Ian McAuley

Comments on “Independent Review of the APS: Priorities for

Change”
Ian McAuley
April 2019

Introduction

The document recognizes some undesirable consequences of the 1980s “New Public

Management” fad. These include a loss of public servants’ capacity to work on policies and

programs crossing portfolio lines, and the pursuit of performance metrics at the expense of

achievement of outputs and outcomes.
My comments, in response to the authors’ invitation to “challenge our thinking”, relate to

three other areas:
The inherent conflicts in serving “the government, the parliament, and the Australian
public”. It is possible that the traditional winner-take-all “Westminster system” with a
public service closely associated with executive government, is not fitted to the way
Australian democracy is evolving.
The need for professionalism. The document correctly asserts that all staff should be
“professional public servants” but it seems to confine the notion of “professionalism” to
the acquisition of skills, without consideration of professional responsibilities and norms
and codes guiding professional behavior.
The need for leadership that allows public servants to help Australians cope with
adaptive change. It appears that the authors have assumed that “leadership” is
synonymous with the exercise of authority.

1. Serving the government, parliament and the Australian public

In the theory of principal-agency behavior as applied to democratic government, there

should be no conflict between serving all three groups – executive government, parliament

and the public. But no democracy is perfect, and the reality is that there are conflicts.
Although there is no constitutional direction specifying the role of the public service, by

convention it serves executive government, which has objectives that don’t necessarily align

with those of parliament. As a minister in the Morrison Government put it “I’ve always seen

Parliament as a disadvantage, frankly, to sitting government”.1 Possibly this was a loose

statement by a politician struggling to understand the ground rules of democracy, but a

conflict between executive government and parliament is manifest during question time

and in Senate hearings, and is also seen in conflicts over important legislation, most starkly

in recent times over medical evacuation for asylum-seekers in offshore detention.
Then there is the question of serving the Australian public. The constitutional and legal

arrangements that provide people with an elected parliament are always conditional, never

entirely settled. Important questions remain unresolved: perhaps they can never be

resolved. Are members of parliament delegates or representatives? Can the voting system

1
Quote from Minister from Home Affairs, Peter Dutton, videoclip on ABC 12 December 2018.
2 Ian McAuley be gamed? How does voting capture the strength of interests? Do the interests of voters

correspond to the interests of the non-enfranchised – the young, recent immigrants, future

generations? Political theory does not provide clear-cut answers to any of these questions.
In a traditional two-party “Westminster” system, however, an arrangement whereby the

public service is answerable to executive government is administratively functional, even if

it falls short of democratic principles, given the “winner-take-all” outcomes of Westminster

systems.
But that system is coming apart. Political alignments are cutting across traditional “left-
right” and “progressive-conservative” divisions that once defined partisan ideologies.
This is most clearly manifest in Australian voting patterns over the last eighty years, as

shown in the figure below. The two-party system, as revealed in voting patterns, is

unraveling, and that unraveling has been particularly strong in the last thirty years.

In terms of political representation there is a time lag, because primary votes for the main

parties have to fall below certain levels before the results show as seats won in parliament.
Those results are likely to be manifest first in the Senate, where there is proportional

representation, and in electorates with strong regional issues transcending party barriers.
Although in the postwar years the party forming executive government has rarely held a

majority in the Senate, many administrations – Coalition governments in particular – have

enjoyed the support of minor parties in the Senate to pass important legislation.
But a Senate alinged with executive government is no longer the norm, and in recent times,
including the present, the party forming executive government has not had enjoyed a

majority in the House of Representatives. Some may regard the experiences of the Gillard-
Comments on Review of the APS 3

Rudd and Morrison administrations to be statistical anomolies, resulting from elections with

close outcomes. For example the media still use the term “hung parliament”, but the trend

seems to be established. It is manifest not only in Australia but also in democracies on the

