2. Principles underpinning a New Public Service would not only include its role but also (a) confirmation of Public Service appointments only on the basis of professional merit (b) government not being seen as a commercial business - and exclusion from the Public Sector of those functions for which the public interest is best served by competitive service delivery to raise economic productivity (c) development of the economy being seen as the major means for raising productivity.

3. Only more higher qualified professionals should endorse others' professionalism. Professionals (with their emphasis on objective reality and technical requirements) are vital for effective government as a counter-balance to politics with its emphasis on media 'appearances'. Professionalism can usefully be defined as a combination of both high level knowledge and practical experience of what should happen when that knowledge is applied. In a Public Service context, if (most) appointments are made by persons with relevant 'professional' knowledge and experience, persons with high level knowledge and relevant experience tend to gain senior positions. However politicisation creates a different regime, in which persons with partial professional competence (eg some theoretical knowledge but no experience, or the reverse) may gain political support because its is much easier to bluff the political system with trendy rhetoric than to see the practical significance of policy theories, cope with complex situations, be credible with peers and achieve real results. Political appointments tend to be focussed on persons known to the political system - who can be those relying on such linkages to get ahead. This can then affect the professional competence of the whole Service, through the inability of political appointees to tolerate subordinates with higher professional capabilities or to appropriately lead, train or select other staff. In practice our political system has proven singularly unable to accurately identify persons who do combine high level knowledge with practical experience (ie are true professionals). For example quite a number of cases can now be identified where politically selected CEOs have been seen as Ministers' greatest problem after about 18 months. Our political system has also been singularly unable to tell what harm it is doing. The idea of 'information asymmetries' (which the Institution of Engineers recently used to good effect in the submission about Queensland's Professional Engineers Act) provides an explanation of why politicisation of senior Public Service positions can be disastrous. It is equivalent to the client deciding who should be a qualified professional. Unless something is done by professional organisations to restore professionalism (ie to re-emphasise a proper balance of real knowledge and experience) as the basis for senior Public Service then the context within which a large fraction of younger professionals work is NOT going to be hospitable to their professional development. Some work is being done by the Institution of Engineers in relation to the question of eroding technical / engineering skills in the Commonwealth Public Service (eg Brook S., 'Faulty engineering formula for disasters', Australian 21/1/00). And other trade and professional bodies have made similar comments (in Breusch J., 'Public Service has lost expertise', Financial Review, 11/1/00). However there has yet been no systematic work done to identify the overall effect of well-meant but ill-advised politicisation / amateurisation of senior Public Service appointments - a predicament which appears to be nation-wide (see note 21). It can also noted that concern has been expressed by Queensland's judiciary about a lack of professional merit in recent Supreme Court appointments (eg Monk S. 'Judge blasts 'political' appointees', Courier Mail, 15/11/99; and 'Gibbs wins peer support' Sunday Mail, 20/2/00) and the Chief Justice has recently produced an account of the requirements for professional merit in judicial appointments ('Equal Justice for all', Courier Mail, 16/2/00). In NSW also there have been reported calls for an expert panel to advise government on judicial appointments (Merritt C., 'Call to rethink judicial selection', Financial Review, 24/3/00).

4. Relevance: Knowledge and experience would need to be relevant to a position. The 'managerialist' assumption that management is a generalist activity requiring no specific knowledge of the function being managed should not be accepted - as it leads to content-free process with inadequate practical outcomes.

5. The Importance of Professional Criteria: It is vitally important that the ability to confirm appointments lie with a professionally qualified panel. Even if exactly the same persons were appointed, the difference in their motivations and behaviour when subjected to true professional assessment would be vital (ie in terms of concern for technical issues, and practical outcomes).

6. Appeal Rights: My experience clearly shows that where appeals are not allowed (as has been the case for SES appointments) there is no real requirement to consider professional merit.

7. Average rate of advancement: A tabulation could be constructed equating all possible past appointments under professional criteria (ie in terms of year and classification level) with a current PMC. This would require a statistical analysis of typical rates of progression and the adoption of a tabulation consistent with the evidence which is smoothed to eliminate anomalies and interpolated to provide completeness. A test of reasonableness should be the basis for such a tabulation.

8. Elected governments' ultimate power: The elected government has the ultimate power to decide appointments under the New Public Service proposal but would not be able to do so (as it can when the process is politically controlled) without being aware of professional considerations in making such appointments. Under the proposal outlined here, appointments made without a favourable professional recommendation would not be confirmed and would not confer a PMC. However, while precipitate political changes to the Public Service would be constrained, over a period of time elected governments would substantially influence the character of the Public Service.

9. Existing PMCs: Some existing public servants (eg those appointed where there were no appeal rights, and later appointees whose evaluation they controlled) might not be able to demonstrate any PMC, while others might have a PMC above or below their old Public Service classifications.

