THE DECAY OF AUSTRALIAN PUBLIC ADMINISTRATION: A DIAGNOSIS (2002+)


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Overview +

Overview

Public administration in Australia seems to be distressed and ineffectual, due to poorly conceived efforts to improve it over the past 10-15 years involving 'new public management' models which trashed government institutions and in effect transformed them into politicized pseudo-businesses which merely pretend to govern.

Change in public administration had been sought in the 1990s especially in relation to naive assumptions that: (a) Public Service resistance (rather than real-world complexity) had been the major obstacle to implementing idealistic / overly-simplistic political agendas in the 1970s; and that (b) increased production efficiency for public services and infrastructure should be sought through business-like methods so as to provide cheaper economic inputs and cut the cost of government.

In practice 'new public management' has led to (a) politicisation of administration (b) emasculation of Public Services; (c) and ineffectual governance with symptoms including: unbalanced economic gains; consequent social stresses; and chronic weaknesses in infrastructure, service delivery and regulatory roles.

The dominant goal of Public Services shifted from helping the public by ensuring good government, to 'helping' the government of the day to retain political power. Ironically this model often led to unexpected electoral backlashes against state administrations who were seen as 'autocratic' after 5-6 years incubation, probably because they had surrounded themselves with 'yes men' and thus lost touch with the fact that not everyone shared their assumptions. This approach was reportedly being put in place in the federal government in 2000.

Blaming failures on 'teething problems' in models that have great future potential is much less credible than blaming mis-management of change and defects in the models themselves.

While mismanagement of change has been a major issue, this can not be separated from apparent misunderstanding of three key issues in developing 'new' models - namely:

  • the nature of the economic challenge;
  • whether governing involves nothing more than running a large business; and
  • the Public Service's role - both in the failure of past political initiatives and in effective administration.

As a result, governments' ability to 'govern' or deliver public goods and services declined and institutions needed to enable the community generally to generate large numbers of highly productive knowledge-intensive job opportunities were not developed.

Mis-understanding was due to the lack of institutions able to provide practical advice about such complex questions at the standard needed for Australia to prosper in a volatile and dangerous world, and to reliance on inexperienced academics and business to give direction to administrative reform.

Renewal requires both research into the effectiveness of public administration and the re-creation of Public Services that are able to be accountable for the practical effectiveness of administration. The proposed establishment of an Australian and New Zealand School of Government, if it was  (as first reported) to train public servants in ineffectual 'new public management' models, would not meet this need.

Qualification

Qualification: This diagnosis of the decay of Australia's system of public administration is preliminary and evolving - as it is based on incomplete information.  This version merely gives an impression of what the author expects ultimately to more fully justify.

Information is most readily available to the author about Queensland's predicament (as this has been closely and directly observed). Interstate and national information is based on press reports, and (quite incomplete) literature reviews.

Informed inputs and comments would be welcomed.

The Problem

The Problem

Changes to Australia's system of public administration have been ongoing - and generally parallel changes in other OECD countries. Unfortunately changes made over the past 10-15 years appear on balance to have been dysfunctional.

Public understanding of the practical consequences of those changes now appears to be particularly necessary because reports suggests that:

  • a 'new public management' (ie politicized corporate-strategic-planning) model like those that various states applied that typically led to administrative failures after 5-6 years incubation (and to unexpected political instability) has been replicated in the federal government since 2000; and
  • arrangements seem to have been made by various governments with a proposed Australia and New Zealand School of Government to train future senior administrators in ways that would suit these ineffectual models. Quite apart from the question of whether this model is worth promulgating, this arrangement seems to lack the contestability and competitive neutrality appropriate to the provision of such services.

The difficulties discussed in this document need to be considered in relation to other indicators of a crisis for governance in Australia which involve:

  • declining practical potency of democratic institutions;
  • federal - state financial imbalances;
  • inadequate evaluation of Australia's strategic interests;
  • reduced political independence of the 'Crown' (Governor General); and
  • erosion of the moral foundations of individual liberty.
Pressures

Pressures for Change

A brief outline of the direction of changes in public administration in Australia before the 1990s is presented in Attachment A. These were responses to pressures such as those outlined below.

In the 1970s public administration confronted particularly the need to take much more account of environmental factors and a desire by a new federal government to extend perceived post-war successes in macro-economic management into social change. Difficulties which the Whitlam Government experienced in achieving the latter, led to a Royal Commission into Australian Government Administration (RCAGA) which was paralleled by a series of similar state inquires. RCAGA's basic conclusion seemed to be that the core obstacle to achieving desired political goals was bureaucratic resistance to change.  At the same time, government's struggled to cope with economic dislocation caused by a global oil supply crisis, escalating inflation and recession.

In the 1980s governments' abilities in macro-economic management proved no longer effective, and at the same time a need for economic change was perceived because of structural weaknesses in Australia's economy and the emergence of a more competitive international environment. In some OECD countries, public losses in nationalized industries started a trend towards privatization. Pressures arose on public administration because of concern about the effects on the economy of taxation and the cost of infrastructure. At the same time there were preliminary efforts (eg in Victoria, NSW and the Commonwealth) to give effect to Wilenski's influential conclusions about the need to overcome 'bureaucratic resistance to change' (a view emerging from the RCAGA).

In the 1990s additional pressures for change came through the acceptance of competition policy guidelines which sought not only to promote economic change through removing regulatory protection of various interest groups, but to subject the production of public goods and services to contestability and competitive neutrality.  At the same time, a corporate style of management and 1970s' political goals of ensuring passive Public Service compliance with political directives were emphasized.

The result, unfortunately, appears to have been a dramatic decline in the effectiveness of public administration, which has had increasingly serious repercussions for the community. The purpose of this [preliminary] document is to suggest how and why this occurred.

Decay

The Decay of Australian Public Administration

The author had a professional involvement in research into the pressures for economic and administrative change during the 1980s and closely observed the Goss Government's attempts to apply a by-then-standard model for administrative reform in Queensland in the early 1990s. The politicisation and de-skilling of public administration which resulted is described in detail in Towards Good Government in Queensland (1995) and overviewed in Queensland's Worst Government (2005).

