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We need a leaner, meaner public service: Commission of Audit

The Commission of Audit, led by Tony Shepherd, has recommended radical changes to the way we do government in Australia. AAP/Lukas Coch

The Commission of Audit’s report, released yesterday, sets out a radical blueprint for the role of government, the scope of its activities and how it goes about getting things done. For the most part there are no surprises. But if the report’s recommendations are adopted, it would transform the way we do government in Australia.

The ten commandments

These values informing the Commission of Audit’s report are captured in the Principles of Good Government that open the report: ten commandments handed down from the commissioners that shaped their investigations and should, they argue, help ensure that the goals of government are achieved.

The underlying notions are simple. Cut spending, compete, give citizens choice, reduce complexity, increase transparency, value for money, target, cut red tape, markets are best, and government should get out of the way.

What does it mean for the public service?

What the Commission of Audit recommends for the public service is profound. There was never any question that the Commission of Audit would make sweeping – potentially transformational – recommendations that would change the shape, structure and operations of the Australian Public Service (APS) itself.

Australia’s public service is too big. The Commission of Audit recommends cutting the APS by 15,000 employees. However, Commission of Audit chairman Tony Shepherd has since told a Senate hearing that he doesn’t know where the number came from.

The scaling back in size would presumably come from the reduced scope of government, but also recommendations about how the APS should be structured and staffed.

The Commission of Audit found that the public sector does too much. The report suggests that the scope of what the APS does should be scaled back.

More of the public sector’s activities should be sent out to the private and non-profit sector. Some of this would be achieved by privatising government assets such as Australia Post, Snowy Hydro Limited and COMCAR, but also through increasing outsourcing across the board.

Perhaps the most controversial recommendation is to outsource the Department of Human Services’ payments system, but the Commission of Audit also recommends outsourcing in areas such as visa processing.

Fixing the broken federation would clarify roles and responsibilities as the Commonwealth moved out of areas it had strayed into more and more over the years. Schools education and health are the obvious candidates. There are clear recommendations on scaling back the scope of activity – which will mean shrinking departments and job losses.

There is also a push for increased self-reliance: for government to let citizens do those things they can best do themselves. In other words, government needs to get out of the way – of individual citizens, the states and territories, and the private and non-profit sectors.

Any cuts to the public service on the scale recommended by the Commission of Audit are likely to encounter significant opposition. AAP/Tracey Nearmy

The Commission of Audit argues that there are too many government bodies. The report points to the proliferation of organisations that populate the Commonwealth and the need to consolidate abolish, merge, privatise and review a range of these.

Few would probably argue with this principle. However, implementing these would have major repercussions in practice. Consolidating border protection and health bodies are just two of the suggestions.

The other big ticket item in this area is the Australian Public Service Commission. The report basically suggests the commission should be abolished, with its activities carved up and split between other departments.

The APS needs to be more productive. There are too many public servants; there is too much rigidity in the APS employment model; there is an underperformance problem that is not being adequately addressed; and there is a potential skill mismatch between what we need for a new APS and what we have.

Much is made of the notion of the span of control – how many people supervisors have under their watch – and how increasing it will drive efficiency. There is detailed analysis of organisations against a “best practice span”. This is pure nonsense, but don’t rule this out as a way of driving structural changes within organisations and major re-designs.

Ideally, any reform would happen in a strategic framework around questions such as:

  • What does the organisation do?
  • What are the goals?
  • What skills do we need?
  • How do we design jobs?

Despite this, don’t be surprised to see this emerge as a new management principle and a hard target across the APS.

Back to the future?

Large parts of what the Commission of Audit has recommended in its vision for transforming the APS are not new. We have had the debate about size, scope, structure and staff for decades.

The Commission of Audit members maintain incredible faith in the power of the market to solve problems – more privatisation, more contestability, smaller government and fewer rules are easy prescriptions. But we also have plenty of experience of this in Australia and from abroad, albeit mostly missing from the report and its reference lists.

Getting the public service to be more productive, more effective and more efficient in an environment where politics rules is much harder.

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