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Part 4: Our concerns with the current administrative framework — Office of the Auditor-General New Zealand
Part 4: Our concerns with the current administrative framework Government and parliamentary publicity and advertising. https://www.oag.govt.nz/2005/govt-publicity/part4.htm https://www.oag.govt.nz/@@site-logo/logo.png
In this Part, we discuss 4 concerns that have emerged during the preparation of this report:
The current guidelines applying to publicly funded publicity and advertising are unclear, produce inconsistent results, and make it difficult to establish the legitimacy of publicity and advertising undertaken by Ministers, government departments, MPs, and parliamentary parties.
Current arrangements do not support the evolution of best practice in the use of communication techniques, and in procurement of communications services.
Arrangements surrounding the sources of funding, and disclosure of spending, do not assist transparency of government and parliamentary publicity and advertising.
Guidelines are unclear and produce inconsistent results
The Members’ Handbook Guidelines are widely permissive as to the scope and content of publicity and advertising by an MP or a parliamentary party. Advertising is allowed in respect of any aspect of “parliamentary business”. This covers many activities, and may include:
promoting or providing details of the services an MP is offering to the public;
material of an informational nature, to inform the recipient of the MP’s views on public issues of the day; and
information about an MP’s activities.11
The definition recognises the political context in which much of an MP’s work is undertaken and, in practice, allows parliamentary party publicity and advertising to contain party political content. The only limits are on:
soliciting of subscriptions from the public;
promotional or electioneering activity; and
any work undertaken by an MP in their capacity as a Minister.
Advertising can stop short of these areas while still containing considerable political content, and achieving advantage and visibility for the political party. Some recent advertising under these guidelines has been highly political (as we noted in Part 2).
A contrasting picture emerges under the Government Advertising Guidelines, where political content and rhetoric of any kind are expressly prohibited. This is most apparent from paragraph 5(b) of the guidelines, which requires government advertising to be presented in a “fair, honest, impartial” manner that is –
… in unbiased and objective language, and … free from partisan promotion of government policy and political argument.
This does not pose a problem for government department publicity and advertising because, under the Public Service Code of Conduct, department staff are required to conduct themselves in a politically neutral way.
However, it is problematic for Ministers in the presentation of their own publicity about government policies and achievements because Ministers, like other MPs, operate in a political environment.
As we explained in Part 2, there are strong incentives for those engaged in the politics of MMP to present media and publicity material in a manner that identifies policies with one or more governing parties. The restrictions of the Government Advertising Guidelines simply do not fit these realities.
This has led some ministerial staff (including the Office of the Prime Minister) to question whether the scope of the Government Advertising Guidelines covers these forms of publicity. This, in turn, has raised questions about whether the Government Advertising Guidelines should be given a legalistic interpretation, or applied according to their spirit and original intention.
It is clear from reading the Government Advertising Guidelines that they were not drafted as a legal document. The title indicates the status of guidance, rather than rules, for spending behaviour.
The introduction says that the Government Advertising Guidelines apply to “government publicity and advertising”. However, those terms are used inconsistently in the guidelines. For example, in Paragraph 3, under the heading of “scope”, the guidelines are limited to “advertising” –
Government advertising refers to any process for which payment is made from public funds for the purpose of publicising any policy, product, service, or activity provided at public expense by the government.
Does this apply to publicity material about government policies and achievements, prepared by Ministers for use in the political context in which they operate? It is hard to say.
In recent years, the number of publications reporting the progress of incumbent governments has increased. These publications usually take the form of a collection of stated “achievements”, rather than detailed information on services or entitlements, and how the public can access them. The publications may be distributed to a relatively small or targeted number of recipients.
We have received several complaints about these publications since 2001. The complaints focus on the inclusion of party political material – including references to the parties that make up the current government and, on occasions, comparative references to previous governments. That type of material would not, in our view, be acceptable under the Government Advertising Guidelines.
However, we found it difficult to consider the publications under the Government Advertising Guidelines because:
The distribution of the publications was limited, in that they were sent unsolicited only to predetermined and restricted lists of recipients, and otherwise were sent to anyone who sought a statement on what the Government had achieved while in office. In our view, given the limited distribution, the publications did not constitute a publicity or advertising “campaign”.