How the 'wheels fell off' in Queensland

The main theme of Towards Good Government in Queensland was that well-intended politically-driven 'reform' under the Goss administration in the early 1990s (accidentally?) demolished the Westminster tradition of an independent meritorious Public Service, and in doing so eroded the Public Service's skill base and eliminated the best source of advice and support able to give competent help in implementing widely supported reforms. Observers' comments on the 'reform' process are contained in Attachment A.

De-skilling slowly led to administrative breakdowns (eg muddles in health and education services, fumbled infrastructure planning) and to an inability to implement pre-election policies promising real economic development (see Defects in Economic Tactics, Strategy and Outcomes). The latter suggests that these failures were a major factor in the political instability revealed by the emergence of One Nation, and that similar symptoms also arose in Victoria - and thus presumably elsewhere.

Arguably Queensland's practical ability to achieve almost any goals, or to make further realistic policy progress, were set back many years - and governing became little more than a pretence based on seeking a trendy image through public relations campaigns.

Ultimately these (invisible) weaknesses led to the demise of the Goss Government - an event which neither political advisers nor the media generally foresaw or understood. Such political 'surprises' apparently eventually became known as the Queensland Effect.

Later governments' efforts to reverse Queensland's administrative decline have so far not been serious.

The main theme of Queensland's Worst Government was that the increasing dysfunctions and crises that Queensland was experiencing in 2005 had to be traced back to the trashing of public intellectual capital by the Goss administration

An outline of the effect of an earlier and essentially identical approach to administrative reform in Victoria in the 1980s that had at least equally disastrous consequences is contained in Review of The Fall of the House of Cain.

A number of other governments (eg Greiner in NSW, Kennett in Victoria) also experienced unexpected large electoral reversals due to general community discontent and perceptions of leadership arrogance. This phenomenon seemed to be associated with a lack of competent support in implementing apparently attractive policies similar to that Queensland suffered under the Goss Government (source - private communication from an experienced national political observer). 'Arrogance' seems likely to emerge because political leaders who are closeted with cronies and 'yes men' fail to understand the need to communicate with segments of the community who do not share their assumptions.

Some observers have suggested to the author that: Federal Government administration has been deteriorating since the 1970s; and that significant efforts to undermine the profession public service were commenced by the Hawke Government. At least one study alleged the existence of a 'degenerative organizational culture' in the 1980s. 

The present Federal Government also seemed to suffer electoral reversals due to weaknesses in ordinary administration (eg in relation to the practical implementation of tax reform - noting Gottleibson R., 'Dispatches from the front make sad reading', The Australian, 14/5/01).

However a report suggests that the federal government has not understood the source of such failures, and  that its central management has now been re-organized in a similar way to that which led (after several years incubation) to major public administration failures elsewhere.

'PM's power of one' (Kelly P., Australian, 23-24/11/02) outlines an arrangement initiated in 2000 that has very strong parallels with that in governments (eg Queensland's Goss Government) that experienced administrative failures leading to delayed political reversals eg:

  • adoption of a rational and plausible agenda, and a strategic planning process;
  • centralization of power in the office of the chief executive;
  • strong emphasis on how the government is presented to the media;
  • a public service dominated by 'yes men';
  • deep politicisation of governing institutions and transfer of power and debate about ideas from the public service to ministerial offices.

The 'wheels must fall off' under such a model because (a) the political system reflects only a narrow set of criteria for public administration (eg popularity rather than practicality) and (b) trying to respond to rapid change through centralized strategic 'planning' is a method that major corporations tried in the 1970s and soon abandoned because it could not work (see Strategy Development in Business and Government). The constraint is identical to that which prevents central economic planning (eg an inability to obtain the required information or mobilize others' commitment).  Rather than centralized 'planning' (guessing the answer), a strategic 'management' alternative would involve posing the important questions for practitioners to answer.

Illustrating the confusion and frustration which most staff must be exposed to by centralized strategic planning, it has been found necessary to establish an additional central unit to ensure that decisions are actually implemented [1] (see also comments on Queensland's 'Administrative Desperation' Unit whose functions are similar).

The 'delusions of grandeur' which the Commonwealth government began to exhibit in 2004 (ie a highly centralistic approach to federal-state relations) are another sign of administrative failure. Autocratically-imposed 'solutions', which may seem simple and obvious when surrounded by people who see the world the same way, may be exposed as embarrassingly dysfunctional when outsiders' perspectives are brought to bear.

However, in the absence of a professional Public Service, the pursuit of apparently 'rational' strategic goals can be expected to blind the political system and the media for several years (eg until  2006) to the inevitability of implementation failure.

The fact that in 2006 business became as concerned about the complexity of new industrial relations arrangements as unions were about the limits to their influence [1] suggests that the impact of 'delusions of grandeur' are becoming obvious (see Is 'Work Choices' a Good choice for Work?).  Similar concerns appear to arise in relation to direct federal efforts to determine priorities under the Auslink program

Unsurprisingly, by early 2007, it was reported that 70% of voters consider Australia's Prime Minister to be arrogant [1]

Other indicators of deterioration in Australian public administration include:

