insignificant minority; the political force which made civil service reform possible was the popular agitation against privilege in all its forms—the same force which had swept away the rotten boroughs and compelled the reform of the municipal corporations. The monopoly of official posts by a privileged class was repugnant to the new democracy. In New Zealand, privilege had not established itself; and in any case official positions, even the highest, were so poorly paid as to be unattractive to men of social eminence. Nor could a poor colony afford the luxury of maintaining sinecures. The difficulty was not to shut out placemen but to attract men of ability and integrity to a service which seemed to offer few rewards.

A convenient starting-point for an historical account of the growth of the New Zealand civil service is provided by the report of a Royal Commission appointed in 1866 'to enquire generally into the page 76clerical strength and efficiency of the several departments of the Public Service, and especially as to the numbers, age of admission, rules of advancement and promotion, and remuneration of the several Clerks and higher Officers of the said departments.' This inquiry, like all civil service inquiries in New Zealand, was undertaken because of a financial stringency. Years of intermittent warfare against the Maoris in the North Island had made severe demands on the Colonial Treasury.

The state of the New Zealand civil service when the commission began its investigations was chaotic. 'There are actually in the Colony,' it reported, 'ten Civil Services (one Colonial and nine Provincial), each entirely independent of the other in those executive functions which the law imposes on it. Nor are those functions of the nine Provincial Executives of that minor kind the exercise of which requires only a small and unimportant staff in each Province, for they include the conduct of Immigration, the construction of Public Works, and the preservation of life and property in settled districts. In none of these services has, so far as we are aware, any systematic organisation been established. Moreover, while the general relation of a Provincial Executive to the Executive of the Colony is one of independence, Provincial Governments have, under delegated authority or by mutual arrangement, acted as the representative of the General Government in page 77important branches of administration (including survey, sale, and management of land). It has been often necessary, both for the sake of economy and efficiency, that an officer of the General Government should also be a Provincial officer.'

Transport difficulties, and the consequent isolation of the various settlements, were another source of confusion. Supervision of local officers of the general government was fitful and ineffective; and they exercised a wide discretion in their methods of accounting for money received and administering the law. Moreover, the dangerous practice had grown up of allowing local officers to draw the whole or part of their salaries from money passing through their hands.

No attempt had yet been made to classify the service or its functions, to establish a system of recruitment, or to regularise promotions. The result, according to the commission, was a lack of 'that twofold spirit of independence and emulation which arises from a reasonable security of tenure and probability of preferment.' Another cause of the 'defective vitality' of the service was 'a disproportionate excess of underpaid officers.' Although 1,602 officials were employed by the general government, the total amount they received in salaries and fees was only £193,404. Chief clerks received an average salary of £281 8s. and other clerks an average salary of £175 17s. The commission recommended a page 78reorganisation of the service on the following principles: classification; promotion from class to class; salaries with minimum and maximum limits, and with annual increments for each class; rules of discipline; and the payment of retirement allowances.

The Civil Service Act of 1866 embodied the commission's recommendations. It divided the service into five classes, the first consisting of the higher executive officers and the judiciary, to the number of sixteen. The salaries of the first class were to be the subject of individual appropriations by the House of Representatives every year; for the remaining classes the House was to fix merely the maximum and minimum salary limits. Officers in the first class were to constitute a Civil Service Board, with advisory powers only, to which civil servants might appeal on matters of salary and classification. The age of entry into the service was fixed at between seventeen and twenty-two years and candidates were required to 'pass before a Board of Examiners appointed by the Governor such examination but without competition as the Governor may determine.' It was provided that when a vacancy occurred, except in the first class, 'the Governor shall wherever he can do so without detriment to the efficiency of the public service promote to such vacancy that officer being qualified to fill that vacancy who shall stand next in rotation on the classified list of the service.' But an important section empowered the Governor in page 79Council to waive this provision when it became expedient to secure the services of 'some person of known ability' and when there was no one else in the service 'fully competent to perform the duties of the vacant office.' Finally, the act provided for a general system of superannuation allowances.

