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Public Service: The Labor Agenda

John Faulkner outlines a Beazley Government's vision for rebuilding the Ciommonwealth public sector.

The Australian Public Service and the other agencies which make up the Commonwealth's administration are among the basic building blocks of our democracy.

The well-being of these institutions is critical to the well-being of the nation.

Their roles and responsibilities are different from those of organisations in the private sector; and these roles and responsibilities must be reflected in their ethos and values, structures and operating methods.

The effectiveness and efficiency of public institutions are not founded, nor should they be, on the desire for profits and the fear of losses.

They are founded instead on the strong will of those who work in these institutions to serve the people through the governments they choose in ways set down in the Constitution and the laws of the Parliament - ways characterised by openness, fairness, the rights and obligations of our citizens and distinctive and rigorous standards of public accountability.

While public sector organisations must be open-minded and alive to the experience of others and willing to learn from them, their essential style and character must reflect the nature of their special roles.

It makes as much sense to force private sector ways on public institutions as it does to impose those of the public sector on private firms. It is irrational, illogical and dangerous.

In its words and deeds the Howard Government has shown that it does not accept, or perhaps even understand, these simple truths.

The indications were there right from the start. They are to be found, for example, in the Government's crude 1996 discussion paper "Towards a Best Practice Public Service": "This Government starts from a fundamental proposition: namely that the industrial and staffing arrangements for the public service should be essentially the same as those for the private sector." And in the 1996 Report of the National Commission of Audit, which has been the blueprint for so much of the Howard Government's agenda: "agencies should be required to market test all activities......unless there is a good reason not to do so."

And the Howard Government's deeds since then have unfortunately spoken even louder than its words.

First, it has politicised the appointments of Secretaries of departments and statutory office holders to an unparalleled degree. Its arbitrary dismissal of six Secretaries immediately upon winning government in 1996 was a disgraceful act of unfairness and prejudice, as was its bungled sacking of the former Secretary of the Department of Defence, Mr Paul Barratt, who was among those appointed in 1996 over the bodies of Mr Howard's first six victims. More broadly, the way it has used a vast number of appointments to reward politically sympathetic mates and undermine the independence and integrity of statutory bodies has been appalling.

Second, the Howard Government set about arbitrarily slashing staff numbers in the Public Service. Having foreshadowed modest cuts of up to 2500 prior to the election, it axed over 30,000 in its first three years in office. One Government member of Parliament, Senator Ian Campbell, was so proud of this outcome he boasted that it had caused a recession in Canberra and that this was "a fantastic achievement". He was obviously ignorant of the fact that over 60 per cent of public servants are located in metropolitan, regional and country areas outside of the ACT. The cutbacks therefore occurred right across the country, in our suburbs and country towns.

Third, having shed staff with little rational justification, the Government has acted with startled alarm when, quite unsurprisingly, things have gone wrong within its administrative agencies. Worse, Mr Howard and his Ministers have sought to shift the blame to the Public Service when it is the Government itself that should bear responsibility for having stripped the Public Service of vital resources, expertise and institutional memory. Witness the vindictive dismantling of the Department of Administrative Services following the travel rorts affair, the sorry saga of Employment National, Mr Fahey accusing government departments of sabotaging the IT outsourcing initiative, and more recently the finger of blame for problems with GST implementation being pointed at Treasury and the Tax Office.

Fourth, the Howard Government has pursued a blatantly ideological approach to the outsourcing of Public Service functions. Without satisfactory analysis of the implications for public accountability or the overall operational effectiveness and efficiency of agencies, public functions have been given to private sector organisations. While the Government's policy rhetoric is full of talk about the need for Public Service agencies to compete in the wider market, in its own approach to outsourcing it has sought to restrict competition. Except in certain limited circumstances, those employed in the Public Service in functions marked for outsourcing are excluded from competing for the business.

Ironically, in the few cases where in-house services have been able to compete, many have managed to win against private sector bidders - in the Department of Defence, for example, and the then Department of Employment, Education, Training and Youth Affairs. Thus the Howard Government has been prepared to risk taxpayers actually paying more for some government functions in the pursuit of an ideological interest in reducing the size of the Public Service. The policy and administrative failures and contradictions in the Government's outsourcing program have been amply demonstrated in, although not confined to, the IT area where they have been painfully documented by both the Auditor-General and in the review conducted by Mr Richard Humphry.