  • practical outcomes for the community such as outlined in Queensland's Challenge at the time of the 2001 Queensland elections; a regular update (Queensland's Ongoing Challenges); and an October 2001 overview of both these sources. The latter referred to: social stresses; the source of these stresses in ineffectual responses to economic change; public administration difficulties (eg the lack of credible means for planning and delivery of infrastructure; financing problems); and dubious ethics and accountability;
  • The Growing Case for a Professional Public Service which refers mainly to the Queensland and Federal Governments, and includes (a) references to detailed accounts of many areas of administrative failure in Queensland; and (b) observers' suggestions that the Federal Government has gone even further in weakening / eliminating professional administration;
  • the emergence of bullying as an unavoidable management style due to limitations in the  skills and professional credibility of politically-endorsed 'senior' officials - a feature which (together with financial mismanagement that has left Queensland's government strapped for cash) has apparently contributed to problems in the public sector enterprise bargaining system;
  • staff unwillingness to tell ministers what they need - because they would be branded troublemakers - thus, in Queensland, government was only told what it wanted to hear [1]
  • the criticism (and need for significant revision) of business-like accounting practices adopted under new public management principles (see comments below);
  • the retreat from the 'new public management' model that the ACT adopted in 1995;
  • reported dis-satisfaction with the purchaser provider model in the ACT;
  • apparent weakness in policy development in Australia, due to the loss of experienced people and the absence of alternative institutions;
  • arrogance is increasingly perceived both by the Beattie Government in Queensland [see Style of Government] and by the Howard Government (in dismissing protests about a war in Iraq, and blankly refusing to discuss hospital funding [1]).  For example, the latter Government (surrounded by cronies and 'yes men' who see the world as it does) appears to have not recognized that:
    • the broader public are unaware that the combination of terrorism by Islamist extremists and their potential access to weapons of mass destruction has created a massive security risk that makes it unacceptable to merely 'contain' those who are perceived as potential sources of such weapons; and
    • there may be valid reasons to suspect that the military strategy adopted to deal with this threat is unlikely to be effective (see Competing Civilizations).
  • an observer suggested that the federal government seems to have lost the plot in terms of accountability and political statesmanship - and has started to show arrogance similar to that which brought down previous governments [1]

Explanations

Why did the Wheels Fall Off?

There are three possible explanations of the apparent decay of public administration. These are:

  • public service staff need to be better trained to operate in 'new public management' frameworks which (despite teething difficulties) offer excellent future prospects; or
  • the process by which 'new public management' was introduced was mismanaged; or
  • the 'new' system contained fundamental defects.

The first of these possible explanations is apparently the basis for now proposing an Australian and New Zealand School of Government - and this will be considered below.

However, as attractive as that assumption may be to those responsible for the problems that have been created in Australian public administration, mis-management of administrative 'reform' over the past decade and the poorly conceived goals of that 'reform' may be better explanations.

In Queensland mismanagement of 'reform' was undoubtedly a factor in the decline of public administration. In summary, Towards Good Government (1995) identified problems such as:

  • a superficial understanding of why problems in public administration had arisen (see also The Lessons of History which those who planned 'reform' seemed quite unaware of);
  • a bullying style which treated existing staff as the cause of those problems - and thus lost the experience and capabilities needed to give effect to a widely supported reform agenda;
  • control by those with good political connections but little experience or practical knowledge;
  • misguided desire to 're-engineer' government as a business (see below); and
  • across the board erosion of relevant knowledge and skills - as these were not understood.

However it is impossible to separate the mismanagement of 'reform' from the simplistic views about various issues that determined the goals of 'reform', such as about:

In some ways what happened can arguably be seen as an early manifestation of the counter-productive effects of 'political correctness' (see The Church of Political Correctness Threatens National Progress)

Misunderstanding the Economic Challenge

An overly simplistic view of Australia's economic challenge has been the basis of policy for more than a decade (as outlined in Defects in Economic Tactics, Strategy and Outcomes).

In brief, this argues that there has been valid recognition since the early 1980s of the need to strengthen and diversify Australia's economy into higher productivity activities - and that neo-liberal ('free-market') policies were generally adopted to facilitate change.

Unfortunately, 1990s attempts at economic change were inadequate because exposure to competitive pressure was not enough to ensure the capabilities to compete adequately (especially in marginal regions). In particular, some essential capabilities involve economic systems through which individuals and enterprises need to receive support. Elements of those systems exist in many other types of enterprises, economic institutions, regulations, the way things are done, etc and can not quickly be changed (or created in under-developed regions) by the initiatives of individuals or enterprises - but they might be enhanced by appropriate leadership.

The result is that (despite sound fiscal and monetary management and rhetoric about an economic miracle) Australia's economic performance over the past decade has been quite poor, eg as indicated by: under-employment (the growth mainly of poor quality jobs); pricing Australians into jobs and creating the impression of productivity gains by ongoing devaluation - followed by productivity stalling when devaluation ceased; continuing poor relative income levels; funding of growth through escalating debts and foreign obligations; the emergence of disadvantaged regions; and steady loss of access to strategic economic intelligence through widespread takeovers of larger firms (see also Impact of Economic Liberalism in Australia).

Governing is not just Running a Large Business

Governments' contribution to Australia's economic challenges has often been mis-understood as primarily requiring reduced taxation to increase economic incentives, and greater efficiency in the production of public goods and services as economic inputs.

Changes have been made to government on these assumptions (ie by the adoption of corporate management and commercialization - eg see Davis G., 'A Future for the Public Service', Canberra Bulletin of Public Administration, August 1998).

The result has been that huge efforts have been concentrated on trying to solve the wrong problem (and difficulties have arisen), because:

  • economic incentives are of limited relevance in the absence of the capabilities to compete (see above);
  • the public revenue problem (which was revealed in the 1970s and 1980s when the growth of public spending outstripped economic growth) that led to an obsession with 'fixing government administration' was partly a symptom of a deficiency in the productive capabilities of the community. The development of apolitical institutions to accelerate change in economic systems could have greatly improved economic performance, reduced the social symptoms of poor economic performance, and also reduced the public revenue problem;
  • the core role of governments is 'governing' - which involves creating a framework for a community's social and economic transactions. Governing is a qualitative / knowledge / wisdom / relationship problem concerned with the way a society works - rather than a quantitative / efficiency problem related to producing goods and services;
  • challenges are emerging to effective government that can't be evaluated by 'business-like' analogies (see Australia's Governance Crisis). For example, community-based as well as private sector arrangements are needed to reduce the complexity governments face to manageable levels. And the social pre-conditions for a legal and governance system that presumes individual liberty are weakening.
  • the goal of a government's 'board of directors' is popularity, rather than effectively meeting the needs of its clients - and this leads to huge delays in its response to changing circumstances (see Why are Bureaucrats bureaucratic?).
  • governments are rarely involved in the production of goods and services that can easily be dealt with by business-like methods.  For example:
    • government's tend to be involved with goods and services that: are subject to large externalities; or are natural monopolies; or are affected by particular public policy priorities (eg equity issues in education). Introducing business-like methods can not remove these complications that lead to market failure or the political environment that constrains efficiency - and can distort already difficult situations with methods that are not appropriate to the problem at hand. In particular:
      • the difficulty of meaningfully defining intrinsically complex / vague services will tend to make purchaser - provider arrangements into a struggle;
      • the federal government reportedly reversed decisions about business-like accounting practices that it introduced under 'new public management' - apparently because it was too hard to define outcomes to be used to measure output; and because the value-added data which measure business productivity may say little about effectiveness in functions that are subject to market failure;
      • instances have been identified in Victoria where full privatization of some infrastructure has resulted in situations where the process could fail because those services could not be successfully disentangled from public interest considerations [1].
    • government 'businesses' are intrinsically limited in their ability to achieve commercial returns due to their political accountability (which reduces their ability to be market responsive). There can never be such as thing as competitive neutrality. Either governments must regulate to inhibit market-focused competitors, or their 'businesses' must deliver large losses to taxpayers (as is traditional for nationalized industries).

