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Letter + Supporting paper and Attachment

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15 April 2004

Mr Bruce Flegg, MLA
Member for Moggill

Enclosed herewith is a paper, Seeking Natural Justice, that contains background information in relation to the issue that I should like to raise with you at our meeting on 19 April 2004.

Seeking Natural Justice amplifies the first issue mentioned in an email of 19 January 2004 (Issues re State Election). As you may recall the latter included an earlier email (Minister Denied Natural Justice of 17 January 2004) to the Premier in which I requested (yet again) attention to an abuse of natural justice by his Department.

In particular Seeking Natural Justice refers to:

  • the background to a dispute with the Department of Premier and Cabinet;
  • the Department's lack of any meaningful response to the issue over many years;
  • evidence that a real abuse of natural justice occurred (which is further amplified in an Attachment, Breakthrough in Understanding Economic Development);
  • other background circumstances to that abuse;
  • current significance of the issues involved in this dispute.

At our meeting I will request that you write to the Premier demanding that a meaningful response should be given to my email of 17 January (which, as you will be aware, has been followed by two reminder letters) and that in his response the fact that his Department refused to allow professional merit to be considered in a grievance about the making of a senior policy R&D appointment should finally be seriously addressed.

In the event that no meaningful response is forthcoming I will further request that you raise the matter in Parliament.

Supporting paper to letter of 15/4/04

Seeking Natural Justice

I am seeking help in correcting an abuse of natural justice which involved the unreasonable refusal by the Department of Premier and Cabinet to allow professional merit to be considered in relation to the making of a senior Public Service appointment.

Documents related to this since July 1998 are on the web - and are thus public information (See chronological list in reverse date order). This includes a history in Autocratic Ignorance Purges the Public Service (dated 28 April 1999), and the remedies I am seeking (see a letter of 10 July 1998 - which replicated those first stated in a letter to the then Premier Goss of 26 May 1992).


In brief, a dispute (which has been actively and continually pursued) arose out of a grievance about the Department's failure (in an across-the-board process of re-staffing under the Goss Government) to give me an interview for a senior policy R&D position I applied for. The position was similar to the role I had successfully filled for a decade in both the Premier's Department and earlier in the Coordinator General's Department. The grievance was based on (a) the technical difficulty of the subject matter the policy R&D position had to deal with (b) the quality of my work and (c) circumstances in the Department (ie loss of technical competence as result of the 'reform' process) which prevented this being understood. The Department refused to allow professional merit to be considered in this grievance (which made meaningful investigation of the grievance impossible) and proceeded with my involuntary retrenchment. At no stage in the process did I encounter anyone who knew or cared what constituted technical merit in a function which was critical to the ability of the elected government to carry out its duties in the interests of the Queensland community.

When the Borbidge Government gained power I foolishly accepted advice not to formally submit claims I had prepared about the dispute, and was appointed by the Premier's Department to a temporary A08 position. The promise of a permanent position was never fulfilled, and great deficiencies remained in the capabilities of the Public Service. My position was terminated without discussion when the Beattie Government was elected and an administrative regime virtually identical to that under the Goss Government was installed.


The Premier's Department is very sensitive about this dispute.

It has provided various wordy responses in relation to this issue that have all scrupulously avoided the actual subject of the dispute (ie none have ever acknowledged that the dispute is about the Department's refusal to allow professional merit to be considered).

The Department has been able to 'stonewall' the dispute (ie refuse to explain its refusal to let merit be considered - or suggest how I was expected to get fair and just treatment) because:

  • a hasty Fair Treatment Appeal in 1992 found, in effect, that refusing to allow merit to be considered and retrenchment - even though the grievance was unresolved - were 'fair';
  • Parliament had enacted legislation which prevented appeals against SES appointments. According to the Ombudsman's office, this (a) would have made it anomalous to consider merit in a grievance process also and (b) potentially allowed injustices to occur;
  • David Watson as my local MLA raised this issue on my behalf with then Premier Goss - but gave up when told that the latter would do nothing. Giving up was unreasonable as:
    • the core issue was (a) the inability of a novice political administration to make unaided judgements about the competencies required in the Public Service and (b) the abuse of power / denial of natural justice / damage to the public interest which arose when that political administration refused to allow its judgement about such matters to be questioned on a professional basis;
    • the then Premier had not acknowledged two written requests I made for attention to the issue, and thus clearly could not be seen as a disinterested party in the dispute;
    • David Watson argued that the matter had to be resolved through a legal process, though the Ombudsman had earlier indicated that legislation made any legal process impossible - so, in the Ombudsman's view, the matter had to be resolved politically.
  • politicisation of the Public Service gained bipartisan political support - and MLAs generally have seemed uninterested in whether the Public Service has had the professional abilities to ensure competent public administration.