In summary, the Howard Government's approach to the Commonwealth public sector has been opportunistic, cynical and damaging.

Labor believes that the long term health and well-being of these institutions is itself a vital aspect of public policy, for their condition directly affects the capacity of governments to develop good policy and administer it effectively. Therefore, a Beazley Labor Government, with a proper appreciation of the role and responsibilities of public sector institutions, will concentrate its energies on their repair and re-invigoration.

Today I would like to outline some of the important steps we will be taking to achieve that goal.

Secretaries and statutory office holders

Secretary and statutory office holder positions are the critical point of connection between a government and its Ministers and their Public Service and other public sector agencies.

It is vital for these relationships to be distinguished by mutual and public confidence, integrity and shared leadership.

At the moment they are attenuated and deeply politicised and they have been soured by, among other things, a system of performance pay that is capricious and inappropriate.

A Beazley Labor Government will work to rebuild these important relationships.

Let me make it clear that Secretaries need have nothing to fear from a Beazley Government for having worked loyally and well for the Howard Government. That is their job. That is what we expect. As we would expect them to work loyally and well for us. Kim Beazley has asked me to re-iterate and re-emphasise the commitment we gave prior to the last election that there will be no night of the long knives should he become Prime Minister.

In fact, a Beazley Labor Government will strengthen the procedures for regulating the appointment and tenure of Secretaries by instituting the following practices:

� As a general rule, Ministers will work with their incumbent secretaries for at least a three-month period from the date of taking office in order to give both parties the opportunity to develop a good working relationship.

� Where, after this period, a Minister and a Secretary are, for whatever reason, unable to establish an effective working relationship, the matter will be subject to a joint process of consultation with the Secretary of the Department of the Prime Minister and Cabinet and the Public Service Commissioner. The primary objective of this process would be to resolve difficulties between the Minister and the Secretary. If that is not possible, the Commissioner and the Secretary of the Department of the Prime Minister and Cabinet would then prepare reports to the Prime Minister canvassing moves to another Secretary position or other suitable positions in the Commonwealth's administration. Similar reports on redeployment would be sought where Secretary positions are abolished or where contracts in particular positions are not renewed.

� The statutorily independent Public Service Commissioner will be asked to provide a report to the Prime Minister, in addition to that provided by the Secretary of the Department of the Prime Minister and Cabinet, on all appointments, transfers, dismissals and retirements. These two officers will be asked to periodically and systematically canvass with other Secretaries the claims of senior officers in the Public Service for appointment at the Secretary level. They will also be asked to pay particular attention to the claims of women in an effort to increase the number of women in the most senior public service positions.

� Performance pay for Secretaries will be abolished and the Remuneration Tribunal will be asked to recommend an appropriate adjustment on that account to base salaries, as has been done in other cases where such payments have been removed.

With statutory office holders, the relevant Minister will, as a first step, consider whether vacancies should be advertised on the basis that this would normally be done well in advance of vacancies falling due. Ministers will ask the Secretaries of their departments to prepare a report on each vacancy, with outside expert assistance if necessary. These reports will be made available to Cabinet, which will consider all intended statutory appointments before they are finalised.

Therefore, in the case of both Secretaries and statutory office holders there will be a more wide-ranging canvassing of possibilities and broader based advice to the Government that will focus on the inherent merit of individuals rather than on their perceived political alignment.

Review of Commonwealth Administration

The last thirty years have seen massive change in the structure and operational framework of the Public Service.

Whole departments and large segments of others have been removed from coverage by the Public Service Act and set up as separate organisations, for example, the Postmaster-General's Department, the defence factories and dockyards and functions within the transport portfolio, not to mention the more recent changes in employment services.

At the same time, departments in the Public Service have assumed far greater responsibility for the development of policies related to their operational responsibilities. Associated policy functions were departmentally consolidated by the Hawke Government in 1987.

