Reforming the Australian Public Service

Address to Heads of Agencies and Members of Senior Executive Service

Great Hall, Parliament House, Canberra

30 April 2008

I begin this morning by honouring the traditional owners of this land on which the Parliament now sits.

Thank you for the efforts that each of you have made to attend this morning.

I know that your workload has been unusually heavy in recent months.

Alongside an exhaustive spending review process for the Budget, the transition to a new government means managing new priorities and new policies, and adjusting to new ministers and their offices.

The leadership roles that each of you exercise require you to balance the day to day needs of government with longer term policy and planning; in short, the reactive versus the strategic.

In the early days of a new government you face both enormous day to day demands while also needing to start implementing new policy platforms.

The transition to a new government is made even harder when it is so many years since the last change of government. Almost two thirds of today’s workforce was not even working in the APS when the government last changed in 1996, and has therefore never gone through this process before.

But a transition like this is a learning experience for everyone.

Just imagine what it was like for those of us in Queensland when the Goss Government won office in 1989.

The last change of government had occurred in 1957 – some 32 years before!

It’s a credit to the APS that the transition to the new Government has been so seamless.

So let me say on behalf of the whole ministry, we do appreciate the enormous amount of work that has been done to date.

You are public policy professionals.

You have chosen your career because you believe public policy counts.

You have chosen a good career path because it is about the public good.

It is about something bigger than yourselves.

Furthermore, the work that you do is essential for the nation.

In public service, you – like us in the Parliament – have a great privilege.

Together, we help to shape our nation’s future – our national security, our economic future and the fabric of our future society.

We help expand opportunities for working Australians.

And we help Australian families who need a helping hand on the way through.

Today, I’ve been asked to outline to the SES the Government’s policy priorities for the future.

And in doing so, I’ll seek to outline the importance the Government attaches to the public service in implementing these policy priorities into the future.

The Government’s reform agenda

The new Government was elected with a comprehensive and challenging long-term policy agenda.

We are committed to building a modern, competitive Australia capable of meeting the challenges of the 21st century – to secure the nation’s future as well as a future for working families.

We are committed to building a strong foundation for future prosperity – through responsible economic management and by enhancing Australia’s international competitiveness and productivity.

The Government’s productivity agenda begins with a comprehensive long-term program of reforms to our education system, ranging from early childhood services through to schools and training, and right through to universities and research programs.

Developing our broadband infrastructure is also one of the keys to lifting our productivity. Broadband is a transformational technology that offers large long term productivity gains across every sector of the economy – private sector, public sector and the third sector.

Another element of our productivity agenda is using the COAG reform process to remove the duplication that exists between Commonwealth and State regulation and service delivery. As many of you will know, the COAG process is already achieving results, although the hardest work lies ahead.

As the leaders of the Commonwealth public service, there is a challenge for you in progressing this COAG reform agenda. That challenge is to appreciate that we are in a new era of Commonwealth/State cooperation.

While always protecting the Commonwealth’s interests, I have a greater expectation that you will work constructively with State and Territory counterparts to achieve lasting reform.

If we get that right, we can deliver a fair deal for the Commonwealth, a fair deal for the States and above all, a great deal for the community.

In addition to lifting productivity growth, the Government is committed to maximising workforce participation, targeting the range of factors that influence workforce participation at different stages of life.

The tax cuts that will come into effect in July are a first step to longer-term tax and welfare reforms to encourage more people into the workforce.

To address the hurdles to participation for women with young children, we are making quality childcare more affordable and more accessible: increasing the child care tax rebate; providing play-based early learning for all 4 year olds, and starting to build child care centres at schools.

Another priority for the Government is to do what we can to address the cost of living pressures on working families.

We have already introduced our transitional amendments to the Workplace Relations Act; we have announced new policy directions on housing affordability; and later this year we will establish a national Fuelwatch scheme as well as receiving the ACCC report on grocery prices.

The Government believes in giving a fair go to all Australians and this is reflected in our policies relating to social inclusion, health care, education, workplace relations and our commitment to close the gap in indigenous life opportunities.

The Government is committed to decisive action on the long-term challenge of climate change, establishing an emissions trading scheme, raising the renewable energy target and ratifying the Kyoto Protocol.

The Government is also committed to a secure Australia – strong at home and fully engaged abroad, through what I have described elsewhere as a creative middle power diplomacy.

Finally we are committed to new ways of governing – strengthening our independent public institutions (including the APS) and how we can make government more open, accountable and responsive to the needs of the Australian community.

The importance of the APS

The Government therefore has an ambitious policy agenda, with a strong focus on long-term policies rather than simply short-term measures.

