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    Essential Information on an Essential Issue

    Letter No.104

    3 August, 1998

    The Winz Whirlpool

    whirlpool2.gif - 11262 Bytes

    "Excessive spending by Work and Income on the television campaign and on the air charter show how a sickness has crept into state sector management..."
    - Jim Anderton, Alliance leader.

    "That's the nature of bureaucracy. They are inclined to spend money. That's why we have ministers."
    - Bill Birch, Minister of Finance

    "For goodness sake, how many people at Winz have the authority to sign off an air charter costing $165,000? When ministers propose trips far less expensive than that, they have to get cabinet approval which is sometimes turned down."
    - Peter Wilson, political columnist, The Daily News

    "Winz, in the present economic climate, faces difficulties in actually getting people into work or training them for anything but menial, low-paid jobs. But when you're hiring planes to go to Taupo, it raises fundamental questions of philosophy and direction ..."
    - Mike O'Brien, Social Policy lecturer, Massey University

    In the last two weeks, public confidence in New Zealand's largest government agency, the Department of Work and Income (Winz) has been in freefall. By most people's standards, $165,000 for the charter of airplanes to take 140 managers to a conference at a resort hotel near Taupo is an outrage. The news revelations, however, have quickly opened up the whole debate on the style and future of this essential public service.

  • The Winz department is only nine months old, after being created in the merger of the NZ Employment Service and Income Support. Opposition MPs have been battling Winz on issues of accountability ever since it started. But with news of the chartered flights to Taupo, they have struck a resounding chord of outrage at public sector extravagance amidst an organisation dedicated to serving New Zealand's poorest.

    While the media feeding frenzy has focussed on chief executive Christine Rankin her earrings, and even the shortness of her dresses the Winz revelations have quickly ingrained themselves into the folklore of the New Zealand underclass. The humiliating effect on Winz staff morale is obvious ... and will take years to rebuild.

    All eyes this week will be on the State Services Commission when Michael Wintringham reports on the plane charter affair and Christine Rankin's future.

  • Beyond this media whirlpool ... the public attention has also started to focus on the pragmatic questions that need to asked at this time:
    - Is the new Winz agency achieving its own stated outcomes and key performance indicators?
    - How did this culture of corporate extravagance get established?
    - How widespread is this behaviour in other government agencies?
    - What has stopped managers within the public service speaking out publicly about all this before?
    - How do we rebuild confidence in this essential public service?

    Labour's Social Welfare and Employment spokesman Steve Maharey has led the Opposition ranks in firing up the Winz debate. Maharey believes we are watching the collapse of the values of a "public service" in New Zealand. He connects the present problems with Winz to a long line of difficulties in public sector organisations extending from Cave Creek to ACC to the New Zealand Qualifications Authority. Maharey also points out that we were warned of these difficulties in 1997 by the eminent public policy academic, Professor Allen Schick.

    In his report, The Spirit of Reform, Shick warned that the kinds of changes taking place in the New Zealand public service "may diminish public-regarding values", including values such as "the trust that comes from serving others, the sense of obligation that overrides personal interest, the professional commitment to do one's best, the pride associated with working in an esteemed organisation, and the stake one acquires from a career in the Public Service..."

    In the last fortnight, Maharey, Rod Donald and other opposition colleagues, editorial writers, and a host of other commentators ... have all thrust such "public-regarding values" into the front line of issues for the coming general election.

    In this special issue of The Jobs Letter, we provide an essential summary of the events of the Winz crisis as they have unfolded.

    Key points and concerns from the Parliarmentary Social Services Select Committee report on the 1999/2000 WINZ estimates
    ... as it unfolded
    ... from the Whirlpool
    ... from the Daily Newspapers
    How much are we talking about?
    What were Fletch and Fletch up To?
    Adam Gifford on disaffection with the Computer System
    One of the more disturbing trends here ...

    winzmoney.jpg - 6181 Bytes

    MERGING INCOME SUPPORT and the Employment Service into Work and Income NZ cost about $48 million but it is expected to generate savings of about $74 million over five years.

    Some of the expenditure for which Winz has come under fire includes:

    • $80,000 for a conference discussing the merger during which a mock wedding reception was held.

    • $90,000 for finding a new name and logo only to find that the Maori name it chose, Manaaki Tangata (looking after ourselves) was already being used by the Alcohol Advisory Council.

    • $2.3 million on branding the new agency, including $110,000 for operation design, $810,000 for developing a corporate identity and $1.4 million for signs.

    • $750,000 employing 94 extra staff to work weekends and evenings to clear the backlog of student loan applications.

    • $250,000 to overcome bad publicity related to its benefit fraud campaign and bungling of student allowances.

    • $600,000 on domestic airfares during its first three months of operation.