European mainland, where formal and informal coalitions are the usual outcome of

elections. In Britain, the US and Canada the trend is less established because of their first-
past-the-post voting systems, but In Britain the manifestation is in terms of a breakdown in

party discipline in the Brexit deliberations.
This means that legislation is often being amended, or increasingly initiated, in parliament.
But those politicians involved generally do not have the assistance of advice from the public

service. They do have resources such as the Parliamentary Library, and the Parliamentary

Budget Office, but these are small and overworked in comparison with the public service. At

times they may be given special and limited access to senior public servants (at the behest

of the relevant minister), but senior public servants do not have the specialist knowledge of

precedents and unintended consequences that more specialist staff down the line have.
Many parliamentarians have little knowledge of the workings of public administration.
Theoretically, in a Westminster system with alternating partisan government, the

opposition has members with ministerial experience, some of whom occupy “shadow”
portfolios, but independents and members of minority parties don’t enjoy that benefit.
There needs to be far more flexible arrangements to ensure that parliamentarians have

access to the knowledge, experience and memory of the public service. Of course that

would be inconsistent with the current arrangements whereby public servants are co-opted

into partisan service to executive government, and where public servants are often in the

role of defending executive government against parliament. (The need for a more

professional public service, serving but not subservient to executive government, is covered

in the section on professionalism).
That would give meaning to the authors’ reasonable assumption that the public service

serves not only government, but also parliament.

Trust

As the authors point out, there is declining trust in traditional institutions. They point to

dissatisfaction with public services.
But this generalization needs unpacking, because in spite of a general decline in trust, some

institutions, including public institutions, are trusted more than others. The diagram on the

next page, based on surveys by Essential Media,2 paints a fuller picture.

2
Essential Report 13 March 2019 Trust.
4 Ian McAuley

At the top are public institutions that are somewhat separated from executive
government – police (state and federal), the High Court, the ABC, and the Reserve Bank.
Next down is the Commonwealth public service.
Then parliament (state and federal).
And at the bottom are political parties.
Executive government is closely associated with political parties, particularly in a period

when governments seem to be in continuous election mode.
Although the public service is trusted in itself, if it is too closely identified with executive

government it is in danger of being dragged down to the same level of mistrust. The public

may not necessarily consider the public service to be partisan, but if the public see it as too
“responsive” – ready to swing in to support and reinforce the ideology and spin of whatever

party takes office – the effect of guilt by association prevails.
Executive government may find it convenient to have a loyal and “responsive” public

service. It’s a tremendous administrative asset in terms of providing secretariat services
(handling correspondence, drafting speeches) and a tremendous political asset in its

capacity to present the government’s platform in a positive light, while engaging in all the

communication devices of sophistry, obfuscation, and suppression of information (while

generally being careful not to cross the boundary that formally constitutes lying).
Such subservience is at the cost of provision of “frank and fearless advice”, as many have

pointed out. It means that the public service becomes, de-facto, an extension of the party in

office.
Comments on Review of the APS 5

Perhaps the public may accept that access to a loyal and responsive public service is a

trophy to be enjoyed by the winning side and will be balanced in the longer term as

elections are won and lost, as if politics is similar to a football competition, where similar

teams play for similar objectives. (It’s notable that many commentators use sporting

metaphors to describe political contests.)
But although many observers have pointed to a convergence of ideologies of “left” and
“right” parties, political parties are not look-alikes wearing different colored sweaters. One

manifestation of difference is between “conservative” and “reforming” parties. In Australia,
in general, the Coalition is conservative while Labor is reforming, but there are important

exceptions, such as the Hewson “Fightback” policy in the 1990s (unsuccessful), and the

radical agenda of the Abbott Government.
A conservative government, concerned to maintain the status quo, will be well-served by a

compliant public service, even if it is tainted with mistrust by association with the

government in office. But a reforming government will be better served by a public service

that is seen as professional, and at arm’s length from government. If a government, in

pursuit of the common good, seeks to implement policies that would cause real (or even

perceived) pain or distress for some groups, then it needs the authority of sources of advice

trusted by the community. After all, a reforming government, almost inevitably, will face

opportunistic criticism from opposition parties and from some lobby groups.
In this regard it is hardly surprising that the Reserve Bank rates highly on the trust scale,
even though its decisions on interest rates (or even its absence of decisions) cause pain and

difficulties for some groups. It is not seen as the handmaiden of the party in office.
Another institution worthy of mention, although not covered in the Essential survey, is the

