Former New Zealand Minister of Finance "reforms confused me"

Reform confused me – Caygill

Dominion post 10 Sept 1991

Opposition MP David Caygill admitted yesterday much of Labour's reform of financial management either passed him by or confused him when finance minister.

In a speech to the Society of Accountants in Wellington, Mr Caygill said the Public Finance and State Sector Acts were two of Labour's most important reforms. Both made changes of such far-reaching significance that many aspects were not apparent at the time, “even to their proponents”, he said.

As minister in charge of the Public Finance Bill's passage through Parliament, he tended to explain just two changes it made: a change in governments financial year and introduction of accrual accounting.

“But for a long while, much of the rest of financial management reform passed me by,” he said. “The destinctions between mode A and mode B, let alone mode B net and mode B gross, I found confusing.”

Gradually a broader picture emerged and familiarity reduced the awkwardness of the new technology.

He said many ministers were unprepared for the changes and the demands on them to specify their requirements in their contracts with chief executives.

“This crucial control is probably still not being used to its full extent that is possible and desirable but the potential is there if ministers are prepared to think through their priorities,” he said.

“In my view, the two acts provide a powerful set of controls and accountabilities which focus attention more clearly than in the past on what the public sector is doing and what it is costing.”