Minister on an aid mission

One of the most contentious MFat changes has been the shift from hand-outs to hand-ups when it comes to assisting our Pacific neighbours, such as Tonga and Samoa. Photo / Dean Purcell

Murray McCully has developed a certain reputation for causing upset in his great experiment to reform the Ministry of Foreign Affairs and Trade. It appears not to bother him. The possibility he may offend the senior diplomats or be accused of being a meddling minister is no deterrent.

Neither of those would be regarded as insults by him. They would be seen as inevitable consequences of transforming the last of the great empires of the public service into a modern agile agency that can change quickly to circumstances. McCully is a no-apology politician: he makes no apology for his policies or his style of implementation.

McCully's latest skirmish involves one of his former officials, the ex-head of NZ Aid, Peter Adams, through the pages of a newspaper column. The McCully piece was in response to an article Adams penned against the decision to merge NZ Aid back into the ministry, and it begins by saying that unlike Adams he was not going to get personal.

It soon suggests, however, that Adams "holds the view not uncommon in the aid industry that the business of handing out taxpayer funds should be reserved for so-called development specialists who are beings of superior intellect, attested to by development degrees from Massey University, who should not be accountable to the public or their elected representative".

Adams, who has a degree from Canterbury, is now retired. They can both afford to take each other on in public. But McCully is no less uncompromising in private. By most accounts, he makes his expectations of the ministry clear. If his expectations are not met, if he thinks he is getting the run-around from officials or they are dragging their heels, he can be unforgiving. It is not uncommon for an official who thinks he has done enough to satisfy the minister to get a savaging because the minister believes they've fallen short.

Not surprisingly very few people in or close to the ministry wanted to be quoted for this piece but it has been suggested that McCully withholds his confidence in officials like a weapon, and you never know when the weapon will go off. One described him in terms of handling a cat - he'll be purring away most of the time but then something will rub him the wrong way and he'll lash out and scratch you.

McCully wouldn't be the first minister after a change of government to have a deep mistrust of officials. Helen Clark's Government in its first term was so mistrustful that Finance Minister Michael Cullen wouldn't even have a Treasury official seconded to his office.

McCully is not only outspoken and impatient, if the ministry isn't doing what he wants he will sometimes resort to doing it himself. Agricultural diplomacy - helping developing countries like Afghanistan or in the Asia/Pacific region to develop their own food security - is a case in point. It is not something New Zealand agriculture has engaged in much, despite having so much expertise.

"I had tried to get the aid function [the International Development Group] to engage with the sector and it wasn't happening so I thought I should lead it myself," McCully told the Weekend Herald. "It has proven to be very productive."

In this case he has been forgiving of his officials.

"The ministry has responded incredibly positively to the process. Some of the officials involved have now become much more actively engaged with people in that sector, probably most of whom they hadn't met. That's extremely healthy."

A work programme is under way, proposals are emerging and discussions are now going on between the officials and the sector, allowing McCully to butt out.

It has been a difficult couple of years for the ministry, having change foisted upon it. It managed to avoid the restructuring most of the public service underwent in the reforms of late 1980s and early 1990s, and its culture remained intact. The hierarchical structure meant good things like promotions came to those who waited, and waited and waited.

One of the most contentious changes has been the unapologetic change in aid emphasis from poverty alleviation to sustainable economic development, or as McCully has put it, giving a hand-up, rather than a hand-out. In practical terms that means more emphasis on things like wharves, airstrips, shipping, and sewerage, and abolishing the semi-autonomous aid agency that was an Alliance initiative in its coalition with Labour. "There is a very strong focus on big things that will make a difference to people's lives," says McCully.

Former diplomat and trade negotiator Charles Finny knows the culture of the ministry inside out: he was raised the son of a diplomat and became one himself until 2004. He backs McCully's drive for for change.

"A lot of the conventions you see in diplomacy today were agreed at the Congress of Vienna of 1815 and the world has changed considerably," says Finny.

