Australian Journal of Public Administration
Vol. 48 No. 1, March 1989 PUBLIC MANAGEMENT FORUM
CHALLENGES IN PUBLIC ADMINISTRATION'
THE HON. R. J. L. HAWKE, AC, MP
Sir Robert Garran was the first public
servant of the Commonwealth of Australia and,
in the period immediately after Federation, he
was briefly our only public servant. In the
succeeding decades Garran played a leading role
in establishing the foundations of the public
service as we know it today. At his retirement in
1932 he had been a permanent head for thirtyone
years a record period of service that, as
the Australian Dictionary of Biography notes
( Parker 1981, p. 623), is unlikely ever to be
broken. Billy Hughes is supposed to have once said
that " the best way to govern Australia was to have
Sir Robert Garran at his elbow, with a fountain
pen and a blank sheet of paper, and the War
Precautions Act" ( Parker, p. 623). This
judgement by Hughes goes to the heart of
Garran's unique skills. Anyone reviewing this
extraordinary career and assessing his immense
contribution to the Commonwealth of Australia
cannot but be impressed by two outstanding
elements. First, Garran was the paragon of
professionalism. He served eleven different
Attorneys-General and sixteen Governments,
covering the spectrum of political affiliations in
that initial period of quite rapid political change.
He served them all with absolute loyalty, and
received their confidence and trust, setting a fine
example of one of the most fundamental values of
our Westminster-derived system of government.
Second, as Garran responded to all the
diverse challenges of administration he faced
initially as an advocate and agent of Federation,
then as the trailblazing public servant and
parliamentary draftsman, then in the international field during and after the First
World, War he proved an unquenchably
creative force. In a time of change, his creativity
in building new institutions, developing practical
solutions and creating workable machinery still
stands as an admirable model for his successors
today. On the basis of my own experience of five
and half years as Prime Minister, I can say that
the Government I have the honour of leading has
been well served by a public service which has
sought, largely successfully, to emulate Garran's
professionalism and his creativity.
Indeed, I argue that today's public
administrators those elected to parliament as
well as those appointed to the bureaucracy
face even greater challenges than those presented
to Garran by Federation, Depression and World
War. As tough as it would have been to establish a
Commonwealth Government where none had
been before, it is perhaps even tougher to manage
and to reform machinery of government which is
inherited. In the era of nuclear missiles, optical
fibres, instant news and 24-hour money markets,
it is anomalous that we face these challenges with
a Constitution inherited from the days of the
penny farthing bicycle.
In the economic sphere, we face the
challenge to restructure the Australian economy
so as to guarantee the future prosperity of our
people. And we must do this in an era when we
can no longer assume, as those of Garran's and
succeeding generations of Australians assumed,
that greater prosperity results simply from
shearing more sheep, harvesting more wheat and
finding fabulous new veins of minerals and
* The 1988 Garran Oration, presented at the National Conference of the Royal Australian Institute of Public Administration,
Melbourne; October 198&
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metals. This restructuring process has been the
principal activity of our Government over the
past five and a half years. It has demanded a
fundamental rethinking of the economic
assumptions that we inherited from the past. At
the same time it requires vigilant attention to
ensuring our political arrangements remain
relevant to the task we face without of course
modifying the democratic and parliamentary
character of our political system.
To a large extent, meeting this challenge of
restructuring has relied on improving the
performance of the private sector, through for
example practising the hard discipline of
becoming more productive and competitive,
making our manufacturing industry more
efficient, boosting our research effort, and
building new industries in the service and high
tech areas.
These have been areas of special priority for
this Government and, thanks to the tremendous
contribution we have received from the entire
community, we are starting to see the fruits of our
efforts: a more diverse and efficient economy
capable of competing and winning on world
markets. But it would have been senseless to have
believed that restructuring was a task solely for
the private sector and that the public sector was
immune from a similar need to improve its
performance. The public sector is a substantial employer
and producer in its own right, and its functions in
regard to the private sector, such as taxation,
regulation, economic analysis and policy advice,
have assumed critical importance in determining
the overall efficiency of our economy.
