Goff has a point

October 12th, 2012 at 11:00 am by David Farrar

Stuff reports:

Labour’s Phil Goff has attacked a big pay rise for the head of the Foreign Affairs ministry as a blatant double standard at a time when many diplomats are losing their jobs.

Figures on state sector chief executives’ pay released today showed Mfat boss John Allen’s salary last year was the highest among chief executives, with a pay rise of $40,000 taking his package between $620,000 and $629,999.

I have no problem with Govt CEOs getting paid market rates, and getting pay rises when they perform well.

But the MFAT restructuring led by the CEO has been somewhat of a clusterfuck, and for the SSC to give the CEO that presided over it a 7% or so payrise is going to go down badly with many. John Allen was an excellent CEO of NZ Post, and may well be doing many things well at MFAT – but the restructuring was a critical piece of work, and there was a near complete failure to get institutional support for it.

This is like the vexed issue of private sector CEOs pay. I don’t think most people are against CEOs getting huge salaries – so long as they and their companies are doing well. Few people ever would have claimed that Rob Fyfe didn’t add value to Air NZ well in excess of a million dollars. Steve Jobs was once valued by the market as being worth several billion to Apple, as that is how far their share price fell on news of his cancer.

But what annoys people is when a company is not performing, and the CEO gets a big pay increase and bonuses.

The figures, released by the State Services Commission also showed shamed former head of the Department of Building and Housing (DBH) Katrina Bach was paid out $81,105 in entitlements when she left the job earlier this year.

This one is a non-issue though. If someone is owed annual leave, they of course get it paid out when they leave. Surely there is no suggestion that the Government should break the law and not pay someone their legal entitlements.

Overall, the average increase in base salary for chief executives was 2.7 per cent. That compared with movement in average base salary across all public service staff of 3 per cent, Rennie said. …

One fifth of state sector bosses took an effective pay cut with either no change to their pay or a reduction.

2.7% overall is pretty modest. The only real issue is the big increase for MFAT CEO.

 

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Dom Post on John Allen appointment

May 19th, 2009 at 11:00 am by David Farrar

The Dom Post approves:

The appointment of New Zealand’s top postman John Allen as its top diplomat is an inspired move by State Services Commissioner Iain Rennie.

It signals that this Government wants to place greater emphasis on the trade side of the Foreign Affairs and Trade Ministry operations.

Prime Minister John Key knows that growth is the only way for New Zealand to succeed once the worldwide slump is behind us.

As tens of thousands of NZ jobs are lost, we are reminded how important economic growth is.

Mr Allen’s imminent shift from the state-owned enterprise NZ Post to head MFAT has some parallels with the National Party’s own election of John Key as its leader in late 2006. Neither man is encumbered by the ancient baggage borne by those around them, allowing each to take a fresh look at the challenges they face and at the solutions that might be offered.

In Mr Allen, according to one insider, the SSC has found a unique individual for a unique position, a man who instinctively understands that trade policy succeeds only when it and a country’s political leadership are aligned.

Foreign affairs in this country has mostly been the preserve of diplomats and cast-out politicians. The ministry has never been led by a businessman, or anyone who has not earned his spurs by patiently crafting elegant papers on arcane aspects of foreign policy, or poring over the entrails of who might succeed the Dear Leader in Pyongyang.

A bit harsh!

He has, instead, been a successful commercial operator, who straddles easily the white line between the public service and private sector sides of his SOEs operations, and is not without international experience.

He co-chairs the Australian New Zealand Leadership Forum and is accustomed to dealing with ministers, which will make accompanying the prime minister and foreign affairs minister on forays abroad easier. …

But his is a bold appointment, and his success or otherwise will reflect on Mr Rennie, Mr Key and ministers Murray McCully and Tim Groser, as well as on himself.

Reaction at MFAT is somewhat mixed I hear. Many of the younger staffers are really excited about a new broom, and see lots of exciting opportunities. A few of the more senior staff are nervous about the appointment, but not hostile.

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Finally official

May 12th, 2009 at 9:13 am by David Farrar

NZ Post has just announced:

New Zealand Post Chairman Rt Hon Jim Bolger today announced that the Group’s Chief Executive John Allen will leave at the end of June to take up the appointment of Chief Executive and Secretary of Foreign Affairs and Trade.

His tenure at MFAT will be much watched!

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MFAT

May 9th, 2009 at 10:16 am by David Farrar

Two good articles on MFAT and NZ Aid. Fran O’Sullivan has a look at MFAT and what the (yet to be announced) appointment of John Allen means. Fran says:

The commission’s panel was encouraged to look at the top MFat job in an “expansive way” and select a new chief executive who could (and this is the most important point) provide leadership for New Zealand – not just the Foreign Affairs Ministry – to help propel a much more aggressive approach offshore.

