Jane Halton on central reform from her new Finance fiefdom

By Stephen Easton

Thursday November 20, 2014

FIRST INTERVIEW: The Finance secretary is central to a new era of reform, against a background of accelerating IT and social change that demands collaboration and new ideas. She sat down with The Mandarin.

It’s easy to stand outside the Australian public service and criticise it as cumbersome and a step behind the most dynamic parts of the private sector. All you have to do is focus on what it is not. But for those who dedicate their lives to it, like newly minted Department of Finance secretary Jane Halton, there’s a certain pride in what the incredible bureaucratic machine actually is, and what it can be.

After just over 12 years running the massive Department of Health (formerly Health and Ageing), Halton is now at the centre of the APS machine, heading up the lead agency in service-wide reform that is souping it up for higher performance while keeping the fiscal engines fueled and purring away. For those coming up in the ranks behind her, she believes now is an exciting time to be part of a world-leading government apparatus, with lots of opportunities to shine.

“I think we have a fantastic quality of public servant in Australia and I do think our history of innovation and our history of staying at the cutting edge is an important legacy that we need to honour, so the opportunity to look at how we do our business and to improve it is a terrific opportunity and I think everyone should embrace that,” Halton told The Mandarin last week, capping off a wide-ranging conversation at her new office at the John Gorton building in Canberra.

Moving swiftly through the ranks early in her career, Halton gained broad experience and held senior roles in Finance and the Department of Prime Minister and Cabinet before becoming head of Health at 42. She is “delighted” to now be the first woman at the helm of a central agency, which makes her Australia’s eighth most powerful lady and “one of the most powerful female bureaucrats in Australian history”, at least according to the recent The Australian Women’s Weekly.

Halton, 54, makes the point more than once that “sometimes we’re hard on ourselves in the public sector”, including in the area of gender equality, where she thinks the APS is “actually doing quite well”. She became the second-ever female departmental head in 2002 — 15 years after Helen Williams became the first — but has seen women moving into the senior ranks more rapidly and in ever larger numbers since then. Her positivity is backed by data prepared for the upcoming State of the Service report that shows “a really solid contingent of women” coming through.

Having said that, she firmly believes that women still need to support each other, a view summed up in “a lovely quote” she recalls from former United States secretary of state Madeleine Albright: “There’s a special place in hell for women who don’t reach down and help up other women. But I do think in the public sector, we are doing better than a lot of other places.”

With systemic barriers like the marriage bar removed long ago, her advice to young women who aspire to senior leadership roles is typically frank: “If you want it, you can do it. You’ve got to work — it’s not going to be handed to you on a plate — but if you want to get there, you can.”

PGPA Act: innovation and collaboration

Halton says public servants also have a tendency to see a half-empty glass when it comes to the perennial pursuit of a more innovative culture, becoming disappointed when the transformative change it promises doesn’t come as fast as expected. “But at least we’re having the debate,” she added. “And, we will change what we do, and how we do it. Nothing is more certain.”

The inevitability of change demands a steady flow of new ideas in both government administration and policy advice, according to the secretary: “Just like technology moves on, we have to move on in terms of how we run the public sector, and we have to use up-to-date knowledge, up-to-date technology, and up-to-date management approaches to do that in the best way that we can.”

For Halton, innovation relies on questioning the way things have always been done and recognising better possibilities when they emerge. Even something as fundamental as the yearly annual reporting cycle should be scrutinised.

“We should question those things,” she said. “We should question how we’ve always [reported] and say to ourselves: ‘Does it value add? Or can we deliver the accountability and transparency that government and the public are looking for in ways which are quicker, less costly and actually more transparent?”

In discussions around the once-in-a-generation reforms being ushered in by the new Public Governance, Performance and Accountability Act 2013, exactly those kinds of conversations are taking place. The careful transition process to the PGPA era can be seen as a vehicle for innovation, and the Finance team is impressed by the number and quality of the submissions it is receiving from public servants in response to its request for input.

Along with a new reporting framework, the PGPA reforms demand the creation of a new performance framework for all publicly funded bodies to measure the impact of programs and services more accurately than ever before. Halton lists the criteria by which she will judge its outcome: “Is it more streamlined, is it more transparent, and does it provide a greater level of accountability with less red tape and overhead?

“We think we can deliver what the Parliament needs in terms of scrutiny, and what the government wants in terms of responsiveness and accountability …”

“That’s really the way I’ll judge this. I mean, I do think there are areas of duplication, for example, in some of the budget papers. We think we can deliver what the Parliament needs in terms of scrutiny, and what the government wants in terms of responsiveness and accountability, in a way that actually reduces internal-to-government red tape.”

The problem the framework seeks to address is formidable and is faced by public bodies the world over: it’s easy to measure where all the dollars go, but how do you provide a full and accurate picture of the public value they create? Halton sees the current dialogue that will inform the department’s ultimate advice to government on how exactly to improve public sector accountability as fundamental to what the APS is there to do.

“The question for government, and I think the question the government rightly asks, is: ‘Could I get better value somewhere?’ That’s a fair question, and we should be able to help government answer that question,” she said.