The content of the publications was essentially no different to the kind of material issued from Ministers’ offices in the form of media or other statements – albeit that the difference in the case of the publications was the use of technology to present the material in a different form.
The electronic age has enabled information to be distributed inexpensively and widely in an unsolicited manner, while simultaneously providing a basis for ongoing and direct 2-way communication between Ministers and members of the public. Because the Government Advertising Guidelines were written in 1989, they did not anticipate such communications – it is unclear, for example, whether the guidelines apply to websites. Neither do the Members’ Handbook Guidelines contain any guidance in relation to MPs or parliamentary parties’ websites.
In our view, there is a need to clarify whether Ministers’, MPs’ or parliamentary parties’ websites should be subject to publicity guidelines (including interactive e-mail communications). There is, in any event, a need for protocols to govern the appearance of those websites, and their links to other (for example, political party) websites.
There is also a need to clarify how the Government Advertising Guidelines apply to publicity by Crown entities.
Other problems of application
In general, conventions applying to the spending of public funds are most easily interpreted and applied when they include:
clearly stated principles, which make clear the overall purposes of spending, and any fundamental riders on the use of resources;
a clear understanding about what activities can be funded, and what cannot, and who has authority to approve such spending;
relevant and understandable guidance about how the principles are to apply, and how rules should be interpreted; and
appropriate sanctions for any breaches.
We have observed the following problems in relation to the Government Advertising Guidelines:
The guidelines place considerable emphasis on the principles of justifiable purpose (that is, advertising should only be undertaken when there is a justifiable information need by the intended recipients), and political neutrality. However, there is no guidance on how these principles ought to be applied in particular circumstances.
The language used in the guidelines provides opportunities for debate about whether compliance is required or preferred – for example, use of words such as “may” and “should” make seemingly clear statements open to interpretation.
There are no sanctions for non-compliance, and it is not practical to control expenditure by using the appropriations funding (see paragraph 4.56).
In relation to the Members’ Handbook Guidelines:
The Parliamentary Service considers the handbook to be, primarily, a guide to entitlements and resources available to MPs. This casts doubt on the standing of the advertising guidelines contained within the handbook.
The Members’ Handbook Guidelineshas the most “rule-like” statements about the forms of advertising that can and cannot be produced at public expense. However, in the absence of a principles-based approach, making distinctions as to what is “party political” and “parliamentary business” can be difficult in practice.
The Members’ Handbook Guidelinesalso includes sanctions for transgression of the guidelines, which may be imposed by the Speaker. Even so, the lack of articulated principles makes it hard to see how sanctions would be imposed in any but the most extreme cases of noncompliance.
Two examples of inconsistent results
In 2004, there were 2 significant examples of the problems caused by the 2 sets of guidelines, and their ambiguities, involving:
integrated publicity strategies; and
publicity by coalition government partners.
An integrated publicity strategy – Working for Families
In Part 2, we commented on the trend towards integrated publicity strategies being used to promote government policy initiatives.
An “integrated publicity strategy” typically involves simultaneous publicity activities for a particular purpose. These activities are likely to include:
Cabinet-authorised advertising by a government department, to inform the public of a new or revised policy or set of entitlements;
preparing targeted publicity material for constituents and interest groups by staff in Ministers’ offices; and
publishing the parliamentary party’s views about the policy, from a parliamentary business perspective.
In the case of the Government’s Working for Families programme, announced in the 2004 Budget:
The Ministry of Social Development and the Inland Revenue Department prepared extensive advertising to advise the public of the programme, and of the changes to benefit entitlements. The advertising complied with the Government Advertising Guidelines, and contained no party political content, although it strongly promoted the programme’s Working for Families brand.
At the same time, the Labour parliamentary party issued extensive publicity and advertising, funded from parliamentary sources, which likewise publicised the programme under the Working for Families brand. However, this time the material contained explicit party political content. The standard for that material was taken from the Members’ Handbook Guidelines.
Members of the public who received both sets of advertising were understandably confused about what the overall standard for the publicity and advertising should have been – and told us so.
Publicity by coalition government partners – advertising drug policy initiatives
We also described in Part 2 how the MMP electoral system raises issues for parliamentary parties and for partners in coalition governments.