While the Department appears to have no legal requirement to have allowed merit to be considered (though it certainly had a moral requirement to do so) - both the Department and the Government have maintained the pretence that Public Service appointments have been based on merit. Admitting that this has not been the case will undermine the professional credibility of the entire Public Service (and perhaps the prospects of many 'senior' officials).

There was a real Abuse of Natural Justice

In order to prove abuse of natural justice, it is merely necessary to show that the grievance outlined above was not properly investigated. This is easy as:

  • the grievance investigator the Department appointed declared in writing that he lacked the ability to assess the issue on the basis of professional merit - and the Department then ignored my written requests for a properly qualified person to be involved;
  • it was unreasonable in investigating complaints about the process of making a senior policy R&D position not to allow professional merit to be considered.

It is not necessary for me to prove merit in order to establish that abuses of natural justice and of the public interest occurred. Rather, as the Department refused it allow merit to be considered, it should have to justify preventing me from properly and fully presenting a case.

None-the-less the fact that the Department's action was unreasonable follows from the fact that the merit issues involved were very substantial. There were a variety of solid bases on which professional merit could have been argued if this had been allowed. For example:

  • I had been involved in leading edge strategic policy R&D in a career over 2 decades, which had been successful in its goal of stimulating constructive change. In particular,
  • in the early 1970s I was involved (with many others) in establishing an early style of regional coordination machinery - as acting Regional Coordinator for North Queensland;
  • I had been involved in (and developed theory - including a masters thesis about) the process of public sector development orchestrated through the Coordinator General's Department in the 1970s. This had been based on organisational systems development using what would now be called a strategic management approach - and resulted for some years in the late 1970s in cohesive and purposeful public administration machinery;
  • in the 1980s in a more difficult environment for reform, I was involved in pro-actively researching opportunities for more sophisticated economic development which:
    • led to the establishment of a policy division in the Premier's Department - which was the first time serious formal policy functions had existed in any Queensland agency;
    • identified the case for some something like a Smart State agenda and how this could be achieved by a systems development approach (see Towards a Strategy for Technological Development in Queensland, 1983). This led to a position as Director of Technology Policy [until responsibility for this function was transferred to the Industry Minister whose Department favoured Australia's traditional government-intervention approach to supporting innovation - an approach whose continuation has now led to an accelerating decline in Australia's international innovation ranking];
    • studied worldwide experience and debates about economic development in depth;
    • applied systems development by strategic management methods to concept development for a Cape York International Spaceport. During the 12 months when this was allowed, that unlikely project progressed from a blank sheet of paper to over 60 international commercial proposals, and hundreds of millions of dollar of unexpected potential benefits were discovered. This process also created an ongoing dynamic which might eventually result in the concept gaining practical reality in one form or another. The methods used to achieve this are described in Developing a Regional Industry Cluster - and are themselves a useful breakthrough in identifying protocols which might accelerate economic development without the process being politicised (which would make the exercise ineffective).

However the most significant point (in relation to my application for a senior policy R&D position in the then Economic Development Division of the Department of Premier and Cabinet) is that, as a result of a decade's public funded research and experimentation, I had achieved a significant breakthrough in understanding economic development as a systemic issue (and particularly in understanding the role of knowledge, which economics has long regarded as the most important factor in economic growth). This insight seems to be of philosophical, theoretical and practical importance - as detailed in an Attachment.

