The BCA's muddled nostalgia

The Business Council's attack on the public service was riddled with errors, and its recommendations show little understanding of federal policymaking.


Business Council head Jennifer Westacott's interventions on public policy since her appointment in April last year have not been the happiest experience for her.

There was the embarrassment of having to explain on Lateline in June why the Business Council was whingeing about productivity the day the ABS released data showing a big rise in labour productivity. There was the attack on Labor for the "broken promise" of the rescinded corporate tax cut, which failed to mention that it was the Coalition that blocked it. There was the claim that the Greens were trying to censor and silence the business community. And there’s been the incessant campaign for industrial relations reform that, nearly one year in, has yet to yield a scintilla of evidence about major problems with the Fair Work Act.

Yesterday Westacott turned her attention to the public service and, on a slow news day, Westacott's pronouncements garnered plenty of attention, particularly from our two national newspapers, which function as mouthpieces for the BCA.

In a speech to the Institute of Public Administration Australia (of which former PM&C head Terry Moran was this week elected president), Westacott called for some major reforms of the Australian Public Service, with the aim of "restoring the independence, authority and legitimacy of the public service."

What is wrong with the APS, according to Westacott? The policymaking process is poor, short-sighted and political and there’s too much regulation. And her prescriptions are to cut the number of ministerial advisers, make departmental secretaries permanent, slash the public service, institute productivity goals for the APS, some nebulous stuff about service delivery, and have performance management and forced redundancies.

There are several howlers in this. It shows how little Westacott knows about the APS – she has been a state-level bureaucrat but never worked for the Commonwealth – that she’s not aware performance management has been in place for well over a decade. Hundred of thousands of public servants have spent millions of taxpayer-funded hours in performance appraisals and at seminars on performance management given by well-paid consultants.

And there’s no ban on forced redundancies. It’s just that every time the government wants to shrink the APS, there are so many volunteers for redundancies they don’t need them.

Nor, presumably, is she aware that for over a decade no Commonwealth public servant has got a pay rise without an offsetting productivity increase negotiated as part of their collective agreement.

And the Howard government instituted, and Labor increased, an elaborate and absurdly bureaucratic series of hoops through which public servants have to jump if any form of regulation is put forward, designed to test the case for, and the efficiency of, additional regulation.

Some basic research by Westacott’s many staff at the BCA would have spared her the humiliation of putting forward the best public service efficiency program of 1995.

As for slashing the public service, she at least was talking some sense there. A good place to start would be the Innovation Department, where hundreds of public servants administer grants to the business community, including many of the BCA's members. Slashing those programs would be a great start.

She also wants to cut back on ministerial advisers. There will, undoubtedly, be a few cheers for this in the APS – although Westacott doesn’t mention that Kevin Rudd initially slashed ministerial staff by a third when he was elected. But the problem isn’t the number of ministerial staff, it’s their lack of accountability, whereby they’re able to provide their ministers with a human shield against scrutiny and the now-abandoned tradition of ministerial responsibility. That’s where ministerial staff have an impact on policy, not whether each minister has one, six or 30.

As for making secretaries permanent again, some history: the first inroads into secretarial tenure began under Malcolm Fraser, and then it was essentially removed in 1984, with the final move to fully contractual secretaryships in 1994. It’s doubtless coincidence that the period in which permanent heads were replaced with contracted secretaries also saw the most significant sustained period of high-quality reform in Australian history, but the idea that non-permanent heads have somehow seen a deterioration in the quality of policymaking in Australia is clearly at odds with the facts. The mandarins presided over what Paul Keating termed "the Rip Van Winkle years". Contracted secretaries have presided over more than two decades of economic growth, major reform and saving Australian workers from the financial crisis.

In fact there’s something very quaint about Westacott’s vision of a reformed public service, like something out of Yes, Minister, with permanent heads nodding sagely at the follies of the ministers while pursuing "the national interest" regardless of what politicians want. Something quaint, and fundamentally undemocratic.

Westacott doesn't seem to understand policymaking. Plainly she's unaware, for example, that despite the innumerable Office of Best Practice Regulation hoops public servants have to jump through, it's ministers on both sides who demand more and more regulation, not public servants. Ultimately ministers are the key policymakers. They interpret the national interest, advised by the public service but with the power to pursue any course they choose. Public servants often mess up program delivery, of course – sometimes because politicians insist they roll programs out too quickly – but responsibility for poor policy belongs more to the politicians who have compromised it for political purposes than to the public servants who prepared the briefs.

Moreover, in a democracy, that is exactly how it should be. Bureaucrats may think they know what the national interest is, but it’s politicians who stand for election based on their vision of it and become decision makers if they’re successful.

What's Westacott’s real problem? Well it's not clear, but I'd hazard a guess: despite this government serving up a remarkable set of economic outcomes amidst a worldwide economic crisis and its lingering aftermath, the BCA is annoyed because its own agenda of 'reform' – IR deregulation, a lower corporate tax rate paid for by the rest of us, infrastructure investment that companies should be undertaking themselves – hasn't been adopted.

And what's really corrupted policymaking is that governments now face an onslaught of self-interest from the business community (and NGOs and unions), who invest vast amounts in trying to influence outcomes via lobbyists, peak bodies, specially commissioned 'independent' modelling, polling and advertising campaigns. And public servants are poorly equipped to help their ministers handle this type of contested environment.

Westacott seems to have a child-like faith that we can return to the days of Nugget Coombs when mandarins ruled the Earth and there was no competing source of advice for politicians. But it's exactly institutions such as the BCA that have ensured that environment has long vanished, and will never return.

This story first appeared on on September 21. Republished with permission.

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