The parasite state of consultants

Government, Politics

Jun 26, 2023

Australian Parliament House in Canberra.

It is an imperative that a new government define an overarching narrative. image: iStock

The vices exposed by the consulting firm, PWC, allegedly leaking confidential tax information, are not limited to one firm’s malpractice. The scandal is not merely the overuse of consultants or the misuse of the public service. The scandal has exposed a loose thread in how we are governed.

Good government is woven from a warp of institutions and a weft of culture. When the carpet is made well it flies, magically. When it is made cheaply, sold by carpetbaggers, and left to decay, it becomes a tawdry rag, infested with parasites. Our national, state and local governments now live in that smelly, stained carpet that we hide in the shed. They have become parasites on the state.

PWC has been exposed, allegedly, as one of those parasites. There is talk of criminal prosecution, and a lot of indignation at a Senate Committee. But, people who are concerned about the public service should not get carried away by treating one out-of-favour firm as a scapegoat. The sacrifice may only entrench the system that made the scandal. The rites may distract us from seeing deeper problems of political disorder.

A swarm of similar parasites, in the Big Four and other firms, feed on the body politic. A proper investigation would disclose other cases of misbehaviour that may have compromised the public interest. They certainly have sucked the life out of the public service for decades.

As a recently retired Victorian public servant, who served for 33 years, I have been puzzled by the new passion of many commentators and academic partisans to complain about the damage done to the public service by these practices. They appear to want to blame Scomo or one political party.

But overuse of consultants is deeply entrenched, systematic and bipartisan. It is not inflicted by one party or leader. It is driven by the behaviour of the senior leaders of the country’s public services as much as by politicians and advisers. A very senior bureaucrat once told me that, above all else, fear of being exposed drives most mandarins to opt for consultants.

Former Australian Public Service Commissioner, Andrew Podger acknowledged in Pearls and Irritations that use of consultants had “gone too far in recent years” and damaged the core role of the public service. He saw welcome signs, however, that a new regime would wind back the overuse of consultants and contractors and repair the damage to public service capability. He counselled hope and patience, since time is needed to fix the problem.

I respect Mr Podger’s experience, judgement and serious efforts to repair the public service, including on issues exposed by the Robodebt Royal Commission. But I have seen this battlefield from the trenches, and I have witnessed too many losses for too long. I can recall feeling the use of consultants had gone too far 25 years ago, when I was subjected to the common political pressure all experienced public servants endure, and told to expedite a bogus tender selection process to appoint a major internationally renowned and politically connected firm. The firm, of course, did a dreadful job.

Reassuring words and a season of tight procurement will not save this host. Overuse of consultants is just one loose thread in the rotting carpet of our public services. There is the pandering to advisers and media politics exposed by the Robodebt Royal Commission. But that is not all. What lessons were learned from the Pink Batts and Banking Royal Commissions? What would be shown if there were a serious Royal Commission into the COVID response by all state and federal bureaucracies?

At the state level in Victoria, there is the “grey corruption” exposed by the Victorian Independent Broad-Based Anti-Corruption. There are the “creeping assumptions” and coordinated blindness demonstrated in the Victorian Hotel Quarantine Inquiry. In 2015 the Victorian Auditor-General reported on the cancelled East West Link that “advice to government did not always meet the expected standard of being frank and fearless.” Numerous audits since have said the same. The High Court found the Lawyer X scandal to be among the nation’s worst breaches of the rule of law, but as yet no police or justice bureaucrat has faced the music. There is the politicisation of the public service being investigated by the Victorian Ombudsman, following a cross-party vote in the Upper House in 2022.

Do we really have time? Should we not heed these signs of distress? Should we not ignore a few reassuring whispers of relief, however well meant?

Importantly, consultants are not only over-used on contracts. They are frequently the executive leaders of public services. In my experience, Victoria no longer operates a professional civil service. It operates a covert US-style ‘spoils system’. Politicised executive appointments are endemic. A loyal cadre has developed through networks of direct political patronage that is largely drawn from political advisers for state and federal politicians, journalists and communications advisers, think tank commentators, and especially consultants from strategy firms. PWC may be among them. A large number come from KPMG and Boston Consulting Group.

These networks increasingly move through senior public service roles. They have not undermined critical capabilities. They have taken over as a cabal.

To fix this problem, we need to do more than fiddle with procurement processes or tut-tut about previous Ministers. We need to rebuild the institutions of the public service and restore the culture of virtuous government. The mercenary elites of our parasite states need to be shaken from the magic carpet of government.

Last year, I proposed to the Victorian Ombudsman a broad ranging public inquiry to recommend major reforms to the public service and political institutions, including parliaments and parties. In 2017, the distinguished public servant, Dennis Richardson, wondered aloud whether the time had come for a second Coombs Royal Commission into the public sector that could examine the foundations of good public services.

Should we spend another six years watching the public service and democracy die wondering?

The broad ranging inquiry I proposed to the Ombudsman need not be a Royal Commission or a judicial inquiry. Indeed, a different kind of inquiry or national conversation may be best. We need big changes to institutions and cultures, not televised performances by lawyers. The inquiry could propose reforms to democracy and political institutions, such as those set out by Stein Ringen in How Democracies Live.

Many distinguished former and current public servants read, contribute to, and, indeed, edit Pearls and Irritations. They will likely have better solutions than this minor government official. But is it not well past time that we spoke up for authentic public service? A national conversation might even restore to the government some lost virtues.