Dialogue is important to Halton. Along with impressing upon her team the need to “join the dots” between the department’s various projects to form a picture that reflects the government’s objectives, she’s been asking them to “talk to people”.

“There’s no point us dreaming up an idea if it doesn’t work in the real world; it won’t be used,” she said. “So, one of the things I’ve been talking to my people a lot about is ‘consult, consult, consult’. Ultimately, government will make a decision, but I need to know and I want my people to know what the CFO down in Health thinks about a framework, or what the secretary of the Defence Department thinks about how this will work for him. We need to understand and get people’s input. I mean, there’s a lot of clever people in the public service. They don’t all reside here, so why wouldn’t we get their ideas?”

Countering the critics, digital first

Shared services is one clear way to streamline government and reduce general running costs. It can also improve responsiveness, reducing the time and money burnt up in the inevitable changes to the machinery of government. The idea isn’t new, but according to Halton the latest efforts to make it happen are “completely different” to past attempts, and they’re working because of the biggest game-changer of them all.

“One of the reasons we went away from [shared services] in the past was because of a lack of flexibility, but also because the technology wasn’t there,” she explained. “So, the difference these days is from a technology perspective. We can deliver much more efficiently and ably across a whole range of agencies, into different platforms, in ways that we couldn’t historically.”

While there are key roles for the Department of Communications and many other parts of the APS in the drive towards e-government, technology is deep inside Finance territory and its secretary agrees there is “lots more work to do”, pausing to repeat the “lots” with added emphasis. But she also rejects the suggestion that the Australian government is a digital dawdler, particularly in comparison to the British government, as a view the facts do not support.

“I mean, let’s be clear, is there a lot more work to be done on this? Oh yes there is. But if you look at the deep changes that we’re bringing about, I think we match the UK,” Halton said. She does, however, credit the British civil service with being ahead in one particular field, which could explain why some see them as miles ahead on digital: “They’d be better at marketing.”

Halton explains that a lot of cross-government work is going on at the moment to identify the next priorities; she believes senior public servants are “very much signed onto” the whole-of-government “digital first” policy.

“You have to know how real people are going to use things; you have to understand what the business of those real people is …”

“You’ve seen the whole series of other policies that are consistent with that, like going to cloud procurement first where it’s appropriate — and it’s not appropriate for everything obviously — so I think you can see us moving in that direction,” she said.

“The other thing you can see — and I’ve got people here in this department who do this work — the other thing that we’re doing is learning very much the lessons in terms of design from the private sector. So understanding that you can’t just design a website sitting in an office block in Canberra — you have to know how real people are going to use things; you have to understand what the business of those real people is. You can also see much more sophisticated approaches to actually encouraging people to come online. But can it be improved? Absolutely.”

She also contests another popular criticism: that the federal public service suffers from a difficulty attracting and retaining financial management skills.

“I think there’s a difference here between people who manage the dollars, and we have very competitive people managing the dollars — most departments don’t overspend their budgets, managers know how much they’ve got to spend — [and] high-end, private sector people who worry about performance and how it is you go about getting best value,” Halton said.

“Now, we are getting better at that and I would agree that there’s a level of private sector skill in some of those things, but that’s back to where we’re going with the PGPA. The notion of how we measure and monitor performance and how we get best value for dollar, the PGPA and the consultation we’re going through at the moment will help us build some of that skill or capability. But I don’t accept that people here, in the Commonwealth, don’t know how to manage money.”

Broad experience for strong leadership

To be an effective senior executive, Halton believes broad experience is the key. Strong specialist knowledge alone isn’t enough, but neither does she subscribe to the belief that good management skills can be applied anywhere.

“I think there are fashions in this; there was a period where everyone thought managers could do anything and it didn’t matter whether they had a degree in fine art, they could actually go and run something to do with astrophysics,” she said. “Now I’m not in that cadre; that is not where I come from.”

That’s not to say she is suggesting what is needed is teams full of all-rounders. As in her previous position, the secretary of the Department of Finance needs a mix of skills on her team to manage the many projects, processes and programs the department has a hand in — from core activities like co-ordinating delivery of the federal budget and managing property and assets along with whole-of-government ICT strategy, guidance and service delivery, to the slow revolution that is the public management reform agenda.

“Certainly at the Department of Health, we needed people who were highly expert in particular things,” Halton said. “If you’re going to be managing a really technical area like blood, you need at least a few people around who know the ins and outs of blood. It’s complicated, it’s scientific; if you don’t have the technical and specialist skills, you can’t do your job. In this place, I need people who are technically qualified and expert in accounting, because it’s the nature of what we do.

“But if I had, in the Department of Health, only people who knew about blood in the blood area, they probably wouldn’t have the policy skills that were needed, or the negotiating skills to work with the states and territories. In this place, I need people who are highly expert on the technical side, but I also need people with the skills to work with government, work with other people in the department, to talk about the frameworks and the accountabilities and how the legislation works, all those things.”

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[…] The Finance secretary is central to a new era of reform, against a background of accelerating IT and social change that demands collaboration and new ideas. She sat down with The Mandarin.  […]


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