Chapter 11: Transparency in Local Government: Antipodean Initiatives

New Zealand is a small country (in terms of population) at the extreme end of the globe from Europe. It seems unlikely at first that events in such a country would hold much interest for more populous and powerful northern hemisphere nations. Yet the New Zealand economic reforms (Bollard, 1992) and the New Zealand model of public management (Boston et al., 1996) have, over the last decade, attracted considerable international attention (see, for example, Osborne & Gaebler, 1993; World Economic Forum, 1993; OAG Canada, 1995). Commentators seem to be intrigued by the speed and comprehensiveness of the reforms, their grounding in an explicitly articulated theoretical framework and the apparently consistent application of that framework across the entire public sector. From the outset, accounting and financial management have formed an integral part of the reforms and have generally been accepted as the most successful aspect of them (Norman, 1995). Reform of public sector accounting and financial management practice is not, of course, unique to New Zealand. Over the last decade, significant reforms have been considered by a wide range of state and local governments throughout the world (Olson et al., 1998). European examples include Spain (Vela, 1996), the United Kingdom (Coombs & Tayib, 1999), Sweden (Brunsson, 1995), Italy (Mussari, 1999), Belgium (Christiaens, 1999), the Netherlands (ter Bogt & van Helden, 2000) and Poland (Jaruga et al., 1998)—to name a few. Nonetheless, New Zealand appears to have led the world in the development of a number of financial management practices. For example, in 1989 it was innovative in placing not only accounting, but also appropriations and budgeting, on a full accruals basis focused on outputs (McCulloch & Ball, 1992). It seems to have been the first country, beginning in 1990, to routinely audit non-fmancial performance information and the first, in 1994, to produce whole-of-government financial statements on a full accruals basis (Pallot, 1994). The Fiscal Responsibility Act 1994 (see Richardson, 1994) took central government to unprecedented levels of transparency and accountability.