Turn-Of-The-Century Change in New Zealand's Public Enterprises

Abstract

The New Zealand reform agenda of 1984–99 included a significant redefinition of the role of the state. Many public sector activities were restructured into corporate form; policy formulation and operations were largely separated; and privatization was extensive. the change of government at the end of 1999, to a center/left coalition, has seen a major reappraisal. Privatization is out of favor; state-owned enterprises (SOEs) are to be managed to enhance shareholder value, with authority to grow their businesses; and the social objectives of crown-owned companies in areas such as health, housing and public broadcasting are being reasserted. This article explores the implications of these shifts and indicates that New Zealand's SOE model, as well as the rationale for using the company form more generally in the public sector, are now under challenge. Reasons include an apparent lack of understanding of the nature of the corporate model and renewed political risk because of the difficulty of separating out social, political and commercial interests in the management of public affairs.