Rebuilding capability in the Australian Public Service – Part 1

Feb 22, 2022

In an article last December I commented on the final report of the Senate Public Administration and Finance References Committee inquiry into the current capability of the APS.

While encouraged by much of the majority report, I expressed disappointment about the Committee’s division on partisan lines. But I did identify the ‘faintly positive thing’ to come from the inquiry: that the majority report includes some important recommendations which the dissenting report does not explicitly reject. Perhaps there is room for eventual bipartisan support for real reform.

Given the Morrison Government’s response to the Thodey Report there seems little chance of the reforms needed if it is re-elected, at least in the short-term. If Labor wins it is important that it pursues a reform agenda that the then Opposition and Cross-bench can agree to. The APS, which serves the Government, the Parliament and the Australian public, needs to have broad support from the Parliament.

In two parts, I outline the components I believe are needed to rebuild the capability and standing of the APS and thereby the performance of the Federal Government, and which a Labor Government could pursue and a Coalition Opposition accept. Many of the components draw on the Senate Committee inquiry recommendations and Thodey recommendations not agreed to by the Morrison Government in 2019. Others address the wider context within which the APS operates.

This first part focuses on measures the incoming government could take immediately to begin a new constructive relationship between ministers and the APS that would promote a strengthening of APS capability.

Administrative Arrangements Order

A first step could be taken with the new Government’s initial AAO. There needs to be far better alignment between ministers and departments, one that encourages closer partnerships between senior officials and ministers focusing on the elected Government’s policy priorities. Increased demand by ministers for policy advice is likely to lead in time to enhanced capacity to provide advice.

The so-called ‘congestion-busting’ changes to departmental structures in early 2020 were not accompanied by corresponding changes to ministerial arrangements. The result was confusion of lines of accountability with many departments having multiple cabinet ministers and/or ministers with responsibilities in other portfolios. Moreover, the restructuring was not linked to any clear policy agendas.

This contrasted with the original introduction of portfolio arrangements in 1987 and continued by the Howard Government. In particular:

  • Every department had a portfolio minister in the cabinet ensuring cabinet encompassed all functions of the federal government without being too big;
  • With only one or two cases exceptions (eg DFAT), each department had just one cabinet minister so secretaries were not faced with advising ministers who could be arguing with each other in cabinet;
  • Each portfolio minister had several assistant ministers or parliamentary secretaries to give more attention to particular functions within the portfolio, and the portfolio ministers and their ministerial teams were given some authority to manage portfolio resources and issues, thus keeping cabinet’s workload manageable;
  • No minister had responsibilities beyond a portfolio, so coordination across portfolios was generally left to cabinet and its committees supported by PM&C and Finance;
  • The portfolios were designed to address key policy priorities (in 1987 these included transport and communications reforms and closer linking of education to employment).

This arrangement encouraged portfolio ministers and their departmental secretaries to work closely together, and most secretaries ensured that each assistant minister and parliamentary secretary also had a deputy secretary dedicated to their support.

Secretary Appointments

A new AAO provides the Government the opportunity to move secretaries, displacing some and making some new appointments. To avoid further politicisation of the Service, it is vital that new appointments are made through a proper merit-based process and that any terminations (outside of reshuffles caused by the AAO) are avoided so there is no ‘night of the long knives’, possibly by applying a three or six month trial period to allow the secretaries to demonstrate their capacity to serve the new Government and their ministers or by negotiating one or two departures with dignity.

While I would prefer appointments to head PM&C to be based on merit, it is now common practice to appoint someone with an established relationship with the PM. If that is the case, it is not unreasonable for the incumbent secretary to have his appointment terminated on a change of government. But even then, the PM should take seriously the advice of the APS Commissioner in his report (required by the Public Service Act) on filling the position, to consider alternative candidates and to be satisfied that the preferred candidate has the necessary experience and competence and can be relied upon to promote and uphold the APS Values and Employment Principles. Given that this appointment might be made very quickly, the APS Commissioner should prepare a briefing paper for the PM-elect on possible candidates ahead of the formal report required by the legislation.

As indicated in a later part, I believe the APS Commissioner should have primary responsibility for advising on secretary appointments but in this first round the current statutory requirements will apply. These require the PM to receive a report from the Secretary of PM&C, who is to consult the APS Commissioner (and the relevant minister of course), before the PM makes a recommendation to the Governor-General.  Consistent with this process, the PM-elect could indicate to the APS Commissioner that he would prefer a joint report with whoever is the PM&C Secretary for each position to be filled. It might be wise for the Commissioner, in addition to drawing on his regular consultations with secretaries about possible future appointments, to consult (in strict confidence) a colleague such as the Treasury Secretary who has high standing and is unlikely to be affected personally.

Reshuffles, terminations and new appointments are likely to take place when or shortly after the new AAOs are issued, within weeks of the election. A new Labor Government could demonstrate its commitment to a merit-based and more independent APS if it openly consulted the APS Commissioner on the range of movements of secretaries and not just the appointment of new secretaries.

Strategic Policy Advice, Policy Research and Evaluation

A professional and productive relationship between ministers and senior public servants can be promoted by the way the PM, his minister assisting on public service matters and the Finance minister set the scene.

Cabinet could reintroduce the systematic evaluation processes used in the early 1990s, requiring new policy proposals to identify the evaluation evidence supporting the proposal and setting out how the proposal if agreed is to be evaluated, and requiring departments to provide Finance with their plans for all programs to be evaluated regularly.

Ministers could also be encouraged to call for regular briefings from their departments on longer-term strategic issues and to encourage open engagement with external experts and stakeholders.

Departments should have strategic policy and evaluation units, focussed on the medium (three to five years) and long-term structural issues affecting the portfolio.  They should consider how demographic, technological and other changes in society will affect program design and performance, and whether policies should be reshaped or new policies introduced to address emerging issues. Where strategic policy capacity has deteriorated substantially, ministers might discuss with secretaries ways to recruit some relevant experts, particularly if the policy field is one of the new government’s key priorities.

Ministers should spend at least one full day twice a year sitting down with their departmental experts to discuss longer-term issues; the first such discussion should be within the first three months. Cabinet might also allocate at least two days a year for discussion of selected longer-term issues.

While such discussions should certainly be confidential, the expectation should be that departments publish data, evaluations and research and subject their work to scrutiny by others. Rather than impose a climate of close political control of all communications, ministers should support a more open process that takes FOI responsibilities seriously, based on trust.



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