The Government is determined to deliver for the working families who have given us this opportunity to build a modern Australia.

The process of policy and program implementation is therefore critically important.

Good policy is one thing.

But good policy without effective program implementation is a dead letter.

The work of the APS is therefore crucially important to the Government.

I understand the vast difference made by good policy design, implementation and service delivery having worked myself at both the Commonwealth and State levels.

Some people like to talk down the public service, and perhaps some graduates are less attracted to the APS because it can’t match some of the monetary rewards in parts of the private sector.

You may be surprised to know that at the recently concluded 2020 Summit, a constant theme across the 1,000 delegates was the absolute importance of building an independent, robust and properly remunerated Australian public service.

Just look at the policy challenges that Australia faces over the next decade and beyond.

It’s the Australian public service that will lead the nation’s response to these great challenges.

The challenge of setting up an emissions trading scheme, and beginning the transformation to becoming a low carbon economy.

The challenge of implementing an education revolution extending from early childhood to schools, apprenticeships, universities and postgraduate research – to prepare a new generation with skills and competencies that employers will be looking for decades from now.

The challenge of reshaping Australia’s sprawling health care system to meet the demands of an ageing population with changing health problems.

I could mention any number of other challenges, from tackling the nation’s water shortages to closing the gap on indigenous life opportunities.

Think even of the opportunities of taking the skills you’ve developed in the APS and using them to transform lives and futures in struggling nations in the Pacific Rim – as 270 APS staff are doing right now, a remarkably important part of Australia’s overseas aid program.

Also, our diplomats, together with the ADF, who continue to work in harm’s way in places like Baghdad and Kabul.

I would contend that the Australian public service offers the most stimulating and challenging job opportunities that you could imagine. And that’s the career environment I would like to create for you – our public policy professionals of the future.

A public service that is characterised by excellence – by policy innovation, by policy creativity, by policy contestability, by long-term policy planning and by a parallel commitment to excellence and innovation in how we best deliver services to the Australian community.

Australia’s long term competitiveness will be shaped by the success of our policies in restoring strong productivity growth, implementing the education revolution, fixing the Federation and responding to climate change.

So let me say very clearly that the Government recognises that we cannot deliver our vision for a modern Australia without an APS that is committed to excellence in policy design, policy implementation and service delivery.

The Government’s agenda for the APS

Today I want to discuss seven elements of the Government’s vision for the future Australian public service:

* Reinvigorating the Westminster tradition of an independent public service with merit-based selection processes and continuity of employment when governments change;

* Building a professionalised public service committed to excellence;

* Developing evidence-based policy making processes as part of a robust culture of policy contestability;

* Enhancing the strategic policy capability of the public service;

* Strengthening the integrity and accountability of government;

* Broadening participation in government through inclusive policy processes, and

* A contemporary view of government service delivery that emphasises both efficiency and effectiveness in outcomes.

Reinvigorating the Westminster traditions of independence and continuity

We cannot afford a public service culture where all you do is tell the Government what you think the Government wants to hear.

We cannot afford second-best policy responses to the challenges of climate change, the competitive challenge from the rise of India and China or the need for reform of the Federation.

The Government must receive the best advice, based on the best available information and evidence.

Public servants will not give frank and fearless advice if they think their career prospects or the continuity of their employment rest on them simply echoing a Government’s own prejudices.

As you know, the last change of government in 1996 saw many public servants removed from senior positions.

Some people argued that on coming into office, the new Government should take a leaf out of the same book and remove agency heads who were seen as being politically aligned to the previous Government’s agenda.

We took a very different view. We made a commitment last year that there’d be no ‘night of the long knives’ when we came to office. We said we’d treat the public service differently to the previous government, and we have honoured that commitment.

To build a first class, independent public service, promotion must be based on merit, not on politics.

That is why the Government has strengthened merit-based selection standards for appointments to many senior government appointments such as statutory office holders.

These standards will apply to more than 130 senior positions, including 65 agency heads.

Under these new arrangements there is a formal requirement that all relevant positions must be advertised. The process of assessing applicants must be based on merit, and each process must be overseen by the relevant departmental secretary and the Public Service Commissioner.

Ministers will receive a considered report based on a process that applied merit and openness, and will then have final responsibility for the decision. That is appropriate in a Westminster system, where final accountability rests with the Minister.

Appointments will normally be for five years, so that office holders are not under the constant threat that their contract may not be renewed.

Westminster, by and large, has served our system of government well – and the time has come to rebuild the Westminster tradition in Australia.

A professionalised public service

A second element of our reform agenda is to build a highly professional public service.