Further, the tendency over many years, and
with increasing frequency since the Second
World War, to see the answer to emerging
community needs lying almost automatically in
an expanded role for government has in fact
created a number of problem areas, both
potential and real. These include:
* inefficiencies of excessive regulation;
* the expensive spiral of government
assistance, be it by direct payment to
welfare recipients or indirectly to
inefficient industries;
* the distortion of the taxation system by the creation of rorts for the privileged few;
the inefficiencies of overlapping local,
state and federal jurisdictions;
the pervasive role of statutory authorities;
and the drain and danger caused by excessive
federal budget deficits.
In declaring my pride in my Government's
record of achievement in minimising these
danger areas, I hasten to point out that we have by
no means accepted the simplistic analysis that
small government is necessarily better
government or that deregulation is a desirable
end in itself. That is a misconception to which
our conservative opponents fal victim with
amazing regularity in the same way as, for that
matter, some on the Left find themselves making
the too-easy assumption of the desirability of
government intervention. Deregulation and
intervention are not ends in themselves; they
may simply be means to the real goal which must
be the creation of a fairer and a more efficient
Australia. As a Labor Prime Minister I am proud of the
way in which we have met our responsibilities as
a Government, protecting the needy, helping the
battlers, and making Australia a fairer society.
And as a Prime Minister committed to reform, I
am proud of Labor's proven capacity to improve
the efficiency and competitiveness of our
economy which is helping to guarantee the
prosperity of all Australians.
My point is that, in today's circumstances,
unless there is constant vigilance by an elected
government alert to the demands of the
international economy, and unless organisational
and attitudinal change becomes a constant part of
the government's management of the
bureaucracy, the public service may succumb to
the almost overwhelming temptation to look
inwards; to become absorbed in its own process
rather than its output; to grow inexorably; in
short, to serve its own ends. If that were to
happen, our overall economic performance
would suffer and the community would be the
poorer. The business of government must be the
provision of the greatest public good at the least
private cost and the public service must
achieve those ends without losing its professional
capacity to serve governments of differing
CHALLENGES IN PUBLIC ADMINISTRATION
political views and with different policy
priorities. Indeed, that capacity should be always
enhanced. In today's environment, when the economy
as a whole must overcome its entrenched
inflexibilities and inefficiencies, that
prescription poses a massive management
challenge. The aim of government must be not only to
ensure that the public service does its own job
professionally and efficiently. The aim must also
be to ensure that the public service is not a
stumbling block for broader, economy-wide
change; indeed, that the public service becomes
where possible an effective instrument for the
achievement of that change.
Having established this broad context, I
want to describe the efforts my Government has
made to achieve those goals, and to spell out our
consistent set of principles which has
underpinned those efforts. You will be broadly
familiar with the extent of our reforms the new
legislation in 1984, the budget reforms, the
streamlining of personnel administration in 1986
and our continuing reforms of statutory
authorities. I have briefly outlined these changes
in an appendix to this Oration. I will address in
more detail here the important structural changes
I announced in July last year and the associated
changes in cabinet arrangements I announced the
following month.
Most commentators on the machinery
changes have, perhaps not surprisingly, tended to
concentrate on whether or not the two-level
ministerial structure is working effectively.
From my perspective it is working well a point
I will return to shortly.
It follows, however, that the commentators
have put too little weight on the very substantial
changes that have been wrought in the public
service itself, and the improvements they have
made to the quality of policy development work,
to the capacity for co-operation and coordination
within the public service, and to the
degree of accountability and flexibility for
managers. The likely benefit of these changes in
improving the quality of management and
decision-making was more important to the
Government than the achievement of savings
through the elimination of overlap and duplication. Commentators have similarly overlooked
the importance of the changes in the cabinet
committee system we introduced, and in
particular our decision to establish three policy
development committees:
the Structural Adjustment Committee
which co-ordinates reform of the microeconomy
to achieve medium-term growth
in our economy;
the Social and Family Policy Committee
which focuses on the development and
implementation of our social justice
strategy to ensure the fair distribution of
the proceeds of economic growth
throughout the community; and
the Public Service Reform Committee
which is concerned with further
improvements in management in the
public sector.