In summary, government is not like a business as (a) its main role is governing, and this requires adjustments for which there are no business alanogies; (b) political popularity doesn't come from a sound bottom line; and (c) its service delivery roles typically involve functions which are intrinsically complex / costly because they are subject to real market failures.

Government's main challenge is to manage the 'relationships' between things that cannot be coordinated through market mechanisms, rather than dealing with 'things' that are coordinated through market mechanisms (which is what business does efficiently). The complexity of public sector functions that results from managing relationships or 'things' for which relationships are of critical importance is also a major (yet unrecognised) constraint on governments' ability to provide goods and services effectively through alternative machinery such as Public Private Partnerships. Moreover understanding that complexity is a key contribution by the Public Service - and this requires career tenure and that high value be placed on experience.

It was ridiculous to focus on trying to improve economic performance by applying business-like methods in areas where such methods are least appropriate - while not doing everything possible to improve the effectiveness of business-like methods in functions where they are appropriate.

And, as it was not understood that developing a stronger economic capability required more changes in the community than in the public sector, and the focus was confined to simple-minded 'production' issues, public services lost the ability which had been emerging in the 1980s to  find ways to create the capabilities needed for stronger economic performance.

Just as significant may be the fact that (in Queensland at least) government now seems unable to effectively plan and deliver infrastructure - ie it is failing in the very functions which new 'public management' models were expected to do most to improve.

This problem is outlined in Defects in Infrastructure Planning and Delivery. Problems identified include:

  • traditional infrastructure machinery (through government departments and other authorities) virtually ceased to operate in a process of 'reform' in the 1990s which involved both de-skilling of the Public Service, and ignoring the machinery and skills needed for realistic infrastructure planning while adopting 'commercialization' and competitive service delivery;
  • a new system emerged which is now constrained by: politicized public administration (ie a focus on the opinions of interest groups rather than on practicality); unrealistic agency strategic planning systems; and the need (in a competitive user-pays environment) for some infrastructure now to be demand, rather than public policy, driven;
  • further complications have been introduced by: attempts to integrate infrastructure planning with regional planning; serious problems in public financing; and two attempts at 'central planning' of infrastructure that ignored both of the previous complications; and
  • Public Private Partnerships' procedures have further fragmented the system -  and are unlikely to achieve their greater-value-for-money goal (as infrastructure quality and probable production cost savings will be lost in the (inevitable) complexities of PPP contract management).

The fundamental problem which is likely to have adversely affected the delivery of all public goods and services (ie not just infrastructure) is that an attempt has been made to use 'business-like' methods (which suit the production and delivery of simple separable items) for functions which are intrinsically more complex - for reasons outlined above.  And the 'business-like' methods do not allow the complexity (eg the close interconnection of diverse goals) to be accommodated.

Other governments are likely to have similar problems associated with allowing in-informed political cronies and 'yes men' to dictate changes to complex operational systems.

It is noteworthy that across the board and growing deficiencies have been said to exist in the provision of all public services - despite very rapid increases in government revenues [1]

A more sophisticated view of how 'smart' small government could be very effective has reportedly made by the Melbourne Institute, and was presented by Michael Keating in Who Rules? How Government Retains Control of a Privatized Economy [1] . The latter suggested that:

  • a bigger, better Public Service is not needed to regulate every aspect of life;
  • privatizing government services has not ended the ideal of egalitarianism;
  • the state should not leave everything to markets - and government are able to manage markets;
  • economic reforms and public service changes have allowed massive improvements in living standards;
  • the job of government is to pursue the national interest in meeting new challenges in training / education / health / aging / war on terror and providing infrastructure;
  • after gaining efficiency dividends from contracting government services to private providers, there is still a need to pay for government services which are not cheaper but just more efficiently allocated.

However, while there is probably no need for a big Public Service, there is a need for one that is competent, and that is what has been lost through poorly conceived and incompetently managed 'reforms' in which political cronies were encouraged to eliminate the threat to their status posed by persons who really understood what might be done. Moreover, there was no recognition of (a) why democratically-accountable government institutions can not genuinely 'manage the market' and (b) the difficulties that must arise when functions which are subject to market failures are externalized from government

Misunderstanding the Public Service's Contribution

Australia's system of public administration derived from the UK's Westminster tradition, and involved key complementary elements including: the constitution; the crown; the legislature (parliament); executive government drawn from the majority political party in the legislature; the judiciary; and professional Public Services.

One reason that this system worked was that Public Services provided high level advice and support biased towards the practical effectiveness of policy to complement government executives whose main concern was whether policy was popular enough to gain electoral support. This was vital to ensure the effectiveness of government in an environment where the political system is intrinsically populist (eg because policy debate has to be conducted in terms that over-simply the immensely complex issues involved, and all that is required to gain an electoral mandate is to bluff the public).

Prior to the 'reforms' of the 1990s, the assumption that Public Services were major obstacles to achieving change was naive. It was an assumption that

  • originated with the RCAGA that emerged from the Whitlam Government's problems;
  • was advocated particularly by Peter Wilenski who persuaded several governments;
  • was reinforced by influences like the populist 'Yes Minister' school of administrative theory;
  • reflected an apparent unsophisticated perception by Australia's community that all that should be required to achieve policy objectives is to gain political power and issue instructions.

