Andrew Podger's brilliant reimagining of the Australian Public Service

By Verona Burgess

September 12, 2018

Verona Burgess analyses former APS Commissioner Andrew Podger’s thought-provoking 8800-word submission to the Thodey review.

Hopes are fading that the Thodey review of the Australian Public Service will publish a compelling set of submissions from the departments of the Prime Minister and Cabinet, the Treasury and Finance, along with the Australian Public Service Commission.

As the central leadership group, they should have been the first to show their colours. Let’s hope their secrecy is not driven by fear of exposure – or arrogant disregard for what the outside world thinks.

Of the 668 submissions plus a few post-deadline, 86% have come from individuals and only 14% from organisations.

We know what the APS thinks only by contributions from (at time of writing) just three portfolio departments – Agriculture, Home Affairs and Infrastructure – along with the Australian Taxation Office and a handful of small agencies. This is so disappointing.

Of other contributions, one that stands out for thoughtfulness, depth of knowledge and grasp of the APS is that of a former Public Service Commissioner, Andrew Podger, who is also a former secretary of several departments, including Health, and now an honorary professor at the Australian National University.

A discussion paper in itself

Podger does not fantasise about the APS as a tabula rasa. His 8800-word submission is a discussion paper in itself, with six main parts: context; capability; culture; operating model; architecture; performance and effective use of taxpayers’ money; and governing legislation.

“Podger recommends that the APS Commissioner be regarded as the ‘professional head’ of the APS, responsible for overall stewardship of the APS, and the secretary of PM&C the ‘operational head’.” 

Under “context”, he considers technology; the role of government and the APS; international context; federalism directions; interaction with third parties; broader trends in public administration; and trust.

Under “capability”, he considers capability gaps and their causes; new skill requirements; mobility; and other aspects of organisational capability.

Under “culture”, he considers (at some length) the APS values; the legal and political environment; employment arrangements; and the Freedom of Information Act.

Under “operating model”, he considers broad operating models of public administration; the impact of technology; linking governance structures to different types of functions (policy advising, funding and purchasing, service delivery, regulation, integrity functions and government business enterprises); regional collaboration in service delivery; and APS workforce models.

Under “architecture”, he considers governance arrangements and public trust; the roles of the APSC and PM&C; machinery of government arrangements and portfolio structures; and policy coordination arrangements (including Cabinet, its committees, the budget, and the roles of Finance and Treasury).

Under “performance and effective use of taxpayers’ money”, he considers staffing controls; running costs; and the funding of pay increases.

Last is “governing legislation”.

To cherrypick does not do this submission justice, but since we’re in the cherrypicking business here are a few points.

Podger recommends that the APS Commissioner be regarded as the “professional head” of the APS, responsible for overall stewardship of the APS, and the secretary of PM&C the “operational head”, marshalling the APS to meet the demands of the prime minister and cabinet.

He would prefer the New Zealand model, where the State Services Commissioner employs heads of agencies, but says, “I doubt that could be introduced here despite the considerable advantages involved.”

Instead, he suggests strengthening the role and independence of the APS Commissioner by having the appointment subject to consultation with the Joint Parliamentary Committee of Public Accounts and Audit, as with the Auditor-General, and giving the Commissioner rather than the PM&C secretary the lead role in advising the PM on secretary appointments, with the PM&C secretary still directly involved.

“The Commissioner should also have a clearer statutory role in advising on other agency head and board appointments, in consultation with the relevant portfolio secretary. These roles naturally build on the Commissioner’s responsibilities in regard to the Senior Executive Service, facilitating more careful succession management consistent with the merit principle, and promoting the concept of ‘One Service’. These roles are also consistent with the Commissioner having responsibility for remuneration (and classification) across the APS.”

‘Unhappy history’ of staffing controls

“He would prefer the New Zealand model, where the State Services Commissioner employs heads of agencies, but says, ‘I doubt that could be introduced here despite the considerable advantages involved’.”

Then there is the “unhappy history” of staffing controls:

“Rather than constraining costs of government, such controls inevitably distort the use of taxpayer resources. They discourage employment of junior staff, restrain recruitment of young people and favour the use of contractors and consultants whether they represent value for money or not and/or whether they undermine APS capability.”

He says that since the 1980s it has been demonstrated that running cost controls are far more effective in managing APS resources, but says there are serious problems with the way they are controlled, not least the damage caused by the continued use of efficiency dividends.

Instead, he recommends applying annual Consumer Price Index adjustments to running costs.

As for pay increases, he says the current approach is unnecessarily complex and based on a false premise.

“The premise is that pay increases can and should be conditional on productivity improvements within each agency. That is not how the labour market works, whether in the private or the public sector, and it is not how enterprise bargaining works in the private sector.

“Not surprisingly, the policy now imposed on the APS is not applied by the Remuneration Tribunal for politicians, judges and statutory office-holders, nor applied to ministerial staff, where the notion of internal productivity offsets is more obviously inappropriate.

“The current APS approach also risks double-counting productivity requirements, again impacting the level and/or quality of services in a disguised way. There is also the risk of ‘gaming’ by agencies as they look for the ‘productivity offsets’ needed to justify pay increases”.

Amen to that. There’s much more, but you’ll need to read it for yourselves. It is well worth it.

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