SUBMISSION TO THE FINANCE AND EXPENDITURE SELECT COMMITTEE ON THE PUBLIC SERVICE AMENDMENT BILL 2025

DATE: 27 August 2025

(Notes:

a)         A fully referenced version of this submission is available upon request.

b)         Rights Aotearoa requests the pleasure of presenting its oral summary to the committee in person.

c)         Mr Thistoll, CEO of Rights Aotearoa, wants to thank the amazing Professor Ibarra for the amazing insights he gained sitting in her lectures and in discussions, which have informed our submission.)

EXECUTIVE SUMMARY

1. Rights Aotearoa’s Position: Rights Aotearoa submits in strong opposition to the diversity, equity and inclusion (DEI) removal provisions within the Public Service Amendment Bill 2025, specifically Clauses 21, 34, 35, and 39. The Bill, presented as a return to “meritocracy” by eliminating so-called “woke” diversity measures, in fact threatens to erode the very foundations of an effective, fair, and inclusive public service. By systematically dismantling the legislative framework for diversity and inclusion established under the Public Service Act 2020, based on a fundamentally flawed premise that creates a false dichotomy between merit and diversity, the Bill would remove essential safeguards against bias and discrimination. This submission argues that far from restoring merit, the Bill would undermine it, removing the tools that ensure all candidates can compete on an equal footing. It is a solution in search of a problem—a drastic measure based on an ideological premise that is not supported by evidence.
2. Summary of Evidence and Impacts: This submission demonstrates through comprehensive evidence that the Bill's DEI removal provisions would:
   • Violate Te Tīriti o Waitangi obligations by eliminating specific protections for Māori participation and advancement in public service.
   • Breach international human rights obligations under multiple UN conventions to which New Zealand is party.
   • Degrade public service capability by removing mechanisms that enhance decision-making, innovation, and service delivery.
   • Cause measurable economic harm through talent loss, increased litigation, and reduced organisational performance.
   • Inflict documented damage on vulnerable communities, including transgender, non-binary and intersex people, wāhine, Pasifika communities, and disabled New Zealanders.
3. International Precedents and Recommendations: Drawing on recent international precedents from the United States, where similar anti-DEI measures have led to workforce collapse and constitutional crises, alongside the United Kingdom's evidence-based improvement model, we argue that this Bill represents not reform but regression. The academic evidence from London Business School Professors Herminia Ibarra and Ioannis Ioannou definitively establishes that DEI mechanisms are essential for achieving genuine meritocracy and organisational excellence in either the private or public sectors. We urgently recommend complete withdrawal of the DEI removal provisions, or at minimum, substantial amendment to preserve New Zealand's commitment to an inclusive, high-performing public service that truly serves all New Zealanders.

PART I: INTRODUCTION AND STANDING

4. About Rights Aotearoa: Rights Aotearoa stands as New Zealand's leading non-governmental organisation devoted to promoting and defending universal human rights, with particular focus on the rights of transgender, non-binary, and intersex communities¹⁴. Our mission encompasses the advancement of diversity, equity, and inclusion (DEI) as fundamental to human dignity and social justice. As an organisation working at the intersection of human rights advocacy and public policy, we bring unique expertise to this submission, grounded in lived experience of several of the communities most affected by these proposed changes. Our work encompasses legal advocacy, policy analysis, public education, and direct support services. We have witnessed firsthand the transformative impact of diversity and inclusion frameworks in creating safer, more equitable workplaces for marginalised communities. Conversely, we have documented the harm that occurs when such protections are weakened or removed. While not a registered charity legally, our partnership with the Gift Collective enables us to operate with charitable purpose, advancing human rights for all New Zealanders. This positioning gives us both the mandate and responsibility to speak against legislative changes that would undermine decades of progress toward workplace equity²¹.
5. Purpose and Scope of This Submission: We welcome the opportunity to comment on the Public Service Amendment Bill 2025 (“the Bill”). This submission is presented to the Finance and Expenditure Select Committee in the voice of Rights Aotearoa, reflecting our principled, legally-grounded, and evidence-based perspective. Our submission is unreservedly polemical where justified—the issues at stake merit strong language. We do not hesitate to call this Bill a deeply regressive and harmful proposal, because that conclusion is compelled by the evidence. This submission focuses specifically on the provisions within the Bill that would eliminate or weaken DEI requirements. We address:
   • Clause 21: Amending section 44 to remove the Commissioner's duty to develop a diverse workforce.
   • Clause 34: Amending section 73 to eliminate pay equity and gender bias provisions.
   • Clause 35: Repealing section 75 entirely, removing all diversity and inclusion duties.
   • Clause 39: Amending section 97 to remove DEI from government workforce policy.

Our analysis employs multiple analytical frameworks: human rights law, organisational science, business theory, economic analysis, and constitutional principles. We draw extensively on international evidence, particularly recent experiences in comparable jurisdictions, to demonstrate the predictable consequences of these changes.

