Thank you very much Commissioner, ladies and gentlemen. I start by congratulating the Public Service Commission on the innovation which is represented by these Ministerial Conversations. This is the first time in the almost 31 years, or more than 31 years, that I've been a member of parliament, nine and half years as Prime Minister and then previously in other ministerial capacities, and as Leader of the Opposition, that I've actually had the opportunity of addressing in a serious gathering the interaction between the political and advisory arms of the Government, and the opportunity to engage in this kind of discourse, and I think it is a wonderful innovation. And if it does lead to an even better understanding of the respective roles within the broad Government firmament of the political arm of government, and the advisory one, then that will be a great thing for the people of Australia.
I do start my remarks by genuinely paying tribute to the quality of the Australian Public Service. You may think well he would say that, wouldn't he? A natural diplomatic, rather meaningless thing to say at the commencement of an address, but one of things that I have been able to do, especially in the time that I've been Prime Minister, is to see something of the operation of the higher levels of bureaucracies in other parts of the word, particularly but not only in the United States, the United Kingdom and New Zealand. And whilst not for a moment suggesting that the quality of the Public Service in those three countries and others is inferior or poor, it is fair to say that the quality of the Public Service in this country is the equal of, or better than any, in my contact with them elsewhere in the world.
But that remark is also based upon some nine and half years of policy and administrative interaction with the Public Service in Australia, during a period of time where there has been major reform in a very significant number of areas. And I do want to record that my very strong belief, and I know it's a belief that is shared by the Secretary of my own Department, that the capacity of the Commonwealth Public Service to provide objective advice remains unimpaired, and strong, and contrary to some of the popular myths and legends that have developed over the years. Having said that of course it is pointless to pretend that the environment in which in the Commonwealth Public Service operates now is essentially the same as it was 30 years ago. One of the things that I did when I was coming home from overseas, in fact the flight from Abu Dhabi to Singapore, was to look again after a period of some 22 years at the Kennedy-Miller programme, the 'Dismissal', which is now being produced in DVD-I hadn't seen it for 22 years and I was reminded again what an outstanding depiction John Stanton delivered of one of my erstwhile predecessors as Prime Minister of Australia. But what was brought home to me in that, even necessarily colourful and I think reasonably accurate depiction of the events was the changed environment in which I think the Public Service and the Government now interact with each other.
Tenure of course is dramatically different than what it was 30 years ago. There is of course a sharply increased role for ministerial advisers. It's fair to say that the era of ministerial advisers began in earnest with the election of the Whitlam Government in 1972, and I don't pass any negative comment in that, I simply observe that as a matter of historical record, and has continued in different ways unabated.
I know there are some in the Public Service who lament that development. My experience is that overwhelmingly though, the quality of ministerial advisers is high, and the proper protocols have been established in ministerial offices for respectful and professional interaction, between ministerial advisors and departments, then that works once again to the benefit of good outcomes.
Many of the ministerial advisors, and certainly the case with my own Chief of Staff, are of course former professional officers in Government Departments-that is not a pre-requisite but it is often a valuable addition, and often produces a smooth and professional understanding between the private office and the Department.
But like every section of the society in which we live the Public Service is now more accountable and it must operate more transparently. So of course the is and does, the political level of Government, the degree of media scrutiny of the political arm of Government has increased one hundred fold since I came to the Old Parliament House in May of 1974, and has even increased dramatically in the nine and a half years that I've been Prime Minister. But we're not going to turn back the clock on that and I don't argue that we should. That is the world in which we now all live and we all must learn to work with it, to respond to it, and to ensure that it doesn't impede in any way our obligations and professional duties.
Public Service advice now is infinitely more contestable, not only within departments, within the Public Service and the Government itself, because there are now so many issues and polices that require a whole of government response. Public Service advice is now infinitely more accountable within the broader community. I was saying to Ken Henry a moment ago that when I delivered my first Budget as Treasurer in 1978, the Government of course had available to it the advice of the Department of Treasury, the Reserve Bank of Australia in putting together the Budget, and of course the Department of Finance. But in 1978 the alternative sources of commentary and advice were pretty minimal compared with what they are now. There was no Access Economics, there were not the plethora of independent economic units within banks and other financial institutions, essentially post Budget commentary came from the economic section of the old bank of New South Wales and from the last Harold Bell at the AMP. And of course that didn't represent the level of commentary and contestability that exists now.
