How the public service conned Hockey

Suddenly, one of the root causes of the Abbott government's problems and Australia's falling growth rate is becoming apparent.

While the Senate quagmire is a clear obstacle, it is also in part a symptom of a much deeper problem -- too many government ministers have become puppets for parts of the public service that have lost touch with the nation.

As a result, ministers who are not doing enough of their own research and policy formation are in terrible trouble.

The Abbott government has produced several first class minsters whom are not unduly influenced by the public service and are doing a fine job, including (in alphabetical order) Julie Bishop, Mathias Cormann, Greg Hunt, Scott Morrison, Andrew Robb and Malcolm Turnbull.

Not on that list, unfortunately, is Treasurer Joe Hockey.

Joe is a great guy and a well-meaning minister, so it is particularly disappointing to realise that he has become a puppet of the Defence Materiel Organisation. The DMO does not appear to understand that having a local defence industry capability is an essential part of defence in wartime -- particularly for an island nation. 

For too many of our defence people, local industry is too hard to manage and mistakes can threaten their career. Joe was sucked in this week, making the totally ridiculous proposition that it would take more than 12 years to produce a submarine using local industry.

My message to Joe Hockey is: “you were conned -- but you should have done the homework”. There are experts outside the public service who will show you how you can combine overseas and local industry and retain local involvement in submarine production and still be very competitive (the submarines must be ready by 2026).

Hockey will discover if he goes to the experts that the combination of overseas and local expertise and facilities can develop a submarine in about eight years, which is world competitive.

The Treasurer needs to set up a non-DMO committee and give it three months to help him understand how we could do it. That committee should include Rex Patrick, who is not liked by defence people because he tells the truth as he sees it.

The DMO was set up in 2000 and seemed a good idea at the time but it has presided over a series of defence equipment blunders.

When Defence Minister David Johnston was in opposition, he understood the value of having local industry but the defence chiefs have captured him as a puppet when it comes to submarines.

There can be no excuse for Johnston because, as I understand it, former defence ministers on both sides privately warned him of how dangerous defence advice has become. One only needs to look at the cover up of abuse to realise what a mess the department is in.

But Johnston fell into the trap and has taken Joe with him. But the Treasurer is also listening too closely to Treasury. What made Paul Keating and Peter Costello great treasurers is that they listened to Treasury's advice but had a network that helped them know when to bin that advice.

Joe Hockey has a lot of responsibility for not taking the low-cost option of keeping part of the motor industry and saving the tens of thousands of jobs which will now be lost around the next election. Now submarines are being added to his hit list which goes to the heart of the nation's defence.

Returning to the budget, had the government stuck to its original agenda, the problems would not have been nearly so serious. For example, by December 2014, the savings to be achieved by eliminating duplication in health and education should have been in prospect for the budget bottom line.

Education Minister Christopher Pyne and Health Minister Peter Dutton plus Hockey once again became puppets for a public service that had a different agenda. The duplication will stay for a long time, thereby putting pressure on other areas of the budget. 

Meanwhile Pyne mixed up budget savings with necessary reforms in the university system and the result has been a shocking mess.

Dutton made a similar mistake with the GP co-payment. He needed to go outside public service advice and really work with the medical area before the co-payment measure was announced.

By contrast Malcolm Turnbull's handling of the complexity of the National Broadband Network has been an example of a minister really getting on top of the detail of his portfolio. He has done the job and Australia will get an affordable broadband network. However, Tony Abbott needs to get him out of that portfolio before the ABC destroy him.

We desperately need a Defence Minister of Turnbull's caliber. An individual that knows when the defence people are telling the truth and when they are simply covering their own backsides. As we have just seen, not only does this ensnare the Treasurer but Australia's future is also at stake.