    • $656,000 employing 14 new public relations advisers.

    • $20,000 for Ms Rankin and National Commissioner Ray Smith to travel to the United States, the Netherlands and Britain on a fact- finding trip.

    • $79,000 on designing a corporate wardrobe bought in Australia, and a glossy brochure detailing it.

    • $1.3 million on a television campaign encouraging employers to use its services.

    winzmoney.jpg - 6181 Bytes

    The Dominion reported on the "danger zone" video, after it was described by an anonymous Winz manager who was present at the screening at the Logan Campbell Centre in April.

    The video, seen by a reporter, shows footage of yachtsman Sir Peter Blake sailing high seas in the Enza catamaran during the 1994 Round the World yacht race. The footage, taken from the Blake video No Latitude for Error, ends with a clip of a wind-blown Ms Rankin in full-length, fur-trimmed silvery coat climbing a ladder at the end of a wharf at Karaka Bay as if she had been dropped off by Enza.

    She is met by two men, who work in the Winz corporate office and are known as Fletch and Fletch, dressed in orange coast-guard suits. The words "I grew up around here. There was many a flash woman in big coat that we lost over the side" appear on screen, and the clip ends.

    At the conference, Ms Rankin then appeared on stage to the song "Danger Zone" from the Top Gun movie soundtrack.

    Later, the conference ended with another video flashing pictures of about eight world leaders, including former Soviet leader Mikhail Gorbachev and American president Ronald Reagan. The screen then showed a picture of Christine Rankin.

    winzqueue.jpg - 5554 Bytes

    AS PART OF THE merger of the Employment Service and Social Welfare's Income Support section, Work and Income NZ must merge or modify several major computer systems, including the $50.63 million SWIFTT benefit payment system and SOLO, the $31 million Employment Service job-seeker registration and case-management system. It is also working on the $38 million Focus project to tie benefit assessment, payment, training and employment into one system, allowing case management by frontline staff.

    Adam Gifford in the New Zealand Herald reports that staff disaffection with the present computer system is detailed in discussion documents posted in March at by Synergia, a consultancy hired by Work and Income NZ to develop a "success model" for the new department. Among the IT problems identified by Synergia were information systems not talking to one another, referral technology which did not talk between case managers who look after the beneficiaries, and work brokers who liaise with employers.

    Consultant Miles Shepheard reported that in all sites visited, staff reported technology difficulties and feelings of frustration at technology and skill levels. There was also concern about how the call centres, a key part of the reforms, were working. Shepheard said there was "widespread frustration that only good news is reportable, that no one wants to know bad news; that lack of acknowledgment of many concerns indicates that suggestions will also not be heeded. This frustration is leading to some suspicion about the `leadership's' motives..."

    Adam Gifford: "One indication of the department's faith in new technology was the decision to replace job boards with computers linked to the job vacancy database. If job-seekers could not use computers, staff said, they had to interrupt their own work to help. They also said the job vacancy database was difficult to navigate and its search function was not good.

    "The same computers were also used by job-seekers to write CVs, during which time they could not be used for job searching. Some offices reported that huge queues were forming to use computers, others said people stopped coming in to look for jobs once the boards went. Some offices had put job boards back up, or put short job descriptions up on a whiteboard ..."

    PERHAPS ONE OF THE more disturbing trends in media reports in the last two weeks has been the number of news items based on reports from "un-named" managers or people "who did not wish to be identified".

    Some political commentators have said that this is a symptom of the new corporatised public service which fears disciplinary action if the employees speak out.

    The code of conduct issued to Winz employees at the establishment of the new department is clear on the rules governing employee relations with the news media. It says: "Response to media inquiries or any other external communication (press or publication article) should only be made by the chief executive or those to whom permission is specifically granted by the chief executive."

    The original code of conduct was also specific about what it terms "political participation" by employees. According to the code, any employee "intending to particpate or already participating in a political organisation" was to "first inform and discuss this with their manager to ensure that there are no conflicts between their responsibilities and duties as an employee of the department and their responsibilities and duties to another organisation".

    Chris Trotter of the NZ Political Review is critical: "When these rules were revealed, Winz hastily retreated ... but nothing could better illustrate the totalitarian ambitions of the new department than this attempt to restrict the citizen's right to engage in political activity. The loyalty of the workforce must be undivided: no other organisation or ideological system can be permitted to intrude itself into the department's corporate culture..."

    • In the wake of the chartered planes crisis, Winz employees have shown concern at news that a private detective has been hired to investigate the affair. Winz spokeswoman Kate Joblin, however, told The Dominion that her organisation was not attempting to find people who had spoken to the media. When asked what would happen to any staff members that the department believed had spoken to the media, Ms Joblin said the question was irrelevant as "no one was being hunted ..."

