Bringing business to the reform table

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As companies try to manage the scale and pace of government reforms, a new report from Deloitte shows how industry and government could break down barriers to collaboration for the benefit of Aotearoa | Content partnership

The traditional relationship between the state and the business sector could perhaps be described as a relationship of symbiosis mixed with skepticism.

Current governments live or die by the numbers contained in unemployment statistics and business confidence surveys, while corporate finances can be disproportionately affected, for good or ill, by the actions of an administration. .

But when it comes to including different voices in major reforms, says BusinessNZ chief executive Kirk Hope, there is sometimes a reluctance to treat business the same as other interest groups.

“It often feels like there’s an inherent bias against a corporate voice, that there’s something wrong with a business group expressing a point of view on something that can often bring wider benefits than self-interest.”

Breaking down biases on both sides is one of the drivers behind a new Deloitte State of the State report, Moving mountains – Big change for a better future, who argues that the “policy-sponsored, public sector-led” model of reform needs to be rethought.

“The government and the civil service are not always in the best position to operate the right levers or do not always have the necessary capacity. Business and community partners also play a key role in co-creating new narratives and changing mindsets through public discussion and influence,” the report states.

“Government is really the guardian of the intention and the results that will be achieved through reform, but only one of the players – maybe a very influential player, and they have to play a leading role, but they don’t don’t need To do everything.”
– David Lovatt, Deloitte Partner and Head of Public Sector

Speaking to Newsroom, David Lovatt, a Deloitte partner and public sector lead, said that while companies can often be consulted on changes, they have rarely had a real chance “to shape and participate or even implement reform on behalf of New Zealand”.

“Government is really the guardian of the intention and the results that will be achieved through reform, but only one of the players – maybe a very influential player, and they have to play a leading role, but they don’t don’t need To do everything.”

The one-dimensional world of decades past, with greater demarcation between the roles of business and government, has given way to a growing range of gray areas, Lovatt says — but neither the public service nor business has fully adapted to the new normal.

“In many areas, companies would like to be able to participate more and would like to lead, but I think people from all walks of life may just be relying on the way things were before rather than the way things were. things could be.”

Girol Karacaoglu, director of the School of Government at Victoria University of Wellington and former chief treasury economist, spoke to Deloitte for his report and also thinks there is a piece of the puzzle missing when it comes to manage the reforms.

“My consistent point throughout has been that one of the things we’ve been missing is an infrastructure that really makes the inclusion of multiple voices effective, and one of the critical voices is the business.”

The traditional view of the relationship, where companies seek maximum profits without caring about others and the government suppresses them as a regulator, must give way to the concept of true partnership, Karacaoglu says.

“We want businesses to be profitable and we want them to produce, because material goods are important in any public policy framework, but we want them to be profitable without harming the environment and taking care people, giving them skills and high pay.”

As an example, he mentions Queenstown, where the business community has benefited from a flow of tourists, but other residents have worried about the environmental effects and wider societal implications for the area.

“When Covid-19 hit and businesses realized tourism money was drying up for a while, especially international tourism, suddenly there was a rich vein of conversation about potential avenues to to come.”

Another area where the potential for true partnership is highlighted is in climate and sustainability, as noted by Andrew Boivin, Deloitte Partner and Head of Climate.

Boivin cites Cercle Aotearoa, a partnership of public and private sector leaders focused on protecting the country’s natural resources, as an example of an opportunity for collaborative reform.

A governance group worked together on roadmaps for change in the seafood and energy sectors, among other areas, “really combining forces between the public sector and the private sector.”

“I was lucky enough to be in a room with the sustainable finance forum, Toitū Tahua, and you can just see the energy when you bring the public and private sectors together, combining the pragmatism of legal and accounting professionals with the dynamism of financial sector leaders – the energy and ideas that emerge can be a real driver of institutional change, in a really positive way.

Deloitte partner David Lovatt says governments can be gatekeepers to reform, but they need not be the only actor involved. Photo: Supplied

One reason Kiwi businesses and governments may find it easier to work together on climate is the inherently long-term nature of the problem.

Often, says Hope, there is a conflict between the scale of ambition in a government’s reform plans and three-year political cycles, leading to an emphasis on speed at the expense of quality. .

“The government does this. [large-scale work] badly enough because they are very keen to put in place a reform bill or framework so that they can demonstrate that they have achieved something politically.

This contributes perhaps to one of the main concerns of business groups and other personalities about the next phase of government reforms, as noted in the Deloitte report – “the demand for time for engagement and consultation, as well as the perceived potential for a piling up of ill-coordinated changes across reform agendas”.

This problem, Lovatt says, can be solved by changing the way governments engage with business and the wider community, taking a more joint approach instead of managing issue-by-issue consultation.

“Rather than repeating the work and doing it multiple times, come together and really think about the collective impact and where you want to go with a company or sector and engage with them through this range of change. This going to be much more effective, and maybe even something you can do in three-year election cycles.

Governments could also make better use of private sector talent, the report says, by combining efforts in areas of high demand for reform rather than competing to poach staff.

“Patterns of detachment between system participants – not just public sector departments, but also business, iwi and community participants – should be encouraged, formalized and invested in.”

New Zealand’s limited skilled resources when it comes to tackling climate change means sharing resources between the public and private sectors is a logical decision, said Andrew Boivin, Deloitte Partner and Head of Climate . Photo: Supplied

Boivin says this would be particularly useful for work on climate change, with demand outstripping supply as the public and private sectors move towards decarbonization.

“We are a small country with limited qualified resources when it comes to fighting climate change. Given the pace and scale of reforms in the climate space, providing access to shared climate mitigation and adaptation resources makes sense. Rapid decarbonization presents a huge challenge for both business and government, which is why providing clear guidance and easy access to resources is crucial for decisive and coherent action, rather than everyone trying to do it. do it himself”

Hope points to another of the Deloitte report’s key recommendations, the creation of a dedicated reform office to review and test reform plans, as an example of where the public sector can learn from its private counterparts.

“If you think about it, we have transformation specialists in the private sector, we have operational transformation specialists in the public sector, but I’m not sure we have a lot of real public policy transformation specialists. and that’s a really specialized skill set,” Hope says.

A critical determinant of successful reform, the report notes, is alignment with the case for change – and not just within the machinery of government.

“Critically, alignment isn’t just about political sponsors. The support of citizens and participants in a system, in particular those who have the most to lose from the reform, was identified by many of our interlocutors as an imperative. »

Companies have a lot to lose from reforms gone wrong, but a lot to gain from a new approach to collaboration.

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