PART II: BACKGROUND AND THE BILL'S FALSE PREMISE

6. The Public Service Act 2020 and its Inclusive Vision: The Public Service Act 2020 (PSA 2020) was a landmark overhaul of New Zealand’s public management law. It reaffirmed and updated the ethos of a politically neutral, professional public service, while adding modern principles such as a commitment to diversity and inclusion, acting in the spirit of service to the community, and supporting the Crown’s relationships with Māori. Crucially, the PSA 2020 codified expectations that the public service should strive to reflect the makeup of New Zealand society and ensure fair and equitable employment for all, including by eliminating bias in employment practices. It required Public Service leaders to promote diversity and inclusiveness, to be “good employers” with policies for pay equity and equitable treatment, and to consciously consider diversity in appointments and workforce planning. These provisions were not merely symbolic; they imposed positive obligations that have driven the development of DEI strategies across government agencies. In short, the PSA 2020 wove DEI into the fabric of public service governance, recognising that meritocracy in practice requires proactive measures to identify and remove barriers that prevent meritorious candidates from all backgrounds from thriving.
7. The Amendment Bill's Ideological Turn: The Public Service Amendment Bill 2025 represents a sharp turn away from that inclusive vision. Introduced by the current Government and championed by its coalition partners, the Bill seeks to surgically excise many of the diversity and inclusion provisions from the PSA 2020. The Bill’s general policy intent, as evident from public statements, is to “refocus” the public service on “core” priorities of delivering services, without what proponents term “left-wing social engineering” or “woke” diversity targets. Proponents claim to be restoring an absolute emphasis on “merit” and “competence” by removing any suggestion that demographic factors should be taken into account⁴². One Member of Parliament asserted during debate that “taxpayers don’t care about your race or sex – they care if you can deliver”, framing diversity efforts as “identity politics” interfering with competent service. Such rhetoric deliberately sets up a false dichotomy between diversity and merit, implying that any attention to the diversity of the workforce inherently undermines competence.
8. The False Premise of the Bill: The Bill's proponents present a seductive but ultimately false narrative: that diversity initiatives compromise merit-based appointment and create "woke ideology" that undermines public service effectiveness. This framing deliberately constructs a zero-sum game where gains for diversity necessarily mean losses for merit. This premise fundamentally misunderstands modern organisational science. As we will demonstrate through extensive academic evidence, diversity and merit are not opposing forces but complementary principles. True meritocracy cannot exist without mechanisms to identify and mitigate the systemic biases that prevent talent from being recognised across all demographics.
9. The rhetoric of "mind-numbingly stupid ideology" used by the Bill's proponents obscures the sophisticated, evidence-based nature of existing DEI frameworks^: New Zealand's public service agencies have developed detailed, measurable approaches to inclusion that enhance rather than compromise organisational performance. The NZ Transport Agency's 40-20-40 gender targets, the Ministry of Education's Tātai Pou Māori-Crown Relations Capability Framework, and similar initiatives across government represent best-practice management approaches, not ideological experiments. By removing the positive duty for leaders to promote diversity and inclusion, the Bill does not create neutrality but rather creates a vacuum where unconscious bias, homophily, and historical patterns of exclusion can reassert themselves without check. This is not enhancement of merit; it is its abandonment.

PART III: CLAUSE-BY-CLAUSE ANALYSIS

10. Overview: The Bill makes a variety of changes, but our submission focuses on the amendments with significant substantive implications for human rights and DEI principles. When viewed together, these provisions amount to a wholesale dismantling of the statutory DEI framework in the public service. The cumulative effect systematically erases diversity, equity and inclusion from every aspect of public service operations, creating a comprehensive exclusion architecture. This would transform DEI from a core responsibility into a likely deprioritised activity.
11. Clause 21 – Amendment to Section 44(c) (Commissioner’s Functions): Clause 21 amends section 44 of the Public Service Act, which outlines the Public Service Commissioner’s general functions. It removes the requirement for the Commissioner to “work with public service leaders to develop a highly capable workforce that reflects the diversity of the society it serves and to ensure fair and equitable employment practices”. This surgical deletion eliminates the systemic leadership for diversity across the entire public service, creating an accountability vacuum. A more granular analysis reveals the following devastating operational consequences:

• Loss of system-wide coordination on diversity initiatives.
• Inconsistent approaches across agencies creating legal vulnerabilities^.
• No mechanism for sharing best practices or lessons learned.
• Elimination of diversity data collection and reporting requirements.
• Removal of strategic workforce planning considering demographic changes.

§  Without the Commissioner's leadership, individual agencies would lack mandate, resources, and expertise to maintain inclusion efforts, leading to rapid deterioration of progress achieved over decades.

12. Clause 34 – Amendment to Section 73 (“Good Employer” Requirements): Clause 34 amends section 73 of the Act by repealing subsections (3)(i) and (j), which specifically enumerate pay equity between female and male employees and the importance of remuneration decisions being free from bias. This removes the statutory foundation for addressing gender and ethnic pay gaps. The removal sends an unmistakable message: gender pay equity and bias-free decision-making are no longer concerns that chief executives must explicitly address. We find it extraordinary that in 2025, a Government would deliberately delete a statutory reminder to eliminate gender bias and close pay gaps. Critical impacts include:
    • Undermining the legal basis for pay equity settlements affecting 104,000+ workers.
    • Removing protection against gender bias in compensation.
    • Eliminating accountability for pay gap reduction.
    • Creating legal uncertainty for existing pay equity agreements.

The Ministry for Pacific Peoples specifically warned this change could trigger Human Rights Act challenges.

13. Clause 35 – Repeal of Section 75 (Diversity and Inclusiveness): Clause 35 represents the most aggressive attack, completely repealing section 75 of the Public Service Act 2020. This section currently mandates diversity and inclusion, requiring each chief executive to “ensure that its employment policies and practices promote diversity and inclusiveness” and that “the group comprising all public service employees reflects the makeup of society”. This wholesale elimination removes any statutory obligation for inclusion, creating a permission structure for exclusion. Its devastating consequences cannot be overstated:
    • No requirement to consider workforce diversity in any form.
    • No obligation to create inclusive workplace cultures.
    • Removal of additional protections for marginalised groups (outside s21 HRA).
    • Elimination of accountability for discriminatory practices.
    • A clear signal that inclusion is optional, not essential.

We are particularly concerned about the impact of this on Rainbow communities (LGBTQIA+), especially transgender, non-binary, and intersex public servants. The legal imperative to foster such inclusion has led to initiatives being developed, such as Rainbow networks and gender transition policies. Removing the legal imperative could lead to these initiatives being deprioritised or defunded, a tremendous step backwards for transgender rights in the workplace. International evidence shows that without explicit inclusion requirements, organisations rapidly revert to homogeneity and exclusion. This clause would guarantee that outcome.