Cabinet, of course, remains the supreme
organ of the decision-making processes of the
Government, and any major matters which
might have their genesis in the committees will in
the end be determined by the cabinet itself.
But these new committees, like the
Expenditure Review Committee in relation to the
budget, have become the engine rooms of our
decision-making processes. They are the forums
in which ministers most directly concerned with
the policy area can collectively and in detail
consider the subject matter and develop policy
proposals or positions for consideration by the
full cabinet. Through these committees, we are
generating a much greater ability for ministers
collectively to engage in policy development,
which had been essentially the preserve of one
minister and most often one department.
Moreover, the new policy development
committees are supported in their work by
groups or task forces of officials who are
interacting more closely with the collective
policy development role of the ministers.
The new two-tier structure of government
has undoubtedly facilitated this approach. Fewer
departments need to be drawn into any particular
policy development exercise and the barriers
which used to exist between departments have
been substantially reduced perhaps because
each department now brings a broader area of
responsibility and broader perspectives to bear
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on any given matter.
A very good illustration of the benefits of
this new approach was contained in this year's
May Statement, in which we unveiled a major
program of structural reform, substantial
developments to advance our social justice
objectives, and significant returns from the
Efficiency Scrutiny program ( Keating 1988).
These measures had been largely developed
through the processes of the three policy
development committees I referred to earlier,
and by a great deal of hard work on the part of
both the ministers on those committees and the
officials supporting them. The new machinery
has also, as I expected, fuirther improved our
budget processes.
This Government's period of office has been
characterised by an unprecedented period of
sustained expenditure restraint.
The last three budgets have actually seen
Commonwealth outlays fall in real terms, and
outlays as a share of GDP are now the lowest
since 1973-74. This fiscal achievement so
essential to the Government's overall economic
strategy has required five years of hard slog by
Expenditure Review Committee ministers.
The sustainability of this process of
expenditure restraint has required us to
concentrate on improving financial management
especially through the progressive
introduction of program budgeting and on
streamlining budget processes.
Our innovations have proven successful.
Rather than wait until just before the August
budget to sift through all the bids ministers may
make for new spending, ERC is now provided
early in the year with a list of ministers' new
policy proposals. Sifting through those bids,
ERC identifies a range of high priority or
unavoidable proposals which are then
scrutinised more closely prior to delivery of the
budget in August.
Streamldining the budget process has also
involved eliminating the need for ERC ministers
to decide on the trivial detail of budget-making,
in particular the minor savings options and
minor new policy proposals costing $ 2 million or
less. This desire on the part of ERC to extricate
itself from the detail of budget-making
complements the trend towards letting ministers
take greater responsibility for their portfolios. These twin goals have been pursued in the most'
recent budget period through the use of portfolio
targets. Thus, in the run-up to the August budget,
ERC can now concentrate on significant new
policy proposals and wrap up remaining budget
matters within portfolio expenditure targets.
Subject to their reporting to ERC on achievement
of those targets, portfolio ministers are now free
to pursue minor policy proposals and minor
savings options without the previous detailed
involvement of ERC ministers.
Another important change I made last year
was, to replace the former Public Service Board
with a much smaller Public Service Commission
reflecting and enhancing our clear preference
for devolving responsibilities for personnel
management to portfolios instead of
concentrating on outdated central agency roles.
A part-time Management Advisory Board was
established to advise the Government on
significant management issues and to be a forum
for considering major management activities
affecting the service as a whole.
