Tony Shepherd: public service capability run down ‘too far’

By David Donaldson

Thursday February 1, 2018

Tony Shepherd

Tony Shepherd is well-known as the man who headed the Abbott government’s 2014 National Commission of Audit, which recommended cuts to government spending across a range of benefits and programs, as well as slicing the number of agencies.

If all its recommendations were implemented, the commission estimated 15,000 public servants would have lost their jobs.

But the former boss of the Business Council of Australia says the degradation of the Australian Public Service has gone “too far”.

“We tend to talk down the public service in Australia. I think that’s a really big structural issue for us, because our form of democracy really does require a strong and very competent — and independent, I might add — public service,” Shepherd told ABC Radio National over the weekend.

He appeared on the radio alongside Labor MP Julian Hill, who is deputy chair of the Joint Committee of Public Accounts and Audit, to discuss the committee’s upcoming inquiry into the use of contractors and consultants in the public service.

“I really think we need to reinvigorate it at the federal and state level in terms of its capacity and its quality,” said Shepherd.

“I think we have with outsourcing and privatisation, what have you, we have probably run it down a bit too far. I think it needs to be adjusted. Backwards, upwards.”

The capability problem is worse at the top, he argues.

“I’m all into rebuilding the public service, particularly at the senior level. And when I did the National Commission of Audit we had support from Treasury and Finance and I have to say the people we worked with out of those two departments were nothing short being outstanding,” said Shepherd.

“There is a good core group there in the public service in Canberra who really do a good job and do it properly and I just think we need to rebuild that at the senior level, perhaps more than at the junior level. But I guess you’ve got to have the junior level building up if you’re going to get the senior level.”

While there are plenty of examples where it’s worth paying for consultants, it’s also important the public service has the skills to properly supervise them.

“You cannot have people placing contracts with consultants and not really understanding what the outcomes are that they are seeking and what it’s all about. You really do need to an experienced project manager and project managers when you are doing that sort of outsource contracting work,” he says.

While the former chair of the Transfield board has had a high profile career in the private sector, he started his career with 16 years in the public service.

“And it was the best thing I ever did,” he adds.

The parliamentary committee’s inquiry into contractors and consultants follows a report by the Australian National Audit Office, which found that APS spending on consultants had leapt from just under $400 million to nearly $700 million between 2013-14 and 2016-17. If anything, says Hill, the way the public service tags contracts as being for a consultancy means these numbers are probably a significant underestimate of the true picture.

The committee will be taking submissions until 16 February.

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