There has been major devolution of personnel and financial management functions from central agencies.

Finally, changes to administrative law and the introduction of large-scale information technology systems have changed the way the Public Service operates and the attitudes and skills public servants must have.

Labor has initiated and supported most of these changes.

More broadly, over much the same time period, the public sector as a whole has undergone a quite radical transformation. Successive reforms have led to a contraction of the public sector and a convergence between the public and private sectors. Public services have become contestable in an open market and many functions have been outsourced or are now delivered in partnership with the private sector. This has led to a sharper focus on the rationale for the public sector and on what constitutes, or should constitute, its 'core' business.

It has also led to increasing public concern about the maintenance of the essential qualities of the public sector - qualities such as accountability, responsiveness, transparency, privacy of client information and accessibility. I see the emergence of organisations such as the National Institute for Governance at the University of Canberra as a manifestation of the importance of these governance issues.

It is time for government to take stock of these changes and address these concerns.

A Beazley Labor Government will therefore establish an independent review in our first term of government. While we would want to have the benefit of a broader range of advice, especially from government departments and agencies, before finalising the terms of reference, we will ask the review to include an examination of:

� Principles which should underpin decisions on the location of functions either in the Public Service or elsewhere in the Commonwealth's administration or in the private sector.

� Ways and means of achieving a better coordination of policy and administration on a whole of government basis while maintaining an appropriate devolved environment.

� The adequacy of existing central management arrangements.

We are very conscious of the massive change to which the Public Service has been subjected and its resultant financial and human costs. Therefore, this review will be directed to concentrate only on those areas where alterations for the distinct betterment of the Service can be assured and to avoid mere change for change's sake.

Outsourcing

Under a Beazley Government there will be no centrally mandated and administered outsourcing program.

Any proposals by departments to contract functions or services will be subject to a public interest test. This test will include the following considerations:

� The need to maintain full public accountability and to ensure that this is not diminished by notions of "commercial confidentiality". My colleague, Lindsay Tanner, the Shadow Minister for Finance, has recently announced at one of these seminars, a number of measures a Beazley Labor Government will adopt to improve public accountability.

� The need to meet the standards of customer service required by the Government.

� Genuine cost savings, not at the expense of service or access to service, nor through cuts to jobs or employment conditions.

� The need to maintain and develop skills and expertise within the Agency concerned to ensure the cost-effective delivery of services and, where services are put on contract, the maintenance of sound contractual arrangements, performance standards and monitoring systems.

� The need to protect the rights of clients to information affecting them and their privacy.

� The overall efficiency of outside markets and the extent to which markets can effectively and quickly overcome the failure of a single provider.

� Any risks of being "captured" by a single outside provider by reason of the knowledge it might gain in taking over a particular function or for any other reason.

� No negative effect on the environment or industry development; and

� Assessment of impacts on regional, rural and remote Australian communities.

Where a case for contracting is made which satisfies these tests, in-house bids will be facilitated as part of the tendering process.

Managing Personnel in the Public Service

Consistent with our views about the particular and special nature of public sector organisations and the vitally important role of public servants in our system of public administration, a Beazley Labor Government will establish a Public Service Institute. The Institute will be dedicated to the provision of high quality education and training in all areas of public administration.

The Australian Public Service Institute will be a "virtual" organisation working in partnership with existing vocational and higher education institutions. This will enable it to confer certificates, diplomas and degrees. It will draw on a variety of sources of learning and methods of delivery to ensure that training is available to all public servants wherever they may be located.

The Institute will operate on a fee-for-service basis and while it will cater primarily for Commonwealth public servants it will also be open to State and local government, as well as overseas and private sector clients should they wish to use it. There will be scope for departments and agencies to develop courses and training to meet their particular needs and objectives.

Work to establish the Institute will begin with a study involving the Public Service and Merit Protection Commission and other key government agencies to determine current and likely future training requirements and priorities. The study will draw on work already done by these agencies, Public Service Education and Training Australia and others. This study will then form the basis of a request for tender to establish and operate the Institute. I note with interest the recent announcement by the Victorian Government of its intention to establish a school of government and look forward to exploring ways in which these two initiatives can complement each other.