MMP has created a multi-party Parliament, in which individual parliamentary parties legitimately need to:
differentiate themselves from others;
communicate with their constituents and respective communities of interest on matters of parliamentary business; and
draw public attention to their policy positions on issues that are of major importance to them.
The Members’ Handbook Guidelines allow political party logos to be used on parliamentary letterhead, and in any form of publicity – which enables differentiation to be achieved.
The situation is different for coalition partners in government. The Government Advertising Guidelines have not been updated to reflect the realities of coalition government.
A problem arises when a junior government coalition partner wishes to be differentiated from the senior partner on a particular issue or government policy. This could happen in either of 2 ways, where:
a coalition agreement contains an “agree to disagree” provision, which allows Ministers to maintain, in public, different party positions on particular issues or policies; or
coalition partners agree that a junior partner will advance and take responsibility for a particular government policy initiative.
The Government Advertising Guidelinesdo not allow the junior partner to be differentiated in either of these circumstances by referring to the name of the political party, because this would breach the guideline that government advertising must be presented in a manner free from partisan promotion of government policy.
This became an issue in 2004, when the Progressive coalition partner in the current government wished to promote its role in producing a government policy initiative about drug abuse.
Advertising material was first prepared which identified the Minister concerned as the leader of the Progressive party. This was not allowed under the Government Advertising Guidelines. However, if the Minister had issued the advertising in his capacity as an MP and party leader (not as a Minister), and funded the advertising from within the Parliamentary Service funding allocations, the advertising would have been permitted under the Members’ Handbook Guidelines. Subsequent material prepared was consistent with the Government Advertising Guidelines.
In such cases, the conflicting approach of the 2 sets of guidelines causes confusion and uncertainty.
The overall result – a confused environment
We said in Part 2 that we had found universal acceptance of the principle of “proper purpose”. This was stated as –
Parliamentary and ministerial communications take place in a political environment. But taxpayers do not pay for political parties’ publicity, except to the extent that it derives indirectly from the proper conduct of parliamentary or ministerial business. This is broadly consistent with the accepted position in New Zealand that the State does not fund political parties.
The application of 2 different sets of guidelines, combined with the ambiguities about the scope of the Government Advertising Guidelines, create an environment where it is difficult to say whether this principle really applies. This is undesirable in an era when the importance of publicity and advertising is growing, and where the focus on political parties creates further pressures. It creates opportunities for abuse, which is naturally of concern to us as the public sector auditor.
Administrative arrangements do not support the evolution of best practice
The lack of any centralised oversight of publicity and advertising practices results in a missed opportunity for good practice to evolve and be encouraged. We have identified 3 areas of weakness.
Branding is an important element of a publicity strategy. A brand can increase audience recognition and acceptance of a product or service, and provides a focus for the creative content of elements of the strategy. Branding can be applied to paper-based, electronic media, and Internet publicity and advertising.
State emblems have a value as “brands”, representing the State or an instrument of government. Emblems most commonly used in publicly funded publicity and advertising include:
the New Zealand coat of arms;
the parliamentary (House of Representatives) crest; and
the official logos of government departments.
However, there is also widespread use of brands of an unofficial nature – for example, in the production of a government department newsletter, or to promote a particular government policy. Other frequently used elements of branding include the use of slogans, catch phrases, by-words, colour schemes, and photographs.
In addition, political party brands are permitted on parliamentary stationery and in parliamentary party advertising.
Branding clearly has its benefits if used in a way that enables a target audience to connect with the message being communicated. However, we are concerned about the proliferation of brands in publicly funded publicity and advertising for 2 reasons. First, the lack of a standardised approach to branding government activities can reduce the public’s ability to recognise a product or service as being that of the Government. Secondly, the use of branding techniques can undermine the neutrality of publicity and advertising, for example, by building in a “feel good” factor to an advertisement, which can provide an opportunity for indirect political benefit.
We consider that a standardised approach to the use of brands in publicly funded publicity and advertising in New Zealand, including website design, has merit. Matters that should be addressed include how unofficial brands in their various forms may be used, including logos, slogans, colour schemes, and political party identifiers and website links. Government agencies should, at the same time, be encouraged to be innovative in communicating their message, and to focus on the information requirements of the recipient.