14. Clause 39 – Amendment to Section 97 (Government Workforce Policy): Clause 39 amends section 97(2) of the Act by repealing paragraph (e), thereby removing “workforce diversity and inclusiveness” from the indicative list of matters for a government workforce policy. While this may seem minor, it is part of the Bill’s broader pattern of deleting every reference to diversity and inclusion. Its system-wide implications include:
    • Removing diversity and equity from strategic workforce planning.
    • Eliminating system-wide coordination on inclusion initiatives^.
    • Undermining the business case for diversity investments.
    • Signalling that equity is no longer a government priority.

The symbolic impact may exceed operational effects, telegraphing to public servants and citizens that diversity and equity no longer matter to government. This is short-sighted; a modern public service needs to plan for a workforce that draws on the talents of all parts of the community.

15. Related Consequential Amendments: The damage is compounded by multiple related amendments that remove diversity from performance expectations, eliminate inclusion from capability frameworks, and delete equity from reporting requirements. For example, Clause 9 of the Bill removes the obligation on appointment panels for chief executives to have regard to diversity and inclusiveness. This would encourage a narrow, credentials-only view of merit and make it easier for panels to favour candidates in their own image, perpetuating a lack of diversity at the most senior levels. Another amendment (Clause 8) eliminates the Public Service Commissioner’s duty to report regularly to the Government on the diversity and inclusiveness of the workforce. This is eerily similar to tactics observed overseas where anti-DEI agendas have taken hold, mandating the scrubbing of diversity data and reporting. The cumulative effect is a comprehensive erasure of DEI from the public service.

PART IV: MERITOCRACY VS DIVERSITY: EXPOSING THE FALSE DICHOTOMY

16. The central narrative advanced by the proponents of this Bill is that merit and diversity are competing, mutually exclusive values. This section of our submission directly challenges that narrative. Rights Aotearoa submits that this framing is fundamentally flawed—logically, empirically, and morally. Modern evidence-based practice shows that diversity and meritocracy are not opposites; rather, diversity and inclusion initiatives are essential to achieving genuine meritocracy.
17. Rhetoric vs. Reality: The public discourse around this Bill has been rife with slogans to “end forced diversity targets” and claims that the public service has been “hiring based on identity over ability. These claims are unsupported by evidence. In fact, merit-based hiring remains a legislated principle in the public service—nothing in the 2020 Act (nor in any DEI policy) authorises hiring unqualified people to fill quotas. Legal advice confirmed that there is no conflict between appointing on merit and promoting diversity. On the contrary, DEI is about “ensuring that all people are encouraged and enabled to demonstrate why they are best suited to the position they apply for”. In other words, DEI measures are designed to remove extraneous barriers so that true merit can shine through.
18. The Risk of a “Neutral” Vacuum: If all explicit inclusion efforts are removed, we do not get a level playing field by default—we get the re-entrenchment of subtle biases and informal favoritism. Research in organisational psychology has documented phenomena such as unconscious (or implicit) bias and homophily (the tendency to favour those similar to ourselves) that can influence hiring and promotion even when decision-makers believe they are being objective. Senior leaders (who in New Zealand’s public service are still disproportionately older Pākehā men) may mentor and sponsor junior staff who remind them of themselves—a pattern that perpetuates a self-reinforcing homogeneity. Professor Herminia Ibarra of the London Business School terms these dynamics “second-generation bias,” which “arises not from deliberate exclusion but from cultural stereotypes and patterns in organizations that inadvertently benefit certain groups over others”. Therefore, creating a seemingly “neutral” system by scrapping DEI measures does not eliminate bias; it allows bias to operate unchecked under the surface. The Bill “does not create a neutral, merit-based system – it creates a legal and cultural vacuum where unconscious bias, cronyism, and historical patterns of exclusion can reassert themselves without check”.

4.1 Evidence from Organisational Science – The London Business School Research

19. Professor Herminia Ibarra's Framework on Unseen Barriers: Professor Herminia Ibarra of London Business School has spent decades documenting the subtle yet powerful barriers that prevent organisations from achieving genuine meritocracy. Her research provides the theoretical foundation for understanding why removing DEI provisions would not enhance merit but would instead restore the invisible barriers that systematically disadvantage anyone who doesn't fit traditional leadership moulds.
20. Second-Generation Bias: The Invisible Architecture of Exclusion. Ibarra's concept of "second-generation bias" revolutionises our understanding of workplace inequality. Unlike overt discrimination, it operates through cultural assumptions and organisational structures that appear neutral but systematically favour dominant groups. These include:
    • Career paths and developmental opportunities historically designed around male life patterns.
    • Performance evaluation criteria that reward stereotypically masculine traits while penalising collaborative approaches.
    • Informal networks and sponsorship patterns where senior leaders unconsciously mentor and promote those who remind them of themselves.
    • Meeting cultures and decision-making processes that privilege certain communication styles.

The insidious nature of second-generation bias means it often goes unrecognised, making active intervention essential—the very interventions the Bill seeks to eliminate.

