The public sector problem teeters at the top

Both parties have pledged cuts to the public service but the problem is not only a rise in staff but too many in the upper ranks. Neither is up to seriously tackling that predicament.

Neither major party has owned up to the truth about what has happened to the Australian public service. Its numbers have risen sharply over the last decade and it has become too top-heavy. Using an old saying (which I hope now does not have unintended racial connotations), there are too many chiefs and not enough indians.

Over the last 14 years we have had three prime ministers and none has tackled the public service problem. In the current election campaign both parties are raising money via ‘efficiency dividends’ while the Coalition is going to stop recruiting and allow natural attrition to reduce numbers by 12,000 and will rationalise activities with the states.

Efficiency dividends and natural attrition are policies that come when you are either too scared or do not know how to show leadership. So on the day before the poll I am going to look at the Australian public service with the help of fascinating research by Wing Commander Chris Mills AM, who has of course retired from his RAAF duties.

I want to emphasise that this is not an attack on public servants or their work. It is an attack on bad management at the political level, covering both parties and at the very top of the public service.

First, let’s look at the numbers. The Mills research shows that between 1998 and 2012 the Australian public service increased by 43.8 per cent, which contrasts sharply with the 27.6 per cent increase in the Australian population over the same period. The public service strength has outgrown the population it serves by a factor of 1:13 and the graph below tells the story.

Graph for The public sector problem teeters at the top

The public servants would argue that they undertake a wider range of activities than in 1998 and if the problem were as simple as that then it would be relatively easy to analyse and solve by the methods being used by both parties in 2013.

Unfortunately, the far bigger problem is the fact that the public service has become too top-heavy. In 1999 some 19,640 public service executives were supervising 81,391 staff – i.e. 19.31 per cent of the public service were executives and the ‘span of control’ was four, which was in line with good management practice.

Go forward to 2012 and the public service has 44,835 executives supervising 109,179 staff – i.e. 29.11 per cent are now executives and the span of control has fallen from four to 2.44, which is a bad ratio. In that situation you find that public servants are creeping up the salary scale. The best way to describe this is with the graph below.

A ratio of one shows no change, less than one means the ratio has decreased and more than one shows an increase:

Graph for The public sector problem teeters at the top

You will see that there has been a dramatic fall in the numbers in the three lowest grades of public service. Then the numbers start going above ‘one’, with a spectacular rise in EL1, which is the first classification where on a median basis public servants are paid six-figure salaries. The increase in the proportion of public servants at the top continues all the way until we reach the very highest level. There are too many executives and not enough real workers. This will help explain long delays in getting things done.

I am not sure either party has people with sufficient calibre to undertake what is a major management problem. This is a task that really needs to be handled by the public servant chiefs themselves. But the doctrine of ‘Yes Minister’ runs very deep.

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