Is he the solution or a big, big part of the problem?

by Gordon Campbell

The myth of competence that’s been woven around Steven Joyce – the Key government’s “Minister of Everything” and “Mr Fixit” – has been disseminated from high-rises to hamlets, across the country. For five years or more, news outlets have willingly (and non-ironically) promoted the legend of Mr Fixit, as in here and also here and here. Oh, and again here, not to mention here and not forgetting here.

The legend of Joyce, the Fixer-Upper, has even been whispered around the political campfires in faraway Britain.

Of late however, the legend has lost some of its lustre. More than anything, it has been his handling of the SkyCity convention deal that has confirmed a lingering Beltway suspicion that Joyce’s reputation for business nous has been something of a selfie, with his competence appearing to be inversely proportional to his sense of self-esteem. Matthew Hooton’s recent critique of Joyce in NBR – which was inspired by how the SkyCity convention deal had cruelly exposed Joyce’s lack of business acumen – got a good deal of traction for that reason. On similar grounds, Joyce’s penchant for (a) micro-managing and (b) the prioritising of issues in terms of their headline potential has resulted in his ministerial office becoming somewhat notorious around Parliament for (c) its congested inefficiency and for (d) a not-unrelated extent of staff burnout. In a recently released State Service report, Joyce’s flagship Ministry of Business, Innovation and Employment (MBIE)was found to have centralised so many functions and resources – not to mention furnishing itself with $6,000 couches – that it has become a managerial black hole from which few meaningful actions are able to emerge. (More on the SSC’s verdict on MBIE later in this article.)

This time last year, Judith Collins and Joyce would have been the leading National Party leadership contenders if John Key went under a bus, or sought other employment. Since then, Collins has taken herself out of contention with the Oravida scandal and other follies, leaving Joyce as virtually the default option. Since then, has the Skycity deal – negotiated very much by Joyce and the PM’s chief of staff Wayne Eagleson with minimal input from the likes of Treasury – done lasting damage to any higher ambitions that Joyce might have entertained ?

Not really, says Auckland political scientist Raymond Miller, because the role was never a good fit. “I’ve never considered him to be a strong contender for the leadership., partly because his career has been so closely aligned with Key that when it comes to the end of Key’s term I think they’ll be looking for a more ideologically motivated leader than someone who is as pragmatic – if not more pragmatic – than Key himself. “ Particularly. Miller adds, if the National Party is going into opposition.

Joyce does have a combative, condescending style in public. Is that something New Zealanders like about him? Miller has some kind words for Joyce on that front. “I wouldn’t call it charming, but he doesn’t come across as being abrasive. He’s not in the kind of Muldoon mode. He’s a clever operator when it comes to the media, I think. While he sticks to his guns, he doesn’t raise hackles among those who are potentially likely to vote for the [National] party. “ And beyond the party camp-fires? ‘I think it’s [his] business focused style of politics that people will eventually tire of. It’s the way in which he does deals – and in this [SkyCity] case, with less regard for community interests than for business interests.” Joyce’s political style, Miller agrees, is not inclusive. “He’s quite open about that. He doesn’t attempt to conceal it in the way that Key does. I get the feeling with Joyce that he doesn’t really think in that way. “

This same Steven-knows-best style feeds through into the way he manages the sectors for which he has direct managerial control – and given the ambit of MBIE, that’s more than half the economy. In practice, is it a form of control, and a method of intimidating officials and sectoral leaders alike, into acquiescence ? “ Yes,” Miller says, “ he’s a lot less flexible than Key. His decisions on tertiary education for instance reflect a certain inflexibility. Once he’s made up his mind that tends to be that.”

And would that tendency have been evident for example, in his decisions about the make-up of university councils ? “Yes, I was thinking in particular about that. But it tends to be the way he operates. If you don’t like it, then lump it.” With your only choice being to fall in behind, or leave the room? “Exactly. But he’s also such a pragmatic politician. “ Especially, Miller adds, when it comes to tacking to a course that’s amenable to business opinion.