10. A problem: with the suggested renewal process is that there may be too few persons left with a high level of provable professionalism to allow senior appointments to be confirmed for several years. If so, so be it. It is the price we may have to pay for political manipulation of the Public Service.

11. Senior New Public Service appointments might not be confirmed for several years: In situations where no persons with high established PMCs may be available, several years may elapse before senior appointments under New Public Service conditions may be finally confirmed. During this period the level of established PMCs would automatically rise (which is reasonable as experience would be increasing), and senior appointments would be subject to periodic review under professional merit criteria by those with the highest PMC. The final step to confirmation for the most senior New Public Servants would often be the result of their PMC increasing with the passage of time (as no other persons would be available with higher PMCs).

12. Protection of Review Panellists: would need to be treated very seriously if real pressure to rebuild professionalism at senior levels is to be achieved, while political favouritism is allowed to play a role in actual some unconfirmed appointments.

13. Short term results in accordance with government policy: Any fundamental renewal of the Public Service risks disabling practical action for some time. Change must therefore either (a) be a very quick and bloody affair so that the period of disruption is small or (b) be undertaken without disrupting constructive work. The latter is preferred, because the former would merely re-create another unsatisfactory and unstable Public Service arrangement. It is suggested that: change be integrated with ongoing work; and the professional credibility and fairness of the process be paramount (including an opportunity, not available in 1990s 'reforms', for individuals to demonstrate their capabilities). Needless to say Public Service cooperation is most likely to be most willing if government policy offers credible solutions to presenting problems.

14. Staff relationships: support should be increased by accurate and timely information about Public Service renewal which is coordinated with the program responsibilities of agencies and which clearly shows 'bread and butter' public servants that (a) the Public Service is to be a part of our system of government where knowledge and experience are valued (b) the problem of politicisation is to be eliminated (hopefully with bipartisan endorsement) (c) politicisation is seen primarily as related to the working environment rather than (in most cases) to the characteristics of individuals (d) reasonable and fair procedures are being established to manage the transition to a New Public Service which will build off existing capabilities, and which most are expected to pass through successfully (e) a credible policy agenda is in place which does not turn a blind eye to real problems. Union participation should be encouraged in a group established to refine the New Public Service 'model' (as in Note 16).

15. Constraining political game-playing in the old Public Service: A significant fraction of the old senior Public Service would be unable to demonstrate a Professional Merit Classification and also has extensive political linkages and skills. Political disruption might be minimised by: seeking bipartisan political support for genuine creation of a New Public Service based on professional merit. Recent reports suggest that bipartisan negotiations on this are proceeding in the Commonwealth arena (McGregor R., 'Shaking the Canberra Tree', Australian, 10/1/00); creating a credible process to achieve a professional Public Service - which includes a willingness by the government of the day to allow its favourites appointments to be NOT confirmed; highlighting the fact that ALL staff lacking an adequate PMC (even those with opposition political connections) would have a fair chance to demonstrate professional merit to persons who are equipped to evaluate this, and who will not be impressed by those resorting to political action; setting reasonable standards. Providing appropriate knowledge and prior experience exist, appointments under new Public Service conditions could be continued - recognising that: those only able to advance by political game-playing will tend to seek other avenues when this option disappears; and senior appointments will often be unconfirmed, and require more effort to build relevant knowledge and experience to eventually gain confirmation.

16. Refining the New Public Service model: In parallel with (rather than as a prerequisite for) efforts to establish a New Public Service based on professional merit, a panel of experts and key stakeholders should be established to define a 'model' for the New Public Service. Such a 'model' should be: drafted over a period of 6 months; circulated as the basis for discussions; incorporated as appropriate by operational agencies; and revised on the basis of feedback and practical experience after 3 years for consideration by government as the policy basis for modifications to initial legislation.

17. Policy and strategy capabilities: The suggested renewal process will tend to favour those remaining with long practical experience and could result in a deficit in creativity, initiative and leading edge policy knowledge. The latter could be corrected by encouraging external institutions to provide policy competition and stimulation, and by a program to develop internal capabilities.

18. Government Business Enterprises (GBEs): Commercial skill may be needed to unwind the business positions of GBEs without triggering trading losses. Corporatisation was introduced for GBEs (initially) to provide financial returns to government and (later with commercialisation) to comply with National Competition Policy requirements for competitive neutrality to boost economic productivity. However all analyses to date have been 'politically correct', and have dangerously ignored the impact of interest-group politics on the ability of GBEs to avoid financial losses in the face of competition. Several persons (in the electricity industry, in industry research) have highlighted to me how political expectations have obliged GBEs to serve clients who do not offer best prospects for financial returns. This should, in principle, be compensated by CSO payments - but in practice it is (usually) not. Furthermore failures of crucial organisational systems required for effective competition (eg for costing) have been alleged, and probably reflect political constraints on adequately preparing affected organisations for a competitive environment. Thus GBEs are now in a position equivalent to that of nationalised industries (ie are subject to both political influences and competition). Historically such entities tend worldwide to produce financial losses for governments because of (a) conflicts between (often informal) political demands and the focus on market demand which is required for commercial success (b) the effect of interest-group politics on management skills and orientation. The actual trading losses emerging in the electricity industry can also be noted (and may be the tip of an iceberg).