As suggested in Section 6 of Towards Good Government in Queensland, scapegoating Public Services merely reflected an inability to confront real-world obstacles to idealized policies.

And scapegoating under-pinned most of the obvious mis-management of 'reform' in Queensland in the early 1990s (and presumably elsewhere where similar models have been applied).

Even now Public Services themselves are not likely to be the major obstacle (ie there will be little to be gained by widespread staff changes). The real problem with such Services now will be that they operate in a 'political' environment that does not recognize that political ideology grossly over-simplifies the requirements for effective public administration.

There is a critical difference (which is intrinsically politically-undetectable) between the concerns of the political system for how policy will be perceived by influential interest groups and the requirements for effective public administration.

Illustrating the gap between politics and effective administration

An inevitable gap exists between between political ideals and the ever-changing practical reality facing governments because of:

  • the impact of changing ideas and client requirements - as illustrated in  Why are bureaucrats bureaucratic?
  • the difference between giving the 'appearance' of performing some function and actually making it work - the latter requiring attention to a vast range of practical considerations (eg the competencies of organizations, inter-relationship with other functions, regulatory requirements).

This gap needs to be bridged if government is to be effective. Under the Westminster tradition that Australia inherited, the ideal of an independent / professional Public Service protected the practical effectiveness of public administration from naive political initiatives, and was as critical to the effectiveness of Australia's system of government as (say) an independent and professional judiciary.

This protection was necessary because the gap can never be detected by the political system, because no one can know the extent of what they do not know.

Because of this undetectable gap, the political manipulation of Public Services that has been the norm since the late 1980s has mainly had the effect of eroding the relevant knowledge and skill base at 'senior' levels. Every time 'yes men' have been given preference over those with knowledge and experience, governments' ability to influence some real-world issue has declined - and simultaneously governments (and their supporters) have become ever more cocooned from this reality.

Political manipulation has also deprived Australia's system of public administration of its professional and moral credibility (see Autocratic Ignorance Purges the Public Service).

These effects were presumably unintended. For example, despite appearances to the contrary (and the tradition of rorts in filling fill important political positions that apparently characterized the AWU, its dominant faction) the Goss Government apparently wanted to increase Public Service merit, and avoid politicisation, But it was unable to do so, as there was no way for it to tell what merit was. Its own view of this was oversimplified, so staffing preferences often came down to cronies and 'yes men'.  An attempted explanation of why politically driven reform must lead to a loss of relevant skills is presented in Note 5 on The Role of Statutory Officers when the Public Service Fails.

The problem may be further illustrated by recognizing that the core business of government involves creating a framework for social and economic transactions within the community - which involves very complex issues. Effectiveness may require familiarity with (say) 200 different sub-systems which affect a particular function. Of these only (say) 20 may be clearly important and thus politically recognized at any given time, while perhaps 100 have some relevance. Over time, the 20 most important sub-systems and the 100 relevant subsystems tend to change - and new sub-systems to emerge. It may take 20 years experience to gain a working understanding of the 200 sub-systems that affect the function, and those who are most familiar with the 200 sub-systems are best positioned to identify and understand relationships that are newly emerging (and also to tell who else understands the situation).

This is why the present author's suggestion in 1990 about Changing the Queensland Public Sector by building on existing capabilities (based on experience of successful reform in the 1970s) was essential to avoid the injustices and massive loss of institutional memory and intangible public assets that eventually occurred.

Unfortunately when a person with  some superficial knowledge (ie of the 20 sub-systems that have current public focus) gains a 'senior' role through their ability to create a good political impression, they will lack the personal credibility to provide leadership to their organizations (and be professionally threatened by 'juniors' with more knowledge and experience). Thus bullying can become the only practical (if ineffectual) management style, while ignorant staff recruitment, training and organizational development can further worsen the problem.

An anecdote: The latter can be illustrated by the history of a Queensland department which suffered a serious morale problem. The problem was recognized and a human resource management 'guru' was recruited as a top executive to fix it. However the problem couldn't be solved 'managerially'. In reality the morale problem was due to the cumulative effect of many demonstrations of a politically-induced incompetence in  the department's 'senior' management about the business of the department - an incompetence that led to dubious decisions and to a bullying management style. But this cause was intrinsically invisible to the  'management' expert who was also technically unskilled. Thus years were spent earnestly trying to fix the problem in a dozen ineffectual ways - while all the time it simply became worse. For example, on one occasion it was suggested to the 'guru' that the department's mission required changing the relationship between two real-world issues ('X' and 'Y') which experienced 'junior' staff at that time knew was being raised in the technical literature. However the 'management' expert declared that 'X' and 'Y' were not related, thus increasing the morale problem by further reducing staff perceptions of 'senior' management's competence. 

Having demolished the Westminster tradition that enabled the gap between politics and effective administration to be bridged, it has proven difficult to recover because (as discussed below) Queensland / Australia has few independent institutions able to provide advice at the standard required by an unstable and challenging environment.

Elsewhere it has been suggested that it is a major problem that senior civil servants are no longer regarded as useful sources of policy advice - as the success of democratic models (and the reason they did not turn into the 'mob-ocracy which opponents feared when universal suffrage was granted) was because of  the political and cultural role of the senior civil servants  [1].

Management problems similar to those caused by politicisation have also been identified in major corporations in the US where senior managements have been aligned solely with the simplistic criteria relevant to shareholders (by the use of stock options) a practice that is equivalent to politicisation.

For example: US executives struggle with a mismatch between demands for good values and realities which demand performance at all costs. Deception from on high is normal. Senior management is seen as 'corporate rapists' (Trinca H. 'Its all rumble in the corporate jungle',  FR,  23/7/02)

To avoid this sort of problem the main requirements are political recognition that Public Services add value to government through knowledge and experience and procedures that allow those with most relevant experience and knowledge to be the 'judges' of merit. And, given that Australia has few other institutions where relevant knowledge and experience can be gained (and Queensland has none), the Public Service had to be the main source of such 'judges'.