Other Background to the Abuse

The dispute basically arose from the loss of technical competence in relation to economic development issues as a result of a 'reform' process which seemed mainly about building a political power base. However other frictions in the Premier's Department at the time need to be recognised. For example:

  • before the Goss Government's election I had discretely 'blown the whistle' on obvious yakuza (ie Japan's politically-motivated organised crime) links in the MFP project for which I was involved in concept development. This implied their involvement in many investments which the Premier's Department had been facilitating - and a risk of dangerous influences over the Bjelke Peterson government. Under the incoming Goss Government, this was referred to the newly formed CJC (and its criminal intelligence operatives seemed to agree that on-the-ground a yakuza presence was very real). However 'blowing the whistle' on yakuza influence in economic (and potentially political) issues had clearly not been appreciated by the Departmental leadership under the National Party administration (and I had been excluded from meaningful work);
  • the incoming Departmental hierarchy was unable to appreciate the significance of this issue, and also had an extremely hostile attitude to existing staff which resulted in innumerable abuses and massive damage to Queensland's public administration;
  • the type of strategic policy work which I had undertaken over a long period became 'flavour of the month' under the Goss administration. However most of those involved were beginners who lacked the knowledge and experience to offer more than a pretence of performance. In this environment, those with longer experience and more knowledge became a threat to the credibility of political insiders;
  • I initially gained a very favourable reaction from some 'reformers' under the Goss Government because of my long internal advocacy of reform and of sophisticated economic development in Queensland. This was abruptly reversed when, on the basis of involvement in an effective reform process some years earlier, I highlighted the likely adverse outcomes of the 'reform' process that the 'reformers' favoured as this would not build on existing capabilities. The latter capabilities were, in fact, irreplaceable and vital to effective ongoing operations.

It also note that I have gone to great lengths to maintain political independence. In particular:

  • at considerable financial cost I had refused contract employment in the late 1980s on the grounds that contracts compromise the political independence of the Public Service;
  • I have never been a member or supporter of any political party. I have never had direct communication with the leader of any major state political party, and have had only a very small number of direct communications with any elected politicians. As a public servant I actively discussed professional issues arising from my strategic policy R&D with others - and this inevitably brought me into contact with some persons / organisations who had political affiliations. However such contacts involved persons affiliated with all parties.

Current Significance

The dispute continues to have current public relevance because, for example,:

  • some persons associated with Public Service 'reform' under the Goss Government have gone on to gain significant roles in society and would presumably not appreciate exposure of the innumerable abuses that this involved;
  • the Public Service can have no professional credibility as long as it remains a fact that professional merit has not been a necessary consideration in senior appointments;
  • the effect of loss of knowledge and skill and of ongoing Public Service politicisation adversely affects Queensland's public administration to this day (see The Growing Case for a Professional Public Service);
  • Queensland's economic tactics in particular remain significantly substandard (see Queensland's Economic Strategy); and
  • there are many very broad implications in the merit issues outlined in Attachment A.
Attachment to letter of 15/4/04 Attachment A: Probable Breakthrough in Understanding Economic Development

Explaining economic growth

There is a large literature on economic growth theory. However to illustrate the significance of my probable breakthrough it is only necessary to recognise that Solow's work, for which he received a Nobel Prize on the 1950s, was long regarded by economists as a critical insight. Economists refer to a 'production function' which typically tries to relate the value of economic production to capital and labour inputs. Solow's contribution was significant in showing that most growth (in a sophisticated economy such as the US) was not due to increases in either of these inputs (ie of capital and labour) but to a 'third factor' which he ascribed to knowledge / technology.

In the 1990s economists grew tired of working with a production function in which the most important cause of growth was not included, and so Romer (and others) suggested various 'new' growth theories which formally introduced 'knowledge' as an input in the production function.

However the key role of knowledge in economic growth is best conceived of, not as a an input to a production function, but as a means for changing the production function by altering the way individuals, organisations or the economy as a whole work.