19. Relieving administrative constipation: Cabinet procedures became extremely complex, formalised and secretive in the 1990s, which became a major constraint on the communication and initiative vital for effective problem solving, and also reduced Cabinet's ability to really influence administration. Other machinery issues which probably require attention are:

• limitations in the Managing for Outcomes framework which has been created to integrate budgetary and strategic planning systems. That system is built on dubious assumptions eg: that government 'outputs' (rather than creating the framework for economic and social transactions) are the most important government contribution to community welfare; that outputs can be defined and measured; and that formal strategic planning can define outputs. Such assumptions can bias outcomes against the public interest. A detailed discussion paper on this is available.
• greater emphasis on the non-financial performance indicators. The latter now appear as a focus by major corporations as they reveal an organisation's ability to achieve future results (while financially based management merely measures past results), and because they can allow operational management consistent with (rather than at odds with) long term strategy;
• development of machinery for knowledge management. The latter assets are now (often) more important to an organisation's productivity than its financial assets; and
• shifting staff training and selection responsibilities onto Public Service professionals, and away from the procedural correctness of 'Human Resource Managers'.

20. National Competition Policy: NCP has had a major impact on government procedures. It emerged as a means to promote economic productivity through the increased efficiency likely where producers (especially those in the public sector) are exposed to the stimulus of competition. However: the micro-economic foundations of NCP are not an adequate basis for ensuring the ability to be successful in a competitive environment (for reasons outlined in Defects in Economic Tactics, Strategy and Outcomes); entities subject to both competition and political demands are likely to generate substantial budgetary losses (see Note 18); and the skills required for commercial competitiveness are not those required in the Public Service to support government. A suggested approach to NCP is that: government's primary role is governing - not being a commercial business; the main scope for improving economic performance through raising productivity lies, in the private sector, and should be achieved through development of the economy (See Defects in Economic Tactics, Strategy and Outcomes); and that, where net public benefits require competitive service delivery, functions should be separated from the public sector. Market mechanisms might none-the-less be used for some public functions, as a means for networked (rather than hierarchical) management - as the former potentially provides advantages in mobilising staff rationality and initiative.

21. Politicisation by other governments: appears (though it is impossible to be sure at a distance) to have led to failures due to loss of professional Public Service support. Considerable comment on the effect on political neutrality has been made in relation to appointments made by the present Commonwealth Government (eg Harris T. 'Yes, yes, yes Minister', Financial Review, 31/12/99). However loss of professional competence is far more important than loss of neutrality, as argued by Professor Richard Mulgan (ANU) in Politicization of Senior Appointments in the Australian Public Service, AJPA, September 1998. Indicators of a possible loss of competent advice include: the poor technical quality of the public debate about the republic referendum; and the mis-handling of Australia's relationships with Indonesia over the East Timor issue. Some discussions between the Coalition and Labor Parties about ensuring an experienced bureaucracy have now been reported (McGregor R., 'Shaking the Canberra Tree', Australian, 10/1/00). However the problem may be far more widespread in State administrations. The spectacular 1980s' failures of the Cain Government in Victoria followed an almost identical 'reform' process to that used later by the Goss administration. Cain sought to use managerialist methods to create a 'reform oriented bureaucracy'. (ie one which was efficient, accountable and coordinated in line with government policy). The effect was documented in The Fall of the House of Cain (Murray R. and White K, 1992), which is outlined in Attachment C to Towards Good Government in Queensland. More recently the phenomenon may be revealed by the many governments which have fallen due to political leaders being seen to be 'arrogant'. For example, the Kennett Government's failure surprised commentators as much as that of the Goss Government, and was also ascribed to 'arrogance' (eg Malcolm Mackerras, 'Political arrogance claims next victim', Australian, 20/9/99). I wrote to Professor Mackerras (an experienced political commentator now at the Australian Defence Force Academy) suggesting (based on Queensland's experience) that political 'arrogance' might be perceived when superficially sensible policy ideas failed to result in real performance because of the (invisible) lack of competent professional support. Professor Mackarras then agreed that this was probably a more important factor in the fall of the Greiner, Goss and Kennett than the 'arrogance' factor his own initial analysis had suggested.