We realise a Beazley Labor Government will face significant challenges in public administration. We will be implementing an ambitious Knowledge Nation agenda and accelerating the transition to the new economy. Our success will be dependent on the skills and ability of our public servants and their capacity to respond to changing circumstances. We understand this will require an investment in ongoing, high quality training and development for all levels of the Public Service. We will make that investment and we know public servants will rise to these challenges.

This initiative is an indication of Labor's commitment to the Public Service. It will help to re-invigorate the Public Service and strengthen its career base.

As the identification of individual development needs is critical to better targetted training, a Beazley Government will expect all agencies to continue to make strenuous efforts to ensure performance management arrangements are more effective and comprehensive. Staff have a right to know what is expected of them, to be told how they have performed and to have any weaknesses properly and promptly attended to through training or other means. This can only be done through a fair and open process of performance management.

We do not believe individual performance bonuses need be part of effective performance management systems. We will be encouraging agencies to phase out use of performance bonuses as industrial agreements expire and new collective agreements are negotiated and implemented.

The Howard Government's industrial relations arrangements have resulted in excessive fragmentation of pay and conditions and associated processes across the Public Service. Barriers to mobility and administrative re-organisation have been created. Duplication of effort has occurred as agencies have been forced to develop employment arrangements on matters which should be service-wide conditions. The problems caused by the Howard Government's approach have been well documented in evidence presented to the Senate Inquiry into APS Employment Matters. Regrettably, the damage cannot be repaired overnight.

The starting point for a Beazley Labor Government will be that the Australian Public Service should be a model employer - one which provides a safe, healthy and positive work environment, has pay and conditions which enable it to attract and retain staff and are fairly related to the remuneration of others in the community undertaking comparable work; one that promotes diversity, is family friendly and facilitates the entry of young people to the APS workforce.

We will want broad standards to apply across the Public Service. These would be set out in an APS-wide framework agreement. But we accept that agencies need a level of flexibility in negotiating pay and conditions to meet their specific needs. Each agency will be encouraged to negotiate collective enterprise agreements with employees and their unions which set out its particular conditions of employment.

Our aim will be to maintain agencies' flexibility to determine conditions that best meet their individual needs while at the same time maintaining the best of a career-based Service. We will ask the Public Service and Merit Protection Commission and the Department of Workplace Relations to report to the Government regularly on how this balance of interests can best be ensured.

There will be no further use of Australian Workplace Agreements in the Public Service. We regard their secrecy and lack of accountability as being particularly inappropriate in the public sector. Transitional arrangements will be developed, in consultation with agencies and unions, to facilitate the bringing of employees who are on AWAs under the new collective enterprise agreements on a no-detriment basis.

It goes without saying that, under Labor, the anti-unionism which has characterised the last five years will be a thing of the past. We will ensure the legitimate role of trade unions and their rights to organise, to take action on behalf of their members and to bargain collectively are recognised within the Public Service.

One obvious area where there should be no need for differences between agencies is in the application of the Public Service Values and the Code of Conduct and in the handling of breaches of the Code. We will therefore ask the Public Service and Merit Protection Commission, in consultation with agencies and unions, to introduce a uniform disciplinary code to support the requirements of the Public Service Act. Secretaries and heads of agencies will have direct responsibility for ensuring that all public servants understand and apply the Values and Code of Conduct.

Agency management accountability

A devolved management environment requires effective means by which agencies can account for the way in which they have managed their responsibilities within whatever overall policy guidance is provided by the Government or the central agencies.

The Public Service Commissioner's annual "State of the Service" Report constitutes one such means. A Beazley Government will build on the success and usefulness of this report by asking the Commissioner, before the beginning of each financial year, to establish five or six key Service-wide management priorities for the year, in consultation with the Minister responsible for the Public Service and all agencies. The Commissioner would then report on the achievements against these priorities in the next annual "State of the Service" report.

This would not prevent agencies from working on some of their own particular priorities. Indeed this would be encouraged. However, it would help to develop a useful whole of government and service-wide approach to issues of common concern and a more robust way of accounting for performance.