Productivity Commission. Its clear separation from industry and other economic

departments has been crucial in helping governments pursue reform agendas. (Scholars of

public administration in other democracies see the Productivity Commission as an

institution they would like to see established in their own countries.) Of course

governments do not necessarily accept all the recommendations of the Commission, but the

Commission does make reform easier.
Similarly the Australian Bureau of Statistics is trusted because of its uncompromising

independence.
An institution that has historically been seen to have some distance from executive

government has been the Treasury Department, particularly before it was broken into two

departments in 1976. It was once seen as a bulwark against the spending whims of

government, representing what some would refer as “the permanent will of the people”.3

Its behavior during the period of the Whitlam Government remains controversial to this

day, but the general principle of having a body responsible for preserving, or at least

overseeing, the condition of national treasure (in that case the government fiscal coffers) is

an important one, particularly in a country with a short three year election cycle. The same

3
John Wanna, Joanne Kelly, and John Forster, Managing Public Expenditure in Australia, Sydney: Allen and

Unwin, 2001.
6 Ian McAuley principle should hold for other assets that can be depleted by an opportunistic government

seeking short-term political gain. Such assets, include physical infrastructure, environmental

resources, and less tangible assets such as education and social capital. It would be

inconsistent with democratic principles (and the Australian Constitution) to give such

institutions the authority to thwart the desires of elected government, but they should be

required to report on the condition of national assets without the fear of any form of

censorship or other retribution from executive government.
There is no simple model of administration that can satisfy, on the one hand a government’s

desire for responsiveness and support, and on the other hand the need for a trusted source

of advice and the community’s desire to see preservation of national assets. But in general

there should be a greater distance established between all government agencies and

executive government.
Also much can be done in the form of processes to make appointments to senior positions,
and development of a culture of professionalism in the public service.

2. Professionalism

The authors call for “formal, focussed professionalisation of all APS roles”. Importantly they

report on skills gaps and the presence of “unused potential”.
These are important issues. In its recruitment the public service does well, but it does not

use or develop that human capital to its full potential.
In evidence assembled over 16 years of teaching around 1600 mainly Canberra-based public

servants, a colleague (the late Helen Coventry) and I found many shortcomings.4 There was

little discontent with general mandated pay and conditions – “hygiene factors” to use the

term of academic management theory5 – but we found several other sources of serious

dissatisfaction:
• the disheartening effect of Coalition politicians devaluing the public sector,
promulgating the idea that it is intrinsically inefficient or even a worthless overhead;
• poor service by the public sector unions, who work to an outdated industrial model;
• soft” bosses, who fail to deal with underperformers;
• skills mismatches, a lack of valuation of professional skills, and a demonstrably false
assumption that seniority and professional competence are correlated;
• contracting out of research and policy advice, ignoring “in house” skills and
experience – a source of annoyance when consultants are overpaid, when they

4
Helen Coventry and Ian McAuley, “A thing or two we learned from public servants in a management course”,
Working document 2017.