Only in the past year or twowere most staff allowed desktop internet access which most other workplaces regarded as essential to productivity. "To me [it ] is just mind-boggling because if any entity needs to know what is going on quickly around the world it is MFat."

The reason was that the ministry had been "paranoid" about security when only about 5 per cent of its work needed to be secure.

In the area of aid, says Finny, two sets of foreign policy were developing, those of MFat and those of NZ Aid.

MFat was a sitting target for McCully who, in Opposition, made his reputation on his forensic assessments of various organisations and power structures. He made good use of his time as Opposition spokesman on foreign affairs working out his plan.

When respected secretary Simon Murdoch retired, McCully wasted no time in approving change specialist John Allen, formerly of NZ Post, for the top job and ending the autonomy of the aid agency.

The squeezing of budgets in the wake of the global financial crisis added greater impetus for the ministry to become more efficient. But had the crisis not happened, the ministry would still have been in for an upheaval.

The most jaw-dropping challenge to the ministry by McCully occurred in April this year when he put a job advertisement in the paper for the next High Commissioner to the tiny Pacific state of Kiribati. In a speech a short time later he gave notice that heads of mission roles (ambassadors and high commissioners to Commonwealth countries) "are not the exclusive preserve of the staff of the Ministry of Foreign Affairs".

"We are testing the market," he said.

The speech and the job advert spelled out in no uncertain terms that the natural order at the ministry had come to an end.

He also said at the time that he and Allen intended to reach down into the middle ranks of the ministry to promote younger talented people - evidenced by the appointment of 42-year-old Vangelis Vitalis as ambassador to the European Commission in Brussels.

If nothing else it was a public slap to the Foreign Service Association, the diplomats' union, which had written to him concerned at the appointment of Martyn Dunne, a former General and Customs service chief, to Canberra.

The appointment of Allen, an outsider, came as a shock to the senior levels at the ministry. They are getting over it. He is the sort of change manager who likes to do things by the change management book - set up visions, strategies and plans and aim to take the staff with him. He doesn't take the "change or be damned" approach of McCully.

He has appointed former new Zealand Institute director David Skilling as his senior adviser, strategy, and former World Bank development specialist Amanda Ellis to head the aid group with the ministry.

Despite the demands of a reforming minister, however, there is no suggestion that Allen and McCully have anything other than a fully functioning working relationship. Allen can handle McCully's frustration with the speed of change. He can handle the minister's criticism aimed at the ministry and may even see it as adding muscle to his change programme.

Labour Foreign Affairs spokeswoman Maryan Street has nothing but praise for Allen's abilities but she is appalled by McCully's approach.

"I don't approve of this tactic of appointing people into positions or reaching down into the organisation and fingering people for positions," she said from South America. "That will inevitably destroy morale.

"I think he is meddling in the appointments process and I don't think it is healthy."

"What does cause me particular concern is the contempt that Murray McCully seems to hold capable public servants in. It's a popular drum to beat and that's all it seems to me to be.

"There's no real analysis going on in McCully's approach to trimming MFat. It is simply an ideological blindspot that he's got about the public service and he wants to run things his way with his people.

McCully says he and Allen have an "extremely good" working relationship. He acknowledges he has been "fairly forthright" about the configuration of diplomatic posts around the globe.

"But I've got a huge respect for the ministry and it has got some incredibly smart people who taxpayers have invested a lot of money in, particularly those who have got language skills, and I don't think we look after many of those people well enough, particularly some of the younger people who need to see more opportunities more quickly."

McCully makes no apology for his changes to the aid programme and the way he has fought opponents.

"I acknowledge that some people from the other side of politics who are engaged in the aid community would not share my ambition for the aid function of the ministry. But at the end of the day its the public's money, not theirs."

And the minister says the best reception he has had for the changes have come from Pacific leaders themselves.

"They could hardly have been more enthusiastic."

As for taking a close interest in the appointments of ambassadors and high commissioners, again he makes no apology. "That's my job."