I think it is fair to say in defence, and I know they say they never need any defending, in the defence of the Treasury and the Reserve Bank, that my experience over the last nine and half years has been that the greater contestability and the greater volume of economic commentary in the community that we now have has not in any way diminished the professional accuracy of the advice tendered by those two bodies, in fact if one looks at the economic predictions that have been made in the main over the last nine and half years, the Treasury and the Reserve Bank, although with different degrees of emphasis on different occasions, I'm sure I should add have been extremely accurate and extremely professional.
It is inevitable when one thinks of the interaction between the Public Service and the political arm of government, that in attitudes and to a degree in culture and certainly in day to day practice, departments will follow the lead of government at a political level. If ministers are cooperating, if Cabinet is working together effectively in pursuing policy change, then that will be reflected across the Public Service.
The Government I've lead for the last nine and half years has endeavoured to run, I hope with a fair degree of success, and I believe I can claim a fair degree of success, has endeavoured to run a strong orthodox cabinet system. Indeed one of the findings that the Head of my Department has made in his interaction with colleagues, broadly within the Westminster Family, is that the Cabinet system in its orthodox accepted since, has survived and operated more fully in this country, perhaps in some other countries with which it is fair to make a comparison.
The emphasis on the whole of government approach is of course quite critical in a number of areas that I will advert to in a moment. But in coming to that I'm reminded of something that I read in Robert Skidelsky's monumental biography of John Maynard Keynes, when he was describing Keynes' first experiences when he went to Washington in the earlier 1940's to begin those long negotiations that led to the formation of the World Bank and the IMF. He said he found in Washington two remarkable features of the way in which the government operated in that country. He found the silo effect and existence, whereby so many government agencies in Washington operated independently of each other and he also found the American penchant for going to lawyers immediately after any negotiation had taken place. I think it's fair to say that many people interacting with government in the United States might find that some of those two characteristics remain.
But the point of referring to that anecdote is that over the past five or six years in particular, where there has been such a heavy emphasis on national security the imperative of a whole of government approach to challenging and solving problems has been with us every day. I would regard one of the very significant successes of this Government in terms of governance arrangements, to be the operation of the National Security Committee of Cabinet.
The National Security Committee of Cabinet as you probably know comprises the sixth senior and most relevant Ministers Prime Minister, Deputy Prime Minister, Treasurer, Minister for Defence, Minister for Foreign Affairs and the Attorney General. And it is attended on a regular and normally hold a meeting basis by the Chief of the Defence Force, the Head of ONA, the Head of ASIO, the Secretary of my Department, the Secretary of Defence and the Secretary of the Department of Foreign Affairs.
And the National Security Committee of Cabinet has operated in that fashion in an unbroken way since the onset of the diplomacy that was needed and later the military intervention regarding East Timor - and that is a period now of almost six years. And it has represented in my experience the best and most productive example of how ministers and very senior advisors can operate on a basis of total confidence and professionalism to produce an outcome which is to the benefit of the Australian people. It is the most effective whole of government arrangement with which I've been associated as Prime Minister, and it has reminded me again and again of the value in a whole of government imperative, the value of arrangements that constantly bring together relevant senior ministers and their advisors.
As I look back over my experience in the last nine and half years I'm also reminded of the process whereby the enormous amount of work leading to the New Taxation System was brought together and that once again involved regular exchanges on a whole of meeting basis between ministers and senior public servants. And I think very relevantly the use extensively and indeed quite exhaustively, Powerpoint presentations to ministers in order to secure the myriad of individual and intricate decisions that were needed to put together that enormous exercise.
I think one of the reminders of the whole of government era in which we now operate was the formation after the last election of the Department of Human Services, and that was an arrangement that brought together all of the service delivery agencies of the Government under one Minister. And I believe it has already produced some excellent results and that investment I think has been well worthwhile. And finally while I'm on the question of talking about whole of government approaches, can I say that the process that has led to the development of the Energy White Paper, which was released some 18 months ago and I understand the white paper itself has recently drawn some very favourable comments from the International Energy Agency is again a reminder of the, not only that we live in this world of whole of government, but the quality of the output I think is beneficial to the interests of the public that we serve.
