MIKE WALLER. The Royal Commission we really need – into Australia’s public administration.

 As Terry Moran has recently pointed out, our system of public administration is in serious trouble.  The last fundamental look at Australian federal public administration was some forty years ago – the Coombs Royal Commission.  We urgently need a successor to Coombs’ forensic and thoughtful approach, but this time addressing the necessary reforms of all levels of government.

In his recent speech to the Victorian branch of the Australian Institute of Public Administration, Terry Moran described the disconnect between what Canberra thinks people want and what they actually want. His answer was “an increasing acceptance of a larger role for government, including involvement in service delivery, more effective regulation and bolder policy initiatives”.  It is time for the public service, he said, “to get back in the game” by “investing in a public service that can think for itself, not smothering it with a dominant microeconomic paradigm that no longer works and the community no longer supports”.

I agree. But this begs the questions of “how” and “when” and indeed (for some) “why” such an outcome should be delivered, given a strong ideological bias in favour of private sector solutions to policy challenges because, so it is often asserted, the public sector is not good at anything.

The answer is a Royal Commission into Australia’s public administration, covering all levels of government. Its objective would be to re-evaluate our entire system of government to identify: what changes are needed to enable all Australians to prosper in future; and (critically) how and when the changes could be delivered. It should emulate Coombs, by using both extensive public consultation and commissioned research to demonstrate how the public and private sectors actually perform in meeting public policy goals, both here and across the world, and how the best of each can be applied here.

Coombs reported in 1976. Our world has transformed since then. Domestically, we are unimaginably wealthier, while our population has increased by seventy per cent. We have become a more ethnically diverse society, in an inclusive and harmonious way.  Our economy has shifted from resources and manufacturing to services. Knowledge/human capital is now the dominant factor of production. Electrons (data and related services) are as important in terms of social and economic impact as atoms. We weathered the Global Financial Crisis better than any other developed economy, reflecting both effective bureaucratic anticipation and China’s growth.

But we are also a less confident, insecure society. Threats – perceived or real – to our safety have justified constraints on personal privacy, the movement of people, and information about government policies and actions that are unprecedented in peacetime. We are not delivering meaningful and rewarding lives for all Australians. Inequity in income and wealth has grown substantially. Household debt is at an all-time high and real wage growth is flat. Thirty per cent of younger Australians are either under-employed or unemployed.  We are not solving the gross disadvantages afflicting the First Australians.

Externally, we live in the fastest growing region in the world.  But our economic prospects are clouded by China’s transition away from investment-led development.   China’s rise involves delicately balancing our economic and strategic interests in the Asia Pacific against our reliance on US military dominance. We are not clear how our interests are served by continuing military deployment in the Middle East.  Globally, the environment on which soon to be nine billion people depend is under unprecedented pressure.

Politicians, bureaucrats and special interest groups are variously cast as the root cause of our political dysfunction, manifested, for example, in the unfolding mess of energy policy or gross, politically inspired subsidies dressed up as defence procurement.  This confuses cause and effect. They are actors in a flawed system that has evolved over decades without consideration of the cumulative impact of what, in every case, is claimed to be a desirable reform.  We now incentivise dysfunction and preference narrow, sectional interests over the public good.

An insightful, evidence-based reform agenda will not come from within this system. Since Coombs, public administration has changed dramatically, absent any set of organising principles or framework. The pursuit of more “responsive” administration at both Commonwealth and State/Territory level has produced: large staffs of ministerial advisers, unaccountable to Parliament and frequently with no administrative or policy skills, controlling advice and access to ministers; fixed term contracts for departmental heads paid handsome salaries, coupled with the sacking of people judged unaligned with the politics of the day; a risk-averse public service, working within institutions that lack a capacity to develop and implement policy changes in the national interest and that are relevant to a rapidly changing world; outsourcing of large elements of administration and service delivery by non-transparent commercial contracts that won’t/can’t demonstrate the use of taxpayer money in the public interest; and, “greater policy contestability” via the proliferation of well-financed, powerful interest groups, supported by lobbyists and consultants for hire (often sourced from ministers, staffers and officials fresh from related jobs) that provide results tailored to self-interest.

Encouraged by dependency on opaque party financing, mainstream political parties with narrow genetics and factional preoccupations pursue personal or sectional interests at the expense of evidence-based pursuit of public welfare. Slogans/sound bites substitute for open engagement with citizenry based on clearly communicated evidence.

In summary, this system doesn’t serve the concerns of Australians seeking a safe, prosperous and sustainable future. Critical issues – sustainable urban development, excessive alcohol consumption, obesity, social exclusion, effective energy/climate policy, personal privacy – are compromised as short-term.  Private gain trumps the health or welfare of citizens.

Exhortation (“adaptation”, “innovation”) and/or piecemeal adjustments (making public servants less risk averse, audit commissions, new public service values) will not solve the problem. We need a forward thinking government and/or Parliament to establish a successor to Coombs’ exemplary work, modelled on his approach but this time addressing how all levels of government need to adapt to our new circumstances. Such a commission should provide a blueprint for the reforms to Australian public administration that work effectively for the public interest. Though challenging, the returns from such work would be far greater than from the resources devoted to another public inquiry into the banks. And it is the right topic for a mode of deep inquiry that has been devalued by its recent use for political payback.

Mike Waller has served in senior economic roles in the UK Treasury and with federal and state governments in Australia. He was Chief Economist for BHP Ltd and a founding partner in a consultancy firm providing strategic advice to global resource and energy companies.  He has also served variously as board member or chair of a number of not for profit and commercial bodies.

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John Laurence Menadue is the publisher of Pearls & Irritations. He has had a distinguished career both in the private sector and in the Public Service.

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