Broken government: it’s the engine as well as the drivers

Aug 13, 2019

Ministers and bureaucrats seem only able to manage spot fires, not policy review beyond three-word-slogans.

Ken Hayne, the former High Court judge who conducted the banking royal commission is quite right in suggesting that the political and bureaucratic system is broken, and in need of fundamental reconstruction. But some of those wisely nodding their heads, or shaking them, according to their immediate partisan advantage, are missing a part of the point: it’s the car that’s broken; it’s not the driving he is criticising.

Actually, it is quite clear, from a few of his savage asides,  that he does not think much of the driving either. He thinks that some of the basic problems are man-made in origin, by politicians and senior bureaucrats of the present era.

But he’s quite right in thinking that there is something structural in the increasing difficulty in making good and informed policy, and in the way in which slogans have increasingly become substitutes for reasoned argument and analysis. He is also right in thinking that there is a democratic deficit in the unnatural influence which lobbyists for vested interests have on political and bureaucratic decision-making processes. Both contribute to the decline of respect, by ordinary citizens, for institutions of the state and of the commercial and community sectors. His own report on the collapse of business morality at all levels, but led from the top of the banking and finance sector, might provide some of the explanation why.

In just the same manner, there could hardly be a better example of how money interests, including party donations, can undermine and undercut the recommendations of a royal commission. For all intents and purposes, most of the businessmen and women strongly criticised by the royal commission  are back urging special favours for themselves, and the softening of commission recommendations, and getting a jolly good reception from the politicians.

I notice for example that there now appears to be a consensus in business and government, including at the top levels of the regulators or guardians of the public interest, that it would be “inappropriate” visiting the criminal law on directors, bank executives, or even the poor bunnies actually implementing conscious plans to defraud ordinary Australians.  Apparently it would be “better” if some sort of civil penalty (perhaps humbly cleared in advance with the malefactors, as seems to have been the case under the old “light touch” regulatory regime) were imposed on  the institutions. That way none of the great and good would be at risk of durance vile, involuntary wealth reduction, or further undesirable and unnecessary public disgrace. Let along exposure to real criminals, such as rapists and fine defaulters.

It is far from clear that the wider public will agree.

We have resumed, likewise, the old practice by which people who have been players at the highest level in the finance industry themselves take a term as regulators, before returning to industry and then becoming wise sages allowed to criticise the new generation.  Typically everyone announces that they accept all of the criticism and all of the recommendations, before getting down to the real business of doing nothing much, other than renewing the arguments they lost during the review as if nothing had happened.

Playing for time, or rather the “reasonable delay’’  caused by close analysis, discussion and mutual undermining of commission recommendations (mostly with the “stakeholders,” – as deeply vested interests are called) is also becoming a systemic problem. It seems plain, if one pays only casual attention to the behind-the-scenes talk about what should happen, that most of the folk are again arguing that problems, if there were any, were caused by a few rotten apples, rather than by a complete corruption of public interest, of the law, and of commercial and ordinary personal morality in the top management of the institutions involved.

It is much the same in other agencies, including departments, subject to review after review. At defence, for example, one can no sooner draw breath after the latest excoriation and set of recommendations before the next review, bound to contradict the last one, begins.

Hayne, talking to Melbourne university lawyers and law students in July, said there seemed to be more and more calls for royal commissions into problems of government, and that inquiries had some advantages over alternatives.

Commissions generally conducted public hearings and had processes for considering the evidence, debating its significance and coming to reasoned conclusions. They listened to complainants, many of whom received some sense of vindication merely by being heard. Inquiries also called those engaged in the conduct in question, often providing a “real measure of public accountability” if one which is quite different from “the proper application of the law by regulators, appropriate prosecution of wrongdoing and adjudication by the courts”.

(That sort of accountability by which, for example, lying and cheating bankers imposing fees for no service, or charges on the dead, were given a public opportunity to explain their conduct. It involves just the sort of public exposure likely to happen if there is a fair-dinkum rather than Micky Mouse ACLEI-type integrity commission conducted behind closed doors, and, typically, never coming to anything much. No integrity commission of the type favoured by Attorney-General Christian Porter would ever be likely to subject a minister, a senior bureaucrat or a banker to public exposure or criticism in the manner of Hayne’s inquiry.)

Inquiries also provide a focus for public debate about the issues in question, and ultimately a report summarising evidence and arguments received, and making reasoned recommendations about what should happen.

A royal commission in short contains ideas of independence, neutrality, publicity and open discussion and reasoned conclusions.  This might be contrasted, Hayne said, with what some would see as the characteristics of modern political practice “with its emphasis on party differences and with decision making processes that not only are opaque but also, too often, are seen as skewed, if not captured by the interests of those large and powerful enough to lobby government behind closed doors…”

“Reasoned debates about issues of policy are now rare. Three- or four-word slogans have taken their place.

“Political and other commentary focuses on what divides us rather than what unites us … And political rhetoric now resorts to the language of war, seeking to portray opposing views as presenting existential threats to society as we now know it …

“It may well be thought that our government institutions are framed on the premise that there can and will be reasoned debate about the merits of competing policy ideas. If that is right, does the premise remain valid? We seem to be unable to conduct reasoned debate about policy matters. Policy ideas seem often to be framed only for partisan or sectional advantage with little articulation of how and why their implementation would contribute to the public goods.

“Notice how many inquiries relate to difficult issues of public policy?  How can we, how should we, look after the aged? How can be, how should we respond to mental health? Some are more particular. Has the course of criminal justice been deflected by the way in which a lawyer provided information to police?

“Does reference of matters of these kinds suggest that our government structures can deal effectively only with the immediate spot fire, and cannot deal with large issues?”