Fran says it is about getting less silos and better co-operations from not just MFAT, but also NZT&E, Immigration Service, Education NZ, and Tourism NZ.

Meanwhile in the Dom Post, Nick Venter looks at NZ Aid:

He starts with why NZ Aid was made semi-autonomous:

Eight years ago an independent review of New Zealand’s  aid programme raised major  concerns about the way aid  money was distributed.

The reviewers reported that the Foreign Affairs and Trade Ministry, which administered the aid programme, regarded aid as “an instrument of foreign policy”, that almost a quarter of the total aid budget of $250 million was spent on tertiary education scholarships – despite poor completion rates and the failure of many students to return home.

The ministry had used $500,000 of aid money to relocate the Samoan Department of Lands, Surveys and Environment so a new New Zealand high commission could be built, that the ministry used its development agency as a “dumping ground for non-performers” and that there was no “formal documented system of analysis or defined criteria used for determining the annual allocation process”.

McCully says:

“You don’t make changes like this if you don’t have to,” he said. “But in terms of the audit reports that have been brought down and some of the examples that I have looked at, over months now, I made up my own mind that I wasn’t going to carry the can for those things.”

Mr McCully has publicly questioned NZAid’s priorities, the amount of money it puts into “unproductive” regional bureaucracies, the size of its staff (281) and the proportion of the aid budget spent on internal overheads (about 8 per cent), but concern about accountability persuaded him to put it back under the umbrella of the ministry.

He says the agency, headed throughout its existence by former diplomat Peter Adams, wrongly assumed that being a semi-autonomous body entitled it to operate outside the normal state sector controls. “NZAid looked at the word autonomous and ignored the word semi.”

One of the consequences was that NZAid did not tell the ministry things it needed to know, “sometimes involving large amounts of money or serious matters of national interest”.

McCully also seems to think overheads were too high:

Mr McCully said he had also been concerned by NZAid’s response to questioning of its overheads. “I was annoyed to find that we were running overheads that were about 8 per cent of the total budget and that NZAid regarded themselves as being immune from any sort of scrutiny in that respect.

At a time when I was putting MFAT through the wringer, I was being told that NZAid were not open to that degree of scrutiny because we just gave them a bulk number and they decided how much of it was going to be overheads . . . . When I said, ‘Okay, presumably that will go down quite a lot when the budget goes up to $600 million,’ I was told, ‘No, it will go up to 9 per cent.’ I said, ‘How is that?’ They said, ‘That is just what we have decided.’ “

The story also focuses on what the goal should be:

He is also sharply critical of Mr McCully’s decision to abandon the poverty alleviation focus favoured by other Western governments as well as the International Monetary Fund and the World Bank.

“Economic development is an important contributor to poverty alleviation, but it’s a means to an end, not an end itself.

“The key to poverty alleviation is benefiting those most in need. Traditionally the elites benefit when money is pumped in with an economic development focus. You achieve poverty alleviation through investment in education, health, literacy and governance.”

Mr McCully, who has described poverty alleviation as a “rather nebulous concept”, says the success of the new focus will be measurable in, among other things, improved trade statistics.

“It is unacceptable that we should be exporting a billion dollars worth of goods to the Pacific and having empty ships coming back here. It shows that we are spending too much of our money on stuff that might help alleviate poverty this year but it does not do anything about next year and the year after.”

One thing is for sure – all eyes will be focused on NZ Aid for the next few years.

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You heard it here first!

May 6th, 2009 at 9:34 am by David Farrar

NZPA reports:

Wellington, May 6 NZPA – New Zealand Post chief executive John Allen will be the next head of the Department of Foreign Affairs and Trade, NZPA understands.

I like this new order of reporting senior appointments:

  1. Tipped on Kiwiblog
  2. Predicted on Transtasman
  3. Reported on NZPA
  4. Announced by the SSC

:-)


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New MFAT Chief Executive

April 30th, 2009 at 12:41 pm by David Farrar

Transtasman are tipping (via e-mail) that NZ Post CEO John Allen is likely to be named Secretary of Foreign Affairs. Incidentally I tipped this back on the 8th of April.

If they are right, then this is a radical change for MFAT. Not only has an outsider never been made CEO before – they don’t have outsiders in any of their senior management team. Every Deputy Secretary(I believe) is from within MFAT.

Most Government Departments have senior managers who have come from other Departments or God forbid even the private sector. MFAT does not. What this means is the only senior managers there are those who have spent decades within MFAT. Hence why this is about Minister McCully wanting a change culture.

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