A new broom and war: 1935-1949

The first Labour Government’s resounding 1935 election victory heralded a greater role for the State, yielding a generous (some said unaffordable) parcel of social policies that would require an expanded Public Service to deliver. Depression-era pay cuts were swiftly reversed, with pay rises and a 40-hour, five-day working week put in place in 1936. Within two years, permanent staff numbers had increased by more than one fifth.

Determined to implement programmes that would lay the foundations of the welfare State, the administration of Prime Minister Michael Savage asserted firm control from the start. Incoming Public Works Minister Bob Semple told departmental heads they would have to administer government policy or ‘get their running shoes’. ¹⁵ He typified the plain-speaking ex-union leaders in this largely working class Cabinet. It must have represented a culture shock to heads more used to dealing with soft-handed gentlemen.

Savage’s administration dragged its feet in replacing Verschaffelt, because they saw his logical successor, Thomas Mark, as unsympathetic to its political programme. In the end the administration appointed two commissioners: Mark, and (as pensions commissioner) John Boyes, seen to be in step with Labour’s far-reaching welfare agenda.

In 1938, the avowedly non-political Mark had earned the trust of the administration, and took on the post of sole commissioner when Boyes became permanent head of the Social Security Department. Public Service unions, however, came to detest ‘efficiency tests’ championed by Mark. The workforce meanwhile exceeded 16,000 (10,427 permanent and 5,788 temporary).

During the six years of war (1939 to 1945), more than 9000 public servants enlisted in the armed forces, creating problems in retaining staff of adequate quality. In this period, numbers of temporary Public Service staff nearly trebled from 6604 to 17,601. The majority were women.

The stresses of working with the Savage administration ultimately proved fatal for Mark. In 1941, he died of heart failure during an argument in a Minister’s office, opposing what he saw as political interference.

The easy-going Boyes returned to the Public Service Commission (PSC), remaining until 1946. Public servants struggled to administer elaborate wartime controls, including a wage and price freeze, and post war ‘stabilisation’ measures.

By the mid 1940s, the commission’s relationship with the PSA and its leader, Jack Lewin, had become testy. Peter Fraser, Savage’s successor as Prime Minister from 1940, intervened to bring union concerns into the heart of State sector pay-fixing and setting of conditions. In 1947, Fraser’s ‘new experiment’, a three-member PSC including a commissioner nominated by the PSA, began work.

Significantly, the man appointed to chair the reconstituted body, former ‘brains trust’ member, economist and London-based diplomat, Dick Campbell, was largely an outsider. (Verschaffelt’s infamous outburst occurred as legislation setting up the new body passed through the House).

The numbers of people administering the Fraser administration’s centralised and ‘stabilised’ economy didn’t abate at the end of the war. They swelled to 23,104 by 1947, including 9,439 temporary staff, many female, made permanent. But the union- friendly ‘experiment’ faltered as austerity-minded Ministers sidelined the PSA representative, particularly over pay-fixing.

The energetic Campbell instituted important efficiency reforms and minor departmental mergers. He drew back, however, from radical proposals by assistant commissioner Jack Hunn (known as the PSC’s ‘ideas man’) to amalgamate the 39 Public Service departments into 22, including railways. ¹⁶ Nor would the administration of Prime Minister Sidney Holland elected in 1949, tinker much with Labour’s expanding State apparatus.