Improving the capability of the APS, and making best use of it, is the responsibility of all ministers with the Prime Minister being responsible for setting the overall climate.
There are three things that the Prime Minister must focus upon to establish the broad framework and ground rules according to which the Government will work with the public service, and the Minister for the Public Service must be ready to give advice on how these should be done to ensure maximum benefit to the Government and the public service.
First, the PM must issue an Administrative Arrangements Order that aligns ministerial and bureaucratic responsibilities. There are some important general principles for an effective AAO:
- Each portfolio minister should be responsible for a distinct major function;
- Responsibility for other functions should be allocated to the portfolio with which the functions are mostly closely linked;
- All portfolio ministers should be in the Cabinet so that Cabinet covers all functions without having to be too large (the number of portfolios with more than one Cabinet minister should be limited);
- Other ministers should have responsibilities within a portfolio, supporting the portfolio minister, and not have responsibilities that cross portfolios.
These arrangements help to clarify lines of accountability throughout government, including between the APS and ministers through to the Parliament. This model was introduced in 1987 and operated successfully at least until 2007. It was diluted by Rudd and Gillard and discarded entirely by Morrison in 2020.
Second, the PM needs to demonstrate appreciation of the role of the APS and its values, including merit, in the appointments made to secretary positions and the processes used. The APS Commissioner should play a key role in the process. Terminations should be minimised, the PM taking advantage of a new AAO and any voluntary departures to make some new appointments and to move some existing secretaries to new positions.
The Minister for the Public Service should advise the PM of the importance of the role of the APS Commissioner and, should that position become vacant, the need for a highly experienced secretary, known universally to be an effective steward of the APS, to be appointed.
Third, the PM sets the standards expected of ministers and their staff. These should include respect for the APS and appreciation that departmental secretaries are the principal policy advisers to ministers.
An immediate measure the Minister for the Public Service should take is to remove staffing caps. Agencies should base decisions about numbers of staff on best value for money to undertake work within their administrative expenses budgets. In doing so, they should be looking also to enhance organisational capability into the future by reviewing the use of consultants, contractors and labour hire.
The Minister should then set in train a series of reviews that can lead to a package of reforms, say, by the end of this year. Some would be led by the APS Commission, others by other agencies including Finance and PM&C. The reviews should be coordinated by a small reference group (not the Secretaries Board given its extraordinary reported support of the Morrison Government’s rejection of key Thodey recommendations), preferably with at least one outsider.
One review would explore possible amendments to the Public Service Act taking into account Thodey recommendations and related studies. This review should consider:
- The respective roles of the APS Commissioner and the Secretary of PM&C;
- Strengthening the independence of the APS Commissioner including by requiring consultation with the Parliament over future appointments;
- Strengthening the merit basis for secretary and other agency head appointments (the review might also suggest merit-based approaches to appointments to boards, tribunals etc. elsewhere);
- Reviewing the articulation of the APS Values and Employment Principles including to give more emphasis to merit; and
- Reviewing the role of the Secretaries Board, in particular to remove the false impression of having authority separate to that of Cabinet and ministers, or of constraining the APS Commissioner.
- A second review should develop a new approach to setting APS remuneration, again revisiting (and building upon) Thodey recommendations rejected by the Morrison Government:
- Moving to APS-wide pay and conditions based upon relevant market considerations;
- Proposing transitional arrangements to minimise disruption;
- Reviewing the current classification system to better align with emerging career paths and occupations and impose renewed discipline on agency establishments and the filling of positions; and
- Advising on possible changes to the Remuneration Tribunal and its policies on secretary and other agency head remuneration.
A third review should consider funding arrangements including the future of the efficiency dividend (touched upon but not considered in detail by Thodey):
- Exploring the way administrative expenses should be budgeted including annual adjustments for cost increases to maintain service levels and quality with strong incentives for productivity improvements;
- Examining the (yet to be released) audit of IT investments and how digital capability should be enhanced.
The Members of Parliament (Staff) Act is already subject to a review by PM&C following the Jenkins Review. It has the potential for clarifying accountability and improving relationships between ministerial advisers and the APS despite the Morrison Government’s rejection of the relevant Thodey recommendation.
The reference group coordinating these reviews should ensure some cross-fertilisation where issues overlap. For example, the review of APS Values and Employment Principles might be linked to any new set of values and employment principles for MOP(S) Act employees, clarifying their distinct roles and responsibilities.
The reference group should also assist the Minister to develop a package of measures for Cabinet consideration taking into account any budgetary implications and the likely need for some trade-offs.
The central purpose of such a package is to enhance the capability of the APS and to ensure the Government is able to make best use of that capability in pursuing its policies and programs.
While this exercise should ensure a more thorough examination of the Thodey Report than conducted by the Morrison Government, and address important gaps in that Report’s proposals, it is important that effort be made to gain support from across the Parliament to any legislative changes involved and to avoid partisan differences over the role and capability of the public service. It is important to recognise that the public service is there to serve the public and the Parliament, not just the Government.
Read more in our if I was a minister series.
Andrew Podger is honorary Professor of Public Policy at The Australian National University, and former Australian Public Service Commissioner and Secretary of the Departments of Health and Aged Care, Housing and Regional Development, and Administrative Services. He was national president of the Institute of Public Administration Australia from 2004 to 2010, and a member of the foundation board of the Australian and New Zealand School of Government. He was made an Officer of the Order of Australia (AO) in 2004, and has written extensively on social policy including health financing, retirement incomes and tax and social security, and on public administration.
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