As well as these changes, the Department of
Finance has progressively become less involved
in detail and changed its financial management
controls to promote greater responsibility for
operating departments and greater incentives for
managers. The Department of the Prime
Minister and Cabinet is also now substantially
less interventionist, with greater concentration
on its fuindamental role as a co-ordinating agency
this reflects a change both in concept and in
the character of the chief political office holder!
The savings that I foreshadowed could arise
from these major machinery changes will be
achieved. But I repeat that they were not the
primary purpose of the changes. Indeed we
recognised at the time that there would be
substantial costs associated with the changes and
substantial dislocation and disturbance both for
agencies and many individuals.
It was my expectation that adjustments
would be necessary over some two years to
accommodate changes of this scale. No certain
assessment of the success of the changes would
be possible before then.
I can say, however, that although they are
difficult to quantify, significant benefits are
already evident to me in the areas of policy
CHALLENGES IN PUBLIC ADMINISTRATION
development and decision-making processes,
and in the area of delegation to, and incentives
for, managers. I return now to the issue of the two-level
ministry and to the associated issues of
accountability. I do not need to remind an audience such as
this of the relentless pressures on ministerial
time in modem government. Among these
pressures are:
* responsibilities in relation to the
minister's electorate and constituents;
* unavoidable party political duties inside
the parliament and in the broader party
organisation;
* legislative and parliamentary obligations;
* overriding responsibility as a member of
the executive government, and associated
responsibilities to cabinet and cabinet
committees;
* and finally, responsibility, derived from
the Constitution, to administer his or her
department.
The immensity of these competing
pressures under the Government of Malcolm
Fraser prompted an investigation by political
scientist Patrick Weller and journalist Michelle
Grattan into the chilling question Can Ministers
Cope? ( 1981).
I do not pretend that ministers of my
Government face no problems in reconciling
competing demands on their time. But I do point
out that the two-tier ministerial structure was
designed to make, and I am convinced is making,
it easier for my ministers to do so.
In introducing these new arrangements we
addressed head-on the legal question which had
bedevilled so much previous consideration of the
rational allocation of functions to departments.
The question whether section 64 of the
Constitution permitted more than one minister to
administer a department had long been the
subject of learned consideration by the lawyers.
Most, including Sir Robert Garran, have been of
the opinion that it was possible the most
notable exception being a narrow interpretation
in 1958 by Mr Barwick, as he then was, as
counsel. I am pleased to note that there has been
subsequent judicial endorsement of the broad
interpretation of section 64 ( see Griffith 1987).
The positive view however has always been tempered by caution because of the potential
consequence of disqualification of a member or
senator if the negative view were held to be
correct. This was an important factor leading to
frequent, costly and inefficient machinery of
government changes.
The revised arrangements we have put in
place provide the flexibility necessary to
accommodate changing political priorities and
circumstances, including new ministerial
appointments, without the need to change the
machinery of government with all the upheaval
that entails. Indeed, one of the virtues of the new
* machinery is that there is great flexibility within
portfolios in allocating responsibility to
ministers and re-drawing lines of operation for
officials flexibilities which also assist
departments and ministers to cope with changing
pressure points.
Under the new system, non-cabinet
ministers are undertaking many functions on
behalf of their portfolio ministers such as
parliamentary duties, correspondence, day-today
administration of specific areas within the
portfolio enabling senior ministers to devote
precious time to broad strategic issues of
government. Not insignificantly, non-cabinet
ministers are also enabled to focus much more
closely on the nitty-gritty issues that are often
vital to the welfare of the individual clients of
government. As I envisaged at the time, it has been
necessary occasionally to refine the
arrangements. This will, no doubt, continue to
be necessary. Overall, however, I believe the
two-level ministry arrangements have worked
remarkably well. As you would be aware, the
Leader of the Opposition, Mr Howard, has
publicly welcomed many aspects of these new
arrangements, including the two-level
ministerial structure, and I welcome his support.
For my part, I regard the new machinery as
setting the basic pattern of Australian
government administration for many years
ahead. Major changes of this kind are disruptive
and, while minor adjustments must be made
where necessary, no major changes at the
departmental level should now be necessary as
far ahead as I can see.