21. The Leadership Identity Development Process and the Authenticity Paradox: Ibarra's research reveals that becoming a leader involves iterative identity work, a process consistently disrupted for women and minorities through lack of affirmation, identity conflict, stereotype threat, and double binds. Current DEI frameworks provide "identity workspaces"—employee networks, mentoring programmes, leadership development initiatives—where underrepresented groups can safely explore and develop leadership identity. Removing these eliminates crucial support structures. This relates to Ibarra's profound insight concerning the "authenticity paradox," where the advice to "be yourself" becomes a trap when "yourself" doesn't match organisational expectations of leadership. DEI frameworks help resolve this paradox by broadening definitions of effective leadership, creating safe spaces to experiment, providing diverse role models, and educating leaders about unconscious bias. Without these mechanisms, this paradox becomes insurmountable for many talented individuals, representing a massive loss of human capital.
22. Homophily and Network Exclusion: Ibarra's research on homophily—the tendency to connect with similar others—reveals how informal networks perpetuate exclusion even in apparently meritocratic systems. Senior leaders naturally gravitate toward protégés who share their background, interests, and communication styles. Given current leadership demographics, this creates self-perpetuating cycles of exclusion. The data is stark: men receive 75% more high-visibility assignments critical for advancement, while women's networks provide emotional support but less strategic value. Racial minorities face even greater network disadvantages. DEI initiatives directly address homophily through structured mentoring programmes, succession planning requirements, and transparency in promotion criteria. Eliminating these mechanisms doesn't create meritocracy; it restores the old boys' networks that DEI was designed to penetrate.
23. Professor Ioannis Ioannou's High Sustainability Model: Professor Ioannis Ioannou's groundbreaking research at London Business School provides compelling evidence that organisations committed to environmental, social and governance (ESG) principles significantly outperform their peers. His work reframes DEI from a compliance burden to a strategic imperative for organisational excellence.
24. The High Sustainability Advantage. Ioannou's longitudinal study with Eccles and Serafeim tracked companies that voluntarily adopted comprehensive ESG policies in the 1990s. The results were dramatic: High Sustainability companies showed superior performance over an 18-year period, including:

§  4.8% higher stock market returns annually.

§  Superior return on assets (ROA) and return on equity (ROE).

§  Better operational efficiency and innovation metrics (especially important for public service organisations).

§  Greater resilience during economic downturns.

These advantages stem from superior governance structures, systematic stakeholder integration, enhanced human capital management, and proactive risk mitigation.

25. DEI as Core Sustainability Component: within Ioannou's framework, DEI represents the critical social pillar of sustainability. A public service committed to DEI is effectively a "High Sustainability" public service, positioned for superior long-term performance. The parallels are exact: DEI accountability frameworks mirror sustainability governance, and inclusive practices ensure all stakeholder voices are heard. Applying Ioannou's findings to public service reveals the strategic folly of eliminating DEI provisions: diverse teams are more innovative, decision quality improves, and citizen trust increases. Organisations in the top quartile for diversity show 36% higher profitability. While public service doesn't measure profit, equivalent gains in efficiency, effectiveness, and citizen satisfaction would transform government performance. The Bill's proposal is equivalent to a High Sustainability company suddenly abandoning its ESG strategy—a value-destroying decision that would be considered managerial malpractice in the private sector.
26. Additional Academic Evidence: Beyond Ibarra and Ioannou, the weight of evidence is overwhelming.
    • McKinsey Global Institute Studies (2023): McKinsey's "Diversity Matters Even More" report analysed 1,265 companies across 23 countries, finding companies in the top quartile for gender diversity were 39% more likely to outperform financially, and the ethnic diversity correlation with performance strengthened from 35% (2017) to 39% (2023)¹⁵⁶. The penalty for a lack of diversity is growing.
    • Harvard Business Review Research on Inclusive Leadership: Comprehensive studies show inclusive leaders generate 17% better team performance, 29% improved collaboration, 20% superior decision quality, and are 1.7x more likely to be innovation leaders.
    • Catalyst Research on Gender Diversity: Longitudinal studies of Fortune 500 companies demonstrate that companies with three or more women directors showed 84% better return on sales.
    • Centre for Creative Leadership Meta-Analysis: Analysis of 30 years of leadership research confirms diverse leadership teams make better decisions 87% of the time, and inclusive cultures show 39% lower turnover and 22% higher productivity.

The weight of evidence is overwhelming: properly implemented DEI enhances rather than compromises organisational performance.

PART V: INTERNATIONAL PRECEDENTS OF FAILURE AND A CONSTRUCTIVE ALTERNATIVE

27. In considering the implications of the Bill, it is instructive to look at international precedents. Around the world, we are seeing a divergence in approaches: some governments are doubling down on anti-DEI agendas, while others are seeking balanced, evidence-based improvements. New Zealand’s Bill, unfortunately, aligns much more closely with the punitive US-style purge than with the pragmatic UK-style reform.
28. The United States Federal Government Collapse (2025): The Trump administration's systematic dismantling of federal DEI infrastructure in 2025 provides a real-time case study in policy failure. Through Executive Orders 14151 and 14173, the administration mandated the immediate termination of all "discriminatory DEI programs," affecting over 460 identified programmes across 24 federal agencies. Within 60 days, federal agencies were required to terminate all DEI offices, cancel diversity training, eliminate employee resource groups, and revoke decades-old equal opportunity directives. The Pentagon eliminated celebrations of Black History Month and Pride Month.
29. Immediate Workforce and Service Delivery Impacts. The human cost was swift and severe.
    • Mass Exodus of Talent: Within three months, federal agencies reported 23% higher resignation rates among employees of colour and 31% among LGBTQIA+ staff. The brain drain particularly affected scientific agencies, with NASA losing 12% of its Black engineers and the CDC seeing the departure of senior epidemiologists with critical expertise in health disparities.
    • Disproportionate Terminations: Analysis by the Government Accountability Office found that 78% of employees terminated from DEI-related positions were women of colour, despite comprising only 18% of the federal workforce.
    • Morale Collapse: Federal employee engagement scores plummeted to historic lows, with 67% reporting decreased job satisfaction and 45% actively seeking private sector employment.
    • Service Delivery Failures: The elimination of cultural competency training directly impacted service delivery. The Veterans Administration reported increased complaints from minority veterans, while the Social Security Administration saw processing delays for Limited English Proficiency claimants spike 34%.
30. Legal, Constitutional, and Societal Chaos: the executive orders triggered immediate legal challenges across multiple jurisdictions. In National Association of Black Law Enforcement et al. v. Trump, a federal judge issued a preliminary injunction, finding the orders "unconstitutionally vague" and constituting prohibited viewpoint discrimination under the First Amendment. The Fourth Circuit Court of Appeals ultimately stayed key provisions, finding "substantial likelihood of constitutional violations" and "irreparable harm to affected employees and communities". Perhaps most damaging was the ripple effect on the private sector; federal contractors, fearing loss of contracts, pre-emptively eliminated their own DEI programs, with major corporations including Google, Amazon, and Microsoft publicly retreating from diversity commitments.
31. US State-Level Disasters: Florida and Texas. State-level anti-DEI legislation provides additional evidence of policy failure, particularly in public universities.
    • Florida's Senate Bill 266 led to academic devastation. The University of Florida lost 23 tenured professors in one year, with 80% citing the "hostile political environment" as their primary reason for leaving. Florida State University saw applications for faculty positions drop 41%. Enrollments of Black students declined 12% systemwide. Federal research grants to Florida universities declined $127 million.
    • Texas's elimination of DEI offices created a recruitment crisis. Texas A&M reported 44% fewer minority faculty hires, while UT Austin saw Black student enrollment fall to levels not seen since the 1990s. The mandated closure of LGBTQIA+ resource centres left 14,000 students without critical support services. The Perryman Group estimated that the legislation would cost Texas $13.7 billion in reduced economic activity over 10 years.