We need public servants who are talented, hard working and innovative to address the immensely complex public policy challenges ahead.

The Government recognises the long term need to strengthen the capacity of the public service.

We cannot do that overnight.

But we know that the Government cannot deliver on its long-term agenda without a high-quality, professional Australian public service.

And as the Audit Office’s report on public sector recruitment this week has highlighted, the APS is facing a challenging environment both for recruitment and retention.

We must build long-term capability and capacity by investing in the APS’s leadership, workforce development and organisational development.

I am committed to an Australian public sector that fosters career development and rewards high achievement.

I also want to see more flexible pathways between the public sector and the private sector, research institutions and the community sector. We should also improve mobility between agencies within the APS and between the APS and state public sector agencies.

For years the private sector has poached and plundered talent from the public sector. The APS should equally seek out talent from the private sector.

The public sector leaders of the future could be drawn from the public, private and community sectors.

The leadership groups within the public service should reflect a wide diversity of past work experience. This diversity better enables us to understand the different needs of the Australian community and to develop and deliver better public policy.

That means we need people in the public service with hands-on experience of business, finance, logistics, strategic planning and so on – just as we also want people with experience in the third sector of voluntary and community organisations.

We need to accept that talent is more mobile now than in the past. But we don’t need to think that just because a talented public servant takes up an opportunity in the private sector – or the community sector – that they won’t return to the public service further down the track.

Indeed we should encourage APS staff to spend time working in the private sector, the community sector and in overseas public sector roles, as opportunities to build a broader skill base that can be put to use in the APS in the future.

Evidence-based policy

A third element of the Government’s agenda for the public service is to ensure a robust, evidence-based policy making process.

Policy design and policy evaluation should be driven by analysis of all the available options, and not by ideology.

When preparing policy advice for the Government, I expect departments to review relevant developments among State and Territory governments and comparable nations overseas.

The Government will not adopt overseas models uncritically.

We’re interested in facts, not fads.

But whether it’s aged care, vocational education or disability services, Australian policy development should be informed by the best of overseas experience and analysis.

In fostering a culture of policy innovation, we should trial new approaches and policy options through small-scale pilot studies.

It may be appropriate to collaborate with a State government, a business organisation, a research centre or a community organisation.

It may even be appropriate to cooperate on policy innovation with a government agency overseas, such as we are now doing on climate change with the United Kingdom.

Policy innovation and evidence-based policy making is at the heart of being a reformist government.

Innovation can help us deliver better policy and better outcomes for the whole community.

This means that we want the culture of the APS to foster new ideas and new directions – and not to let the narrow interests of particular branches or agencies stand in the way of innovation.

Enhancing strategic policy capabilities

One important feature of the priorities that I’ve discussed this morning is the long-term nature of many of Australia’s key policy challenges.

For the APS to deliver on the Government’s long term reform agenda, we will need to invest in a greater strategic policy capability.

By this I mean a greater capacity to see emerging challenges and opportunities – and to see them not just from the perspective of government, but also from the perspective of all parts of the community.

Strategic policy development is especially important at the level of the Department of Prime Minister and Cabinet, which should play a whole-of-government, forward-looking role in policy development, as well as carefully thinking through implementation issues, and taking corrective action when policies are not working.

PM&C’s role is to support the development and delivery of policy across all of government. In doing so, I expect it to work collaboratively with the entire APS so that we genuinely deliver ‘joined up’ government.

As Prime Minister most of my interactions with the APS occur through my Department. My expectations of PM&C are:

* timely, well-argued, robust and forward looking policy advice;

* a coordination role, particularly through the Cabinet process, and

* supporting the implementation of key government programs.

I know this has been a matter of debate in recent years, but I hold the firm view that your job is not just to advise on the day to day issues as they arise. You should also be providing long-term strategic advice to assist the Government in developing its policy direction.

The public service must have the systems in place to tackle the hard issues that present challenges across portfolios, across departments, across governments and across generations.

Of course, the Government is ultimately responsible for decision making. Once a decision is taken, the task of the public service changes to ensuring effective implementation and service delivery.

And this is as important as the decision itself.

Inclusive and innovative government

A fifth element of the Government’s agenda for the APS is to encourage wider participation in the processes of government from all parts of the community.

By engaging the community more broadly we can understand better how government policies impact families, individuals, communities and businesses.

This can help us with the challenge of making the different parts of government join up, and ensure that services are not just delivered efficiently from the Government’s perspective, but effectively from the citizen’s perspective.

One of our challenges is to find ways to harness the best ideas from Australians of all backgrounds and all ages.