Inclusive or not, is it a modus operandi that has achieved results? Given that he has been Minister of Everything for so long, it is surprisingly hard to see what substantive runs on the board Joyce has accumulated. Part of this seems to come back, again, to his management style. Given how much power has been centralized in MBIE and given Joyce’s tendency to micro-manage its outputs…does that seem to Miller like a very efficient – or sustainable – way to operate ? “I wouldn’t have thought so.”

Not only is Joyce’s ministerial office renowned as an administrative bottleneck – where issues tend to be ranked in terms of their p.r. potential for the Minister – none of this seems to be in service of any wider goal or vision. As Mr Fixit, Joyce tends to be engaged in the equivalents of blown fuses and leaking taps – rather in the re-design of the political architecture. Joyce has simply never been – and has never pretended to be – a big picture kind of politician. He has been never someone with an abiding interest in – or the intellectual stamina for – systemic change.

Would Miller agree with that depiction? “Yes, I think that’s right. I don’t think there’s a big thinker there at all. He deals with issues as they come up and he does it in a way he sees as being appropriate in terms of the reputation of his government and so on. But I don’ t see him as being a big picture type at all. He’s not an idealist. He’s an opportunist. That’s just the way of his style of politics. We see the same of course with Key, but Key is a much more charming person. He [Key] does reach out to public opinion, and to community interests much more than Joyce. “

Yet if the differences are mainly stylistic – with Joyce being more than willing to play bad cop to Key’s good cop – then this shouldn’t obscure the fact that the underlying content is remarkably similar ? “That’s right. And that’s why Key is so comfortable leaving things to Joyce to tidy up. Because Key doesn’t feel he’s any threat.”

Elsewhere on the world stage, teams of the like-minded have been known to succeed each other. The papacies of John-Paul II and his own like-minded Mr Fixit – Cardinal Josef Ratzinger, who became Pope Benedict XVI– come to mind. In this case though, Miller thinks the National Party will look elsewhere. “I used to see Collins as a likely successor, particularly because she enjoyed so much support within the party, especially amongst women. But more recently, I’ve thought that someone like Paula Bennett or Simon Bridges would represent a somewhat younger group within the National Party and be someone capable of being much more ideological. Someone more able to pick the party up, if it is defeated in the 2017 election.”

Ultimately, being Mr Fixit is both a strength and weakness for a politician such as Joyce. “He’s being stretched in all directions,” Miller concludes. “If there’s a by- election he’s called in, if there’s a general election he does the same. He’s constantly being called upon to do various things and obviously, he relishes taking on any job he’s asked to take on. But on the other hand, is it possible to actually find time to reflect on what you’re doing, and have any clear picture of where you want the government to be going ? I just don’t see that in Steven Joyce at all. He’s such a day-to-day pragmatic politician. “

Would that the recent spate of attacks on Joyce could be put down to mere bitchiness and name-calling. Not so. Just before Christmas , the State Services, Treasury and DPMC released a joint report on MBIE that would seem to confirm many of the mis-givings cited above that (a) the centralisation of power in MBIE and (b) Joyce’s micro-managing tendencies and (c) lack of mental staying power are something of a toxic cocktail. Lest we forget, MBIE is the super-ministry that’s driving the government’s economic agenda. Its performance matters. Yet as RNZ put it at the time:

Out of 32 areas of review, the report highlighted 22 that needed development, and five that were weak… Only five areas were considered well placed for future performance, and none achieved the top rating of ‘strong’. MBIE rated ‘weak’ on leadership and governance; workforce development; improving efficiency and effectiveness, and financial and risk management.

