During Budget week the media seems to give more than usual air time to politicians to express their policies, preferences and prejudices. Politicians perhaps more than most of us, consider they have the best insight on the way the world should be. Few public perception surveys would give any credence to that belief, politicians ranking among the most poorly rated occupational groups. On a world stage however one hopes that they all assertively champion our national interest ( whatever they may be). Politicians must always be conscious of how their constituency sees them…. As elections have characteristics of a popularity contest.  But does it really make any difference how we are seen in the eyes of others?

A Pew Survey published last week explored a range of attitudes within the European Union. One interesting but probably trivial assessment was of perceived national characteristics.  The survey shows that Germany is recognised as being the most trustworthy nation in the EU – except by the Greeks,  but also seen by many as the most arrogant and least compassionate.

Those surveyed seem prepared to concede that they may be less trustworthy and less compassionate that other Europeans, but it appears that only the Italians are willing to acknowledge that another national group may be less arrogant than themselves.

www.pewglobal.org/2013/05/13/the-new-sick-man-of-europe-the-european-union/

The comment in the State Services Commission 2013-2014 statement of intent, that it is “looking at undertaking a survey” in 2013-2014 as a measure of the trustworthiness of agencies and their staff, was published at the same time as Deloitte issued a risk and compliance guideline about the criticality of integrity to an organization (The Deloitte Governance Framework: Framing the Future of Corporate Governance).

“A commitment to … integrity is widely recognised as a “must have” in organisations, yet many people and organizations struggle to put this ideal into practice.” The need is for “… a corporate culture of integrity and ethics, coupled with corporate, environmental and social responsibility…. to build trust and long-term relationships with shareholders, customers, regulators and employees.”

Deloitte regards integrity as so central to business success that organisations should have an individual conversation about their code each year with each employee, manager and director. There must be an expectation that staff, from the time they join an organisation, understand integrity standards and the consequences of any breaches. The recommendation is that staff at all levels affirm in writing that they understand their organisation’s code, are fully compliant and that they are committed to reporting misconduct. Highly effective organisations evaluate and compensate managers who actively promote and model integrity and enforce those standards.

Deloitte identifies systems for measuring compliance, including

• conducting cultural and ethical surveys and evaluating employee responses
• reviewing reports to the ethics hotline, whistleblower reports and trend analyses
• benchmarking against peer, industry, country and corruption indices
• conducting quality surveys and evaluating employee responses
• monitoring and evaluating public scrutiny from the media, shareholders, customers and external watchdog agencies

These seem to reflect the more comprehensive evaluation measures of integrity that the Auditor General has specified in the OAG statement of intent, rather than the SSC proposal to use just the Kiwis Count survey and possibly a survey of integrity breaches observed by State Servants.

Deloitte reports that 46% of public company respondents in the United States survey staff regularly. The results indicate how effective the “tone at the top” is being disseminated throughout the organisation – and more directly whether there is modelling by senior managers.

http://deloitte.wsj.com/riskandcompliance/2013/05/17/integrity-in-the-boardroom-what-does-it-really-mean/?mod=wsjrc_hp_deloitte

The State Services Commission statement of intent published yesterday in conjunction with the Budget lists its operating intentions.  These will focus on four activities;

• Leading the System
• Delivering Performance Excellence
•  Building System Capability,  and
• Strengthening Trust and Integrity

The Commission notes that “maintaining high standards is integral to ensuring the State Services are trusted by government and the public…Institutional integrity, a corruption-free bureaucracy and high-quality government institutions create a stable platform for business investment and economic growth… the Integrity … programme is a critical underpinning for all of our work across the State sector…”

SSC indicates that it will measure the effectiveness of its promotion of integrity across the State Services through results collated from the Kiwis Count survey, and in what is a proposal without any commitment, a further State Services Integrity Survey. Such a survey would add to data sets provided by the 2007 and the 2010 surveys. It is interesting to speculate on how likely it is that this survey will be take place.  The wording in the SOI is that “SSC is looking at undertaking a survey…”

There seems to be a worryingly lack of determination in the SSC mission to make a difference in the quality of integrity across the sector.  The target for the Kiwis Count measure of public trust is “at least 70%” of respondents agree that “…you can trust public servants to do what is right.”  But the standard last year was 74%. This suggests that a report at the year’s end could show that the standard of 70% had been exceeded, but having lowered the bar, it need not indicate that integrity standards may well be falling.