I've spent a little time talking contextually and talking generally about how I see the relations between the political arm of government and the public service because in a series such as this, some thought, particularly from somebody who's had the opportunity of observing it over a reasonable period of time I hope will be valuable.
Turning to some of the particular tasks that we have in the fourth term of this Government. Clearly the two most important tasks that remain and will be undiminished during our fourth term are the emphasis on continued strong economic management, maintaining the fullest possible level of employment and economic growth, and also the very heavy emphasis on national security issues. The fight against terrorism and the national security response and the greater emphasis on the role of the security forces and the defence forces has become a characteristic of the first years of the 21st century. I'd like to say otherwise but I don't see that changing in the short term. And the continued emphasis on it is likely to be a challenge for ministers and advisers for many years into the future.
I think you'll be aware of the views I hold on the importance of economic management and maintaining balanced and indeed surplus budgets, and maintaining the momentum of economic change and reform. I have frequently in recent months characterised the challenge of economic reform in a globalised world as being akin to participating in a race, with an ever- receding finishing line. It's frustrating but the problem is that the other competitors will run past you if you don't continue striving to reach that ever-receding finishing line and I can't really describe it any better or any differently than that and I do think that the realities of the globalised world and the way in which approaches to economic policy have by and large converged wherever you might be and I am reminded of that whenever I visit for example the United Kingdom and I speak to my counterpart in that country who leads as you know a centre left government but whose approach to for example university reform and change is similar to that of the present government and paradoxically his nominally centre-right opponents in that country have opposed those reforms but that is one of the ironies of modern politics. I think the request for further economic reform in a globalised world environment will stay with us forever.
That necessarily leads me to what is one of the major, if not the major, economic reform challenges of this term of government and that is further workplace relations reform. The government has outlined some very significant changes in that area and we do see them as very important to purchasing further productivity gains and I am often asked constructively, in other cases not so constructively, why is it at a time of the lowest unemployment in thirty years, at a time of high economic growth, why is it that further labour market reform is necessary in this country?
My response to that is that we are now essentially living off the fat of earlier economic reforms. It is true if you go back over the last ten, fifteen to twenty years, this country has undertaken some huge economic reforms. I can recall making some remarks in about 1980 or about 1981 looking at the reform agenda that lay ahead at that time we still had a highly regulated financial system, we still had very high tariffs, we certainly still had a highly centralised wage fixation system but at that particular time enjoyed bipartisan support in 1980 -81 it was not Coalition policy to change the centralised wage fixation system and of course we had the taxation system that was fundamentally altered with the tax reforms of 1998 so if you look back over that period of time, you can accumulate, you can count the number of very significant economic reforms that have taken place and I think the productivity we now have is certainly a product of the reforms that have gone on since then particularly in recent years of the strong fiscal position of our economy and the significant labour market reforms of 1996 and 1997 and of course the specific changes in relation to waterfront reform of 1998. But the point I simply make is that we are enjoying the benefits and the fruits of those changes now and the government's case, and I think it is a strong one, is that if we are to have in 5 or 10 year's time the same level of unemployment that we have now or perhaps even lower, then we do need to make further changes in that area and included in those changes is the implementation of a national system of industrial relations.
The national character of our economy has become so emphatic over the last thirty years. I recalled that when I, for reasons of becoming a junior minister in the government, I resigned the partnership in a Sydney law firm that I then had in 1975 that it was still necessary in those days to engage interstate agents if you wanted to conduct legal work in different parts of the country. It hadn't been long before the company formed in NSW that wanted to carry on Victoria, had to register in Victoria as a foreign company and of course those were the days that pre-dated the formation of the very large national legal and accounting firms that is now a characteristic of doing professional business in this country.
The point I simply make - I don't think it would be lost in an audience like this, is that in so many ways we are now emphatically and unalterably a single economic unit operating in a national way and we need a national industrial relations system to underpin those operations.
Amongst the other goals that the government has for change and reform in this area include a number of very important social policy changes. There is a tendency with a huge emphasis on national security and economic policy, to see this government as exclusively focussed on those changes or changes in those areas to the exclusion of important social areas. But I would like to plead the case for the government's social reform agenda in a number of areas.