A Westminster public service was frustratingly slow (and could be improved), but it usually seemed to deliver the knowledge and skills which were required - because the people in charge knew from experience roughly what was needed to achieve results.

Information Gaps

Why these Problems were Misunderstood: A Lack of Strategic Information

A critical issue to consider is how it is that such problems could arise and continue.

In the late 1980s, Queensland's public administration had been widely recognized to be suffering from serious neglect and touch of corruption. Then a government whose claimed goal was reform actually managed to make the situation much worse (see Queensland's Worst Government).   This strongly suggests that the cause of the problem is deeper than the failings of any particular elected government.

It is hypothesized that the core problem (and thus the potential for a solution) lies in the traditional inability of Australia's civil institutions (eg universities, business associations, unions, research institutes) to provide well-considered and applied inputs to the political system in relation to highly complex practical issues - ie those in which it is difficult for those without experience to understand why ideas that sound good may not work in practice.

In Queensland's case, this deficiency is extreme and seems to be both a cause and a consequence of Queensland's relatively underdeveloped economy (see Queensland's Weak Parliament).  Queensland endured ill-informed, populist and autocratic governments, who traditionally depended heavily on the Public Service to provide realistic information.

However Queensland is not significantly different from Australia as a whole (eg it has only a slightly higher level of economic dependence on natural resources). Though there are national institutions that provide public and economic policy inputs, there are few with high level insights into economic strategy or the management of large organizations - because of Australia's traditional quasi-colonial status (ie reliance on UK / US ideas about governance) and its (growing) economic branch office status. This gap is a 'banana republic' syndrome.

In seeking to 'reform' public administration (while scapegoating public servants for prior problems), governments tended to put university 'experts' on public administration in charge. 

Unfortunately, though knowing a great deal about the general theory of (say) 'public administration', the latter had only superficial knowledge of the actual functions that government had to deal with (eg building roads, providing education services, developing the economy) and no experience in how to link policy and practice - or suspicion of the dangers of not doing so. None-the-less they were allowed to replace experienced practitioners in those actual functions with cronies and 'yes men' - and no one was then able or motivated to alert governments to the fact that few then really knew what they were talking about or doing.  

The outcome (in Queensland and reportedly elsewhere) was: massive discontent in the bureaucracy; a perception of autocratic power; truly fantastic policy rhetoric which convinced the political system and the media that things were going well (so they failed to detect what was going wrong even after the event); grassroots practical failures; and ultimately an electoral backlash that supposedly informed observers could not explain.

The Fall of the House of Cain noted that ministers were allowed to replace senior administrators with inexperienced university staff, and that turmoil resulted.

Human Resource Management specialists undoubtedly contributed to this problem. Pseudo 'scientific' lists of 'selection criteria' were established as the basis for staff selection which helped obscure the fact that few if any people on a selection panel might recognize an experienced professional if they fell over one in the street.

A further reason that support from university experts has not led to practical outcomes is that there has been a hard-to-explain and partly-justified shift in emphasis by many students of the humanities from philosophical 'realism' (ie the concept that knowledge is derived by being tested against empirical evidence) to an emphasis on philosophical 'idealism' (the concept that knowledge is mainly tested against individual or social preferences) - a trend which goes under the name of 'post-modernism'. 

This epistemological shift has, amongst other things provided a rationale to devalue practical knowledge and experience. This 'justified' politicisation and 'managerialism'. The latter is the view that managers need little knowledge and experience of the functions they administer, and its symptoms include 'content free' management and a fixation on formal procedures. Managerialism is seen to have destroyed the quality of Australian universities [1] - where professional knowledge and skill is as important as in Public Services

Undoubtedly the main reason that such problems have not been widely discussed is that (as noted in relation to Victoria) professed academic experts in public administration (the ones most likely to produce critiques) were heavily involved in and supportive of the mis-management of 'reform'.

Renewal

Renewal of Australian Public Administration

It is now a massive (and long term) problem to unravel the damage that has been done to Australia's system of public administration. Hopefully this can be achieved before Australia actually collapses into a true banana republic, or is overwhelmed by the risks inherent in the current international environment. There is however no guarantee that this can be achieved.

Overcoming the lack of relevant information would seem to be the most important step - ie enhancing the ability of civil institutions to suggest practical enhancements to highly complex systems as raw material for public policy debate. This might be achieved by:

  • events and arrangements to promote cross fertilization of ideas and people between organizations concerned with low-level-practical and high-level-theoretical policy (to raise the sights of the former, and provide grounding to the latter);
  • encouraging policy inputs from institutions which (a) comprise a series of of complementary interests - rather than single interests (b) develop both indicative enterprising options that might be undertaken by collaboration amongst complementary organisations and ideas for public policy initiatives and (c) arrange extended periods of international experience for staff.

A serious review of the effectiveness of public administration is also essential, as well as ensuring that someone now again becomes accountable for the practical effectiveness of policy.

Some speculative suggestions about professional renewal of Queensland's Public Service were put forward in August 1995April 2000 and November 2005. One key point in these proposals were that review and renewal should not be seen as a process that is divorced from ongoing operations, and that heavy emphasis needs to be given to applied knowledge and experience.

Alternative proposals for the establishment of an Australian and New Zealand School of Government envisage the creation of a school which promotes the public service as a profession (see Durie J. 'School for bureaucrats', Financial Review, 27/11/02),

Though a public service college has long been needed in Australia, the above report suggests that the  proposal is be based on 'new public service' models that have failed - and failed most comprehensively in Queensland from which the idea of the School apparently originated.

For example: At least one of the School's proponents reportedly suggests that public service leaders need to have core abilities such as strong quantitative analysis skills, presenting net present value analysis on policy programs and and an ability to measure whether public service can do a better job than the private sector. 

This is nonsense. These are the mechanical skills required by a Public Service that brings no knowledge, experience or wisdom to elected government about governing, and participates in very dubious models for the delivery of public goods and services.