In the lead-up to my visit last year to the
Soviet Union, I had drawn to my attention a
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-omment of Lenin's. It was a comment of great
relevance to the reforms sought by Mr
Gorbachev, and has been quoted approvingly by
an influential Soviet economist, close to
Gorbachev, seeking to condemn the rigidities
and inefficiencies of the Soviet system
bequeathed by Brezhnev. Lenin's comment has
unexpected relevance today, less because of his
definition of the problem than his articulation of
the solution. If you will forgive Lenin's
unfortunately scatological language, I will read it
to you: In our country everything is swamped in a foul
bureaucratic morass of " departments"* Great
authority, intelligence, and strength are needed
for the day-to-day struggle against this.
Departments are shit; decrees are shit. Seeking
out people and entrusting the work to them that
is all that matters ( cited in Shmelev 1987).
And in many ways, seeking out people and
entrusting the work to them is all that matters to
reformers of the public service, and indeed of the
private sector, in Australia today. In our pursuit
of greater efficiency and effectiveness in the
public service, we have followed a consistent set
of principles. With rather less brevity than
Lenin, let me outline the principles
underpinning our reforms. They have been
aimed at: clarifying the lines of accountability at all
levels of government, including through
greater delegation of responsibility to line
managers; retaining and where possible enhancing
the professional character of the public
service and its ability to serve the elected
government of the day;
pursuing greater equity in public
administration including in the delivery
of services; and
providing maximum scope for our
greatest resource, our people in the
workforce, through greater individual
initiative, innovation and job satisfaction.
Let me now discuss how these principles
have been advanced.
As to the first, accountability is a pervasive
principle, that at one end of the spectrum ensures
voters can endorse or reject a government in the
ballot box, and that at the other gives force to the
claim of a pensioner seeking assistance over the counter of a Social Security office.
It has been in pursuit of this principle that we
have: redefined, in legislation, the relative
responsibilities of ministers and departmental
secretaries for the administration
of departments;
enhanced ministerial responsibility
through the new two-level ministry
system; introduced a range of measures designed
to reduce central agency controls and put
responsibility more clearly in portfolios
and complementary measures to
reduce central controls within portfolios;
and improved budget processes and financial
controls.
Within these differing levels of
accountability, one layer seems particularly
problematical: the accountability of the
executive to the parliament.
The parliament, through question time,
parliamentary committees, and detailed scrutiny
of legislation, provides the means by which
government is called to account during its term of
office. It has been my Government's desire,
particularly through its budgetary reforms and
the manner in which financial information is
made available to the parliament, to do all it can
to make the processes of government as
transparent and amenable to parliamentary
scrutiny as possible.
Given this subtle and multifaceted process
of accountability, it is depressing that, at least in
some quarters, the whole concept of
accountability gets reduced to a barren quest for
ministerial resignations. Opposition parties
today and, I suppose, of earlier periods
seem to believe they are engaged in a game of
cricket. They are too eager to cry LBW, and tend
to do so for all the wrong reasons.
The true measure of ministerial
accountability, here and in Britain, has never
been the tally of ministerial resignations. Even in
the slower and simpler formative period of our
system of government, the strict theory that
ministers were fuilly accountable for every act or
omrission of their departmental officers was,
simply, far-fetched. In today's environment the
traditional hypothesis just cannot be reconciled
CHALLENGES IN PUBLIC ADMINISTRATION
with political and administrative realities.. The
relationship between ministers and officials is far
more complex than the hypothesis, with its alltoo-
neat dichotomy between policy and
administration, permits.
Clearly there are many areas where the
detailed development of policy proposals is,
within a broad framework of ministerial
direction, entrusted to officials; similarly, there
are many matters of administration in which
ministers take a close interest.
