Australia’s public service is “a hell of a good asset there that is not used to its potential” thanks to poor management and interference, says public sector expert Ian McAuley.
McAuley (pictured), who recently published a book titled Governomics: Can We Afford Small Government? with Miriam Lyons, told The Mandarin that managerialism and politicisation have “really infected the whole public sector”, creating an impediment to effective public administration.
KPIs have become ends in themselves, McAuley said: “You have to have goals, but unfortunately we get a set of performance indicators that morph into perfomance measures and eventually morph into goals themselves. They’re not really measures, they’re simply indicators.”
A small government culture that sees the public service as unworthy compared to the private sector does not help, argues McAuley. He recalls a course he ran a few years ago for newly-recruited public service graduates.
“At the end we thought we should get someone from the public service to talk about it, and we got onto the Public Service Commission. They sent [Howard-era secretary of the Department of Prime Minister and Cabinet] Max Moore-Wilton.
“He gets up and says something along the lines of ‘I can see you’re all very talented people and the best of you will probably move on and get jobs in the private sector, while the rest of you will be left in the public sector’.
“That was the attitude,” says McAuley, “that the public service creates no value.”
The evolution of portfolio budgeting during the Hawke-Keating era, which “in a way was excellent”, has inhibited the management of government funds on a whole-of-government basis.
“It means that government says, simply: ‘we don’t care what you do within the budget, just don’t come to us for more money. Find savings within your portfolio.’ It’s good because it takes cabinet out of micromanagement and you don’t have the stupidity where you had allocations for travel, overtime, stationery etc.
“A byproduct, however, has been much less concern with all-of-government,” thinks McAuley.
It’s also given agencies more freedom to set their own salaries, which has reduced mobility as taking a similar job in a different department may require swallowing a pay cut.
“There used to be general intakes of grads and they were deliberately moved around, but that’s become almost impossible because of differential salaries,” said McAuley.
Perhaps the most damaging impact has been the incentive portfolio funding creates for cost-shifting.“Everything is about cost shifting … a capability review of the health department found different parts of department are even shifting costs to each other.”
“I’ve come across this particularly in health. Everything is about cost shifting — states run hospitals, the Commonwealth runs Medicare and the PBS and so on,” he says. The result is familiar, creating a temptation for the Commonwealth to palm off patients to the state-funded hospital system and vice versa.
“A capability review of the health department found different parts of department are even shifting costs to each other.
“There’s a lack of awareness of all-of-government or serving the public purpose. One senior public servant said to me that there is no longer a public service — nowadays people work for their agencies,” he recalls.
There has also been a shift towards service being “more to the minister than to the public”, thinks McAuley. “There’s this strange phenomenon where public servants are like a praetorian guard around the minister, protecting the minister from the public. It means there’s a certain cut off from the public.”
He illustrates his point with an anecdote. When he started out in a big manufacturing firm, “if you were talking to a customer, that was paramount” he says — but when he joined the public service, in the Department of Industry, he remembers “talking to a pissed off business person, sounding him out about what was wrong, when my boss came up to my desk and stood over me, telling me to get off the phone.
“I said I was talking to a taxpaying citizen and he responded that it didn’t matter. That attitude is built into public service culture. But if you are the minister, I think you would want the public service serving the public, to build up your own support and so you can hear issues before they make it to the Daily Telegraph.”
The roles of public servants and political staffers have gotten it “the wrong way around”, he says.“In the Rudd-Gillard years, the staffers were kids in pants. In this government they are older, but definitely have vested interests.”
“Public servants are doing political work, responding to letters, writing speeches, and the staffers are doing policy work. In the best agencies public servants are still there doing cost-benefits, consulting, looking at unintended outcomes and so on, but in the worst instances, policies are emanating from ministers’ offices.
“In the Rudd-Gillard years, the staffers were kids in pants. In this government they are older, but definitely have vested interests.”
He adds that “it really pisses off public servants when outside consultants come in and get paid much more for doing the same job they could have done for cheap.” While he says he is not against the public service using consultants “if they need skills they don’t have, but for routine jobs it really is an expensive way to do it”.
Costing guidelines that are weighted towards making outsourcing appear cheaper than it is in comparison to in-house procurement, and a poor understanding of accounting methods adds to the problem, McAuley argues.