The report also left little hope for immediate improvement, given that in only 5 out of 32 areas of performance was MBIE deemed to be well-positioned to do better in future. Evidently, the SSC was talking about something more serious than the usual teething problems involved in putting several former ministries under one big, new umbrella. You can read the full report here, although be warned. You will need to cut your way through forests of jargon – e.g. providing “ thought leadership” is apparently better than providing the plain old “leadership” that used to be sufficient in the past, and which evidently relied on blind instinct. There are more serious concerns. The Business Growth Agenda (BGA) happens to be the government’s masterplan for the economic development of New Zealand – and the report reminds us that MBIE is the main driver of the BGA:

MBIE has a central role to play, as a key economic advisor with primary responsibility for providing leadership on the microeconomic elements of the government economic growth agenda (currently the BGA) and as a Ministry with direct responsibility for delivering large parts of that agenda.

It sounded at first as if everything was turning out OK with the BGA:

Government has recently published its Progress Report on the 346 actions that make up the BGA. It shows significant progress over the 12 months to November 2013, with 42% of these actions completed, a further 34% being implemented and only 22% still ‘in progress’. There were only three new actions added during this period.

But then, uh oh:

While each of these actions will help achieve the BGA goals, and the Report records significant progress on these actions, there is no sense of the extent to which these actions are contributing, or will be sufficient, to achieve the BGA goals.

Hmmm. So we’re pedalling off somewhere at a rate of knots, but we don’t know if that’s going to be particularly relevant , or will be enough. ( ‘There is no sense of the extent to which these actions are contributing, or will be sufficient to achieve the BGA goals’) Which makes it hard to make rational judgments:

That makes it difficult to prioritise, to learn what is most

effective and to identify and size the need for additional action. While estimating contribution and sufficiency will always be a matter of judgement, officials leading this process are making this judgement in formulating their advice to Ministers, even if only implicitly. It would be helpful to make such judgements explicit in order to subject them to contest and refinement.

Indeed, it seems unlikely that the BGA goals will be delivered, given current course and speed, despite the very real progress on the BGA action plan…..

Great. So we’re making progress on the BGA action plan. We just don’t know if we’re doing the right thing, going in the right direction, and will be able to deliver what the plan says we should, or even be able to rationally assess any of the above – and in any case, it won’t be delivered on time. At some point surely these failures have to be sheeted home to the lack of clear, consistent and intelligent leadership from the top. In the meantime, the outlook seems dim:

To be confident of delivering, MBIE would need to be

better placed to ensure that both the recovery we are starting to see will be sustained and that longer term trend output performance will be significantly better than has been achieved in the past…. That, in turn, is likely to require a more transformative business strategy from MBIE (see the business strategy and the changes in operating model required to bring that to life).

OK. Now if I get that right, it means that under Joyce’s leadership there is a plan to activate the operating model to kickstart the business strategy to implement the BGA agenda to enhance the ‘longer term trend output performance’ that will – with a bit of luck ! – sustain the economic recovery that will eventually bring good tidings of great fortune to all of God’s creatures, big and small. And if it should come to pass that things don’t quite work out that way, it would be a very brave official indeed who would be looking to MBIE’s current Minister for the reasons why.

Joyce is a busy guy, no doubt. Plus, he keeps his staff and his officials busy, too. Yet ultra-busyness, as business commentator Rod Oram says, is not the same thing as efficiency. “You look at something like the BGA and the enormous complexity there of hundreds of projects across the six key areas of the agenda, and you can see the government is very busy, but its very hard to work out how effective that is…” .The Primary Growth Partnerships and Callaghan Innovation strike him as being parallel examples. “Again, amidst all that business, there is some publicity about successful things. But I hope those are only the tip of an iceberg. I hope there is an awful lot more happening. But again, there’s no measurement.”

Further evidence perhaps that once again – as Miller maintains – Joyce is simply not a co-ordinated thinker with an eye on systemic connections and on long term outcomes. He’s not, Oram agrees. “ I’ve heard him say on a number of occasions that he distrusts grand strategies. Or even any strategy at all. The classic work is the BGA and he seems to think that if you put up lots of these things, and get a lot of them going, it will have a big impact. I’m not saying some of these things aren’t worth working on – there is some good stuff in there – but we’re not getting out of MBIE a bold, strong view of where the best opportunities in economic development lie….