In other words, ministers must, of course,
continue to be answerable to the parliament and
to take any necessary corrective action. But the
truth is that there is no requirement for them to
resign except where a significant act or omission
was theirs, or was taken at their personal
direction, or was a matter about which they
obviously should have known and done
something. Ministerial responsibility of course is but
one strand in the web of accountability that
pervades our whole political and administrative
structure. It is a principle to which, as all our
public service reforms show, we attach very great
importance. It is not, let me stress, in any way
contradictory to the second principle we have
pursued: maintaining and enhancing a highly
professional public service.
Some critics of the changes made to
appointment and tenure provisions for
departmental secretaries argued they would lead
to politicisation. Four years later, no one could
reasonably claim that the portfolio secretaries
serving my Government are other than highly
professional career public servants who have
also served previous governments in senior
positions. The public service remains, at all
levels, a highly professional institution.
The third principle I referred to, which
draws out the importance of equity in public
sector management and employment, has also
been advanced. In terms of government outputs,
this is reflected in the advances we have made
towards our social justice objectives. In terms of
staffing it is best reflected in the legislative
advances in 1984 and in the new machinery to
follow those changes through and to foster a
management culture in the public service which
pays proper regard to the merit principle, to
industrial democracy and to equal employment opportunity. These developments tend to be seen as soft
optional extras. This is short-sighted; there are
substantial management benefits in all of these
measures. I regard the continuing efforts the
Government is makcing to foster EEO as
especially important in seeking to harness for the
public sector the best available human resources
in our multicultural society.
The final principle, enhancing scope for
initiative, innovation and job satisfaction, does
not lend itself so readily to assessment. Much of
our effort has gone into providing a framework
Within which managers at all levels have clearer
lines 6f responsibility and a greater degree of
autonomy. I recognise we have more to do on these
qualitative issues but we have been necessarily
living through a period of stringency and
adjustment, and it takes time for a new
management culture and envirornent to be
established. I should say, however, that there
have been many examples of innovative policy
development and innovative changes in program
management. Despite the apparent size and sometimes
impersonal face of government there is, I believe,
tremendous scope in the public service for
individual initiative and sense of satisfaction
arising from contribution to the public good. The
changes we have made should, over time, lead to
greater scope for such innovation and, I believe,
greater potential for job satisfaction.
One of the management challenges we face
is to ensure that this is the case. Another is how to
achieve greater recognition for the substantial
contribution to this nation made by those in the
public sector employment.
Public servants have come a long way since
Kafka gave bureaucracy a bad name or since Tom
Collins gave a particularly Australian twist to the
characterisation. Tom Collins, of course, was the
pseudonym adopted by Joseph Furphy in his
classic of the Australian bush Such is Life. At the
outset of Chapter 1 the recently unemployed
Collins writes of his days in the public service:
One generally feels a sort of diffidence in
introducing one's self; but I may remark that I
was at that time a Government official, of the
ninth class; paid rather according to my grade
than my merit, and not by any means in
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proportion to the loafing I had to do ( Furphy
1944, p. 5).
That was a laconic way of putting Lord Samuel's
dictum: that a public service will find a difficulty
for every solution.
It's unfortunate that such stereotypes persist
in the public mind. I repeat what I said at the
outset that I consider my Government to be
very well served by the federal public service.
And I take considerable pride in the fact that the
reforms my Government has made to the public
service have served further to increase its
efficiency and professionalism.
As you are well aware, over recent years I
have been stressing over and over again to the
business community, to the union movement,
to our primary producers, and to workers
throughout Australia, the overwhelming need for
adaptability and readiness to accept change if we
are to prosper as a nation. Similar adaptability
and readiness to embrace change is absolutely
imperative in our public institutions if they are to
provide the framework within which our visions
of an econon-ically prosperous and socially just
Australia are to be realised.
As we approach the end of this century and
the centenary of the establishment of the
Commonwealth, in which Garran played such a
large part, I am confident that our measures to
create a management environment and culture
which emphasise the ability to promote and
adapt to change will be seen as among our most
significant achievements.
