Commonwealth ‘all thumbs’ on social policy, says former top public servant

By David Donaldson

Tuesday July 17, 2018

The federal bureaucracy’s diminished ability is such that Terry Moran wouldn’t trust the Commonwealth “with organising a collection of funds to build the local church”. But he thinks the new Treasury boss should be given a chance.

Much of the federal bureaucracy has “learned institutional stupidity” and lost the ability to develop decent social policy, thinks Terry Moran, former secretary of the Department of the Prime Minister and Cabinet.

While certain parts of government, such as the national security agencies, are competent, much of the domestic policy bureaucracy has been “eroded and corrupted”, he said on Monday night in discussion with former prime minister Kevin Rudd, hosted by Latrobe University’s Ideas and Society Program.

“After you take out national security you’re left with domestic policy, largely social policy. And in that area the Commonwealth is all thumbs and I wouldn’t trust them with organising a collection of funds to build the local church.

“Because in the last 30 years those areas have got rid of — in health, education, elsewhere — any substantial number of people who actually know how those big systems work and brought in instead lots of microeconomists and generalists. I should say I was recruited as a generalist and am probably still one, but I think you can have too many generalists.

“I think Martin’s doing a good job of rebuilding [PM&C] after a rough time. My only problem is there are too many economists in it.”

“In those departments the answer to almost any problem is: create a market, frame the market, put a price on it, and go for light handed regulation. And wherever possible also outsource. Not only service delivery but also core government functions.

“We’ve got into the position where those parts of the public service have learned institutional stupidity — this is in Canberra — and they simply don’t have a clue about how the big systems in Melbourne and Brisbane and elsewhere actually work. That’s the problem that ought to be the focus in the Australian Public Service.

“The Australian Public Service is not, in my view, irredeemably screwed, all over, it’s just that specific part of it that has been eroded and corrupted.”

He also gave his assessment of how his old department is faring.

“I think Martin [Parkinson]’s doing a good job of rebuilding it after a rough time. My only problem is there are too many economists in it,” he said.

“You need more people in that department as well who know how things work on the ground.”

Arguing that the federal government “doesn’t even follow what’s happening with its own programs using the data that it has”, Moran suggested increasing the states’ role in social policy — or even giving some such responsibilities to local government.

As he is living in the United States, Rudd was not keen to get into current domestic issues, but argued that the federal government is poorly placed to understand how social policy affected regular people’s lives.

“Federal bureaucrats do not effectively deliver programs which mean things to real people on the ground, other than making payments to them through the payments and benefits system,” Rudd said.

Give Gaetjens a chance

Phil Gaetjens

There has been notable criticism around Treasurer Scott Morrison’s decision to appoint a longtime Liberal staffer, Phillip Gaetjens, as head of the Treasury.

Gaetjens has served as chief of staff to both Morrison, and spent 10 years as CoS for then-treasurer Peter Costello. He’s also been a public servant, serving a stint as secretary of the NSW Treasury.

Moran is willing to give him the benefit of the doubt for now, however.

“I think Treasury now has still got lots of capable people in it,” he said.

“I think the new Treasury secretary should be given a chance to do what he can because I know him, he’s a very good person, and he did a very good job as secretary of Treasury in NSW for four years. But they don’t have the mandate to think thoughts about where the country is going and feed those into a national debate, and that’s part of the problem.”

Blinkered on China

The two also dwelled on one of Rudd’s favourite topics — China — with the ex-PM repeatedly complaining about the harsh tone of the debate around how to deal with China.

Rudd likened the shift in power in the Pacific to Australia’s move towards the United States in World War II as Britain vacated the field.

“That happened quite dramatically. This is a slow burn effect, and it depends where American politics ultimately lands,” he said.

The national security bureaucracy’s heavy reliance on its ties with the United States could increasingly present problems with America becoming an unreliable partner and China single-mindedly pursuing its own national interest, Moran said.

“Too many parts of the public service have frankly got a few blinkers on that ought to be taken off,” said Moran.

“The national security community made a huge investment in America, and I observed that they all kept trouping off to America and coming back and they were incredibly well networked. And this was really important to our security.

“But it meant that we were already blinkered in dealing with China. Although the secretary of the Department of Foreign Affairs and Trade was previously our ambassador to China … generally speaking, the whole machine is still American oriented, and it isn’t coming up with the new ideas in this area that are needed to better engage with China, listen to China more carefully, not be paranoid about China and how it might be painted, as it was in the 50s and 60s here in Australia.

“That has to change, but arguably it’s not registering much yet on the domestic political scene and so the timing of that change is going to be more dictated by what happens internationally.

“Personally I’m really worried about America’s fortitude into the future. I can observe that China is now more single minded than ever before and we’ve got to dance with the two of them.”

Top photo via @RobBendigo on Twitter. Inset photo by AAP Image/Mark Graham.

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