Meanwhile, several major initiatives – Oram mentions the complete reworking of the health and safety regime – seem to have stalled on Joyce’s watch. “Another example is the huge effort that’s gone into offshore oil and gas exploration. Yes, Joyce can point to rig counts and all the rest… But while that’s interesting, it hasn’t delivered. Nothing has come out the other end of that. “

In subsequent issues, Werewolf will be reporting on the success/failure of the tertiary education emphases and of the National Science Challenge initiatives in scientific funding and research that Joyce has overseen. In passing however Joyce’s (a) handling of the changes to university councils and (b) his response last year to criticisms from the science community about aspects of the Science Challenges and the (lack of) consultation that preceded them, have both been good case studies of the Steven Joyce School of Management. (Motto: Mea Via, Aut Altus Via.)

1.The University Councils Debacle. In his role as Tertiary Edicastion Minister, Joyce has decreed that universities will have smaller councils with a greater ratio of ministerial appointments, and no representative positions by students or staff, or alumni, or employers, or trade unions. On councils of 12, four will be ministerial appointments and the other eight will be chosen by the council as a whole, for their skills.

Few observers – or interested p[artries – have had anything good to say about the plan. “ It is an efficiency argument not borne out by science [or research] but by ministerial hunch,” says NZUSA national president Rory McCourt. “There‘s no call from business to say this is what the sector wants. All things considered, the university sector is doing pretty bloody well, given its resources. Treasury [has] said this shouldn’t be a priority, that there isn’t a problem here. His response was: everyone doesn’t like it: so, it must be a good thing.”

McCourt’s criticism has been echoed – in more discrete language – by the regulatory impact report by Treasury on the proposed changes.

This regulatory impact statement identifies significant risks with proceeding with the recommended changes. It is likely that proceeding with the recommended changes will be met with opposition from some universities, most union and peak body organisations, and many individuals. Staff and students may feel particularly disenfranchised by the elimination of

required representational membership from university and wānanga councils. Their reactions to legislative change may be significant and may mean that the costs of change could erode the benefits.

On page 18, the regulatory impact report expands on those concerns:

Generally, there was concern that the consultation document did not provide sufficient detail regarding the rationale for change/problem definition, the proposals themselves, and evidence to support the rationale and proposals for change. Some expressed concern that the solution was pre-determined and that there is not any particular problem that it solves. There was also general concern that the proposals, especially for changes to university governance, do not recognise the characteristics of universities and wānanga that are unique from other organisations (ITPs and private-sector companies, for example), including that they are complex organisations with drivers beyond profit. Many respondents expressed concern that changes to governance would negatively impact institutional autonomy and academic freedom. Many indicated that the democratic election of staff, student and community representation on councils is important to institutional characteristics, such as institutional autonomy and academic freedom…

Joyce has, to date, totally ignored the feedback. People have to simply follow the path that he’s blazed, rather than being invited to help define what the path should be. “The Vice chancellors said this was a terrible idea, “McCourt says, “and that we want larger councils. [ ie. like Oxford and Cambridge, who use those larger councils to liaise with the community, to fund raise, and to lobby politicians on issues and legislation relevant to them. ] “Despite there being 574 submissions saying it was a bad idea, he didn’t buckle on any of the changes.”

Hard to see Joyce being a pragmatist here. More a case, perhaps, of him picking a fight with the tertiary sector as part of a periodic process of showing them who’s boss ? McCourt agrees. His concern is that Joyce has little concern or interest in the long-term health of the systems that he oversees. “For me, after watching Joyce for a few years, I think what drives him is headlines around the sector. He’s not particularly concerned about the systems or the structures…He’s not a reformer. He’s someone who sucks headline data out of the sector and then does really great p.r. with it. Which is fine. But you know… eventually the structure crumbles.”