Viewed in relation to contemporary practice in other British countries, the Civil Service Act of 1866 is remarkable for its rejection of the device of competitive examinations to regulate entry into the service and for the seemingly excessive weight given to seniority in the machinery of promotion. The rejection of competitive examinations was probably due partly to the country's inadequate education facilities and partly to the unwillingness of ministers and members of the General Assembly wholly to forego the right of patronage. The provision for promotion in order of rotation from the classified list was a reaction against the extreme fluidity and capriciousness which characterised existing methods. For the civil service as a whole (and all the members of the Civil Service Commission were civil servants), stability, order, and established rules of procedure appeared to be the supreme needs of the moment. But it is important to bear in mind that, while the act enthroned the seniority principle, it also provided the means of evading it. It is scarcely an exaggeration to say that the whole history of the public service lies in the conflict between these two provisions— page 80between the desire of the public service itself for an established system of promotion from within and the inevitable tendency of Parliament and the Cabinet to exercise a free prerogative in making appointments. The conflict is sometimes represented as a struggle by the public service to rid itself of what is called 'political influence', and no doubt the desire of politicians to distribute favours was, more than any other single cause, responsible for keeping open the 'back door' to the service. But that is not the whole story. Wherever the work of the State expands rapidly, and wherever the State enters upon a new field of enterprise, some strain must be imposed on the existing system of making appointments to official positions. That system may prevent the service from expanding numerically at the rate desired, or it may prevent the State from obtaining public servants with the required abilities.

In the next twenty years the fortunes of the public service fluctuated with economic conditions. During the boom of the seventies its numerical strength increased rapidly and salary increments were given generously. When the inevitable recession set in public servants were the first to suffer. In 1880 a Royal Commission which included no one with experience of public administration and was thoroughly reactionary in outlook presented a report on the condition of the service which was made the excuse for extensive dismissals and salary page 81reductions. The clauses in the Civil Service Act of 1866 providing for education tests and classification were half-heartedly and fitfully applied. Though examinations were held and cadets appointed as a result of them, the great majority of entrants were political nominees and political influence predominated in promotions. The system of promoting officers in rotation from a classified list, contemplated in the act, did not come into force because little progress was made with classification except in the Railways Department and the Post Office. Because of the scope of their activities and because they had to employ large numbers of technicians, craftsmen, and accountants these two departments early established themselves in a special position; and in the twenty years after 1866 both had instituted rudimentary systems of classification. In 1886 the Government of the day made another effort to systematise the public service and eliminate patronage. Competitive examination was established as the sole method of entry into the service and the appointment of outsiders to higher positions was made difficult, though not impossible. Parliament's self-denying ordinance had a brief life. In the following year amending legislation gave the Government power to appoint persons for any temporary service. The 'back door' was once more wide open; and through it, in the period of prosperity and expanding state activity which followed, poured a stream of page 82political appointees which soon swamped what was left of the system of entry by merit and promotion from within.

The period of expanding state activity and unregulated growth in the public service ended with the first decade of the twentieth century. Public service reform was one of the main planks in the platform of the opponents of the Liberal Government; and it is an indication of the state of public opinion that one of the first acts of the short-lived Mackenzie Ministry was to set up a commission to report upon the condition of the public service and to recommend means for the promotion of efficiency and economy. Like the commission of 1880, the commission of 1912 consisted entirely of business men and tended to regard state activity as a necessary evil, to be kept within the closest possible limits. Unlike the commission of 1880, it went about its work painstakingly and thoroughly, probing minutely into the organisation of departments and, in its conclusions and recommendations, showing at times real insight into the problems of public administration and a high order of constructive thought.

