After three years it has come to this. Mugged by the reality of a cynical, noisy electorate, a government which fell at its first hurdle — budget 2014 — and never really recovered, and a tyro administration delivering its first budget on the eve of a general election, budget 2016 was always going to be a a modest, cautious affair.
A hold on spending, little for the punters, the best the government could show for its three hard years is a decade long, slow reduction in company tax — 10 years before we get our corporate rate to the middle ranks of the world economies!“This was never going to be the time for a bold vision for public sector reformation.”
The tilt to innovation and a readiness to look for a new way to drive infrastructure suggest a government at least thinking about a new world. There’s a quick and clinical windback of Peter Costello’s open ended superannuation tax benefits, the net result of three years of tax reform. But in the time available the reality is we will have to wait for the government’s successful re-election to get a sense of what a real Turnbull budget is.
Meanwhile the government has been left to make a silk purse out of a pig’s ear. All the noise about this being a plan, not a budget, is of course political rhetoric. Turnbull and Morrison’s surprising inability to craft a compelling economic narrative meant this election-eve budget had to fill this yawning political gap.
The electorate will make its call come July 2, but in the meantime we are left to wonder what could have been.
Take the issue dear to our heart: good government. According to the budget papers the Smaller Government agenda has delivered $1.5 billion in savings to date. A rolling program of efficiency reviews, continued efficiency dividends, some amalgamation of back office functions, a clamp down on the number of agencies and headcount have all contributed to a material, if not exactly stellar, number for a public service that costs $67 billion to operate.
For a government that wants to make the public sector an exemplar for innovation and delivery there was little to show in last night’s budget. The half-billion dollar public sector productivity fund is an intriguing piggy bank — if well used. Vague observations about using data to better inform programs, digital delivery to offer better and cheaper services, and an inclination to be more open to outside solutions for complex problems, all hint at a different approach.
But it is hardly revolutionary, and a million miles from the massive disruption and change those outside of government are struggling with.
Frankly for a first term government, fighting for its survival, this was never going to be the time for a bold vision for public sector reformation. But given government in this country represents between a quarter to a third of all activity, it is remarkable that so little attention is given to a robust rethink of our post-war public sector model.
In a highly competitive world, a small country like Australia needs its public sector to be contributing big time to our national effort. Long sheltered from the profound disruptive changes transforming the world, government administration has to remake itself or risk being irrelevant — road kill in a world that ruthlessly disposes of things that don’t work.“The challenge of disruption is going to have to come from within.”
Shaving an efficiency here or there is just not going to do it. Technology is rapidly making a mockery of old fashioned bureaucratic fiefdoms. For instance the creation of mega service portals (eg ServiceVIC, Service NSW) has mashed together the hundreds of back office systems of various agencies. This begs the question of what is future of the agencies whose services are now offered through a single portal.
We are seeing the power of algorithms big time in Google, Uber, Facebook, Netflix and Airbnb to profoundly reset whole industries, yet in government much remains business as usual, with the federal bureaucracy still largely doing what it has been doing for the last 60 years.
It is early days for the development of these types of platforms, but if government doesn’t reinvent itself to be part of this new world, it faces the near certainty it will be left to run the steam engines. Prime Minister Turnbull, to his credit, is perhaps the first Prime Minister to put this challenge directly to public administrators. But in the crudity of politics, public sector reformation is never going to get a big look in when it comes to political attention.
This means the challenge of disruption is going to have to come from within. And be driven by strong leadership that profoundly challenges the status quo. If there is one lesson from the many industries that have already been disrupted, it is that the survivors are the organisations that deeply remade themselves to meet the needs of their users. Incrementalism does not work in this world.