20 February 2004

Mr Graham Heilbronn
President
Queensland Commerce

Auditing the Queensland Public Service

I should like to belatedly offer suggestions about a call by Commerce Queensland in December 2003 for (a) an extensive audit of the state Public Service to drive out waste and inefficiency, and (b) changes to Queensland's financial priorities.

My interpretation: Queensland needs a wide-ranging external audit of its public service to drive out waste and inefficiency - according to Commerce Queensland which has put forward a 10 point plan. This also includes: using higher-than expected GST revenues to begin eliminating payroll-tax and spend more on infrastructure. Other money for investment could come from removing waste in government according to Commerce Queensland president Graham Heilbronn. The last audit was in 1990 when Peter Coaldrake was chairman of PSMC. Recent issues such as abuse of children in foster care had been addressed on a piecemeal basis. There needs to be an independent review of the whole system. Deputy Premer suggested that government has conducted its own internal reviews, and these were being implemented. Sharing services such as payroll will save up to $100m annually. Government opposes private reviews (Wisenthal S., 'Call for audit of Queensland Public Service', Financial Review, 18/12/03)

It is my understanding that the '10 point plan' is Smart Business: Smart Queensland which is on the Commerce Queensland web-site. My suggestions in relation to just two of the many points it raised follow.

'Auditing' the Public Service

From Section 4 of that document I understand that Commerce Queensland argues that:

• government administrative practices must 'stand up to public scrutiny through transparent, ethical and responsible management'; and
• a Public Service 'audit' should be concerned with more than efficiency. It should evaluate whether what is done delivers value for money.

This call for an 'audit' of the effectiveness of Queensland's Public Service deserves strong support, as there is little doubt that there are major problems in Queensland's public administration (eg see The Growing Case for a Professional Public Service).

I should like to suggest for your consideration that an 'audit' would best take the form of:

• a review of the machinery of government administration as this currently appears to induce administrative constipation. Some of the defects which could be the focus of such a review are suggested in Growth Management in SE Queensland.
• renewed professional accountability for the Public Service. This (rather than additional public scrutiny) is appropriate because the democratic process already provides reasonable scope for scrutiny of the Public Service by the community's elected representatives. The main problem arises in evaluating the professional competency of the Public Service in matters which go beyond the knowledge and experience of the average member of the public, or its elected representatives. An argument as to why this requires primarily professional (rather than public) accountability is presented in Accountability of Queensland's senior public servants. The (so called) Office of Public Service Merit and Equity is not a credible vehicle for addressing these problems.

Development of more effective administrative machinery and a renewal of professional accountability for the Public Service would then allow solutions to problems of waste and inefficiency to be more readily identified internally.

An external audit of the complex activities of government in detail is likely to suffer from difficulties in fully understanding the situation, and risk becoming a witch-hunt. This was clearly demonstrated by the external audit conducted by the Goss administration in the early 1990s - as it was the half-baked guesses about missions, methods and staffing changes that were made during this process which largely created the problems from which Queensland's administration now suffers (see Towards Good Government in Queensland).

Public Finance

Commerce Queensland's call for changes to Queensland's financial practices is undoubtedly also well advised.

However I submit that the situation may be more complex and difficult than the 10 point plan reportedly envisages (because 'balancing' the state budget has apparently been based on creative accounting (see Enron-itis; and About the 2003-04 Budget), and there are signs that serious financial pressures are building which will allow anything but tax relief).