Dame Margaret Bazley told the forum little progress had been made since she became a department head in 1988.
Statistics NZ figures show that the public sector gender pay gap has closed only slightly, from 19.4 per cent in 1989 to 17.1 per cent in March this year. Dr Blue's report says the gap in the 29 core departments is now 14.3 per cent.
The gender pay gap for the whole New Zealand workforce has narrowed from 18 per cent in 1989 to 12.8 per cent.
Maori and Asians make 11.2 per cent less than the public service average, and Pacific people earn 19.4 per cent below average, although both these gaps are less than in the wider workforce.
The new report also finds that only 42 per cent of senior public service managers, and only nine out of 29 (31 per cent) of chief executives from next week, are women, even though women make up 60 per cent of all public servants.
Dr Blue said formal targets had been successful in public hospitals in areas such as reducing waiting times in emergency departments, and the Government had also set public service targets such as reducing crime rates.
"Targets focus the mind and mean that conversations happen," she said.
She said targets should aim to eliminate gender and ethnic pay gaps completely, and to lift the representation of women and ethnic minorities in management to around their shares of the population.
But she said targets should not be at the expense of promoting the best person on merit.
The Government's Chief Talent Officer, Andrew Hampton, who works for the State Services Commission, said the report was timely as he took up his newly created role only a month ago.
"One of my first tasks is to refresh the approach we are taking to encouraging and supporting diversity in the public service," he said. "I am considering this report as part of that."