The core of the 1912 commission's recommendations was its proposal that the public service should be brought under the control of a board of management responsible to the Cabinet and functioning under the general direction of the Cabinet. This board was to be responsible, not merely for classifying the service page 83and dealing with the problems of promotion, recruitment, and salaries, but also for the general organisation of departments and the co-ordination of their work. Cabinet was to make general policy decisions; the task of translating policy into terms of administration was to be left to the board. By the time the commission reported, the Mackenzie Ministry had been replaced by the more conservative Massey Ministry which, while it was grateful to the commission for its labours, felt under no particular obligation to accept all of its recommendations. With the commission's advocacy of a definite system of classification, of more rigid adherence to the principle of promotion from within, and of the elimination of 'back door' entry into the service it was fully in accord; and all these reforms found their place in the Public Service Act of 1912. But the proposal for a board of management working under direction of the Cabinet failed to meet the clamour of the general public and of the service itself for complete elimination of 'political influence'. The Government therefore sought from Australian authorities information on the working of the system of public service control by commissioners responsible to the legislature and satisfied itself that this system was best adapted to New Zealand requirements. Accordingly, the act of 1912 provided for the control of the service by a commissioner appointed for a term of seven years and removable only with page 84the consent of the House of Representatives. The act also divided the service into four divisions—administrative, professional, clerical, and general. As in the act of 1866, it was provided that the salaries of officers in the administrative division (who were in effect the heads of departments) were to be voted annually by Parliament; for the rest of the service there were fixed salary scales.

The outstanding virtue of the New Zealand public service of to-day is its high average of competence, integrity, and contentment. This must be attributed largely to the reforms introduced by the Public Service Act of 1912 and particularly to the establishment of the system of commissioner control, which the service as a whole strongly supports. Every cadet who enters the service does so in the knowledge that there are no barriers to his advancement to the highest positions, that his capacities will be impartially assessed, that his right of appeal against decisions affecting his status and salary is carefully safeguarded, and that he will be adequately pensioned on his retirement. If equality of opportunity is the essence of democracy, then New Zealand has a democratic public service. These generalisations must, however, be qualified by an admission that the extension in state activity which has taken place in the last three or four years has begun to impose a severe strain on the existing system. During the economic depression of 1929-34, public expenditure was contracted to page 85such an extent that the flow of recruits into the service dried up almost completely. The rapid transition in the economic field from depression to boom and in the political field from conservatism to socialism which took place towards the end of 1935 increased state activity so rapidly that the public service, weakened by the policy of retrenchment, had to be reinforced by the admission of temporary employees. In 1930 there were, in the departments controlled by the Public Service Commissioner, 7,803 permanent employees and 2,047 temporary employees; in 1939 there were in these departments 10,659 permanent employees and 6,587 temporary employees. Already, the position of the latter, who as a class have no appeal rights, no pension rights, and are not very highly paid has become a difficult problem. The 'back door' into the service cannot, it would seem, be closed effectively as long as the extent of state activity fluctuates in response to a kind of politico-economic cycle.

The retrenchments of the depression period have also tended to break down the system of entry into the service by means of competitive examination and have left the whole question of recruitment in a state of some confusion. Up to the depression, intending entrants were required to sit the Junior Public Service examination, which was on a competitive basis. In the depression, the supply of recruits so greatly exceeded the demand that it was found possible to page 86demand a higher educational standard. Accordingly, in 1931 the Public Service Entrance examination, normally taken by pupils in the fourth or fifth forms of secondary schools, was abolished in favour of a group of examinations including university entrance and sections of various university degrees. At the present time, therefore, entry is governed not by the results of a competitive examination but by a system of classification according to educational requirements. Although the Public Service Entrance examination has been restored, it is only one among many examinations giving entry to the service.

The question of recruitment is intimately bound up with the question of training and promotion after entry. In Great Britain, heavy emphasis is laid on the value of general educational qualifications as a test of fitness for administrative responsibility. The higher officials in the British civil service are selected from an administrative division recruited mainly from university graduates by means of a competitive examination supplemented by interviews. Candidates for entry into this division are neither expected nor desired to have specialised in subjects immediately related to any particular branch of administration. From time to time the adoption of this system in New Zealand has been urged by representatives of the university and of secondary schools and by some newspapers, their argument being that the present page 87system of recruitment does not give adequate opportunities to New Zealand graduates and that there is in the New Zealand public service too much emphasis on the value of routine training. A reply to criticism of this sort which appeared in the 1938 report of the Public Service Commissioners well summarises the general attitude of the public service authorities (and, indeed, of the great majority of public servants) to the problems of recruitment and training. 'It appears to be assumed by some,' say the Commissioners, 'that a university training obtained before entry to the public service must be regarded as of more value than if acquired after appointment. Quite a large number of graduates are appointed to the service, but the Commissioners do not subscribe to the opinion that because they qualified before entry they are necessarily better equipped than those who graduated after entry to the service. While the Commissioners encourage officers in many ways to undertake university studies, there are comparatively few opportunities of admitting to the public service students who have secured what may be termed a "cultural" degree. There are wide and varied careers open to the specialist-degree holder, as medicine, engineering, law, commerce, and science; in fact, in some few of these we are short of recruits. The public service of New Zealand has developed mainly on the lines that it produces and trains its own administrators, but it does expect that its officers will equip themselves to better adorn page 88administrative positions by study prior to and subsequent to entering the service and that the study should be a continuous process.' An indication of the extent to which members of the service have striven to equip themselves for administrative responsibility is given in the 1937 report of the Public Service Commissioners, where it is stated that an average of one member in every three of the clerical, professional, and administrative divisions holds a degree or has passed some professional examination. It is significant that only about 8 per cent of public servants thus qualified hold 'cultural' degrees.