Though another 20 years work is needed on this question, it seems likely that this insight is valid because of the consistent implications of:

  • the failure of anyone to present 'new' growth theory in a useful form;
  • the role which change (ie re-organising to escape growing competitive pressure and exploit new opportunities) has in increasing both competitiveness and economic productivity;
  • systems theory which recognises that the relationships in a system can constitute the cause of the behaviour of an element in the system (so that causality can change), and which also recognises the dominant influence of the environment on the development of any system;
  • the essential role which the importation of information (neg-entropy) from the environment has in maintaining living systems in stable non-equilibrium states;
  • problems in explaining change / evolution as due to random internal variations - when the laws of physics, which control the behaviour of micro elements of any system, seem to involve a time-reversible determinism which makes true randomness impossible;
  • the intellectual foundations of economic miracles in East Asia (see below);
  • successful practical experience from actually using this insight - and the scope it provides to express concisely the fact (which is otherwise only obvious from detailed study of economic processes) that providing knowledge inputs to an economic system does not ensure the ability to use them productively (see comments on Smart State below);

If correct this insight breaks the paradigm of 'positive' / scientific economics and makes a huge difference to what must be seen to be possible.

For example, it is of theoretical importance in economics because it shows the possibility of doing more to create a business-supporting economic environment than a government-created tax / regulatory / infrastructure regime (ie by informed leadership to change the way the economy works within itself). In particular it shows the possibility of a dynamic approach to the (static) concept of industry clusters (ie of the overall economic system within which an enterprise operates) which were recognised in the 1990s to be of critical significance to the competitiveness / productivity of enterprises and regional economies.

The insight is also of practical significance. For example:

  • the methods now being used to pursue the popular Smart State goal are futile because (consistent with 'new' growth theory principles) that agenda is basically to increase 'smart' / knowledge inputs to the economy - though the latter lacks the systemic ability to make productive use of them (as is indicated by evidence cited in my email, More Evidence Against Smart State of 4/4/04, and as was obvious to everyone who seriously studied technology strategy issues in the 1980s). The ability to use such smart inputs productively needs to be enhanced by stimulating changes in the working / capabilities of the economy as a whole;
  • effective protocols for private / public partnerships for development of industry clusters to raise economic productivity / competitiveness were developed in the US in the early 1990s particularly by the Stanford Research Institute. SRI had been involved in producing the Quality Queensland economic strategy under Premier Ahern, and had been advocating methods considerably inferior to those developed earlier in Queensland by myself and others. While the protocols that later emerged in the US were effective, no US sources seem to have put forward any complementary theory which is as philosophically significant as I have developed.

Broader Implications

This insight potentially has important implications in many areas, because:

  • it seems to be of philosophical significance. For example:
    • economics tries to be a 'positive' science like physics and determine what causal relationships drive an economic system in order to understand how inputs are transformed into outputs. The implication of my insight is that the goal has to be to use knowledge to change, rather than to understand, the production function;
    • it potentially affects the whole concept of 'science' - and sheds new light on discussions in recent decades amongst philosophers of science about the uncertainty of scientific conclusions;
    • it also sheds new light on the process of creation / evolution generally - by highlighting how change to the behaviour of systems can be triggered by information from a system's environment (rather than from random internal variations which has traditionally been seen as the source of evolutionary changes).
  • it touches upon issues which are central to the difference between Western societies (with an intellectual heritage and ability in science traceable to classical Greece) and those in East Asia with an ancient Chinese heritage. In particular, it allows understanding of:
    • the very rapid economic development which has been uniquely achieved in East Asia (eg the basic means of problem solving in countries such as Japan is to use knowledge to stimulate changes in social and economic systems, rather than to 'understand');
    • the origins of the Asian financial crisis (ie the fact that change is driven by social relationships and financial outcomes are considered unimportant, and in fact cannot be taken seriously where arational, rather than analytical, logic prevails);
    • the risk to global economic growth which is implicit in the demand deficit and monetary controls which are thus required to protect the insolvent financial systems of major East Asian societies (especially Japan, China). Because of this, global growth has depended critically on US demand, and fiscal imbalances (huge US current account deficits and accumulated debts) have emerged which threaten global growth (see Structural Incompatibility put Global Growth at Risk);
  • it provides a path to understanding the relationships between cultural assumptions and economic prosperity generally - which is particularly relevant to:
  • it potentially requires a change in the nature of economic study and research. The latter has often come to involve complex mathematical formulations that seem to have negligible practical value. If it is recognised that causal relationships in economic systems can be easily changed, then the arcane mathematical analysis which absorbs many academic economists is clearly irrelevant.