It has also been suggested that (a) the proposed school would only accept participants who were nominated by governments and (b) participants would form a cohort of people who know one another and think alike as the basis for Australia's whole system of administration [1]

This could be incredibly dangerous - because it would tend to reinforce and perpetuate all of the problems that have been introduced into Australian public administration over the past decade. A much more open and competitive model would seem vital.

It may be worth considering why the Ecole Nationale d'Administration in France, which has been described as a possible precedent for the proposed Australian and New Zealand School of Government, is perhaps at risk of closure. It was suggested that its elite graduates seem unable to contribute to the real problems confronting France, and seem to be best at exploiting their connections to plan the advancement of their own careers. The decay of public administration in the 1990s has already given Australia more than enough of such people.

On the other hand it has been suggested that in practice the proposed School may seek to "rise above ... uncritical acceptance of the new public management model. .... (and consider) ... some overseas schools such as Harvard where there is a fairly critical approach to the new public management model" (source email from Professor Allan Fels, nominated as founding Dean of the proposed School, 6/12/02). However a willingness by some of the School's proponents to start questioning unsatisfactory models that others apparently endorse does not imply that the School would be able to provide the answer or that the School's proponents would be the best equipped to find it.

By late 2006 it appeared that little had been learned - and further suggestions about renewal of Australia's institutions were put forward.

November 2002 and modified later

A: Pre 1990 Changes

ATTACHMENT A: PRE 1990 PUBLIC ADMINISTRATION CHANGE STRATEGIES

The following is a sample intended to provide a "flavour" of what was done, rather than a comprehensive account.

(a) Background

A series of public sector reviews which commenced in the 1970's, were the first since early in the 20th century.

The series was dominated by the Royal Commission on Australian Government Administration, chaired by Coombes (RCAGA). It was initiated in 1974 and reported in 1976. The RCAGA was paralleled by the Bland inquiry in Victoria (1975), Corbett in South Australia (1975), Lewis and Hewitt (1976) and Wilenski (1977-82) in NSW; Cortland in Tasmania (1981); and Guerin in South
Australia (1985).

The reasons for the reviews were suggested by Painter (Steering the Modern State: Changes in Central Coordination in Three Australian Governments, 1987) to be: new (reformist) governments; greater complexity due to public sector growth; and "fashion".

The experience of the Whitlam Government from 1972 had been widely noted, where rapid change was sought, and was seen to have resulted in implementation failures, and the growth of internal and external resistance.

Wilenski was very influential in introducing corporate management approaches in the NSW and Commonwealth Governments.

According to Broad ("Reform Strategies in the 1980s', G.O., 1986), Wilenski's attitudes to public sector reform were:

  • the need to plan to overcome resistance (which was seen to be inevitable given changes to power);
  • most reform fails because resistance is not overcame and reform committees usually disband after reporting.
  • political support, time and resources are essential;
  • changing behaviours can be a lever to changing attitudes (which cannot be directly influenced);
  • resistance may originate from genuine differences in opinion, which should not by destroyed. Others may be correct;
  • all opposition will be expressed in the loftiest terms;
  • resistance may go underground using such techniques as: "we are doing that already"; underestimating required resources; delaying implementation;

Wilenski saw key reform strategies as: legislation requiring new obligations; establishing new institutions whose sole purpose is reform; recruitment of committed people to existing institutions
and redistributing power into their hands; and changing formal structures (eg flatter structures would force more delegation). Training and pilot programs are less effective strategies. It
is not necessary that all peoples' attitudes are changed before reform, but it is important that the values behind proposals be clearly explained (even if not universally accepted), and that there be unity an objectives.

(b) Commonwealth

The RCAGA was established because of a perception of lack of responsiveness of the public sector to a new Government.

Coombes' themes were the efficiency of resource usage, and co-ordination and control of the activities of administration. It was an attempt to change the balance of power between central
agencies and departments / permanent heads.

RCAGA had a weak base, poorly defined mission, and was subject to  control by the central Government agencies it was reviewing. (Schaffer and Hawker) Recognising gaps in available information relevant to its subject, RCAGA commissioned research, but the  results may have been too late to be useful. Furthermore initial assumptions about the information required for the inquiry may have been incorrect. It proved difficult to divide up the themes to be researched (which is the same as the problem of rationally dividing government functions). The research produced was ritualistic, not focused.

RCAGA'S most successful results were achieved from action research (ie through stimulating trials of actual innovative organisational arrangements).

Implementation was hoped to be through responsibility being taken by a central agency, and extensive preparations were made for this.

RCAGA was deliberately ignored by a new Commonwealth Government which set up its own Administrative Review Committee before the RCAGA reported.

RCAGA "proposals sank without trace in the bowels of the bureaucracy" (Weller, 'Strategic leadership in Modern Government,  Canberra Bulletin of Public Administration, 1985?)

The Commonwealth underwent several major reviews in the term of the Hawke / Keating Government.

The first was initiated by a policy paper Reforming the Australian Public Service (1983). This was primarily a non structural change oriented to: changing roles and resources of ministers and senior officials; resource allocation; and personnel practices. These changes were designed to increase
political influence over the public service, whilst avoiding charges of politicisation. Efficiency and economy of Government operations were not emphasised. A senior executive Service was introduced, as well as requirements for industrial democracy and equal opportunity employment.

The second stage concerned public service streamlining (human resource management) and the establishment of an Efficiency Scrutiny unit in 1986. The primary consideration was financial
and staffing efficiency in an era of austerity.

The third stage was primarily structural (ie rearranging the machinery of Government) in the 1987 reorganisation. The primary goals related to increasing government control over the public sector, rather than efficiency, recognising that structure is not neutral to the distribution of power. Cabinet was reconstituted as the upper level of a two tier ministry, departments were re-integrated into mega departments and the Public Service Board abolished. Its abolition, and devolution of responsibilities to departments, was based on the perception that this constituted best private sector practice. Associated with the macro changes were the micro effects of a second tier agreement relating to broad banding and multi skilling.

The results of these processes were: change from the older generation of "mandarins" to a newer generation of economically literate managers; a focus on efficiency and performance; and greater demands on the public service for policy changes appropriate to a tough economic climate.