    The Dominion 17 July 1999 "Fly-away staff scandal deepens" by Karen Howard;
    19 July 1999 "Several work agency `boot camps' held" by Cheryl Norrie;
    20 July 1999 "Winz boss admits signing of travel bill" by Karen Howard;
    21 July 1999 "Suspended manager refuses to front" by Karen Howard; "Weathering the Storm profile of Christine Rankin" by Karen Howard;
    22 July 1999 "Outsider to hear case, but Winz boss has final say" by Jonathan Milne; "Poor show of rich pickings" Broadside column by Rosemary McLeod;
    23 July 1999 "Winz disputes interpretation of Rankin's `danger zone' video" by NZPA; "Inside the brave new world of Winz" From the Left column by Chris Trotter
    24 July 1999 "Mock wedding revealed in Winz saga" by Karen Howard;
    26 July 1999 "Welfare staff were jandall wearers - PM" by Andrea Fox and NZPA; "Political Week column by Nick Venter;
    27 July 1999 "Error may cost Rankin $30,000" by Mathew Brockett; "Winz man checks on pot plant placement" by Karen Howard; "Acid goes on to stop the rot" Editorial; "Morale plummeting at Manawatu Winz" by Susan Campion;
    28 July 1999 "How you paid for glitzy lectures" by Kevin Norquay; "Winz denies paying Rankin's partner";
    29 July 1999 "Manager speaks up for Rankin"; "Winz took cheapest seats for 18 staff to attend seminar
    31 July 1999 "Winz manager quits, hearing a farce - lawyer" by Oskar Alley
    New Zealand Herald 19 July 1999 "Winz self-promotion ads cost the taxpayer $1.3m" by NZPA;
    20 July 1999 "Winz chief knew about plane charter" by NZPA
    21 July 1999 "Ministers turn on chief of Winz" by Eugene Bingham; "Winz appears doomed to losing streak" by Deborah Diaz;
    22 July 1999 "Winz splashes out on consultants. Embattled Rankin pays for damage control" by Vernon Small; "New Brand of Nonsense" Editorial;
    23 July 1999 "Labour roasts new Winz spin" by Vernon Small; "Winz lavishness does not extend to clients";
    26 July 1999 "Dismiss chief of all-glitz Winz: Labour" by Vernon Small; "`Missing' $65,000 at centre of charter flights inquiry" by Vernon Small; "Staff and clients frustrated at service's computer system" by Adam Gifford;
    28 July 1999 "Winz workers attack leadership. Letter spells out frustration with Rankin" by NZPA
    29 July 1999 "Winz had cheaper seats at seminar" by NZPA
    31 July 1999 "Suspended Winz `scapegoat' hits back with suit" by Vernon Small; "Winz takes tough line on IT schedule" by Adam Gifford
    The Daily News 17 July 1999 "Winz cancels conference booking in plane scandal" by NZPA ;
    19 July 1999 "Winz staff trained in ritzy resort" by NZPA; "Winz travel saga adds to list of blunders" by Peter Wilson;
    20 July 1999 "Winz boss admits she approved staff flight to Taupo" by NZPA;
    21 July 1999 "Winz boss on review over blowout" by Tracy Watkins;
    22 July 1999 "Rankin off Winz disciplinary team" by Kevin Norquay NZPA;
    23 July 1999 "Winz boss Rankin further into danger zone" by Astrid Smeele NZPA
    26 July 1999 "PM urged to probe `squandering'" by NZPA
    27 July 1999 "Winz executive `checks pot plants'" by NZPA
    28 July 1999 "Disgruntled Winz staff call for full audit" by NZPA
    31 July 1999 "Winz law suit adds costs for taxpayers" by NZPA
    The Press 20 July 1999 "Winz boss under fire. MPs call for suspension" by Michael Rentoul;

    Sunday Star Times 25 July 1999 "Lost in Managerial Fantasyland" Editorial; "Wary agencies cancel resorts" by Sarah Catherall; "Flash offices for Winz" by Phil Taylor; "C for consultants and Christine" Quite Right column by Frank Haden; "Winz leader focus of dissatisfaction" by Ruth Laugesen;
    1 August 1999 "Voters lose faith in democracy" by Ruth Laugeson; "Minders for Winz boss" and "New breed of bosses on loose rein" by Anthony Hubbard; "The gang of four leading a revolution" by Rosemary McLeod; "Will the real social welfare agency please stand up? " by Sandra Coney
    26 July 1999 "Prime Minister Unhappy with Winz chartering planes" by Peter Fowler;
    28 July 1999 "Who wins with Winz" press release from the Christian Heritage Party;
    30 July 1999 "NZIM angry" press release from NZIM; "WINZ breaks link with community" press release from FinSec union;

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