One particular example of this approach: Joyce has had a well known, oft and loudly expressed desire that our tertiary institutions should place a greater focus on the so called STEM subjects: science, technology, engineering and mathematics. “The tool for that,” says NZUSA executive director Alister Shaw, “ was to increase the funding for those subjects. Yet all the institutions who bid for those extra places and extra money had trouble filling them. In addition, the institution had no requirement to change the fees for the courses they were getting extra money to provide. So, they still put the fees up by 4%. – to go and do engineering, and to do science –which are already more expensive than other courses. The fees incentivised the students away from the courses to which Joyce was providing more money.”

Has Joyce’s sloganeering – lets make our universities be more responsive to business needs ! – been reflected in the uptake ? “No. My information is that they’ve all struggled to fill their extra places. Because the other big problem is that students are not well prepared for them. There is a disconnect between secondary and tertiary [education] in that respect. People are given poor advice and bad support – and there isn’t the quality of teachers to teach chemistry and physics, and that’s from year nine and ten.”

In other words, a big part of the problem lies upstream, at secondary level. In recognition of that need, there used to be teacher training scholarships – called Teach NZ – in maths and science specialties. Yet in 2012, Shaw points out, these were canned, in a classic case of the Minister’s right hand not knowing what his left hand is trying to do. “ Its an example of him not being prepared to tackle the changes that are necessary,” Shaw says. “ It means he can announce 5% extra funding for engineering and X number of places around the country. But it makes almost no difference. Because that’s not where the problem is. At Victoria, they have an engineering school. Almost all the students in the first year are in remedial calculus and physics. The problem with the STEM subjects is that unless you are really lucky where you went to school, you are not going to be well prepared enough.” Too hard and too dull a task, for our busy Mr Fixit.

Science is another area where Joyce’s unilateral style – and his disinterest in the systemic complexities he oversees – has led him into a fruitless and unnecessary conflict with the scientific research community. Last August, the ten ( now eleven ) National Science Challenges – which will run ( for now at least) in parallel with the Marsden Fund as the main funding reservoirs for scientific research – ran into a storm of criticism from a wide sample of leading scientists. As RNZ reported at the time the comments in the survey, carried out by the NZ Association of Scientists, included those by scientists who had spent more than 100 hours working on proposals for the Challenges. Among the comments:

• “This has been a stitch up job from start to end, so that last century’s scientists can continue doing last century’s science. Stakeholder and scientist priorities have only been given lip-service; the challenges represent management and institution priorities.”

• “One of the less well recognized concerns is the sheer cost of governance. In the Biological Heritage challenge, there is about $1m per year assigned to governance, but only about $2m to the science programme.”

• “The topic areas of the ten identified challenges is so broad that virtually any research is possible under this umbrella. However, the amount of money initially indicated (approx $3 million per year per challenge) would not, and could not, result in any huge impact on any problem that needs solving.”

In sum:

Association of Scientists president Nicola Gaston said the comments represent a strong feeling among scientists that the challenges have lacked transparency. Of the 280 scientists who responded to a survey about the challenges by the association, 80 percent were dissatisfied with how they have been developed.

Joyce’s response was to reject the survey findings out of hand as “unscientific” – because the responses were self-selected. The Association of course, had been entirely upfront that this was a self –selected survey – while maintaining that the evidence of such high levels of disquiet was significant, however it had been elicited. As Association president Nicola Gaston pointed out to Werewolf, there has been no rebuttal since from government of the major concerns raised about the National Science Challenges. “The constructive thing to do at this stage is to say well, we’ll have to see what happens.”

Briefly, she explains, the concerns were about (a) the initial selection of the scientific areas (b) how the process was managed and (c) the level of [non] transparency involved. “ The challenges as they were articulated to the public – and they were always intended to be able to be articulated to the public – were not very well defined in terms of what might come out, in a scientific sense. The criticism a lot of people would have is that they are not really scientific challenges. They may be societal challenges, but was that really the intention?”