Is there an irony here about trusting public servants to do the right thing?

http://ssc.govt.nz/node/8876

The New Zealand chapter of Transparency International today released the first wave of its findings to update the 2003 National Integrity Survey.  Work has been underway since the beginning of the year on an expanded version of the NIS template upon which most jurisdictions have been assessed.  TINZ refers to “…moving well beyond the classical NIS with a much more comprehensive and prescriptive approach than ever before…” with what it calls “Integrity Plus NIS” (yet the classical pillared Greek temple provides the model rather than the tangled birds nest advocated by some at Griffith University.)

The findings should give credence to the low levels of public sector corruption in New Zealand reported every year since the Corruption Perceptions Index was established.

A summary of the work to date is referenced on the TINZ website and set out in the chapter’s May newsletter. The NIS model involves the pillars of good government.   Research into the makeup of each of these pillars and the support they give to system integrity is to be released in batches over the next few months.

The release of emergent findings today was an opportunity to recognise the contribution of the late Jeremy Pope both to the creation of Transparency International and to formulating the NIS as a model for consistency in the evaluation of national institutions upon which system integrity depends. Today’s release is also another marker of the centenary of the Public Service Act coming into force in April 1913, and a commemoration of the contribution which an integrity-rich public administration has made to the quality of life in New Zealand.

Today’s release covered the pillars relating to

• Judiciary
• Electoral Management
• Ombudsman
• Supreme Audit Institution, OAG
• Media
• Public Sector Components:
  • Fiscal Transparency
  • Environmental Governance
  • Procurement

The TINZ May newsletter sets out three or four findings about each of these elements. Although none is surprising, the value of the findings lies in the comprehensive research from which they are derived.

Sir Anand Satyanand in chairing the presentation today referred to Kofi Annan, after a visit to New Zealand as the UN Secretary General, declaring that it was “… a country that works…”

http://transparency.org.nz/index.php/indices-reports/new-zealand/parliamentary-submissions/doc_view/182-transparency-times-may-2013

http://transparency.org.nz/

http://www98.griffith.edu.au/dspace/bitstream/handle/10072/4158/32116_1.pdf?sequence=1

http://integritytalkingpoints.com/2012/08/31/integrity-is-more-than-just-measuring-corruption-the-passing-of-jeremy-pope/

New obligations on lobbyists came into force in Queensland last week.  They flow from a 2012 amendment to the Right to Information and Integrity Act,

Not only are Ministers and Departments required to disclose contacts made by lobbyists and any document disclosed to the lobbyist but the State’s lobbyists code of conduct now includes requirement that lobbyists also record and declare their contacts with both Ministers and opposition MPs.

The code changes were planned for 1 April but procedural issues delayed the commencement date.

The enthusiasm in most western democracies for transparency obligations on both lobbyists and the lobbied continues to pass New Zealand by.  Engendering public interest in the current Constitution Review seems to be an uphill struggle.  Few seem interested in constraining what may be generally accepted as the way politicians go about their business. In New Zealand, lobbying does not appear to have the undesirable connotation it has elsewhere.

The new Queensland definition of lobbying activity is;

(a) contact with a government representative in an effort to influence State or local government decision-making, including—

(i) the making or amendment of legislation; and

(ii) the development or amendment of a government policy or program; and

(iii) the awarding of a government contract or grant; and

(iv) the allocation of funding; and

(v) the making of a decision about planning or giving of a development approval under the Sustainable Planning Act 2009; or

(b) contact with an Opposition representative in an effort to influence the Opposition’s decision-making, including—

(i) the making or amendment of legislation; and

(ii) the development or amendment of a policy or program of the Opposition; and

(iii) the Opposition’s position or view in relation to State or local government decision-making, including, for example, the matters mentioned in paragraph (a)(i) to (v).

www.integrity.qld.gov.au/page/tools/whats-new.shtml

www.integrity.qld.gov.au/page/lobbyists/code-of-conduct.shtml

The Press Freedom Index published by Freedom House on 3 May marked World Press Freedom Day.  The index suggests a disappointing lack of improvement in the extent of media freedom.  Countries ranked at the top of the index are not substantially different from the 2012 list – the “Free” jurisdictions cover nearly 14% of the world’s population.  But though there have been marked improvements in a few countries, best illustrated by Burma, there has been a deterioration of press freedom in many other developing jurisdictions. Similar numbers  - 43% of the the world’s population – live in countries which are “Partly Free” and those that are “Not Free”.

