The robodebt saga has prompted numerous articles discussing the need for an independent Australian Public Service (APS) that provides frank and fearless advice to the government of the day.
A critical related issue is the appointment and termination of departmental secretaries. Like the head of any organisation, it is these departmental secretaries who are principally responsible for setting the culture of their department and thus the nature of its advice.
Unlike the other commentators, I have actually been personally involved in decisions to appoint and terminate the appointments of departmental secretaries (as Head of PM&C under Keating and the beginning of the Howard government). I was also heavily involved in the reforms to public administration during the Hawke-Keating governments in the 1980s and 1990s. So, I think a little bit of an historical perspective might help in going forward.
The APS reforms of the 1980s
The APS reforms of the 1980s drew heavily on three reports:
- The Coombs Royal Commission on Australian Government Administration, set up by the Whitlam government
- The Reid Review of Commonwealth Administration, commissioned by the Fraser government
- A report, Labor and the Quality of Government, produced prior to the 1983 election by Gareth Evans and Peter Wilenski.
The thrust of these reforms was to:
- Let the managers manage, by reducing the excessive control of departments’ decision-making by the central agencies — the Treasury and then Finance after it was split off, the Public Service Board, and to a lesser extent back then by PM&C.
- Make the managers manage by shifting from an excessive focus on due process to the program outcomes being sought and achieved.
- A more responsive public service that was attuned to assisting the elected government in achieving its election policy objectives.
It is the need for a more responsive public service that is principally relevant to the present discussion and that set of reforms will be discussed in more detail below. But it is important to understand the general context of the three groups of reforms as they re-enforced each other.
Responsiveness versus independence
When the Whitlam government was elected at the end of 1972, the public service had been serving the Coalition government for 23 years. Both the government and the public service had been very comfortable with the existing array of policies and functional arrangements.
But the Whitlam government represented a seemingly radical change, quite unfamiliar to many of the senior public servants of the time. Furthermore, many of these men (and there were no senior women) thought that their independence meant that they were duty-bound to protect the nation from politicians who were too ready to seek electoral advantage by embracing populist positions.
Some examples of the then-dominance of the public service over the government are:
- The way in which Treasury misled the Whitlam government about the Budget figuring during the 1974 Budget preparations in an attempt to get the government to adopt much tighter fiscal policies (see the Hayden memoirs for further details).
- The resistance of the Treasury over several years to the Fraser government’s attempts to introduce financial deregulation — as Fraser put it John Stone, the then Secretary of the Treasury, wanted to deregulate everything except what he regulated himself.
- Sir Arthur Tange, the Permanent Secretary of the Department of Defence at the time of the Whitlam government, who in his self-appointed role as the ultimate judge of Australia’s national interest in the security domain was relentlessly economical with the truth in what he chose to reveal to the elected government (see forthcoming article by Jon Stanford).
The Hawke government’s reforms were deliberately aimed at creating a more responsive public service, that would assist in realising its policy agenda, rather than seeking to frustrate it, while also recognising the continuing need for frank and fearless advice.
In other words, the aim was to strike a balance between independence and responsiveness, and I like to think that back then we generally got that balance right.
But I would also agree with the critics of today’s public service, especially under the Morrison government that the balance swung far too far in favour of responsiveness at the expense of independence and frank and fearless advice.
So where to from here?
The main thrust of most of the articles commenting on how to restore an independent public service that can be relied upon to provide frank and fearless advice is that we need to restore the security of tenure of departmental secretaries. The contention is that secretaries have failed to provide the required frank and fearless advice because they are fearful of losing their jobs if they seem to question government policies.
As Chris Wallace put it in her article: “Contract employment for APS secretaries … was arguably the key change.”
I am, however, less sure. Secretaries lost their security of tenure a long time ago. For example, while John Howard was notorious for sacking six secretaries in his first week in office, over the first three years of the Howard government fewer secretaries lost their jobs than in the almost three-year period of the Whitlam government. In other words, the permanence of secretaries 50 years ago was more apparent than real.
In fact, I personally chaired the meeting of secretaries that voted to embrace contract employment, and I clearly recollect that all but two secretaries voted in favour at that time. Their reason was that they didn’t feel any less secure with a term-limited contract.
One of the secretaries who voted for the switch to contracts was Tony Ayers, who is approvingly quoted by Peter O’Keefe in his article as an arch exponent of frank and fearless advice, telling Malcolm Fraser that “I am not here to tell you what you want f…ing want to hear. I am here to tell you what you f….ing need to hear.” But I am sure that all of us who knew Tony never thought he changed the nature of his advice after contracts were introduced.
In short, I think the significance of tenure for departmental secretaries is being exaggerated by much of the commentary. Indeed, I am inclined to agree with another former Head of PM&C, Peter Shergold, who back in 2007 in a debate with Andrew Podger, claimed that “frank and fearless advice is a function of character, not tenure.”
But that said, I am also inclined to agree with Andrew Podger that it will reassure both secretaries and their departmental staff if the appointment and termination of secretaries are seen to be based on a proper review of merit.
One difficulty, however, is that the assessment of merit is to some extent subjective. I would not, however, go as far as Mike Scrafton who thinks that merit is so subjective, affected by personality preferences, ideological compatibility, familiarity, or the weighing of particular experience that it is not scientific. Instead, I would argue that just as the assessment of the quality of a work of art is subjective, we can still agree on the relevant criteria and typically reach substantial agreement on the relative merit of different people’s performance.
The final decision about the appointment and termination of secretaries lies with the prime minister. One reason is that it does not help the good working of government if the departmental secretary and the minister are incompatible, although they are both duty-bound to try to work closely together.
In addition, to help ensure the integrity of the process for appointing and dismissing secretaries I think the assessment of merit should be based upon a written report to the Prime Minister. In my day that report was prepared by the secretary of PM&C, as the Head of the APS, but I always consulted with the head of the Public Service Commission about appointments.
I also think that, given that the assessment of merit can vary, and especially vary through time, there are good reasons for only appointing the chief executive of any organisation for a limited term of around five years. Indeed, I am sympathetic to the old adage that as head of an organisation you are learning and improving your performance for the first three years, the fourth year you consolidate your performance and position, and by the fifth year you start defending your mistakes.
Furthermore, the demands on organisations can change over time, and that will affect the assessment of merit in terms of what is required. Thus, in my experience organisations are better off if they are open to new ideas, and one way of ensuring this is to rotate their chief executive.
Of course, that doesn’t mean that secretaries should be out of a job after spending five years in a particular department. Sometimes their contract will have to be extended if no other suitable position is currently available (indeed, that happened to me after I had completed five years as Head of Finance). But generally, after five years in one department, a secretary can be shifted to another department with benefits all round in terms of experience and improving coordination among departments.
Usually when secretaries change departments it will be to another closely related department, but it does not always have to be the case. For example, Tony Ayers was secretary of the Department of Social Security before he became secretary of Defence, and I believe that his impact was widely applauded in both jobs.
Because of the advantage of prior experience, I would also argue in favour of a presumption that the secretaries of the central coordinating departments — PM&C and Finance — and the Public Service Commission should have had experience as a departmental secretary in a line department first. That experience will help them in advising their line department colleagues when difficult decisions have to be made.
In sum I don’t think big changes to the rules are needed to restore the integrity of the public service. Rather the rules that were established by the Hawke and Keating governments thirty years ago need to be followed and enforced. By general agreement that was a period of very good government.
This article is reproduced from Pearls & Irritations.
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