At the same time, there have been conflict of interest issues – inevitably so perhaps, in a small pond like New Zealand. Ideally those put in charge of managing the distribution of funds should not themselves be eligible to apply for funding. That has prtoved somewhat impossible in practice however, given that some people had ben selected to manage the Challenge precisely because of their expertise, and thus would also be directly involved in the science. “Questions like that,” Gaston says, “ were simply not dealt with upfront.”

Very little of this, she suggests, can be traced directly back to the Minister. Getting public engagement is Joyce’s “ thing” and this strikes her as not being a negative thing at all. “What went wrong was that there had been a lack of confidence or trust in the scientific community for quite a while – and scientists were brought into the tent only once the Challenges had been decided and were then told “Now, you’ve to play nicely together and agree what to do with this.” Perhaps a degree of top down direction, she concedes, was necessary. “ But I think a lot of people felt there was just not enough information in the early stages of the process. It wasn’t transparent. They didn’t know what was happening. And so by the time they could engage, it was too late. “

As they evolve, the National Science Challenges bid to shape how scientific research will be conducted and funded in this country in future. Once again, in the absence of any big picture strategy, the aggregate of Science Challenges will become the plan, virtually by default. As Gaston explains: “When the Challenges were first announced, it was made very clear that increased amounts of funding over time would be mapped onto the Challenges, and that this money would come from other parts of the Science sector.. and that you would have a better chance of being funded in future if you were aligned to one of the Challenges. So one of the big criticisms of the selection of these initial ten topics that they became a default strategy for the NZ science sector in the absence of an overt strategy for the science sector.”

Meanwhile though, the Marsden Fund has been chugging along in parallel. Surely, if science researchers did decide to wash their hands of the Challenges, couldn’t they pin their hopes and dreams on the Marsden Fund and continue as if this Science Challenge thing simply wasn’t there ? “That,” Gaston says, “ is what some people do. The ten per cent who can, do just that.”

Finally then, is the $133.5 million budgeted for the Science Challenges, entirely new money ? Apparently not. Only an initial small amount was. “The really scary thing for a lot of people – and which I would say caused some institutional…. bad behaviour and fed the perception of capture by vested interests – is that a lot of the Crown Research Institute core funds aligned with the Challenges got mapped onto the Challenges. Which is to say the funds were taken away from the control of those CRIs and re-directed through the Challenges. In the process, CRIs had a very strong vested interest to ensure that their existing programmes continued to be funded by that money.” It was in effect, an enforced buy-in that Gaston feels was extremely heavy-handed. “It was probably necessary to get parts of the science sector engaged – but I think it did a lot of damage, because of these perceptions about vested interests..”

In other words, there is a widespread perception that – whatever the short term headline benefits of getting public engaged with science on simple, easy to grasp topics…the longer term effect is that money for science will dry up from other areas of research, and this laundry list of Challenges will become a default strategy for where our science funding and the thrust of our research effort goes. “I think that’s the biggest concern,” Gaston concludes, “ that people had. “

Footnote:. Make it simple. Don’t have a plan, just have a whole lot of things that will guarantee him a few headlines, and maybe one or two items on the list might even succeed. Don’t worry about the institutional repercussions or the downstream effects. Downplay the after-shocks, pooh pooh the negativism of your critics, claim omniscience and declare victory at any and all points along the way.

We can’t say that Steven Joyce didn’t warn us. In his maiden speech in December 2008, Joyce explicitly declared that simplicity was where this country’s strategic advantage lies. “I’m for spare and sensible rules of commerce and social interaction.” Complex answers, Joyce claimed, were a luxury that only richer, larger countries can afford. Not his style. Not where he wanted New Zealand to be headed. The climax of his maiden speech was this: “We can recapture our mojo – and become the feisty, resourceful, exciting, Number 8 wire sort of place that enabled all our forebears to make a success of themselves way down here at the bottom of the world!” That’s his ticket. With Steven Joyce as the Minister of Everything, New Zealand is being steered back into a romanticized No. 8 wire past, ass-backwards to the future.