One of the quiet but very important changes that has occurred is in the area of indigenous policy with the abolition of ATSIC - perhaps it is fair to say that it wasn't so quiet, but quiet in the sense of comparison with some other changes and the development under the leadership and guidance of Peter Shergold of the whole of government approach to the delivery of services to indigenous Australians. I think we are beginning to see a new era and a new approach but it will rely very heavily on a whole of government response and cooperation between departments as well as cooperation between relevant ministers and in that context I am pleased to announce today, that the government will provide additional funding of $6.4 million to improve employment opportunities for Aboriginal and Torres Strait islanders in the Australian Public Service. We are as I say in the early stages of a major reform in the management of indigenous affairs and this requires in my view as many indigenous people as possible skilled in doing whole of government business and it is vital that indigenous Australians are among the highly skilled public servants who implement this important agenda.
The numbers of indigenous staff at the senior levels have almost doubled over the last ten years but I think it is fair to say that in the last few years the growth has tended to plateau, and as a result a new measure of support and a new injection is needed. There are two other areas of social policy that do merit a mention. One of those of course is the important raft of changes announced in the last budget involving welfare to work, they have perhaps not received as much commentary as at the time as I would have expected and that is not a bad thing and perhaps they are more broadly embraced and accepted than I expected but they do represent a very significant change, they are designed to address the intrinsic merit and value in people being in work rather than on welfare and that is overwhelmingly their objective. They are not punitive in character, they will in fact in the early years as Ken Henry and Ian Watt know, they will cost and not save money. They are not cost cutting exercises, they are not punishment exercises, they are enlarging exercises and they are also designed in part to address the great demographic challenge that this country faces of an ageing population.
Another area of social policy that I give a lot of importance to are the changes that the government has announced in the area of family law and the development of the family relationship centres. These represent in my experience the most concerted attempt by the government to try and provide an initial and more effective shock absorber to marriage or relationship breakdown, particularly where the custody and caring arrangements, the children are contested. When implemented they will represent the most significant changes to the family law system since the passage of the Family Law Act in 1975. They do, like the Job Network, and many of the other approaches of the government to social policy which engaged those great social welfare organisations which have so much knowledge and understanding at the coalface and I believe as the next two years go by and the relationship centres are rolled out there will be a broader appreciation within the community of the value of those changes.
And the final specific areas of policy that I'd like to touch upon to remind you of the importance of them to the government is of course possible changes in the area of communications and media policy. They are not strangers to political debate and they will continue to occupy a great deal of media space and a great deal of commentary in the weeks and months ahead. It's important they are not as important as some of the other things I've mentioned that if we are able to secure changes particularly in the area of communications in relation to the ownership of Telstra and it remains my strong view that we cannot indefinitely maintain what I still regard as the absurdity of the government, only just over half of the largest company in the country, that I think that change eventually is something that is very desirable.
Before concluding, can I just mention three other matters very briefly, I apprehend in the community, particularly the business community, that there is a growing concern about the level of red tape emanating from government, at all three levels, now that is something that many of you will say, well they always complain about red tape and that is true. Some of those complaints aren't justified, some of them are justified, many of them are the product of the strength and the activity of the economy, many of them are the product of the indiscretions and the venality of some; a small number which has brought discredit on the community generally but I do foreshadow the fact that it's an issue to which the government will be giving increasing attention as time goes by. The introduction of a Cabinet implementation unit which is designed in a systematic way to ensure that decisions once taken with great fanfare are not then forgotten and lose their lustre through lack of vigorous detailed implementation, so far has proved to be a valuable addition to my understanding of progress, and also that of Ministers and I think the initiative which has worked well, is one that is certainly here to stay.
And finally can I say that I do place a lot of store and importance on the implementation of the many recommendations that flowed from the Uhrig Inquiry and investigation into governance arrangements inside the Commonwealth public service. As the character of the public service changes and its interaction with not only the political arm of government but also the business community changes, so it is important that we alter the governance arrangements to reflect those changed circumstances and can I conclude Commissioner where I began, in saying that not only is this an excellent innovation and not only is it an opportunity for me to share some thoughts and I hope to identify some goals but it is also an opportunity for me to thank all of you in the Senior Executive Service and through you, all of your colleagues in the Commonwealth Public Service for your professionalism and commitment and the contribution that you have collectively made to the strength of this country in 2005 and the respect with which it is held around the world. It has been an interesting journey for me, a journey which would not have been possible without the support, advice and counsel, not always taken - but always listened to - of the professional men and women of the Australian Public Service and I very warmly thank you for that commitment.
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