Broadband audit challenges public sector advice failure

By Harley Dennett

August 5, 2014

An audit of the NBN public policy process has challenged public sector leaders to ask why their advice was not seriously considered.

The Independent Audit — NBN Public Policy Processes: April 2008 – May 2010 report authored by Bill Scales, a former Productivity Commission head and Telstra director, credits the public officials involving in the NBN policy development with “dedication and commitment” to making it work. Department of Communications officials have been largely vindicated by an independent audit for their part in the development of National Broadband Network policy. But the Australian Competition and Consumer Commission came into criticism for giving “unsolicited advice”

However, Scales took task with the lack of resistance within the public service when its cautions were rejected by government:

“[T]he public service, even at its most senior levels, had difficulty in having its ‘voice’ heard on many important NBN policy matters. It is tempting to assume that this was simply circumstantial and related to the very special circumstances and operating culture of the Rudd Labor Government at the time and were specific to the NBN public policy development process. However, this may be too convenient an explanation. There have been many other times in Australia’s history when similarly difficult and complex policy issues have emerged and have created tensions between the Executive and the most senior levels of the public service, and yet, robust advice has still been provided to Ministers and the Executive, and it has been seriously considered by the Government of the day.

“The most senior levels of the Australian Public Service should consider whether the inability of the public service to have its views seriously considered during the NBN public policy development process was circumstantial, or whether it signals a more serious malaise within the Australian Public Service that needs to be addressed.”

Pre-announcement secrecy demands from the former Labor minister Stephen Conroy and the special priorities and budget committee of the cabinet drew most of the lashings in the audit, as it prevented Department of Broadband, Communications and the Digital Economy officials from seeking external subject matter experts that could have better advised on large infrastructure projects.

Scales argued for departments to be resourced with greater in-house expertise and “urgently review their strategic objectives” to ensure they had highly knowledgeable subject matter experts to assist departments meet the demands of government.

Future projects of this scale should be referred to the Productivity Commission or Infrastructure Australia for independent costings before the project proceeds, Scales recommended, and any public infrastructure projects with a cost above $1 billion should be subject to a cost benefit analysis study.

Public servants could also benefit from the creation of a whole-of-government guidebook or website that sets out the roles and good government processes during the proposal and preparation of large infrastructure projects and reforms, he argued.

The main portfolio department with carriage for the NBN in the review period was the former Department of Broadband, Communications and Digital Economy. Thesecretaries during the NBN development period were Patricia Scott and Peter Harris, both who are now Productivity Commissioners. Harris heads the Commission and was replaced by Drew Clarke and the department was rebranded as simply Communications when the new government was sworn in.

Before the new government was elected Clarke commissioned the Boston Consulting Group to review the departments direction. BCG recommended a digital first strategy and Clark has been implementing this major change in direction moving the department away from the traditional regulatory arenas of telecommunications and media, focussing instead on digital productivity and infrastructure.

The ACCC also drew criticism for providing “unsolicited advice” in a presentation to the initial panel of experts, including departmental secretaries for DBCDE and Treasury, that warned that upgrading from FTTN to FTTP was not an efficient path as 70% of FTTN costs would be “stranded” in any subsequent upgrade to FTTP. The panel of experts was criticised for relying too heavily on the ACCC’s advice and not subjecting it further scrutiny.

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