These are not idle questions for political scientists or lawyers. They are at the heart of much of the discussion in the wider community about the authority, legitimacy  and capacity of government to effect change. And of claims that government models are broken and that we need strongman governments– perhaps on the Donald Trump model.  People who talk of “draining the swamp”, and people who believe that many political and bureaucratic decisions involve corruption, cronyism, and privileged access and influence going to insiders and mates of government are using the sort of deficiencies to which Hayne points as their evidence.

There are other developments not so obvious to the broader public. Between the bureaucracy  and the minister is a cadre of ministerial advisers, focused on injecting political considerations into decision making. Their work is not accountable to the public or parliament, and rarely documented. They listen, before and after getting bureaucratic advice, to lobbies, party people, and other political operators who want secondary, perhaps improper political considerations to be involved – such as (if anyone could imagine this) the diversion of public money to particular seats, or to particular friends of the government.

There is depressing evidence that some ostensibly independent and neutral advice coming to government from the bureaucracy has been less than detached. Senior public servants have provided alibis attesting to the regularity of processes when they have been plainly irregular, or to the propriety of conduct that has manifestly “failed the pub test”. Governments on both sides of politics have been addicted to putting mates and relations in important patronage jobs, including in quasi-judicial tribunals. There have been attempts to use national security issues for partisan advantage. The AFP gives every appearance of having lost its independence of government, and has been strangely reluctant to initiate or carry to conclusion anything with the capacity to embarrass government.

That’s in addition to problems caused by modern communications and computer technology, including the so-called 24/7 news cycle. The increased pace of the political day is said to cause a focus on short-term fire-fighting at the expense of longer-term considerations.

One bad Australian custom, getting worse by the decade, is frustrating good policy development. Any political official who thinks aloud has her or his statement closely parsed and analysed for the slightest deviation from established policy. Any open discussion about public funding, or potential public funding is quickly denounced, by the opposite side, as a plan for a secret tax, or for savage cuts to existing services. The media plays a depressing role of being thought police on such deviation – often seeming determined to suppress open debate rather than to be a forum for fresh ideas.

Some of the matters that could be considered abuses, such as the Rolls-Royce road to private sector jobs on political retirement, are plainly evident in the Morrison government and would not have been tolerated 10, 20 or 30 years ago. But abuse has become a bipartisan sport.

It cannot be thought that modern public service reforms, in place or planned, will provide any relief from the problems. Most of the changes in place or under discussion have been focused on reorganisations, management flim flam and relatively meaningless crusades in favour of “leadership” and war against the imagined horror of “silos”, duplication and regulation. These have not improved outputs or outcomes. On the leadership front, the current public service rear line is virtually unknown to the public – and even often inside their departments – unknown in particular for any contributions on the policy front. Most are bland, incapable of providing inspiration to staff, not to mention terrified of the media and of leaks.

The answer is not, as some people seem to think, to remove politicians from the political process. But the answer surely embraces making politicians more accountable for their stewardship of public resources, and for the regularity and openness with which public goods are rationed, and policy choices are made.

Since the election, the prime minister has seemed to suggest that the public service is rather more concerned with the implementation of policy, rather than in its development. That has been accompanied by an increasing use of outside consultants, many hopelessly conflicted, advising on policy, with only limited accountability or scrutiny for expertise, independence or judgment. Passive “leaders” in public service departments have also run down their policy expertise over the years, in part because of relentless “efficiency dividends.”  There are far too many former top public servants (and politicians) serving  as government or policy consultants of top law, accountancy and consultancy firms, and cynics wonder which ones have organised their declining years on the public payroll around the prospect of future employment ultimately paid by the taxpayer.

Some will puff up with anger at suggestions that government is becoming less, not more, efficient or effective, less, not more, imbued with concepts of public service, integrity and the public interest, and a lot less publicly accountable for its actions. Some will spout almost meaningless management words about best practice, responsiveness to government and stakeholders and new concepts of partnership with the private sector.

Most public servants are of high integrity and love their jobs, seeing something noble in the concept of public service. It is not their fault that the job is now harder, the public interest sometimes more difficult to discern, and the messages coming from above more ambiguous and uncertain. Yet all, from top to bottom, must share in some collective responsibility for the growth of the problem. To take a limited example – if one that would be familiar to Ken Hayne – public servants in Treasury and prime ministers,  and in regulatory agencies, resisted the very idea of a banking royal commission with, if anything even more zeal than their ministers. This was not in mere loyalty to the publicly expressed views of Morrison, who fought the good fight until being struck down at Damascus.

These advisers feared that an inquiry might actually frustrate real reform, and might damage the reputation of the banks in a way that damaged Australia itself, as well as its credit policies. Though Australian politicians and public servants had managed the 2007-08 global financial crisis well, they attributed most of the ”consumer” problems and loud noises from people banks had ruined as legacy matters from that crisis, now largely fixed up. They were wrong on almost every point, but few – least of all Scott Morrison or his closest advisers — are much embarrassed as a result. Certainly none have been called to account in any serious way.

In the short term, it can be politically convenient, even for public servants, if the system is broken. In the long run good politicians and good bureaucrats know the value of fixing things. In-built problems compound, they don’t fade away. Deferred problems erupt, usually unexpectedly. And when they do, all of the discretionary powers, compulsive secrecy and reigns of terror supervised by tamed cops will not prevent a calling to account, perhaps by royal commission. As some bankers can attest, questioning by a genuine inquiry is not something similar to question time, where one can bluster, prevaricate, distract and otherwise fail to answer the questions.

Care and maintenance of the engine of government is more efficient and politically less expensive than fixups, improvisation and sticky tape.

Jack Waterford is a former Editor of The Canberra Times 


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