Dr Liz Gordon – The State Sector Act and all that




I know I am late in commenting on the extraordinary revelations about the use of surveillance by state agencies onto ordinary people, but cannot let this go by.  I remember the State Sector Act 1987 very well, and the arguments that were used to bring it in by a Labour Government.

Here are what I remember as the headline acts:

  1. The state sector is bloated and self-interested.  Its only interest is in making itself larger. This argument was used to corporatise and privatise large swatches of the public service, and weaken others.
  2. The state sector is far too large.
  3. The state sector cannot manage itself.  It has no discipline and certainly no fiscal discipline.
  4. Policy mandarins of the ‘Yes Minister’ variety lurked on every corner, plotting to overthrow legitimate government power and reduce sectoral change.
  5. The sector is inadequately managed and inadequately run.  It is highly inefficient.
  6. Most of the work that the state does would be much better achieved by the private sector, where market discipline would operate.

The State Sector Act brought in enormous changes beyond the very obvious corporatisation and privatisation moves.  The Act was designed to weaken the state sector overall, remove the bonds between agencies, remove or destabilise institutional knowledge, force market thinking (the profit motive) onto state agencies.

It was highly successful in what it intended to do.  We saw years of the most creative models of state sector management: daft privatisations, the health system split into four regional boards which were expected to compete with one another; school management devolved to thousands of boards of trustees who mostly came into their positions with no skills and no experience; failing schools that had to be rescued by Commissioners, an increasingly punitive welfare system, the high point being Chief Executive Christine Rankin descending from the ceiling in a sparkly dress; failure after failure in the health sector; restructuring everything on numerous occasions. ACC. DIA.  Need I say more?

All of these great successes occurred at the same time that successive governments whittled down the resources available to the state sector, year on year, from around 40% of GDP in 1990 to less than 30% now.

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In short, dear friends, the people of New Zealand were duped about the intentions of reform in 1987 and duped again about what the effects would be.  Because the biggest privatisation that has taken place has been that of democracy itself. The sector agencies, once the best advocates for the people they served, have been mired in so many failures and disasters, attempting to meet government targets, trying to ensure compliance with impossible policies, that over time they have instead turned against the people they were supposed to serve.

Some people have learned to hate the state sector.  A parents whose special needs child is turfed out of schooling; people struggling to survive on benefits who cannot understand why they are so poor; people who cannot access needed operations or medications; ACC claimants who cannot get the financial support they need.  The list is very long.

The irony of the state sector hiring private sector agents against the people has been well played out over the past few days.  The fact that they were spying on citizens is clear; why they were doing so is sometimes less so.

I am not despairing about these revelations.  The writing was undoubtedly on the wall for this approach to the state sector before and now the removal of this model and its replacement with something better is assured.  And about time!

As usual a wishlist:

  1. Fit for purpose systems to run agencies, especially the social agencies that need to put their experiences of clients front and centre in a non-punitive way.
  2. Bring back quality expertise into the sector, including high quality knowledge and understanding of sectoral requirements.
  3. Make sectors whole again.  The may involve a reversal of privatisation and corporatised models.
  4. New models of leadership that do not ape the private sector – and over time reduce inflated senior management salaries.
  5. Reduce hierarchies and increase understanding through the systems.
  6. Increase government spending by at least 5% of GDP by 2020.  Additional expenditure on the sector comes straight back to government in taxes, GST and other routes.  It is win-win.

I am sure there are more wishes, but it is Christmas and I have things to do.  

Merry Christmas to everyone.


Dr Liz Gordon began her working life as a university lecturer at Massey and the Canterbury universities. She spent six years as an Alliance MP, before starting her own research company, Pukeko Research.  Her work is in the fields of justice, law, education and sociology (poverty and inequality). She is the president of Pillars, a charity that works for the children of prisoners, a prison volunteer, and is on the board of several other organisations. Her mission is to see New Zealand freed from the shackles of neo-liberalism before she dies (hopefully well before!).


  1. While we are at it, remove the last remnants of “conservation for profit” from our department of conservation and administer New Zealander public land for us not the tourism sector. Might need to remake the whole self serving department. again. They are simply a PR machine for themselves.
    Did you know that none other than our own humble DoC is the department employing non licensed thugs against the public to keep their activities from scrutiny?
    “The Court established that Sturgeon was then dragged out of his car by a Department of Conservation guard and a scuffle ensued.

    The security guard hired by the Department of Conservation did not have a current Certificate of Approval from the Security Licencing Authority and was untrained in ‘crowd control’.”

    In his evidence, the guard made a number of statements that proved false under cross-examination.
    Photos show Sturgeon with a bloody nose and ripped clothes.“

  2. yeah exactly, there is no democracy in New Zealand, there is corporatism on a country wide scale, failing to cope as usual, unelected dictatorship.
    With such a history of failure why would you follow a system doomed from the onset? For profit of course, how else to rob a entire generation for your own financial benefit.

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