Evidence that this insight involves a significant breakthrough is available, including:

  • the practical progress that was achieved in a small number of experiments;
  • the favourable response by Japanese connections to a paper Towards an Understanding with Japan which was written as part of concept development for the MFP proposal - which explored Japanese intellectual traditions which had been the basis of their economic miracle;
  • written comments by US Professor Chalmers Johnson (author of MITI and the Japanese Miracle and widely regarded as an expert on Japan's very rapid economic progress) suggesting that my work 'was on the leading edge of the social sciences';
  • written comments by Michael Cunningham (then in Queensland Treasury, an ex senior researcher with EPAC, and author Queensland's Leading State economic strategy in the early 1990s) suggesting that he could understand what I was taking about because he was well up to date on relevant theories, but that most others would not do so;
  • flattering introduction by Reg Little to a book outlining my theories, Transforming the Tortoise, which was published in 1993. Reg Little is author of the widely translated Confucian Renaissance - which seems to be accepted as dealing with what many in Asia believe explains their rapid economic advancement;
  • favourable reaction in Yogyakarta (the Javanese cultural capital in Indonesia) when a paper was presented at a seminar in 2002 on Comparative Development Theory: Australia / Indonesia. As a result the provincial Commissioner for State Industries arranged an interview with his economic minister and apparently translated the paper into Indonesian for local publication. The economic minister suggested a future discussion with the Sultan of Yogyakarta (who is the traditional leader of the Javanese people who dominate Indonesia - and who has taken a lead role in efforts to modernise Indonesia). These linkages were disrupted by the Bali bombing a few weeks later.
Reply #1


Thank you for your letter of 6 May 2004 and the attachments which, though lengthy, I have fully read.

I have some commercial background but no background in formal economics so I cannot comment from my own knowledge on some of your technical issues relating to economic development.

However, I do note very strongly your point about the politicisation of the public service and advancement by political connections of people who do not have the best professional qualifications for their position.

I shudder when I see the Boards of Management of power stations containing union representatives from white collar unions for example.

I also take very strongly your point that governments should not be funding R&D and that governments and the public service are the very worst people to pick economic and research projects on their merit. History is littered with the corpses of projects that received enthusiastic support from government. We need look no further than the recent Australian Magnesium Corporation debacle in Queensland to see that.

I believe that we should be an innovative country. A country that invests heavily in the future which means investing in R&D but as you rightly point out I believe that it should be private business with the encouragement of government that fulfils this role.

Where possible I will support these objectives. In relation to your own case, I am not sure where you can go from here as quite a bit of time has elapsed and many of the personalities of the day have moved on.

Further representations to the Premier's Department are unlikely to illicit any more satisfactory response from the previous ones.

If you have any ideas or I could be of assistance don't hesitate to reply. In the meantime thanks very much for your input which is greatly appreciated.

With best wishes,

Yours sincerely

Bruce Flegg MP
Member for Moggill

Response #1

17 May 2004

Dr Bruce Flegg, MLA
Member for Moggill

Thanks for your consideration in reading the rather lengthy attachments to my letters of 15 April and 6 May. I note from your letter of 11 May that (though you lack background in formal economics) you agree with some basic points I made (eg about the adverse effects of public service politicisation and 'picking winners'; and about the need for an innovative capability).

I also respect your view that, as a great deal time has elapsed, it is hard to see what might be achieved in my own case. However a great deal could be achieved. I note that:

  • for the same great deal of time I have been subjected to (and continued to protest at) an abuse of natural justice - which has damaged my career and family's prospects - because everyone who has examined the matter from the very beginning has (like yourself) lacked the ability to assess the issues which I raised about technical aspects of economic development. And on that basis they (a) have prevented anyone with the relevant knowledge and experience from being involved in assessing those issues and (b) refused to give any reasons for doing so;
  • the technical issues are very significant - and time has increased this. For example:
    • the philosophical and theoretical implications of the technical aspects of my case are probably a 'once in a century' breakthrough which few will yet understand;
    • despite its recent 'reform', the Department of State Development remains a directionless set of 'Mickey Mouse' functions - in an increasingly risky economic environment;
    • current efforts being made to develop innovation capabilities by leveraging off publicly funded R&D - both at state and national level - are bound to be ineffectual;
    • power is exerted in East Asia in ways that are unfamiliar to Western societies (ie by manipulating subordinates' thinking - see Pye, Asian Power and Politics) - and as Australia is drawn into that world it is vulnerable to manipulation (and subjugation). This affected the state under Bjelke Peterson's government - and contributed to the problems which emerged;