For those who question the directions we are
taking, let me refer you to some remarks of
Garran about the constitutional debates of the
1890s: Looking back over these debates, one is struck by
the vanity of human fears and precautions
( T) hose fifty of the elect of Australia spent
months discussing dangers and difficulties, most
of which the experience of half a century has
shown to be imaginary. On the other hand, many
of the troubles that, as it turned out, have beset
the Constitution since its establishment are
matters that never occurred to them ( Garran
1958, p. 112).
For reasons that are obvious enough, I say
nothing at this point about constitutional reform
and the difficulties thereof. But I do make the
point that change is a constant. The last decade in
particular has seen so many of the certitudes of
the past brought into question, modified or
despatched to the dustbins of history. These
winds of change have been no respecter of
ideological boundaries. In differing degrees they
have blasted China, the Soviet Union and the
West and in differing degrees the public service
has been affected by, in some cases indeed is
central to, how these changes are worked out in
the society in question.
In the Soviet Union, for example, the
success or otherwise of the historically
momentous changes enunciated by Secretary-
General Gorbachev will be determined by his
capacity both to overcome the opposition of so
much of the bureaucracy to those changes, and
then to harness a leaner public service as a
positive element in the processes of change.
In Australia, where the challenge of change
is a compelling constant for all of us, I believe we
are singularly fortunate in having an Australian
Public Service which has, in my judgement, both
the character and capacity to enable it fully to
meet that responsibility.
REFERENCES: Furphy, Joseph 1944. Such is Life ( Being Certain Extra cts from the Diary of Tom Collins), Angus Robertson,
Sydney ( originally published 1903).
Garran, Sir Robert Randolph 1958. Prosper the Commonwealth, Angus Robertson, Sydney.
Griffith, Gavan 1987. " In the Matter of Appointment of Ministers and Section 64 of the Constitution", Canberra
Bulletin of Public Administration, no. 52, October.
Keating, Paul ( Treasurer) 1988. " Economic Measures: Ministerial Statement", Corn. Panl. Debs, House of
Representatives, 25 May, pp. 3009-15.
Parker, R. S. 1981. " Garran, Sir Robert Randolph ( 1867-1957)", in Australian Dictionary of Biography, vol. 8,
University of Melbourne Press.
Shmelev, N. 1987. " Advances and Debts", Novy Mir, No. 6, June.
Weller, Patrick, Grattan, Michelle 1981. Can Ministers Cope?, Hutchinson, Melbourne.
CHALLENGES IN PUBLIC ADMINISTRATION
APPENDIX Against the background of the policy positions developed in opposition as reflected in the document Labor
and Quality of Government, my Government moved quickly in 1983 to set up the task force chaired by Mr
Dawkins, then Minister for Finance and Minister assisting me for public service matters. A wide-ranging
discussion paper was published in December 1983. The resultant legislation, the Public Service Reform Act 1984,
was passed in June 1984.
The Act made it quite clear that the responsibility of departmental secretaries for " the general working, and
for all the business" of their departments was subordinate to the fundamental responsibility of ministers, derived
from the Constitution, to administer departments. It also provided for more flexible appointment and tenure
provisions for secretaries.
We established the Senior Executive Service in place of the former second division, again with more flexible
appointment and tenure provisions. All SES vacancies were opened up to people outside the public service. Far
greater emphasis was placed on mobility and management development programs. The Public Service Board, and
later the Public Service Commission, were given important roles in ensuring the integrity of SES staffing
decisions. We moved to establish separate legislation, the Members of Parliament ( Stafi Act, for the employment of
ministerial consultants and ministerial and electorate staff, to facilitate appointment of people not drawn from the
public service, while removing any possible charges of politicisation. The Act also provides an umbrella for career
public servants to gain experience in a minister's office.
A significant start was made in what was to be an ongoing process of devolution from central agencies to
departmental management. From 1 July 1984, secretaries were given the ability to create and abolish positions and
to reclassify them. We also began the process of integrating staff number and financial controls, by moving
responsibility for the former from the Board to the Department of Finance.