This emphasis on technical and professional qualifications has produced a high level of efficiency in those activities of the State, and they are many, which call for a knowledge of accountancy, engineering, medicine, law, and the physical sciences. Whether there is equal efficiency in the organisation and direction of state activity and in the translation of policy into terms of administration is doubtful. It is perhaps significant that the New Zealand public service authorities are fond of laying down the principle that it is for ministers to make decisions and for public servants to carry them out. Such a view implies an unreal separation between policy and administration, between the functions of the minister and his high officials. Government policy, as finally expressed in administration, is the product of a complex process of discussion and investigation by ministers and officials working in page 89partnership. In the British civil service, the place of the civil servant in formulating policy and organising the means of carrying it out is formally recognised; what is more, it is recognised that this task calls for a special type of ability. The duties of the administrative division are defined as 'those concerned with the formation of policy, with the co-ordination and improvement of government machinery, and with the general administration and control of the departments of the public service.' Rightly or wrongly, the New Zealand public service authorities have regarded the British administrative division as undemocratic. With the approval of the service as a whole, they have set their faces against any attempt to pre-select leaders by the test of general educational qualifications. The only test in which they have faith is the test of actual performance.

This does not mean, however, that the New Zealand public service authorities are satisfied with existing methods of selecting the higher officials of the service. The increase in the extent and variety of state activities in recent years has produced in the New Zealand public service a healthy tendency to self-criticism and constructive thinking on the problems of public administration. Among the symptoms of this development are the formation of branches of the Institute of Public Administration in the main centres of population, the appointment of an official committee to enquire into opportunities for university page 90graduates in the service, the establishment of a chair of public administration at Victoria University College, and the frequency with which the wider problems of recruitment and promotion are discussed in the annual reports of the Public Service Commissioner. For several reasons, the problem of the higher officers has attracted particular attention. One is that, in restoring the salary 'cuts' imposed during the economic depression, the Government was relatively more generous to the lower grades than to the small administrative class. This has tended to make the salaries paid to high officials substantially lower than the salaries paid in industry and commerce for similarly responsible work. Moreover, many of the new state services instituted recently have been placed under the control of men recruited from industry and commerce; and in all cases it has been necessary to pay the market rate for their services. The result is that some of the heads of departments brought in from outside are being paid two and three times as much as heads of older-established departments who have risen from the ranks. The New Zealand public service is beginning to realise that the recent tendency of governments to go outside its own ranks in filling the higher official positions implies a criticism of its methods of recruitment, training, and promotion. The response to this criticism can be seen in the establishment within the Public Service Commissioner's office of a staff training branch, in the page 91institution of internal efficiency tests, and in the almost revolutionary decision to provide the abler young officers with opportunities to widen their administrative experience and to fit themselves for early promotion to positions of responsibility. 'When the foundations of the New Zealand public service were laid in 1912,' says the Public Service Commissioner in his 1939 report, 'its administrative functions, regarded comparatively with those of to-day, were elementary. Since that time the front has been widened and the functions multiplied. The whole conception of the public service has been rapidly altered in the last twenty-five years, and it needs no prophetic genius to anticipate even greater changes in the next twenty-five years. We have therefore to commence now to build anew if we are to meet the situation that is developing for the public service of the future.'