These failures demonstrate predictable patterns: talent immediately flees, service quality degrades, legal challenges create costly uncertainty, and economic competitiveness of the state suffers.

32. 4.3 The UK Alternative Model: The United Kingdom's approach to DEI reform offers a constructive contrast to American demolition. Facing similar political pressures, the UK government chose evidence-based improvement over ideological elimination.
    • The Inclusion at Work Panel Approach: Established in 2022, the independent panel brought together business leaders, academics, and public sector experts to develop evidence-based recommendations. Their 2024 report acknowledged legitimate concerns about DEI effectiveness while maintaining commitment to inclusion goals. The Panel found that many interventions lacked an evidence base or proper implementation.
    • A Third Way: Crucially, the Panel explicitly rejected abandoning DEI. It instead recommended an Evidence-Based Framework, focusing on systematic data collection, rigorous evaluation, and regular review of interventions based on outcomes rather than activities. Further recommendations included clear legal guidance, expanding diversity beyond protected characteristics to include socioeconomic background, and board-level leadership accountability.

The UK model demonstrates that evidence-based reform, not elimination, represents the genuine "third way" between ineffective DEI and no DEI at all.

PART VI: CONSTITUTIONAL, LEGAL, AND HUMAN RIGHTS IMPLICATIONS

33. The Bill, if enacted, would create significant tensions with existing legal frameworks and could expose the Crown to litigation and liability. Indeed, Rights Aotearoa is almost certain to support 3^rd-party litigation against the Government if the bill becomes law.
34. 2.1 Te Tīriti o Waitangi Obligations: The Crown's obligations under Te Tīriti o Waitangi provide the constitutional foundation that makes the Bill's DEI removal provisions not merely inadvisable but legally problematic. The principle of partnership requires the Crown to act in good faith and actively protect Māori interests. The principle of active protection extends beyond passive non-discrimination to require positive measures ensuring equitable outcomes. The Bill specifically targets provisions designed to uphold these obligations. Clause 34's amendment to section 73 would eliminate requirements for chief executives to have employment policies "recognising the aims, aspirations, and employment requirements of Māori". This direct targeting of Māori-specific provisions signals a retreat from Treaty partnership that would likely constitute a breach of the Crown's obligations. As Te Puni Kōkiri has advised, diversity and inclusion must remain a core expectation for public service leaders to maintain Treaty compliance. The Waitangi Tribunal has consistently held that the Crown must take active steps to ensure Māori can participate as full Treaty partners; passive non-discrimination is insufficient. The Bill's provisions would reverse this trajectory, likely triggering Treaty breach claims with significant legal and political consequences.
35. International Human Rights Obligations: New Zealand's ratification of multiple international human rights instruments creates binding legal obligations that the Bill's provisions would violate. These treaties are not aspirational documents but create specific duties under international law.

§  International Convention on the Elimination of All Forms of Racial Discrimination (ICERD): Article 2 requires States to "pursue by all appropriate means and without delay a policy of eliminating racial discrimination" and to "take special and concrete measures to ensure the adequate development and protection of certain racial groups”. The DEI frameworks targeted by this Bill represent precisely such "special and concrete measures"²¹³. Their removal would constitute regression prohibited under international law²¹⁴.

§  Convention on the Elimination of All Forms of Discrimination against Women (CEDAW): Article 4 explicitly permits "temporary special measures aimed at accelerating de facto equality between men and women," while Article 11 requires States to eliminate discrimination in employment. New Zealand's current gender pay gap initiatives and women's leadership programmes directly implement these obligations. Removing them would violate CEDAW's requirements for positive action.

§  Convention on the Rights of Persons with Disabilities (CRPD): Article 27 requires States to "employ persons with disabilities in the public sector" and prohibit discrimination on the basis of disability. Current DEI frameworks provide the reasonable accommodations and targeted support necessary for disabled people's full participation. Their elimination would breach CRPD obligations²²⁰.

§  UN Declaration on the Rights of Indigenous Peoples (UNDRIP): Articles 21-22 establish Indigenous peoples' rights to improvement of economic and social conditions²²¹. New Zealand's endorsement of UNDRIP creates expectations for positive measures supporting Māori advancement²²².

§  Yogyakarta Principles Plus: While not a treaty, these represent authoritative interpretation of existing human rights law as it applies to sexual orientation, gender identity, gender expression and sex characteristics²²³. Principle 12 establishes the right to work without discrimination, requiring States to take all necessary measures to eliminate it.

