Albanese squibs on APS independence: Can the crossbench force genuine reform?

Jan 24, 2025
Prime Minister Anthony Albanese

While the Albanese Government has made some progress in rebuilding APS capability, it has dropped the ball on restoring the degree of independence it promised. Moreover, because so little of what it has done has been legislated, almost everything of consequence could be quickly undone by a future government. For genuine and lasting reform, we must therefore turn to the crossbench to insist on appropriate legislation by the next Parliament.

APS independence

The APS is not independent of the elected government, nor are departmental secretaries. But they must have a degree of independence as required by the APS Values of impartiality and professionalism, and in providing ‘frank and fearless’ advice.

Despite all the Albanese Government’s rhetoric about APS independence, if and when a future government terminates the appointments of secretaries it does not favour, don’t just blame that government: also blame the Albanese Government for failing to fix the system.

After Senator Gallagher’s 2023 statement on APS reform, she asked me ‘to be kind’ in my reporting. I was. I acknowledged that at long last the minister had committed the Government to genuine reform, to new legislation (beyond what was then before the Parliament) locking in merit-based appointments of secretaries and strengthening the role and independence of the APS Commissioner. Her commitments were in line with the recommendations of the 2019 Thodey Report which had been explicitly endorsed by the Robodebt Royal Commission.

As I rose to ask the Minister a question after her 2024 statement last month, she again asked me to be kind. Given her answer, I find that difficult. I asked her about her 2023 commitments which she had not referred to in her 2024 statement. She obfuscated, saying:

‘there’s a whole range of areas that APS reform can be moving into, and we can be continuing with legislation and directions and all the rest of it. But that’s a moot point if there’s going to be 36,000 less of you.’

No, that is not a moot point. Reform is not about the numbers but about the thos of public service and how it operates whatever its size. Robodebt was not caused by a lack of staff, but a lack of courage and a lack of independence.

I am sure the commitments Gallagher made in 2023 were genuine, and I strongly suspect they remain her preferred position. I can only speculate that she has since been rolled by some of her colleagues, presumably including PM Albanese, perhaps influenced by colleagues in Victoria and NSW who have so politicised their public services. That might also explain the failure to release Lynelle Briggs’ 2023 report on other appointments which almost certainly called for the strengthening of merit-based requirements.

Glyn Davis made his own position clear in answering a question from Professor John Halligan after his annual address to the APS before Christmas. He reminded the audience that he is on the public record on these issues as a signatory (along with Gordon de Brouwer) of the Thodey Report. Indeed, Davis intimated that his personal preference was not only to legislate firmer merit-based appointment processes and strengthening the role of the APS Commissioner but also to re-establish greater tenure for secretaries.

We can only speculate whether this view is shared by other members of the Secretaries Board, notwithstanding the likely implication for their remuneration (which was increased by 20% when the ‘contract’ system was introduced thirty years ago). What was evident from Davis’s response was that his view was not the accepted view now of the Albanese Cabinet.

Providing greater security of tenure may not guarantee the provision of ‘frank and fearless’ advice of course: that also requires character. But Robodebt demonstrated how the rewards and penalties secretaries face do affect their behaviour, and in turn undermine the degree of independence the APS Values require of other APS executives.

Davis mentioned the classic (if hypothetical) British advice to a minister: ‘if you are determined to pursue this damn silly policy, minister, at least don’t do it in this damn silly way’.

I wonder how many – if any – current Australian secretaries have ever given as frank advice as that.

APS capability

While admitting that her 2024 statement was more ‘political’ than previous statements, Gallagher made many valid points defending the Government’s actions to rebuild APS capability and attacking the Opposition’s populist suggestions to reduce APS staffing by 36,000.

Davis also bravely (but in a strictly non-partisan way) called for an evidence-based critique of the size and performance of the APS.

The recent growth of the APS has not been as dramatic or costly as the Opposition claims, nor has it been concentrated in Canberra.

The APSC’s latest State of the Service Report (Table 9) shows the APS headcount is lower now as a percentage of the Australian population and the employed workforce than it was in 2008 (0.68% compared to 0.75% of the Australian population, and 1.36% compared to 1.52% of the employed workforce).

The SOSR (Table 10) also shows that the 33,000 growth since 2015 has been predominantly outside the ACT (the ACT share fell from 38.1% to 36.9% in 2024, though the ACT headcount did grow by over 10,000 over that period). Growth over the last three years under this Government (Figure 8) has also been mostly outside the ACT.

This is consistent with Government claims of giving priority to improved services to the public such as through the NDIS, Veterans Affairs and Centrelink.

