COM 0500.001 1996-1998 - Laserfiche WebLink

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J.K Mclay Limited: Changuib ~ Economy by Ghanguig itr Pubiic Sector "ase L r • Accounting systems - - did not measure the use of resources; - created incentives for poor use of resources; - ignored and/or failed to proved adequate information on and management of the Government's assets and liabilities. • Control systems - - destroyed incentives to perform; - over-centralised decision-making • Overall, there were few sanctions for poor performance. This has been described as a "system for control, not for performance". At the political level, there was increasing frustration at the weaknesses of the public service in delivering policy outcomes and its cumbersome nature. In particular, the system of incentives was perceived as unsatisfactory. Departmental trading functions For more than 140 years, New Zealand governments played a more active role in developing and regulating the country than in many other Western economies. The Government provided a wide range of goods and services and was instrumental in establishing many leading industries through substantial ownership in the finance, energy, transport, agriculture and telecommunications sectorslb. In the early 1980s, the resources controlled by the public sector amounted to around twenty five percent of Gross Domestic Product. In addition, many Government Departments had trading functions. In most cases, these "Departmental Businesses" had operated for many years, and presented numerous problems - • resources were squandered; By way of example: In the finance sector the Government owned the largest commercial and savings banks, the lazgest motor vehicle insurer, and the largest farm mortgage and residential lending institutions and was also the indirect owner of one of the largest merchant banks.