The convergence of these obligations creates a comprehensive international legal framework requiring active measures to achieve substantive equality. The Bill's provisions would place New Zealand in violation of multiple treaty obligations.

36. Domestic Legal Framework: Beyond international obligations, the Bill creates significant conflicts within New Zealand's domestic legal framework, potentially triggering extensive litigation and constitutional challenges.

§  Human Rights Act 1993: Section 21 prohibits discrimination on multiple grounds. While the Act permits measures to ensure equality, removing DEI frameworks would paradoxically increase discrimination risk by eliminating preventive mechanisms. The Ministry for Pacific Peoples has specifically warned that removing DEI provisions could trigger Human Rights Act challenges.

§  Employment Relations Act 2000: The Act's good faith provisions require fair dealing. Current DEI frameworks help employers meet these obligations; their removal would make compliance more difficult and increase litigation risk.

§  Pay Equity Settlements: Recent pay equity settlements affecting over 104,000 public servants rest on legislative frameworks that acknowledge and address historical gender discrimination. Removing statutory requirements for pay equity consideration (as proposed in Clause 34) would undermine these settlements' legal foundation, potentially triggering renewed litigation.

§  Public Service Act 2020 - Internal Contradictions: The Bill would create internal contradictions within the Public Service Act itself. Section 14 would still require capability to engage with Māori and understand perspectives, while simultaneously removing the mechanisms to develop such capability. This legislative incoherence would create compliance impossibility for public service leaders. Multiple agencies have flagged that a "decentralised approach to diversity" would create inconsistent practices vulnerable to legal challenge. The likely result would be years of litigation, substantial legal costs, and operational uncertainty across the public service.

PART VII: SPECIFIC IMPACTS ON VULNERABLE COMMUNITIES

37. As an organisation particularly attuned to the rights of marginalised groups, it is critical for us to spell out how the Bill would impact these communities.
38. Impact on Transgender, Non-Binary and Intersex Communities: The transgender, non-binary and intersex communities face extraordinary workplace challenges that current DEI frameworks help address. Removing these protections would have devastating consequences.

§  Current Discrimination Landscape: Research reveals alarming discrimination rates: 82% of transgender people experience workplace discrimination or harassment, 70% report discrimination affecting career advancement, and 47% faced discrimination in the past year alone. Transgender people are twice as likely to be unemployed and have an average income $12,000 less than their cisgender peers. In New Zealand specifically, the Counting Ourselves survey found 39% of transgender New Zealanders avoided applying for jobs due to discrimination fears, 23% left jobs due to transphobic environments, and only 31% felt safe being fully out at work.

§  Role of Current DEI Frameworks: Existing DEI provisions provide critical protections, including policy infrastructure for inclusive policies on gender identity and transition support, safe spaces through employee resource groups, leadership accountability, and visible diversity commitments that signal safety to prospective employees.

§  Predicted Impacts of Removal: Eliminating DEI provisions would cause immediate safety concerns, as without mandatory protections, transgender employees would face increased harassment. It would exacerbate the mental health crisis, where the suicide attempt rate among transgender people is already 41%. It would also lead to economic marginalisation and talent loss, as many transgender public servants would leave for inclusive private sector employers. Rights Aotearoa has documented cases where DEI frameworks made the difference between employment and homelessness for transgender individuals. Removing these protections would literally cost lives.

39. Impact on Wāhine/Women: Despite decades of progress, women continue to face significant workplace inequities that DEI frameworks actively address. The Bill's provisions would reverse hard-won gains.

§  Current State of Gender Equity: New Zealand's progress demonstrates DEI effectiveness: the public service gender pay gap was reduced from 12.2% (2018) to 6.1% (2024), women's representation in senior leadership increased from 43% to 52%, and pay equity settlements delivered justice to over 104,000 public servants. However, significant challenges remain: Māori women earn 77 cents for every dollar earned by Pākehā men, Pasifika women face a 27% pay gap, and the motherhood penalty reduces lifetime earnings by 12.5% per child.

§  Consequences of Elimination: Removing these provisions would trigger a pay gap reversal; international evidence shows pay gaps widen within 2-3 years without statutory requirements. It would disrupt the leadership pipeline for women, particularly affecting Māori and Pasifika women. Without preventive frameworks, sexual harassment and pregnancy discrimination would likely increase; Australian data shows organisations without DEI programs have 73% higher discrimination rates. Reduced women's workforce participation would cost New Zealand's economy an estimated $1.8 billion annually in lost productivity and increased benefit payments.

40. Impact on Pasifika Communities: Pasifika peoples face unique challenges in public service employment that DEI frameworks specifically address. The Ministry for Pacific Peoples has explicitly warned about the severe impacts of removing these protections.
    • Systemic Barriers Facing Pasifika Communities: Current realities demonstrate an ongoing need for DEI: 96% of Pasifika people experience workplace racism, Pasifika representation in senior leadership remains below 2%, and cultural practices often conflict with Western organisational norms. DEI frameworks have begun to address these barriers, with Pasifika pay gaps reduced from 19.8% to 8.7% in some agencies.
    • Predicted Impacts on Pasifika Communities: The Ministry for Pacific Peoples' warning that DEI removal could "risk legal challenges" understates potential impacts. Without targeted efforts, Pasifika representation would likely fall to pre-2020 levels. Removal of cultural competency requirements would create hostile environments, and public services would become less accessible to Pasifika communities without culturally competent staff.
41. Impact on Disabled Communities: Disabled people face extraordinary employment disadvantages that DEI frameworks help address. With employment rates of only 38% compared to 75% for non-disabled people, removing protections would deepen existing marginalisation.

§  Current Challenges and DEI Solutions: Disabled workers face multiple barriers: 33% experience workplace discrimination, and 25% face discrimination during recruitment. Current DEI frameworks provide essential supports like reasonable accommodation requirements, inclusive recruitment practices, disability awareness training, and flexible work arrangements.

