Removing the bloat from the public service

Our public service is becoming increasingly inefficient, with productivity falling every year over the last decade. If we don't fix it now, there will be a huge cost burden as our population ages.

Today’s graphs from Accenture should scare every Australian. We can’t even contemplate being a leader in Asia until we tackle the abysmal state of our federal, state and local public services.

The inefficiency and waste in these public services is sucking Australia dry and Accenture warn that unless we do something about it, our ageing population means that Australia faces a grim future funding squeeze. The good news is that Accenture set out what we have to do and, if there is political and public service will, it can be done.

And to public servants with unfunded defined benefit pension plans – remember that if the public services drain the country dry, we will not be able to pay the pensions (Canberra's great superannuation rort, October 1).

For the last decade, the mining boom has obscured the fact that each year the productivity of our public services has fallen by 0.6 per cent. Yesterday, I set out the challenge the mining change presents for Federal Treasurer Wayne Swan and his mining tax (Swan's miserable mining confusion, October 29).

Alan Kohler shows each night on ABC TV news that a graph can tell a thousand words. Our first graph shows the productivity disaster that is the total Australian public services. The second shows how we compare with the US, which also has a problem because they spend a greater proportion of their GDP on their public services than Australia.



Accenture says that with the ageing of the Australian community, the demands for public services will rise and that if we keep lowering our productivity we will face a huge funding task. Go to the report for the figures, Delivering Public Service for the Future: Navigating the Shifts.

My comments today focus on what we need to do about it. I have changed the order of the Accenture recommendations but they are all important:

– Solution one: Take action across all government departments/agencies to eliminate duplication and rethink how public services are designed and delivered to improve efficiency.

Australia over the last decade as added a Commonwealth Public Service in education, health and many other areas that duplicates the states but delivers no services. There is duplication and useless empires everywhere. Every government channel thinks they are unique and develops their own technology. Accenture point out that they are not unique and that cloud computing gives us the opportunity to align the base technologies and gain scale with enormous increases in efficiency and better service.

– Solution two: Tailor public services to the specific needs of each citizen to drive better outcomes at sustainable cost.

The public services in Australia are silos so that those seeking information have to tailor their requests to those silos – no easy process and one that creates enormous waste. Telstra was a mini version of state and federal public services. CEO David Thodey and his predecessors have worked hard to break down the silos but the job is far from over. In the private sector there has been a lot of work done to tailor service delivery to customer requirements and, if you get it right, the productivity and consumer satisfaction improvements are enormous.

– Solution three: React in advance to insights using information and technology to identify and solve problems.

Accenture say that in predictive heath we are starting to identify problems well in advance and by taking action early we reduce the costs later. Most of the Australian public services deal with problems as they come.

– Solution four: Public management to public entrepreneurship – leveraging the scale and assets of government for maximum impact in the economy.

The New South Wales government is seeking answers from the private sector as to how to deal with problems. A lot of the problems in the public services have been solved by the private sector. For example, in cutting down silos you could start by discovering what Telstra did right and what they did wrong.

It’s time to take a different course and when do that we can be a real Asian nation.


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