Similar concerns were discussed in the recent report of an independent committee appointed to review the appropriations of the Parliamentary Service under the Parliamentary Service Act. The committee expressed concerns about the signs used on MPs’ out-of-Parliament offices–
Out-of-Parliament offices are typically presented (sometimes aggressively so) in the colours and/or the “brand” and signage of the political party each MP represents.
We believe that consistent with the purpose of out-of-Parliament offices as part of the democratic process, and with the fact that they are publicly funded, décor and signage should be standardised. Consideration should also be given to establishing a parliamentary ‘brand’ on out-of- Parliament offices. [Emphasis in original]
We think this would be an enhancement to democracy. It is vital that all citizens feel comfortable about using the services of an out-of-Parliament office, regardless of their political persuasion. People should not be put off visiting an out-of-Parliament office by a perception that the office is for party political purposes. We suggest the Parliamentary Service Commission determine what the appropriate standard should be.
The independent review committee’s suggestion of a standard for office signs could usefully be extended to include parliamentary party websites.
Identifying information needs and strategies
Information programmes should always be prepared based on sound research of the subject matter, and the information needs of the intended audience. A recent example has involved the work of the Climate Change Office (based in the Ministry for the Environment) to prepare a campaign aimed at changing people’s attitudes and behaviours in respect of the environment and climate change. Based on comprehensive research and consultation, the Office was able to produce a multi-faceted information programme, at a relatively modest cost, which included newspaper, radio, and Internet publicity and advertising – backed up by an informative and interactive website.
We found a similar emphasis on research and development in our overseas enquiries. In many instances, this is supported by the work of centralised information units (such as the Government Communications Unit in Australia). Centralised involvement appears to enhance the growth of good practice. The State Services Commission has an increasingly important, but still relatively limited, role in New Zealand – particularly through a forum for government department senior communications advisers, and the work of its E-government Unit.
The Government Advertising Guidelinesacknowledge the possibility that advertising campaigns may involve the use of “public relations consultants, market research agencies, advertising agencies, or other specialist consultants”. Paid advertising also involves the purchase of space in the print and electronic media (including, most recently, website banner space).
All of these activities require procurement decisions. The Government Advertising Guidelinesrequire “reasonable and fair procedures” to be used, unless there are exceptional circumstances such as “extreme urgency”. Our guidelines on procurement12 are also relevant in the advertising context.
Advertising and communications services are specialised products, which can have a significant creative component. Making a “pitch” for an advertising campaign can, therefore, involve considerable time and effort on the part of a prospective provider. In the course of our review, we became aware of concerns in the communications industry about some public entities’ lack of appreciation of these factors. We were told, for example, of unrealistically tight timeframes for submitting proposals, of large numbers of prospective parties being short-listed and asked to prepare creative “pitch” material, and, in one case, of a project brief being withdrawn after such material had been prepared.
In New Zealand, individual government departments are responsible for their own procurement, and there is no centralised resource for advertising procurement – other than the Government Electronic Tenders Service (GETS) Internet facility, which is used for inviting expressions of interest or proposals. We highlighted the risks involved in the creation and costing of advertising strategies in a report on the budgeting of the Working for Families campaign in September 2004. We also heard of concerns in the industry that the threshold at which departments must place contracts for tender on the GETS system is too low, making it uneconomic in some cases for prospective providers to respond.
Subject to economies of scale, there could be advantages in a more centralised or co-ordinated approach to the preparation and procurement of government publicity campaigns. This could also result in a better understanding, throughout the public sector, of the nature of communications and advertising services, how best to involve external agencies in the creation of communications campaigns, and the emergence of good practice in the engagement of those agencies.
Financial management lacks transparency
Wherever public funds are involved, transparent financial management is essential. While there are many factors which support financial transparency, 2 are relevant to this discussion:
the nature of the appropriations that allow publicity and advertising expenditure; and
the nature of any financial reporting associated with publicity and advertising expenditure.
Nature of appropriations relevant to publicly funded publicity and advertising
When the appropriations relevant to publicly funded publicity and advertising are considered, the following factors become apparent.