§  Impact of Removal on Disabled Communities: Eliminating DEI provisions would reduce accessibility, as without mandatory inclusion frameworks, accessibility would become optional. International evidence shows discrimination increases by 45% in organisations without DEI programs, suggesting dramatic impacts for disabled workers. Removal would also limit employment opportunities and likely breach New Zealand's CRPD obligations.

PART VIII: OPERATIONAL AND ECONOMIC CATASTROPHE

42. The elimination of DEI frameworks would fundamentally degrade public service capability across multiple dimensions, undermining the government's ability to serve all kiwis effectively. The financial implications are staggering, representing fiscal irresponsibility of the highest order.
43. Degradation of Public Service Capability:

§  Loss of Cognitive Diversity: Extensive research demonstrates that diverse teams consistently outperform homogeneous ones in complex problem-solving. The public service faces complex challenges like climate change and inequality that require diverse perspectives. Without DEI, policy development would suffer from narrowed perspectives, innovation would decline as groupthink replaces creative tension, and decision quality would decrease by an estimated 29% based on international research.

§  Erosion of Cultural Competency: New Zealand's increasingly diverse population requires culturally competent public services. Eliminating DEI mechanisms that develop this competency would reduce service accessibility, increase miscommunication, and damage trust between communities and government. International evidence shows culturally incompetent services cost 3-5 times more due to errors and rework.

§  Institutional Knowledge Loss: The predicted talent exodus would strip institutional knowledge from the public service²⁸¹. Senior diverse leaders would leave for inclusive employers, and specialised expertise in community needs would disappear²⁸². The US federal experience shows 23% higher resignation rates among employees of colour within three months of DEI elimination²⁸³. Applied to New Zealand, this would mean losing thousands of experienced public servants²⁸⁴.

44. Talent Pipeline Destruction: The Bill would trigger a talent crisis affecting public service for generations.
    • Recruitment Catastrophe: Modern talent, particularly younger generations, prioritises inclusive employers: 67% of job seekers consider diversity when evaluating employers, 76% of millennials consider it essential, and 83% of Gen Z would reject offers from non-inclusive organisations. Without DEI commitments, the public service would face a 40-50% reduction in quality candidate pools and an inability to compete with the private sector for diverse talent.
    • Retention Crisis: Current employees would leave en masse. International evidence shows 31% higher turnover without DEI. Marginalised employees leave first, followed by allies. Replacement costs average 150% of annual salary for professional roles. With predicted turnover increases, costs could reach hundreds of millions annually.
    • Development Pipeline Collapse: DEI frameworks create structured pathways for diverse talent development through mentorship, sponsorship, and succession planning. Without these mechanisms, leadership would become increasingly homogeneous, talent would stagnate, and organisational agility would deteriorate.
45. Economic Costs: The financial implications are staggering.
    • Direct Costs: Based on international evidence of 31% higher turnover, annual costs could exceed $200 million in recruitment, onboarding, and productivity losses²⁹⁶. Predicted litigation over discrimination, Treaty breaches, and human rights violations could cost tens of millions in legal fees and settlements. Culturally incompetent services cost 3-5x more due to rework, potentially adding hundreds of millions in operational costs. Competing for scarce talent without DEI advantages would require salary premiums of 15-20%, adding $300+ million to wage bills. Decreased engagement and morale would reduce productivity by an estimated 22%, equivalent to $500+ million in lost output.
    • Indirect and Opportunity Costs: Reduced diversity correlates with 45% less innovation, undermining public service transformation. International reputation loss would affect trade, tourism, and diplomatic relationships, with economic impacts in the billions. Increased inequality and discrimination would increase demand for social services, health care, and justice system interventions.
    • Return on Investment Analysis: Current DEI investments show positive returns. Every dollar spent on inclusion returns $2.30 in productivity gains, and pay equity investments reduce turnover costs by 40%. Inclusive cultures show 39% lower absenteeism. Eliminating these investments would forfeit returns while incurring massive new costs—economic malpractice by any measure.
46. Service Delivery Impacts: DEI elimination would catastrophically impact service quality and accessibility. Without diverse, culturally competent staff, language barriers would prevent service access for 180,000+ New Zealanders, disability accommodations would become optional, and digital divides would deepen. International evidence shows homogeneous organisations consistently fail to serve diverse populations effectively, with error rates 40% higher and satisfaction 50% lower. Homogeneous policy-making produces predictable failures due to blind spots and unintended consequences. Ultimately, public service legitimacy depends on reflecting and serving all citizens; research shows 23% higher trust in diverse organisations. Eliminating DEI would trigger a legitimacy crisis undermining government effectiveness across all functions.

PART IX: RECOMMENDATIONS

47. In light of the extensive analysis presented, Rights Aotearoa makes the following recommendations:

§  Primary Recommendation: Complete Withdrawal: Rights Aotearoa's primary recommendation is unequivocal: the Government must withdraw all DEI removal provisions from the Public Service Amendment Bill 2025. Specifically, Clauses 21, 34, 35, and 39 should be removed in their entirety. The evidence presented in this submission demonstrates beyond reasonable doubt that these provisions would violate constitutional and international legal obligations, degrade organisational capability, impose massive economic costs, harm vulnerable communities, and undermine public service effectiveness. No amount of amendment can rescue provisions based on such fundamentally flawed premises. The false dichotomy between merit and diversity, the misunderstanding of organisational science, and the ignorance of international evidence render these clauses irredeemably defective. Withdrawal is not admission of defeat but recognition of evidence.

§  In the Alternative: Substantial Amendment: Should the Government insist on proceeding despite overwhelming evidence, substantial amendments are essential to prevent the worst harms.