  • the Department has not 'lost its memory' of what happened. The issue has been raised repeatedly, so it will have a detailed file. In 2001 it stated that it was satisfied with the situation;
  • there is now increasing questioning of Public Service competencies - but deficiencies can not be meaningfully corrected without dealing with the issues I am raising. For example:

All I need you to do is to ask the Department of Premier and Cabinet to try to explain why it did not allow professional merit to be considered in relation to my grievance about the process of making a senior policy R&D appointment in its then Economic Development Division.


John Craig

Reply #2


Further to my letter of 25 May 2004, I have received a reply from Mr George O'Farrell, Acting Public Service Commissioner, a copy of which I have enclosed for your information.

It appears that they will not reconsider your case, as they feel that all your grievances have been properly aired and examined in the past by the appropriate officers.

I regret my representations were not successful.

Yours sincerely

Bruce Flegg MP
Member for Moggill

[With the following attached]

7 June 2004

Dr Bruce Flegg MP
Member for Moggill

Thank you for your letter dated 25 May 2004 to Dr Leo Keliher regarding matters raised by Mr John Craig. The Director general has asked for my consideration of this matter and to respond directly to you.

Mr Craig has raised issues concerning his previous employment in the public service on numerous occasions. I am satisfied that Mr Craig's grievances have been properly aired and examined by appropriate officers. I can see no useful purpose to be served by considering these matters again.

Should you have any further queries, please contact Jennifer Reid, Principal Policy Officer, Workforce Management Group on telephone (07) 3227 8627, or email

Yours sincerely

George O'Farrell
Acting Public Service Commissioner

Response #2

15 June 2004

Dr Bruce Flegg, MLA
Member for Moggill

Thanks for your advice of 10/6/04 about the Acting Public Service Commissioner's response to your representations to the Director General, Department of Premier and Cabinet.

Presuming that your representation asked why that Department refused to allow professional merit to be considered in my formal 1992 grievance about the making of a senior policy R&D appointment, his reply was just a contemptuous refusal to answer the question. This tactic has been repeatedly used over the last decade to cover-up the Department's actions.

Mr O'Farrell's claim that my 'grievances' have been 'properly aired and examined by appropriate officers' is preposterous. Not only did the Department abuse natural justice by preventing merit being considered in my formal 1992 grievance, but (as you can see) there has been no meaningful response at all to the subsequent dispute about its decision to do so.

This is a blatant attempt to cover-up an abuse of power - which can be compared with other notorious apparent cover-ups of abuses (eg consider 'Shedder-gate'; 'Wine-gate').

May I suggest that it would be possible to get a more meaningful response by replying to the Acting Public Service Commissioner's letter of 7/6/04 along the following lines:

  • providing documentary evidence that the Department of Premier and Cabinet prevented professional merit being considered in my formal 1992 grievance, and subsequently refused all requests for its reasons for this action (I can make such evidence available);
  • pointing out that my case was described in the literature as a test of the Westminster tradition of a professional Public Service (McDermott P., `Tenure of Senior Queensland Public Servants', Australian Journal of Public Administration, March 1993);
  • stating that, no matter how many 'appropriate officers' have gone through the motions of examining this matter, you are not convinced that such behaviour is compatible with natural justice or maintaining the professional integrity of the Public Service; and
  • promising to raise the question with the Premier in Parliament if a more meaningful response is not immediately forthcoming.

Government functions have become ineffectual as Public Service staffing has degenerated into building a political power base rather than gaining practical support in policy development and implementation. This is now well understood by community leaders - and is on the point of becoming obvious to the 'world and his wife'.

In 2001 the Queensland Council of Professions seemed to agree that there was a problem (but could see no way forward) when a respected business 'networker' and I made a submission about the loss of Public Service professionalism. That Council (and other responsible organisations) might by now be willing to publicly support an initiative to start insisting on professional accountability in the Public Service. This could be a step towards the goal which you implied that the Opposition as a whole has on gaining government - namely running the Public Service in a more professional manner.


John Craig