Working with the community sector

I have spoken of the convergence between the public and private sectors and the need to better define the appropriate boundaries between the two. But we are also mindful of the need for government to relate to and work with the non-government or community sector. We acknowledge the legitimate expectations of community organisations to be supported by government, to have access to government and to have their views heard by government.

We are particularly aware in the contemporary political climate of what I have recently seen referred to as the "politics of the powerless" - the alienation of too many members of the community from the political process. We recognise that unless governments connect with local communities their understanding of what is happening on the ground will be lost and hence their ability to respond effectively to the needs of communities will be severely limited.

That is why my colleague, Wayne Swan, the Shadow Minister for Family and Community Services has announced on behalf of the Opposition, a commitment to develop a Community Compact. This Compact will involve three key commitments: to work in an equal partnership with community organisations to rebuild communities; to remove compulsory competitive tendering to allow organisations greater scope to get involved in addressing the needs of communities rather than the services governments think they need; and to sustain and nurture the charitable and not-for-profit sector into the future.

I won't elaborate on this concept here, but I did want to mention it given the vital role played by the community sector in public administration.

Conclusion

Let me conclude.

The Labor Party has been the Party of innovation and improvement in the Public Service and Commonwealth administration over the last 30 years.

In that time it has, for example:

� Established the only all encompassing review of the Commonwealth's administration (the Coombs Royal Commission) in the mid 1970s.

� Initiated and supported the major administrative law reforms which have transformed public administration and decision-making in Australia.

� Introduced major improvements in Public Service personnel management and financial management and budgeting in the mid 1980s.

� Fostered the introduction of information technology and the development of skills to use it effectively in the interests of better administration and client service.

� Implemented in 1987 the most significant improvements to the structure of departments in the history of the Public Service.

� Corporatised and made more efficient major defence and transport functions in the late 1980s and early 1990s.

� Introduced, for the first time, devolved agency powers to fix pay and conditions, again in the early 1990s, but within a framework which maintained core pay and conditions.

� Instituted a review of the Public Service Act that culminated in a new Act in 1999 that contained key improvements forced on a reluctant Government by a determined Labor Opposition.

So, when the Labor Party talks about its interest in re-invigorating Commonwealth public administration, its track record in and out of Government demands that it be taken seriously.

We understand and value the role of a public sector that has fallen on hard times under the Howard Government.

A Beazley Labor Government will not only stop the rot.

It will not regard itself as a whingeing and complaining "customer" buying services from its own administration.

It will lead and work with the policy and administrative agencies of government.

The Commonwealth's administration has had an enviable reputation throughout the world - that will be restored and enhanced.

A former colleague of mine enjoyed citing an ambiguous quotation from Adlai Stevenson to the effect that the Civil Service serves government right.

The Howard Government has brought to the Public Service a harmful mixture of bloody-mindedness, ideological prejudice and policy laziness and, in a perverse sense, it has satisfied Adlai Stevenson's rule of thumb.

A Beazley Labor Government will repair that damage and ensure that we have a Public Service that will well and truly serve all Australians right.

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  Issue 89 contents

»	Abbott and �Drinking Buddy� Under Microscope
»	Working Visas: Ruddock Sells Dump to Abbott
»	Tourist Guides Bussed In
»	Fair Wear Holds Breath as Carr Celebrates
»	Labor to Restore Public Sector�s Dignity
»	Its Time for Carr to Act on Safey on Building Sites
»	Bread Maker Slices Workforce
»	Workers Show Grace Under Pressure
»	Engineers Win BHP Redundancy Case
»	Transport Drug Pushers Not Charged
»	Training Body Needs $150 Million to Cope with Growth
»	HIH Urged To Safeguard Employee Entitlements
»	Carr Proposal For Public Schools Flawed
»	Human Smirk Returns to Spiritual Home
»	McGauchie Appointment Draws MUA Fire
»	Bove Loses McDonald's Raid Appeal
»	James Hardie Called to Account
»	Australasian Union Organising Conference
»	Activist Notebook

»	The Soapbox
»	The Locker Room
»	Trades Hall
»	Tool Shed

»	AXA Has Form
»	Leichhardt Debate Hots Up

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