There are 197 countries on 2013 index.  A total of 63 (32 percent) were rated Free, 70 (36 percent) were rated Partly Free, and 64 (32 percent) were rated Not Free.  There was no general improvement in press freedom on the previous index  ( the totals last year were 66 Free, 72 Partly Free, and 59 Not Free ).

New Zealand’s placing at 13th, was unchanged from last year.

2013 Press Freedom Index – “Top 20″

USA ranked 23rd =, Canada 29th= and the United Kingdom and Australia were 32nd =.

All the Pacific Forum countries are ranked as Free, except for Fiji.

The world’s eight worst-rated countries, where there is almost nothing indicative of press freedoms, are Belarus, Cuba, Equatorial Guinea, Eritrea, Iran, North Korea, Turkmenistan, and Uzbekistan. 

www.freedomhouse.org/sites/default/files/FOTP%202013%20Booklet%20Final%20Complete%20-%20Web.pdf

http://batchgeo.com/map/8351f81ddc77f9f5db3c99b27f294c25

Privacy Awareness week – a campaign largely championed by countries around the Pacific rim – runs throughout this week.   A related article in the Wall Street Journal  indicates how recent laws  introduced in a majority of US states that prohibit employers searching the social media accounts of their employees, are already being eroded.

Social-media privacy laws enacted last year in California, Illinois, Maryland and Michigan are now being complemented by similar statutes introduced in 35 other states since the beginning of the year.

Watering down of a prohibition on employer-searching has been led by the Federal Financial Industry Regulatory Authority. Its concern is about the misuse of personal accounts. The fear is that protecting employees’ privacy puts investors at risk. If there is uncontrolled posting of financial advice on Facebook or through Twitter, then it will be harder to monitor what employees are pitching to investors, and new channels for Ponzi schemes will arise.

Securities regulators worry that the new laws will make fighting fraud harder if companies cannot follow how their employees may be marketing products.

Supporters of the laws say they are needed to protect employees, and should apply even if the employer is the subject of tweets or other messages made on an employee’s social-networking website.  But financial regulators suggest that the laws “puts customers at risk, as it will be much harder for firms to detect serious problems.”

Justifying the legislation California’s Governor has spoken of protecting “all Californians from unwarranted invasions of their personal social-media accounts”.

Courts haven’t ruled on whether state laws or the financial regulation rules should take precedence over employee privacy.  Inevitably that will be tested before long.

There is little evidence that New Zealanders see a problem of anything like the magnitude of the US.

http://online.wsj.com/article/SB10001424127887323551004578436713224083592.html?mod=djem_jiewr_BE_domainid

The Commons Public Accounts Committee chair, on releasing a report on the role of large accountancy firms in tax avoidance, has suggested that it is ridiculous for the Treasury and HM Revenue and Customs to accept seconded of staff from the Big Four accounting firms - which make about $8 bn annually from tax work in Britain.

An inability of the HMRC to get the better of tax planning arrangements may well reflect the use of such staff.

“The large accountancy firms are in a powerful position in the tax world and have an unhealthily cosy relationship with government. They second staff to the Treasury to advise on formulating tax legislation.”

“When those staff return to their firms, they have the very inside knowledge and insight to be able to identify loopholes in the new legislation and advise their clients on how to take advantage of them. The poacher, turned gamekeeper for a time, returns to poaching.”  As an example, she spoke off how these firms have about 250 experts in transfer pricing who out manoeuvre the 65 HMRC staff working in that area, with a result that about half of the complex tax avoidance schemes they develop are unable to be undone through litigation.

The Public Accounts Committee, which has nine coalition members and only four opposition members, seems to support the powerfully independent stance taken by its chair.  In this tax report, the PAC’s 44th Report of this Session, principal concerns are with way substantial companies can utilise international tax arrangements so that they make a minimal contribution in Britain, and “with a never-ending game of cat and mouse” with the Big Four.

http://www.parliament.uk/business/committees/committees-a-z/commons-select/public-accounts-committee/news/tax-avoidance-the-role-of-large-accountancy-firms/

Europeans are losing their enthusiasm for the European Union according to the findings of the lastest Eurobarometer. This indicates a substantial loss of public trust in countries like Spain, Germany and Italy where large parts of the population have always been strongly pro European.

