New Zealand’s Innovative Government Reforms

Case study

Ever since its pioneering economic reforms in the 1980s New Zealand has interested students of government effectiveness. New Zealanders are the first to point out that theirs is a small country compared to the UK, with a different economy, grappling with problems, too. Yet our historic links and the similarities of a parliamentary democracy incline us to pay attention to their innovative reforms. Some of these, such as central bank independence, we have followed. Others we have not: the commissioning of departments and the co-location of ministers in a single building (the “Beehive”) were ideas that raised eyebrows and remained firmly on the far side of the world.

This paper focuses on more recent reforms that should equally interest us: the introduction of wellbeing budgeting, and the Public Service Act 2020. Building on reforms under John Key’s National government, Jacinda Ardern’s Labour administration aims to tackle long-term social problems which cross departmental boundaries by radically changing the way budgets are allocated, and by creating new, legally-empowered vehicles to drive joint action.

New Zealand’s success in tackling COVID has renewed international attention on the effectiveness of its government. This achievement may well be a reflection, in large part, of its remote island status. Still, this country’s recent reforms are of great interest to the Commission for Smart Government as we consider how to improve strategic and financial planning, overcome entrenched departmentalism, and place a focus on citizens. 

Nick Herbert