The reforms of the late 1980s and early 1990s introduced a comprehensive legislative base as a catalyst of change, and as a reflection of the strategic direction of government. In the employment setting the role of law as a protector of rights was down-played. This chapter is being written at a time when there appears to be something of a turning point in the state sector reform process. The ‘big’ reforms have been achieved and are now firmly embedded, as is the legislative framework and the supporting culture. It did however, become apparent that those reforms had been at some cost. This cost included a level of deterioration in the capacity and capabilities of particularly the core public service to carry out the functions of government. This deterioration should not be overstated but there seems to be a realisation first, that private sector values and methodologies are not necessarily best suited to all the functions of government, and secondly that the public service had become unduly segmented with the result that there has been a loss of a broader public service culture.

This time, although the rhetoric is different, the mechanisms for achieving further reform in the state sector remain broadly similar — the law, structures, and culture. The degree of legislative change is smaller and less comprehensive, but still significant. For example the Crown Entities Act, the amendments to the State Sector Act, the Public Finance Act and State-Owned Enterprises Act, changes to the Health and Safety in Employment Act and other employment legislation including the Employment Relations Act, as well as the changes in professional/occupational legislation, will in combination have significant medium to long term repercussions throughout the state sector. The role of the law has ceased to be that of a catalyst for dramatic and bold change but has become more focused on achieving normative and cultural evolution within the state sector. The push for change will come from the ‘structural’ mechanisms: the committees, boards and project teams established to implement aspects of the Review of the Centre and the teams, networks and organisational consolidation that emerge as new ways of working. The cultural mechanisms are evident in an emerging new state sector lexicon around co-ordination, capability, sustainability, leadership, values and outcomes. Whether these will be reinforced in state sector workplaces, and across sectors, remains to be seen.

Indeed, as governments worldwide grapple with skill shortages, particularly in the health and education sectors, will a joined up/reconstructed state sector be enough to meet the potential labour market and employment relations challenges that face a small economy such as that of New Zealand?