O’Flynn: headcount obsession and a stale ‘reform’ agenda

By Janine O'Flynn

Wednesday May 4, 2016

Politicians of both major parties are obsessed with the number of public servants and addicted to abstract concepts such as productivity, some of which are not especially useful in many areas of public sector activity. Purpose and performance should hold much more sway across the large, often unwieldy, collection of organisations which are charged with delivering on often conflicting or ambiguous governmental agendas.

When Malcolm Turnbull deposed Tony Abbott in September last year I mused both publicly and privately on whether Australia would have its first CEO-style Prime Minister. Was it time for a revolution, of sorts, in the Australian Public Service (APS)?

” … much of what we got was a tired story that the APS needs to be trimmed.”

He got to work quickly announcing the arrival of 21st Century Government and a Ministry of the future (whatever that meant). In terms of the structure of government the PM announced: “Very big changes to meet very challenges to help all of us seize very big opportunities” and began sprinkling his speeches and media bursts with plenty of hip, modern catchphrases — innovation, disruption, agility, nimbleness, human capital, renewal, integration. Most of this was outward looking, designed to fire up the broader population for the great transition we are currently in; not much seemed to be focused on the machinery of government he would need to facilitate this.

The big reports that have landed on his desk, albeit not commissioned under his watch, have been lacklustre and will not likely underpin a revolution that will produce a nimble, agile, innovative, disruptive APS. Peter Shergold’s report on learning from failure and adaptive government was widely disparaged as full of clichés and downplaying the challenge of change. More recently, Sandra McPhee’s review on workforce management practices recommended the end of jobs for life, more outsourcing, and centralization.  Alongside these proclamations of a groovy, modern APS is the inconvenient truth that many in the APS remain in protracted bargaining over terms and conditions of employment.

There was not much fire and brimstone for the APS in the budget speech and a full measure of what the budget means for the APS requires a deep dive into Budget Paper 4, which covers agency resourcing. It is in here that we find the Transforming Government agenda which sets out fourteen elements of “reform”. Two big ticket items — the efficiency dividend and functional and efficiency reviews — and a grab bag of twelve others. The overarching aim being to create an APS which can be positioned “to respond to growing public demands, including for more open and collaborative solutions to emerging complex challenges and opportunities”.

A transformation however requires more than the stale list of so-called reforms listed under the Transforming Government — maintaining the efficiency dividend, more functional reviews, shared services, rationalizing the property portfolio, more competition, and the sharing of public data (to name a few). There is nothing here that signals big investment in building the human capital or capacity in the APS, but rather a zombie-style commitment to small government, a fixation on a specific level of employment, and the continuation of one of the laziest and bluntest tools in the public sector toolbox — the efficiency dividend. Anyone looking for an actual transformation of the APS, which fits with the innovation babble of the last six months, will not find it here.

It’s not clear that the PM sees the APS as the vehicle through which to deliver on many of his big, bold proclamations. And via his first budget much of what we got was a tired story that it needs to be trimmed. Why that is the case, however, is anyone’s guess. Like many before him, the Treasurer took the easy road (for government) of relying on the efficiency dividend. This sends a signal that smaller government is better; but better at what? The efficiency dividend remains at 2.5% rather than being reduced and alongside this is the continuation of the functional and efficiency reviews. No wonder when the government claims they have already delivered $2.7 billion, although it’s tough to fully ascribe this to the reviews themselves.

As I have argued elsewhere the use of an efficiency dividend is lazy because all it does is chip away at government organisations rather than making the much harder decision about what you want to do and they think about how you want to do it. Inevitably it takes crucial resources away from areas that are operating effectively, those that are high priority, as well as those and those that are lower priority or wasteful. In place for almost thirty years, it appears that governments of all persuasion are addicted to an instrument that delivers cuts but does not necessarily address the way in which organisations operate.

Forcing public sector organisations to keep cutting their costs in this way does not provide the basis for a “Smart Agile Responsive Public Service”, it simply starves the beast. Recycling $500m of those savings to automation and business reengineering which probably means plenty of work for consultants, rather than direct investment in public service capability — time will tell.

Public sector reform is exceedingly difficult, for many reasons, and talk of a big transformation is just that; talk. Chipping away at budgets, recycling the savings, or part of them, into lucrative consultancy gigs, and ramping up competition does not provide the foundation to respond to complex challenges and opportunities, it simply maintains the long, slow bleed that has beset the APS, and further risks a hollowing out of its core capabilities; something a CEO-PM should truly understand.

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