The appropriations are not clear and enforceable
As mentioned previously, appropriations constitute high-level authorisation for spending public funds. The Auditor-General, using the Controller function, has various powers to ensure the lawfulness of expenditure.
The effectiveness of the Controller function depends on how much information appropriations provide on how funds are to be spent. We are not aware of “advertising” or “ publicity”, as an activity, being separately identified in any appropriations used by Ministers or MPs to fund publicity or advertising activities. This has a 2-fold effect:
At a high level, it is unclear what publicity or advertising activities are proposed within a Vote, and how much they may cost.
The lack of clarity makes it impractical to control “inappropriate” advertising spending under the appropriations.
The parliamentary appropriations do not support the equitable distribution of resources
Equity is an important principle underlying funding of parliamentary parties. Larger parties receive more funding than smaller parties – but the formula used to set the funding is the same, no matter what size a parliamentary party is.
We have previously highlighted that, while some of the funding provided to parliamentary parties is specific to those parties, other funds are shared between parliamentary parties. We have also described how publicity and advertising can be produced using any of these resources. It is possible for a party to access more than its fair share of funds, which may give the party a resourcing advantage. This could result in a political benefit being achieved with the additional resources.
It is unclear what funds are used for publicity and advertising
We are aware (from the complaints that we receive) that the public wants to know how Ministers, government departments, and MPs use public funds for publicity and advertising. However, we have observed that it is becoming harder to tell what publicity and advertising has been paid for with public funds, and what has been paid for with private, party funds.
The main issue is attribution. In theory, publicly funded publicity and advertising should show how the advertisement has been funded:
Under the Members’ Handbook Guidelines, the parliamentary crest must be included on advertising funded through Vote Parliamentary Services.
Under the Government Advertising Guidelines, all government advertising should include information about its origin, and the responsible Minister or agency.
However, we are aware of examples of advertising from Ministerial and parliamentary sources that do not clearly attribute the source of funding. This can lead to confusion.
In relation to parliamentary party publicity and advertising, the Principles on Advertising Paid for From Vote Parliamentary Service say this about transparency–
The reasons for, and the circumstances surrounding, the use of public resources by individual members or parliamentary political parties should be publicly available. The process by which funds are expended should also be publicly known.
During consultation for this report, we became aware of a concern held by some parliamentary party leaders about whether using the parliamentary crest is sufficient to meet the attribution requirements of this principle and, in particular, to inform the reader that an advertisement has been paid for by public funds (rather than the funds of the political party).
We can understand the reason for concern, given the political nature of some parliamentary party publicity and advertising. We consider that a member of the public is entitled to assume that an advertisement containing party political statements has been funded from private sources, unless there are clear indications to the contrary. The question is whether the appearance of the parliamentary crest on the advertisement is sufficient indication, or whether a more direct form of attribution is required.
In our view, this issue deserves further consideration by the Parliamentary Service Commission.
One of the core functions of the Auditor-General, as the auditor of public entities, is to provide assurance that entities present their accountability information to Parliament in a financially transparent manner.
We are not aware of “advertising” or “publicity” costs being routinely reported in the audited annual reports of any government departments. Such forms of disclosure have some precedent overseas.
The administrative framework does not support accountability
In our view, the administrative framework does not support accountability in:
financial management arrangements; and
oversight of the guidelines.
While the Department of Internal Affairs and the Parliamentary Service are responsible for managing resources used by Ministers and MPs for publicity and advertising purposes, these agencies could be more effective in this role.
We note that there are some factors that create difficulties for the 2 agencies, for example–
the specific roles and responsibilities of the administering agencies are not defined, nor are the agencies formally recognised as having this responsibility;
the agencies must apply unclear guidelines;
the manner in which spending is incurred by Ministers and MPs, and met by the agencies, minimises opportunities for pre-press review of proposed advertising; and
the publicity and advertising environment is highly politicised, which may further complicate the implementation of administrative solutions.
It is important to respect the political autonomy of Ministers, MPs, and parliamentary parties to communicate with the public in the manner they see fit. However, that does not eliminate the need for a sound administrative framework, and proper controls, which should reflect good practice and be applied consistently to all publicity and advertising spending.
Oversight of guidelines
Both sets of guidelines suffer, to varying degrees, from a lack of ownership and oversight.