The Australia 2020 Summit showed that many Australians are keen to participate in the policy process.

A more inclusive policy process means engaging average Australians as well as experts, think tanks and business and community groups in policy development and delivery. Many parts of the APS already have good processes of community engagement on which we can build.

This more inclusive approach extends to policy implementation and service delivery.

Australians increasingly expect a more personalised service when they deal with large organisations, whether businesses or government agencies. Government agencies must meet those expectations.

This also means cultivating a genuine spirit of public service on the front line of service delivery.

Much of the best innovation will be driven from the front line of service delivery, and we need ways to capture feedback from the front line where public servants interact with people.

The responsibility of capturing this information and feeding it back into the policy process will largely rest with you.

Integrity and accountability

The sixth element of the Government’s agenda for the APS is rebuilding a culture of accountability across all levels of government.

The Government has begun that with the Standards of Ministerial Ethics, the Register of Lobbyists, and the Lobbying Code of Conduct.

I have also foreshadowed my intention to introduce new codes of conduct relating to ministerial staff.

Just as these high standards apply to ministers and their offices, I similarly expect the public service to comply with the APS Values and Code of Conduct and the Public Service Act.

The Government will also be enhancing the culture of transparency in government through reforms to Freedom of Information laws, including the abolition of conclusive certificates and the creation of a Freedom of Information Commissioner.

A contemporary view of government service delivery

The final aspect of the Government’s agenda for the public service is that we have a contemporary view of the role of the state in service delivery.

I do not have an ideological preference for the public sector, nor for the private sector. The question of how services are best delivered has not been resolved conclusively in favour of either the market or the state.

In some instances, the public sector may provide services that are of better quality, are more accessible, or that come at a lower cost.

In other instances, private or community sector provision may reflect a better use of limited public resources.

Service delivery should be contestable, and decisions about the mix of the public and private sectors should be based on the available evidence on how to deliver services efficiently and effectively.

This means that we will sometimes support services being delivered by those outside of the public sector, but with the proviso that we examine all of the costs and benefits of service delivery options.

As many private sector businesses have concluded, outsourcing can sometimes be a false economy because it can hollow out an organisation’s important technical skills and know-how, to its long term detriment.

Corporate memory is important, especially in government, and we should ensure that it is not diminished by short-term assessments of the costs and benefits of how we implement decisions and deliver services.

Conclusion

Australia has been profoundly shaped by the great public servants of the past.

Just think of the extraordinary contribution made to successive governments – and more importantly, to Australia – by H.C. Coombs, or ‘Nugget’ Coombs as he was universally known.

For five decades from the late 1930s, Nugget served as an economist; as the first Governor of the Reserve Bank; as an architect of a new approach to indigenous affairs, and as a source of advice for successive Prime Ministers of all political persuasions.

He worked directly with Prime Ministers Curtin, Chifley, Menzies, Holt, Gorton, McMahon and Whitlam.

One reflection of his extraordinary contribution is the effusive letters of thanks that were written to him by Prime Ministers Menzies and Whitlam.

After his retirement as Governor of the Reserve Bank, Sir Robert Menzies wrote to thank him for being:

“a man of the most conspicuous ability and of the most shining integrity… [I] have benefited so much from your great services to our country.”

Some years later, Gough Whitlam also wrote to thank Nugget for his contribution to the Whitlam Government’s achievements relating to indigenous affairs, the arts, the public service and the public sector:

“[T]he fact that these achievements will endure and make a permanent impression on Australian society is due primarily to your dedication and skill and lofty sense of duty. I thank you for all you have done.”

Nugget Coombs’ career shows that independence, excellence and absolute integrity can all go together.

Nugget’s concluding thoughts in his autobiography are perhaps more sharp and relevant today than even when he wrote them almost thirty years ago:

“Perhaps the young and idealistic recruits to Australian Government bureaucracies who sometimes must despair of finding scope for either their abilities or their idealism may find some comfort in the evidence the letters and other aspects of this story provide, that mutually rewarding relationships between Ministers and their official and unofficial advisers exist more often than one would be led to believe by media comment or some aspects of recent political history.”

I hope we can see a new generation of public servants with the spirit of Nugget Coombs.

I look forward to a strong, constructive partnership between the APS and the Government that I lead.

It will sometimes be demanding, sometimes frustrating, and sometimes exhilarating.

But I hope, it will always be rewarding in the role that you play in shaping Australia’s future.

I hope that you will each be able to take great pride in your work and the work of your agencies in the months and years ahead.

And I look forward to what we can do together – to equip Australia to deal with the challenges of the 21st century.