Some of the most recent growth has also been offset by reduced use of contractors, consultants and labour hire, though we are yet to see an update of the APSC/Finance Department Employment Audit which revealed a workforce of some 54,000 private sector employees engaged by Commonwealth agencies in 2021-22.

Other Government measures to enhance capability include the reintroduction of regular capability reviews of departments and major agencies, and Andrew Leigh’s push for more systematic evaluation that should over time enhance APS policy advising capability.

There remains room, however, for legitimate exploration of the size and composition of the APS, even if the Opposition’s recent suggestions have no evidentiary basis whatsoever.

I suspect that total administrative expenses – including APS remuneration, travel, rent, contractors, consultants, labour hire etc. – has increased in real terms over the last three years notwithstanding the cuts to contractors, consultants etc. Whether services have improved commensurately is unclear.

Better use of technology, including AI, also offers important efficiency gains.

If the Opposition winds back some of the growth in programs such as the NDIS and childcare, there may also be some staff savings.

And the classification profile of the APS is still awry. Indeed, according to the 2024 SOSR, the SES has grown by over 1,000 since 2015, significantly faster than the APS as a whole, despite evidence of top heavy growth prior to 2015.

Remuneration, particularly amongst the SES and other executives, still varies greatly across agencies, and is arguably excessive at the top end (including for secretaries). However, a rational remuneration policy matching market rates for comparable work would almost certainly lead to increases for high demand occupations such as IT experts.

More emphasis on skills and capability and less than the APSC devotes to diversity and inclusion in the latest SOSR might also attract legitimate attention by the Opposition.

Locking in reform

Despite all those claims over the last three years of a sequence of ‘tranches’ of APS reform, the 2023 Public Service Act Amendment Bill being just the first tranche and the most recent APS Issues Paper with suggestions for the ‘next stage of integrity reforms’, it is doubtful that Labor will enter the coming election with a firm commitment to substantial legislative reform. The 2023 Bill enacted last year omitted anything of real substance, and the 2024 APSC Issues Paper did not even include the commitments Gallagher made in 2023.

The message presumably will be just ‘trust us’. We won’t move too far away from merit-based appointments (though we won’t promise total absence of jobs for the boys), and we will protect the APS, not like those opposite.

But that is not good enough. Substantial reform is needed, locked in by legislation. Reform not just to the integrity of the APS but also to its capability and future performance.

Labor should face pressure from within, including the union movement, for further reforms in its election commitments, and from the crossbench both before and after the election for much more substantial legislative reforms.

I spelt out an agenda in a discussion paper released last July and Mandarin article on 9 July 2023.

  1. Amending the APS Values to better reflect Westminster principles (including merit).
  2. Reviewing the Parliamentary Service Values similarly, and articulating the values of other Commonwealth employees, including ministerial staff, reflecting their respective institutional roles and responsibilities.
  3. Providing for Secretary appointees to have the same tenure provisions as other APS staff, with expectations of rotations and with every effort to find an alternative position when a Secretary is moved.
  4. Secretary appointments to be more firmly merit-based (as proposed by Thodey, endorsed by the Robodebt Royal Commission), with a stronger role for the APS Commissioner.
  5. The Leader of the Opposition to be consulted on the appointment of the APS Commissioner (as proposed by Thodey and endorsed by the Robodebt RC).
  6. The APS Commissioner to be designated the ‘Professional Head of the APS’, and the PM&C Secretary the ‘Coordinator-General’.
  7. Legislating a Code of Conduct for ministerial staff (as proposed by Thodey and Jenkins, and endorsed by the Robodebt RC).
  8. Legislating a basic set of principles to ensure merit-based appointments for all statutory offices.
  9. Setting a ceiling on the proportion of ambassador/high commissioner/ consulate head positions filled other than by a strict merit process by the DFAT Secretary.
  10. Applying strict tests of essentiality, cost-effectiveness and value-for-money to the use of consultants and contractors.
  11. The APS Commissioner to approve the creation of deputy secretary level positions, and to report annually on SES structures across the APS.
  12. APS agencies to provide brief merit staffing plans to the APSC and to report on achievements of those plans.
  13. The PS Act to include specific provisions fir regulating conflicts of interest associated with post-separation employment.

These are aimed not only at addressing the outstanding recommendations from the 2019 Thodey Report, but also issues raised in the Parliament over the last three years by many crossbench members concerning merit-based appointments, the use of consultants, the management of conflicts of interest, and the role and conduct of ministerial staff. They represent a reasonably comprehensive set of legislative reforms, but need to be complemented by other non-legislative measures such as on APS remuneration and performance management.

Hopefully, the Albanese Government’s timidity can be fixed by some crossbench backbone.

A better public service means better government and better services to the public.

Republished from THE MANDARIN Jan 10, 2025

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