However, the constant turnover of staff made it difficult to pursue any long term agenda (such as is required by social and economic development); or to enable learning from experience.

Some concerns with the change process were expressed by Halligan ('Reorganizing Australian Governments Departments',  Canberra Bulleting of Public Administration No 52, Oct 1987):

  • problems for agencies in pursuing several different directions simultaneously (eg integrating new policy combinations, closely monitoring Government policy, adjusting to new staff, reduced staff numbers, increase staffing responsibilities);
  • changes appear to have been more oriented to the short term concerns of Government (ie political factors) rather than longer term vision of where the public service was going;
  • the previous 15 years of reorganizations had been a time of instability for the public service. Perhaps some greater attention should be given to the processes that will contribute over the longer term to the enhancement of the Service.

Implicit in the reviews had been a desire to create a new public service culture.

Culture is characterized amongst other things by structure (Delman and Dick, Politics, Conflict and Culture, 1987). However unlike structure, culture can not be changed by edict (Tunstall, 'The breakup of the bell system: A case study in Cultural Transformation,  California Management review, V26, n2). Failure to consider these issues has been suggested to be likely to cause a "degenerative organizational culture" in the case of changes at the Commonwealth level. (Cahoon, 'Restraint management in the public sector the human factor',  Canberra Bulletin of Public Administration, v 54, 1988)

(c) New South Wales

NSW had a strong tradition of central agency initiative on public sector wide matters. (Painter, 1987)

The NSW Machinery of Government Review was commissioned in 1974. It was an internal process conducted under a cabinet committee. Its motive may have been to create some political ability to regulate powerful agencies. It was conducted on a shoe-string budget, through a series of internal working parties. Implementation of its conclusions was instantaneous, but the limited impact achieved may demonstrate that tinkering with structures is not a fundamental change. (Curnow, 'The NSW Machinery of Government Review' in Smith and Weller, Public Service Inquiries in Australia, 1978)

Wilenski's report in NSW had the primary theme of structuring decision making processes such that elected politicians should make the most important decisions. (Review of NSW Government
Administration, 1977).

The New South Wales Government dismissed a large number of existing staff after it was elected, and recruited others acting on the explicit belief that the public service had to be politicised. (Boyen, 'Lifes not that peachy for the mandarins', Financial Review, 29/4/88).

It is reported by one observer that there was great difficulty in obtaining anyone better, and that recruitment of "charlatans" was sometimes a problem.

NSW placed considerable emphasis on "corporatisation" of public sector trading enterprises as a means of promoting efficiency. (Moffet, 'NSW set for corporatisation',  Financial Review, 17/7/89)

NSW Government also appeared to be emphasising a "project" development approach, similar to that which probably fragmented Queensland's public sector during the 1980s.

(d) Victoria

Victoria had a tradition of administrative decentralisation, and relatively inactive roles for central agencies (Painter, 1987).

A ramshackle system of Commissions, Boards, Authorities, Committees, Councils and Agencies existed as a consequence of political perception that the only way to deal with any issue was
to create a new entity as a buffer between the minister and advocates. They could not work through public sector mechanisms whose arrangements were obstacles to direct political responses.

With increasing complexity in the 1970's a massive increase in "co-ordinative" mechanisms ensued - with significant overlap and conflict.

Bland was appointed to head an inquiry in 1973. Several reports were produced including those designed to:

  • define and systematise the public sector. Conclusions were accepted but predictable;
  • identify means to manage more effectively a number of areas of key policy concern to government. Bland was critical of fragmentation, but had a world view which saw the top man making decisions and others complying. Reality is different, and especially when the Inquiry touched upon statutory authorities, it could not find an effective co-ordinating procedure. The outcome was adding additional layers of responsibility;

An account of subsequent process of reform in Victoria from 1982 is given in Halligan and O'Grady ('Public Sector reform: Exploring the Victorian Experience',  Australian Journal of Public Administration, March 1985).

Victorian Government apparently deliberately began treating the public sector as an instrument of politics (Smith, 'Cabinet Government and public Sector performance in Victoria', in Davis, Weller and Lewis, Corporate Management in Australian Government,  1989).

The displacement of staff who had functional expertise, by those who were politically supportive was widely noted by observers. This probably meant that when implementation difficulties occurred no effective problem solving capabilities were available. The unfortunate consequences for public administration in Victoria were predictable. See also Review of The Fall of the House of Cain.

(e) South Australia

According to a description by Painter (1987) South Australia had a tradition of a gentlemanly, clubbish approach to public service. Smaller scale produced more informal, collegial patterns of leadership and co-operation. Individuals were dominant because of ability. Initiative and excellence in the lower ranks were quickly and readily recognised. A reputation for innovation and excellence prevailed due to anti-bureaucratic traits.

In the 1970's, the influx of newcomers swept away provincial stuffiness and staidness. Officials had an image of "problem solver" rather than bureaucratic politician. Administrative conflicts were over ideas and ideals. The problem was not to impose reforms, but to harness the multiplicity of conflicting reformist ideas.

The Corbett Committee of Inquiry into the Public Service of South Australia was established in 1973. It directly involved senior officials, and there was no suggestion of any resistance to change or that goals were other than modest. Implementation was slow but steady, because of determination to ensure aspects of reality not recognized by reviewers were not overlooked. (Saensch)

(f) Northern Territory

An attempt at substantial public sector change in the Northern Territory was suggested to have resulted in: a turning inward of the focus of attention, towards defending the status quo; a significant loss of morale; and massive turnovers and net losses, of key personal.

These changes had been the consequence of economic circumstances forcing the public sector to do more with less, loss of relativities in pay and conditions, and widespread criticism of
public service performance.

In order to head off consequent loss of expertise, skill, effort, quality of service, it was felt that a massive team building effort was required. (Perron 'Northern Territory Government: new demands, new directions', RAIPA, 1989)

(g) Western Australia

Western Australian Government apparently sought assistance from the private sector in directing and managing public sector change. This was the genesis of arrangement generally referred to as WA Inc., which resulted in considerable financial losses.