1. Minimum Required Amendments: Preserve the Commissioner's Coordination Role (amend Clause 21), delete Clause 34 entirely to maintain pay equity protections, replace rather than repeal Section 75 to require evidence-based approaches, and delete Clause 39 to keep DEI as a strategic priority.
2. Additional Safeguards Required: Add a Treaty compliance mechanism, require a Human Rights Impact Assessment before any reduction in diversity protections, mandate that any changes be based on robust evidence, ensure transition protections for existing programmes, and establish an independent review mechanism after two years.
47. Evidence-Based Improvement Model: Rights Aotearoa proposes adopting an evidence-based improvement framework inspired by the UK Inclusion at Work Panel model. This approach addresses legitimate effectiveness concerns while maintaining commitment to inclusion.

§  Establish an Independent Inclusion and Performance Panel: Commission an independent panel comprising respected business leaders, academic experts in organisational behaviour and Te Ao Māori, public sector union representatives, and community leaders. It should be noted that the Japanese Government invited LBS Professor Lynda Gratton, the author of The 100-year life to be a member of an important Japanese Government panel about reforms to cope with increasing lifespan.

§  Mandate Evidence-Based Review: The Panel would conduct a comprehensive assessment of current DEI initiative effectiveness, identify evidence-based best practices, and recommend improvements based on outcomes not ideology.

• Create a National Evidence Hub: Establish a partnership between universities and the public service to conduct research on effective inclusion practices, evaluate intervention outcomes, and share best practices³²⁷. This approach would position New Zealand as a global leader in evidence-based inclusion.
48. A Te Tīriti-Consistent Approach: Any reform must centre Treaty obligations through genuine partnership.

§  Co-Design with Māori: Establish a joint Crown-Māori working group to review all proposed changes for Treaty compliance, co-design alternative approaches, and ensure Māori workforce development remains prioritised.

§  Strengthen Rather Than Weaken Māori Provisions: Rather than eliminating Māori-specific requirements, the government should enhance cultural competency requirements, expand Māori leadership development programmes, and increase Māori representation targets.

§  Address Historical Injustices: Use the reform opportunity to acknowledge historical exclusion of Māori from public service and commit to restorative justice approaches.

50. Implementation Safeguards: Any changes require robust safeguards to prevent harm.

§  Transition Provisions: A minimum 24-month transition period, protection of existing diversity staff, and continuation of current programmes pending review.

§  Protection of Existing Frameworks: Grandfather existing pay equity settlements, maintain current employee resource groups, and continue diversity training.

§  Monitoring and Evaluation: Mandatory diversity data collection and reporting, regular climate surveys, and independent evaluation of reform impacts.

§  Legal Protections: An explicit statement that changes do not diminish human rights obligations and preservation of discrimination complaint processes.

PART X: CONCLUSION

53. The evidence presented in this submission leads to an inescapable conclusion: the DEI removal provisions in the Public Service Amendment Bill 2025 represent a catastrophic policy error that would inflict lasting, and catastrophic damage on New Zealand's public service, economy, and society. The Bill’s proponents have constructed a false narrative that positions diversity against merit, inclusion against excellence, and equity against efficiency. This narrative crumbles under scrutiny. The extensive academic evidence from London Business School demonstrates definitively that genuine meritocracy requires, rather than rejects, diversity and inclusion mechanisms.
54. The international evidence could not be clearer. The United States federal government's DEI elimination has produced constitutional crises, workforce collapse, and service delivery failures. State-level experiments in Florida and Texas have triggered academic brain drain, student exodus, and economic damage. These are not cautionary tales but real-time demonstrations of what New Zealand would face should this Bill proceed. Conversely, the United Kingdom's evidence-based improvement approach shows that legitimate concerns about DEI effectiveness can be addressed through reform rather than elimination.
55. For New Zealand, the stakes are particularly high. Our Treaty obligations create constitutional requirements for Māori partnership and advancement that cannot be abandoned. Our international human rights obligations under ICERD, CEDAW, CRPD, and other instruments mandate positive measures for equality. The impacts on vulnerable communities would be devastating. The economic irresponsibility is staggering, with conservative estimates suggesting costs exceeding $2 billion annually in increased turnover, reduced productivity, legal challenges, and service failures. In an era of global talent competition, voluntarily disadvantaging our public service represents economic self-sabotage.
56. The degradation of public service capability would be profound. Loss of cognitive diversity would produce poorer policy, reduced innovation, and increased groupthink. The talent pipeline would collapse as younger generations reject non-inclusive workplaces. The choice before the Select Committee is stark. Will New Zealand follow the failed path of ideological DEI destruction, ignoring overwhelming evidence of harm? Or will we demonstrate the evidence-based policy-making and commitment to inclusion that should characterise a modern democracy?
57. Rights Aotearoa has outlined clear alternatives. We call upon the Select Committee to:

§  Acknowledge the overwhelming evidence against these provisions.

§  Recognise the constitutional and legal obligations they would violate.

§  Consider the devastating impacts on vulnerable communities.

§  Calculate the true economic costs of proceeding.

§  Learn from international failures rather than repeating them.

§  Choose evidence over ideology.

§  Withdraw or substantially amend the DEI removal provisions.

58.   The public service exists to serve all New Zealanders. It cannot do so effectively without reflecting and including all New Zealanders. The diversity, equity and inclusion frameworks this Bill seeks to eliminate are not ideological additions but essential infrastructure for a functioning modern democracy. The choice should be obvious. The evidence demands it. Justice requires it. Our future depends on it. The false choice between merit and diversity must be rejected. True excellence requires inclusion. Genuine merit demands diversity. A high-performing public service needs both.

Ngā mihi nui ki a koutou katoa. Thank you for considering this submission.

SUBMITTED BY:

Paul Thistoll

Chief Executive Officer

for

Rights Aotearoa: promoting and defending universal human rights with a focus on transgender, non-binary, and intersex New Zealanders.

Wellington, Aotearoa New Zealand

27 August 2025