Ensuring the public service is completely compliant risks the quality of independent work

By Bernard Keane

Tuesday August 3, 2021

Australia suffers from a thinning of sources of quality independent work, due to the government’s determination to ensure the public service is completely compliant. (Gorodenkoff/Adobe)

It’s broadly accepted that the quality of public debate has an impact on the quality of government, but if anyone was wondering, public policy expert John Daley’s final report for the Grattan Institute provides a way of measuring that link. 

He notes that the most important determinant in the success or failure of economic reforms is the unpopularity of the reform: over the past decade, no public policy reform recommended by the Grattan Institute (the sample Daley drew on) was implemented if it was electorally unpopular. Unpopularity was the most common factor across reforms that had not succeeded — 15 of them.

In the 1980s and 1990s, unpopularity was less of an issue — for example, the key tax reforms of the Hawke government, and its removal of tariffs, were unpopular, but pursued anyway. But under our current leaders, unpopular reforms don’t go anywhere.

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Part of that is down to the fact that at least some of the Hawke-Keating reforms, especially around privatisation and the removal of tariffs, were supported by the then-opposition, leaving the electorate with nowhere to go. Some of those reforms, such as the sale of Qantas and the Commonwealth Bank, remain unpopular to this day — any number of voters from all sides would cheerfully support their nationalisation.

The days of bipartisanship are long gone, however: Labor’s efforts in government to pursue sound economic reforms like establishing a carbon pricing scheme, restricting family payments and private health insurance subsidies and overhauling education funding were vehemently opposed by the coalition. For its part, Labor opposed any suggestion of improving the efficiency of the GST, and (paying the coalition back in kind) cynically exploited the Turnbull government’s effort to reduce funding to wealthy private schools.

Missing, too, was media support for reforms — whereas once there may have been support in the commentariat, even in outlets owned by News Corp, for market-based reforms, now there are campaigns against climate action and demonisation of efforts to reduce middle class welfare. As Daley points out, News Corp “runs extended campaigns on policy issues in ways that former Prime Ministers Rudd and Turnbull have both argued does not serve the Australian public interest.”

(In some alternate universe, News Corp was every bit as viciously anti-Labor in the 1980s as it now is, and successfully led a campaign against the Hawke government over its plans — prepared by an “out-of-touch bureaucratic elite” — to let foreign manufacturers steal the jobs of Aussie battlers in our biggest industry.)

But for a governing class that has spent much of the past decade lamenting the lack of substantive reform from politicians, Daley’s analysis (along with the rest of his report) should be top of mind. How do we do a better job of convincing the electorate of the merits of reforms?

The first part is understanding that you’ll never convince much of the electorate of many of the “reforms” urged by employer groups, because they are all about self-interest, not the public interest. Changes that form the basis of so many press releases from employer groups like the Business Council and the Australian Chamber of Commerce and Industry —industrial relations deregulation and company tax cuts — are rightly seen as benefiting only employers and corporations.

But not every reform is naked self-interest. A look at the Productivity Commission’s Shifting the Dial report  from 2017 reveals a number of useful reforms that would likely go down poorly with the electorate — road pricing, dumping the community pharmacy model (at least after the Pharmacy Guild has had some time to make sure its consumers understand how terrible it is), reducing land use regulation and development red tape, and land tax. You could probably add carbon pricing to that mix too.

The ACT is well advanced in implementing land tax — despite constant opposition by the ACT Liberals over multiple elections — and the NSW government has floated a model that should address the least popular element — the sense of unfairness from existing home owners who’ve already paid stamp duty and would also pay land tax.

Beyond that, how to overcome community opposition to reforms that would benefit everyone?

One of the problems that Daley points to is the relative lack of genuinely independent research into public policy issues — something, of course, that the Grattan Institute was designed to remedy. 

“The evidence base would be stronger if more work was done and published by sources independent of vested interests. This might be the work of public service departments, independent arms of government such as the Productivity Commission or the Reserve Bank, parliamentary committees, the Parliamentary Research Service, or think tanks. Publications are more likely to be of high quality and useful to public consideration of policy change if they are more independent of the government of the day.”

But Australia suffers from a thinning of sources of quality independent work, due to the government’s determination to ensure the public service is completely compliant. Daley notes that the public service now publishes less work and once-useful series of independent reports and speeches from Treasury have been abandoned. He also makes an insightful point about evaluation, which is now undertaken much more rarely within the APS and thus provides no solid evidence within departments themselves about program implementation.

The vanishing of evaluation in part reflects the fact that governments have no interest in evaluation — it is assumed that every program is a triumph, and any evidence to the contrary must be avoided at all costs, preferably by not being produced in the first place. And devoting resources to evaluating whether a program met its goals is certainly not a priority at a time when the APS has been significantly downsized and much of its work handed to consultants happy to tell the government whatever it wants to hear.

We still have independent arms of government: the Reserve Bank, which is now the primary economic policy institution in Australia; the Productivity Commission; the Parliamentary Budget Office, the Australian National Audit Office, Infrastructure Australia. Each speaks with authority in a way that Treasury has not for years, and each serves the public interest well.

But the lack of a departmental public service voice in policy debate means a lack of sector-specific knowledge. If departments now express any view, it is assumed it is the government’s view, shaped by political considerations, rather than the view of an unbiased expert focused on the public interest.

Ironically, the relentless logic of neoliberal policymaking — shrinking the size of government, outsourcing policy work to the private sector, dismantling bureaucratic and regulatory structures and demanding they be more “responsive” — has reduced the capacity of governments to effectively shape public opinion in favour of further reforms. Who believed the government when it claimed company tax cuts would lead to more jobs, higher wages and higher productivity, rather than simply hand a windfall to its donors? Treasury modelling to that effect could be dismissed as simply being constructed to serve the political interests of the government.

In the unlikely event that it should actually seek to undertake any more unpopular reforms, the government will find itself bereft of the capacity to influence the ensuing debate. And Australia’s capacity to undertake genuine, but difficult, reforms, rather than policy changes favouring vested interests, will continue to diminish.


Heigh-ho: from a golden age of policymaking to our winter of discontent

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