The survey responses from the six biggest EU members - comprising nearly 70% of the EU population – is reported to “represent a nightmare” for European leaders.. The results suggest that there is a crisis of political and democratic legitimacy in both the wealthy north and the financially troubled south.

The European Commission president commented that the European dream may well be threatened by a resurgence of populism – which of course created the repeated conflicts of the 20^th century.  It is not surprising that of the surveyed countries,- Germany, Poland, France, Britain, Italy and Spain -the greatest loss of public trust is in Spain. The collapse there of banks, the housing market and of employment opportunities is reflected in only 20% indicating that they tend to trust the European Union. The figure was 65% five years ago

The Eurosceptics in Britain have been reinforced.  Mistrust throughout the United Kingdom grew from 49% to 69%. Usually showing the least confidence in the EU,  the British have been overtaken by the Spanish with their dramatic new levels of mistrust.

The Guardian has reported that a more detailed study published this week on the impact of the global financial crisis found equally steep falls in faith in democracy and political elites across the EU.

“Overall levels of political trust and satisfaction with democracy [declined] across much of Europe, but this varied markedly between countries.”

It was “significant” in Britain, Belgium, Denmark and Finland;

“particularly notable” in France, Ireland, Slovenia and Spain;

and reached “truly alarming proportions” in the case of Greece.”

Some see federalism as the only answer. Others warn that surrendering national powers to Brussels would backfire. “Public support for the EU has been falling since 2007. So it is risky to go for federalism as it can cause a backlash and unleash greater populism.”

www.guardian.co.uk/world/2013/apr/24/trust-eu-falls-record-low

www.nytimes.com/2013/04/13/world/europe/13iht-letter13.html?ref=francoishollande&_r=0

Lord O’Donnell, the former Secretary of the UK Cabinet Office and Head of the Civil Service, is apparently contemplating the role of Governor of the Bank of England.  Baron Gus O’Donnell (“GOD”) had training as an economist. Appointments during his career with both the IMF and the World Bank perhaps indicate appropriate experience.  The current Deputy Governor, the heir apparent, may have a lesser view of Lord O’Donnell’s suitability.  An inference may be that challenges as a cross bench member of the House of Lords have little continuing attraction.

Today, he will deliver an Inaugural Speech as a Visiting Professor at University College.

The speech is titled Building a Better Government: the Political and Constitutional Reforms necessary to build Better Governments. A trailer for the speech suggests that he considers political change to be as important as any contribution of the bureaucracy to better government.

The New Zealand drive for Better Public Services has kept clear of expecting changes by politicians but other aspects have identifiable equivalents to Lord O’Donnell’s proposals. According to the Constitution Unit blog he will make a forthright and political declaration about needing “… to build a consensus for change that will be embraced across the political spectrum. The goal is a noble one: to increase wellbeing sustainably and reduce inequality. Better politics for a better Britain.”  He recommends:

• A joint Office of Taxpayer Responsibility (OTR) and Office for Budgetary Responsibility (OBR) to cost and evaluate new policies and each major party’s election manifesto.
• A smarter bureaucracy to make greater use of behavioural sciences to assess the needs and responses of the public for better services.
• A new agency, along the lines of the Canadian Public Tenders, to ensure the taxpayer doesn’t miss out commercially in negotiations with the private sector.
• An emphasis on improving wellbeing, rather than just meeting targets, leading to better policies in areas like health and welfare, while living within budget constraints.
• Reform of the political decision making process, including
  •  training and development opportunities for backbenchers to prepare them for ministerial office, and
  • a way for the centre of government to assess the performance of departments at the political as well as the policy level.
• A greater diversity among politicians to better represent communities, leading to policies more suited to social diversity.

www.telegraph.co.uk/finance/economics/9221995/Former-Cabinet-Secretary-Lord-ODonnell-hints-he-could-enter-race-to-replace-Bank-of-England-Governor-Sir-Mervyn-King.html

http://constitution-unit.com/2013/04/23/press-release-inaugural-lecture-by-the-former-cabinet-secretary-lord-gus-odonnell-building-a-better-government-the-political-and-constitutional-reforms-necessary-to-build-better-governme/