Significant changes were also made in personnel policies. The merit principle and anti-discrimination
provisions were included in the Public Service Act. Requirements were introduced for equal employment
opportunity programs and industrial democracy plans. Part-time employment was introduced for permanent staff.
A new grievance and appeals body the Merit Protection and Review Agency was established under its own
legislation. Running parallel to these changes were our reforms to the budget and financial management processes, the
most important of which has been the progressive introduction of program budgeting. For the first time this has
enabled ministers and the parliament to be given reliable costings of government activities, program by program,
rather than the previous unhelpful breakdown by type of expenditure, such as travel, telephones, stationery.
Such information is vital for two reasons. First, it gives individual managers a far greater sense of
responsibility for the expenditure of program funds. Secondly, it enables ministers to take far more informed
decisions on the competing priorities of various policies and programs. In the present fiscal climate, program
budgeting has assisted in the continuing and rigorous search for offsets and trade-offs.
At the same time we adopted a policy of releasing forward estimates of expenditure and, contrary to long-held
views in some quarters, this has not had the dire economic consequences predicted.
In 1986 a dramatic turn-around in our terms of trade created economic circumstances which made the
processes of reform on the government's agenda much more important and, urgent. There needed to be a
fundamental restructuring in the private sector of the economy to enable us to compete internationally and enable
continued domestic growth. It was necessary to ask the private sector to make sacrifices in this adjustment process
and to find means of further increasing its efficiency.
We could hardly do so without considering what adjustments should be made in the public sector to assist the
process of change in the private sector, and indeed without seeking to set an example by accelerating the drive for
greater efficiency in the public sector.
That is the background to the public sector decisions announced by me in the parliament on 25 September
1986. An efficiency dividend was required from departments and agencies for the three financial years beginning in
1987-88, initially set at 1% of administrative expenses and subsequently amended to 1. 25
An Efficiency Scrutiny Unit was established under the leadership of an experienced businessman, Mr David
Block. A large number of scrutinies of administrative approaches and practices was conducted under the umbrella
of the unit. They were carried out by departmental staff specially selected and trained for the purpose. Some 25
of the savings achieved ($ 100 million in a full year) was allowed to be retained by the departments as an incentive,
and that incentive remains in place with responsibility for further scrutinies resting clearly with departments.
HAWKE
Other incentives for improved management were also put in place.
For example, there was provision for greater flexibility in financial management, in particular by permitting
some carry-over of funds from one financial year to the next and by providing greater freedom to move funds
between salaries and administrative expenses votes.
There were, as well, major changes to the arrangements for the redeployment or retirement of public service
staff, and many changes streamlining personnel management, including further devolution to departments.
I also foreshadowed, on 25 September 1986, the extensive restructuring of public service job classifications
designed to remove obsolete distinctions, to reduce the overall number of personnel transactions, and through
multi-skilling to provide greater flexibility in the use of personnel. These changes are now being implemented
following Conciliation and Arbitration Commission approval as part of the second-tier wage round in accordance
with the government's wages policy.
As well as the substantial reforms in the public service, we have given close attention to statutory authorities.
In January 1986, our policy statement Reform of Commonwealth Primary Industry Statutory Marketing
Authorities was issued and subsequently legislation has been passed enabling these authorities to adopt a more
flexible commercial approach to the marketing of rural products.
A policy information paper Policy Guidelines for Commnonwealth Statutory Authorities and Government
Business Enterprises was tabled by my colleague, Peter Walsh, in October 1987 and since then extensive work has
been done, especially in the transport and communications portfolio, on the reshaping of government business
enterprises to enable them to operate more competitively, to be freed of many bureaucratic controls, so that they
may be held more accountable for their performance.
Details of the changes made in relation to these business enterprises were contained in the May statement this
year, and further work is proceeding in relation to other business enterprises and statutory authorities.
[Date confirmed]