There is no clear “owner” of the Government Advertising Guidelines, and no single agency responsible for enforcement. Although the Government Advertising Guidelinesappear in the Cabinet Manual 2001, it is not the Cabinet Office’s responsibility to enforce them (although the Office has taken responsibility for initiating a review of whether revision is required).
We have traditionally had a measure of oversight in relation to the Government Advertising Guidelines through the provision of assurance about compliance by Ministers and government departments. We are sometimes asked to provide independent assurance on whether proposed publicity and advertising complies with existing guidelines, and to investigate complaints about improper spending on government publicity and advertising. However, while such roles are in keeping with the independent status of the Auditor-General, we cannot carry out any formal enforcement role.
The Speaker is responsible for establishing and enforcing the Members’ Handbook Guidelines, on advice from the Parliamentary Service Commission. For example, changes to the Members’ Handbook Guidelines are made after consultation between the Commission and the Parliamentary Service.
The Parliamentary Service does not have a clearly stated role to ensure compliance with the Members’ Handbook Guidelines. It is able to exert some influence through its financial management role in relation to Vote Parliamentary Service. However, the overall responsibility for owning and enforcing the guidelines is not clear.
There are 2 important factors that distinguish publicity and advertising activities from other areas of public management:
Publicity and advertising are important operational tools for government departments, Ministers, MPs, and parliamentary parties. They need to be recognised as such, and to be understood as products in their own right – not just operational expenses.
Publicly funded publicity and advertising can also be a valuable tool for those engaged in political activity. There is a need for clearly defined principles, rules, and standards to protect the public interest against the potential for misuse of public funds.
While the current administrative framework is intended to manage these factors in a context of prudent financial management, it has serious deficiencies that undermine its effectiveness.
In relation to the 2 sets of guidelines applying to government and parliamentary publicity and advertising, we have observed that:
The guidelines appear inconsistent, and are confusing to those who must apply them. The differences arise from whether the publicity or advertising is, broadly speaking, of a government department, ministerial, or parliamentary nature.
The different practices arising from the guidelines are confusing and hard to understand. This is especially so for staff in ministerial offices, who have access to funds from both executive and parliamentary sources, but must apply different guidelines when preparing publicity material – depending on which source they use.
The practices under each set of guidelines produce different results. This is most obvious in the extent to which publicity or advertising can contain party political content. It is not always clear which set of guidelines has been applied to a particular publication. Publicity or advertising material produced under one set of guidelines can also undermine the integrity of material produced under the other set.
A lack of centralised oversight limits the opportunity for good practice to be identified and encouraged:
We are concerned about the proliferation of brands in publicly funded publicity, and consider that guidelines on the use of brands could have benefit.
There is a need for guidance in the research, preparation, and evaluation of communications programmes.
There could be advantages in a more centralised or co-ordinated approach to procurement.
The funding arrangements for publicity and advertising lack transparency:
None of the relevant appropriations that fund government department, ministerial, or parliamentary publicity and advertising refer to the activity as such.
Departments and the Parliamentary Service report the activity as an operational expense, and usually in an aggregated form combined with other operational spending. There is no reporting of publicity or advertising spending by individual Ministers or parliamentary parties.
The guidelines about attribution do not ensure that the source of funding for publicity or advertising is always clear.
We are concerned that, in relation to administrative arrangements:
The 2 different sets of guidelines have been produced in isolation. Overall “ownership” of the guidelines for spending public funds on publicity and advertising is unclear. Better co-ordination is needed.
The separation between ministerial and parliamentary appropriations is not reflected in the way that some budgets are managed. It is not uncommon for ministerial staff to manage a Minister’s executive and parliamentary budgets as a single set of resources.
The ability of the Department of Internal Affairs’ and Parliamentary Service’s managers to oversee and monitor publicity and advertising activity under their Votes is variable and, in some cases, minimal.
11: The term “parliamentary business” is also defined by the Remuneration Authority, for the purposes of setting MPs’ remuneration and allowances. We commented on the scope of an MP’s role in our report Parliamentary Salaries, Allowances and Other Entitlements – Final Report, ISBN 0-477-02880-2, July 2001.
12: Procurement: A Statement of Good Practice, July 2001 (available on our website, www.oag.govt.nz).