What 'common pay' really means and other things we learned questioning David Thodey

By Stephen Easton

March 21, 2019

One of the more interesting ideas that emerged from the Australian Public Service Review this week was a move towards “common pay”, but as excitement buzzed the review chair realised something was amiss.

Review chair David Thodey (pictured) clarified the review panel’s thinking on this and several other weighty issues at a special press conference after he launched the review’s interim report on Tuesday.

What does “common pay” really mean?

The reviewers see value in a slow shift towards greater equity in the widely variable pay and employment conditions of APS departments, certainly not a sudden switch to the same remuneration for all public servants at the same level.

“We never said there should be standardised pay,” Thodey emphatically told journalists, struggling to recall if the term “common pay” was used in the report or something more generic like “employment arrangements”. The former yes, the latter no.

The proposal was trying to convey a gradual shift towards greater equity driven by the APS commissioner, whose role should be strengthened, according to reviewers.

“It’s saying we’re trying to move towards an environment that would have greater transparency and more common terms because one of the problems we’ve got at the moment is there’s so many of them out there,” Thodey said.

The overarching concern should always be “what is best for the public service” and that includes the ability to attract “the right people” to jobs, he added.

“I think the more transparency we can have, the better. But we’re not going to an environment where everyone on the same level is paid exactly the same, because we want performance management in the system as well.

“But we also have got to be careful that we’ve not got too much unintended disparities, and that’s why we need, and the public service commission needs, to look across and make sure that it’s equitable.

“That’s what I mean – not common pay in the sense that everyone’s paid exactly the same.”

That would be “impossible” in his view.

The Mandarin asked how this might work in practice – would it mean the APSC taking a more active role in enterprise bargaining? Details were not exactly forthcoming, but another spokesperson from the secretariat noted this was one of many ideas also found in Ahead of the Game, the report of the last major APS review.

“You’ve got to be pragmatic but what you want is fairness, equity and transparency,” said Thodey, suggesting “a strong public service commission that is looking across government” could encourage this.

He said this he would “put this in the same camp” as efforts to encourage gender pay equity over time, which incidentally is “not an issue” in the APS, in his view.

A gender pay gap may not be as evident in the APS as elsewhere, but there is still a gap. And to some extent, it reflects the wide differences in pay between some departments and is related to the fact that more women have traditionally worked in lower-valued occupations.

“It’s going to take time,” said Thodey. “There’s different roles and you’ve got to make sure you’re considering market conditions etcetera, but then over time you will just quietly sort of move people into, you know, the right level. … You’ve got to be pragmatic and balanced in these things.”

Do the public need a Westminster crash course?

A lot of the submissions and comments to the panel make it clear that there is not a clear and widespread common understanding of the role of the public service.

The review panel has been careful to stay positive and assure everyone the APS is not broken, but there is a strong impression on its discussion website that something has been going badly wrong somewhere in the relationship between it and successive governments.

Some think perhaps public servants are no longer independent and apolitical enough, but not everyone agrees – nobody elected them, after all.

“There is no question that the public service, a department, must serve the minister of the day,” said Thodey.

“But there is a role for the public service [in providing] continuity, in representing the people of Australia, because governments come and go.

“And therein lies the wonderful balance within the Westminster system, so I’m afraid it’s both. You must serve the minister, but you also must look after the greater good of Australia.”

What about clearer rules or at least more clarity about these time honoured conventions? Australians are now almost constantly hearing political arguments over whether ministers have politicised the public service or should resign for breaching one long-standing convention or another – in part because there is room for differences of opinion.

“Look, maybe there’s a need for more communication but I don’t think it’s a difficult concept to communicate,” said Thodey.

“The public service is there to give frank and fearless advice to the minister. It is the responsibility of ministers to pass legislation and the responsibility of the department to implement, so therein lies the balance.”

He doesn’t think it’s a very complex idea – likening it to the relationship between a board of directors and a chief executive.

Thodey noted in his speech “it is clear that the APS’s critical relationship with the executive and the Parliament has evolved over time” and said this could be strengthened through “a commonly agreed understanding of respective roles” – particularly more recognition of the role of ministerial advisors.

“We welcome the contest of ideas; we think that’s really important,” he said in the press conference.

“That’s what makes for good democracies and good decision-making, so we don’t want to in any way lessen that, but we do think there’s some support we can give to the minister’s offices in terms of training and development, career paths and how they operate that will benefit everybody.”

He said there were also examples of the ministerial advisors filling a valuable function.

“We are quite enamoured with the idea of the UK, of public servants having to serve in a minister’s office before they get promoted,” he added. “We think that’s a healthy step.

“We haven’t decided if we’ll put that in the recommendations but we want an open and transparent relationship, because they both play different roles.”

Should it be harder to sack department heads?

“We think the Australian people need to, you know, be assured that there’s a good process in terms of appointments and so on,” said Thodey.

“But, we all live in the real world – sometimes things work and sometimes they don’t and there’s got to be an ability to change, but … our job is to make sure that there’s great transparency in that, and the process is well defined [for terminations].”

But, The Mandarin asked, what does the panel think of the view that to give truly frank and apolitical advice, department heads need to be less afraid of the axe?

“I think we need a strong and independent public service but they’ve got to recognise that they serve the elected official,” Thodey replied. “That’s the way it works. So you need strength on both sides.”

“It’s not one bigger than the other… it’s a complex relationship, and that’s why we need really good leaders in the public sector and we need really good public officials.”

Are they going to mention the staffing cap?

“Most big organisations around the world have used headcount caps as a means to drive an outcome and it serves its purpose for a while, but you’ve got to keep moving forward,” said Thodey, when asked directly about the cap on budgeted staffing levels.

“And I don’t sense any disagreement within the public service, that they hold themselves responsible for delivering the best outcome with every dollar they spend. Long may that continue.”

He acknowledged strict policies could often feel very constraining to people working in the public sector and that in some cases, they realistically needed “some decision rights, within certain bounds” to have maximum impact. But at the end of the day, government must have the right to set such rules.

Integrity framework: will the panel go there?

The importance of integrity appears throughout the interim report and the federal integrity system is the subject of one of the panel’s main research papers, by Nikolas Kirby and Simone Webbe from ANZSOG.

But with both sides of politics committed to a new federal integrity commission of some kind, we wondered how far the review was venturing into this territory.

The review chairman said the final recommendations would go towards building a stronger culture of “personal integrity within the public service” where following all the rules is “just the way you do things” – and he senses that is broadly the culture already in the APS.

“But there’s always opportunities for misbehaviour, and when you get it you’ve got to call it out, take action, and it can be at any level.”

He said anyone who had been in leadership positions for a while knew that integrity required processes and rules, as well as a culture of doing the right thing.

“Rules drive compliance, and external bodies drive fear,” Thodey said. “All three are needed.”

The interim report was launched at a participatory event hosted by the Institute of Public Administration Australia that allowed senior public servants and academics to discuss the draft recommendations and ask questions of their own.


Top image: RLDI / IPAA ACT

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