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Terry Moran: time for an inquiry into the public service

Terry Moran has called for the strengthening of the Australian Public Service. Alan Porritt / AAP

Terry Moran was Secretary of the Department of the Prime Minister and Cabinet from 2008 to 2011. He is now President of the Institute of Public Administration Australia and a governor of the Committee for Economic Development of Australia.

He joined John Alford, Professor of Public Sector Management at the Australia and New Zealand School of Government and at the Melbourne Business School, in conversation on the future of Australia’s public service.

They discussed how the public service has changed, how it should operate, and the vexed question of the role of ministerial advisers.

John Alford: I invite you to think about when you first joined the public service. Do you think the public service will change as much in the future as it has since you joined it? Could you talk about a couple of the major changes?

Terry Moran: I think that devolving more authority to deliver services to the lowest possible level is already underway. It’s gone furthest in Victoria but it has to go a long way in other states. Devolving responsibility into new governance structures is a critical change. That will in turn shake up what government departments think their business is, particularly in social policy, environmental policy and aspects of industry policy.

It will have a huge impact on how the commonwealth thinks its job should be described and how state governments think their jobs should be described. All of these things can be sorted out in a technical sense. The variable is the political impetus.

John Alford: What is your prognosis as to the likelihood of some of those things coming to fruition?

Terry Moran: I think we are facing years of fiscal constraint in Australia, not as significant as in Europe and the US, but nonetheless significant.

I can’t see the long term average proportion of GDP devoted to government activities going up; it’s actually down below that long term average at the moment because of the contraction in revenue effecting the commonwealth and state governments. Of course, it will return eventually to the long term average.

The commonwealth and the states and territories are going to have to look harder at what their core business is. At the national level we are seeing an argument emerge on both sides of politics along the lines of, “we want more activities shipped out to the states”. The current federal government has done that in a number of ways. Take the 2011 reforms to public hospitals. These go past the state and territory governments to self-governing public hospitals, to which governments will pay fixed proportions of the efficient price for delivery of service. This can become a template for other areas of social policy in the future.

John Alford: One thing that has come up recently is the role of ministerial advisers. Do you think they make it necessarily harder or easier for public servants to have a productive relationship with elected politicians?

Terry Moran: I think there is a big problem. Ministerial advisers have become the black hole of accountability within our parliamentary democracy.

The reason for that is that the old conventions governing their roles no longer hold true. In the past, if a public servant told a ministerial adviser something it would be deemed that they had told the minister, and the adviser would make sure the minister knew. In turn an adviser would speak with authority if they actually knew the minister’s wishes or had good reason to know what they would be.

There is insufficient accountability because there are so many ministerial advisers now with few, in some jurisdictions, who actually possess a grasp of the business of government commensurate with their responsibilities. No one can suggest that they are an expression of the “persona” of the minister any more. Now the minister isn’t accountable for what they do, because now a minister can say, “Oh that was one of my advisers, I did not know about this”.

Well, if ministers are using that to escape accountability, they can’t escape the proposition that it’s time the advisers were made more accountable for defined roles, and became answerable in the same way as public servants to all the investigatory and accountability bodies, including parliamentary committees.

John Alford: Do you think it would make a difference if there were to be a cap placed on the number of ministerial advisers?

Terry Moran: It would help, because it would be another means of forcing a hard look at what jobs they do. So when the Coombs Royal Commission reported in 1976, there was a definition of the role of ministerial advisers that seemed reasonable to everybody at the time. That’s fallen away. Now, in some jurisdictions, you have tribes of younger, inexperienced people who crowd out mature policy debates while they pursue hyper active issues management. This is corrosive of good government.

John Alford: If you were king for a day, what changes would you make to the public service?

Terry Moran: Well first, I think accountability has to be improved. So I would make the heads of agencies and departmental heads more directly accountable in their own right to parliamentary committees for delivery, particularly through the examination of their annual reports. These reports should actually provide more useful information about departments and KPIs to use in assessing performance.

I’d move to better define the role of ministers for the purposes of ministerial responsibility. At the moment, the media is prepared to hold ministers in many portfolios responsible for anything that crops up. In practical terms this cannot work. It creates confusion, public dissatisfaction, the removal of any real sanctions for poor performance and exhaustion for ministers over time as they cope with immense and impossible pressures.

Finally, at the state level, service delivery has got to be well and truly devolved to new style governance arrangements of the sort you see in Victoria and elsewhere for hospitals, schools, vocational education and training under modern purchaser-provider arrangements. This supports more competition between providers where possible and thus more innovation. Competition between public sector providers and entities in the private sector can deliver good results for citizens and enables public sector people to demonstrate the quality and efficiency of which they are capable. But in order for that to happen, as we see with the Gonski recommendations for schools, you have to actually put money into the system to enable public sector providers and others wishing it to address disadvantage effectively.

John Alford: Of course we know the public sector is beset with a whole pile of investigative and indeed inquisitorial agencies that can be construed as making life difficult for public servants and their work. What can be done about this?

Terry Moran: One of the consequences of what happens in nearly all jurisdictions is that the public comes to feel that public services are riven with inadequacy and incompetence. This is just not true.

If you look back over the past 40 years, the transformation of Australia in an economic and social sense would have been impossible without the drive and implementation capacity of the public services of Australia. That change has transformed Australia so that we are far more prosperous, and, in other respects have all done better than would have otherwise been the case.

If Australia is much better because of what has been done by governments and the public services over the past 40 years, we have to ask why it is that the public has now reached a point where it is almost conditioned to believe that poor performance is endemic.

I think it’s good that there are such investigative and inquisitorial bodies, which are there ultimately to lighten the load of parliament itself, but I think it’s probably time for a Commission of Inquiry to look into how these bodies could relate more effectively to the Australian Parliaments.

The full transcript of Terry and John’s conversation is available here.

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