5
Frederick Herzberg, “One More Time: How do You Motivate Employees?” Harvard Business Review, January-
February 1968
Comments on Review of the APS 7

produce poor quality or conflicted work, and when the ease of employing consultants
contrasts with the impediments imposed by staff ceilings;
• poor appointments of senior staff, based more on loyalty to and conformance with
agency traditions than on policy or administrative competence;
• a general management culture impeding productivity – a lack of access to resources
required for people to work efficiently, a lack of cost-awareness (manifest in public
servants being directed to unproductive work), open office work environments;
• poor quality training run by big-name consultants;
• politicization – particularly in departments under direct ministerial control where
there are perceptions of corruption and where there is co-option of public servants
for partisan work (less prevalent in other agencies such as the ABS);
• a culture that places support for executive government above any notion of public
value-added;
• a general culture of “learned helplessness” manifest in people behaving with a lack of
energy, confidence or enthusiasm, and in some cases deep cynicism.
Some of these findings align with the authors’ findings about skill deficits. But they go

further, suggesting that there is a lack of professional respect in the public service. In spite

of rhetoric about “flatter structures”, the public service remains what organization theorists

call a “machine bureaucracy”, organized along hierarchical Weberian lines, rather than a
“professional bureaucracy”, with respect not only for professional standards of expertise

but also for professional standards of behavior.6

Many administrative functions of the public service are appropriately organized as machine

bureaucracies, but that model is entirely inappropriate for work involving research, policy

design, and consultation with stakeholders.
Professional standards need to incorporate not only specific qualifications, but also

responsibilities and duties. Those entrusted by the public to attend to the public purpose

should be held to high standards of honesty and integrity.
This may seem to state the obvious, but public servants are often called upon, or take it

upon themselves, to act unethically in service of their political masters. Rarely does this

extend to blatant lying, but there are many other behaviors that have the effect of

misleading or holding important information from the public, in order to provide ministers

with cover. Confidentiality is often used for no reason other than to protect politicians or

interest groups supportive of the government from embarrassment. More generally, there

are ways in which language can be and is used to mislead, such as:
• presenting numerical data using the most favorable frame possible, deciding whether
or not to normalize for inflation or population growth, choosing convenient start
dates for time series and so on;

6
Henry Mintzberg, “Organization design: Fashion or fit”, Harvard Business Review January 1981.
8 Ian McAuley

• using sophistry to frame statements in ways that are logically correct but misleading
– “this decision was taken after consideration of scientific advice”, “we cannot
guarantee that there were no terrorists on that boat”;
• using vague language, ruling out the possibility of verification – “it is generally
believed that …”, “the government considers it to be appropriate that …”
At a minimum all public servants should have the right to refuse to follow directions to

present information in ways that mislead the public in the service of partisan interests.
Furthermore, if they are directed to work in ways which are contrary to legislation or other

published rules on probity, they should be able, in fact obliged, to refuse such work and to

provide a signed statement as to why they are refusing, without any detriment to their own

interests. Such a situation may arise, for example, when ministers seek to make a grant that

does not align with legislation, or that has not been subject to required assessment.
Along with a right to refuse such work, there should be more obligations of responsibility

placed on public servants to account for their own work. There is an established, but absurd

tradition of responsibility-shifting in many public service departments, where people sign off

on their subordinates’ work, even if they have had no part in the task, and , conversely,
where public servants get their bosses to sign off on their own work.
Public servants should not be expected to write speeches for ministers, or to prepare press

releases or correspondence for ministers with partisan spin. Ministers have their political

staff who can add spin to briefs prepared by public servants.
Public servants should always be conscious that their salaries and administrative expenses

are appropriated by parliament, not by their ministers, and that they are “public servants”
rather than “ministerial staff”.

3. Leadership – not the same as authority

It is easy to confuse leadership with the exercise of authority, but they are separate

functions.
The authors of the review have written about “a leadership model”, but with its focus on

the roles of departmental secretaries and departmental heads, it is really about the exercise

of authority.
This is not so suggest the authors are wrong. Every organization needs an authority

structure. But leadership is something different, and it does not always mesh neatly with

the exercise of authority. Leadership is not necessarily associated with any position, nor is it

necessarily top-down. Leadership can be exercised from any position.
The authors correctly identify authority vested in departmental secretaries and agency

heads, but there are other sources of authority, including the law and professional

standards as mentioned above. Just as the CEO of an airline does not have the authority to

direct pilots to disobey air traffic rules or to depart from professional judgement on matters
Comments on Review of the APS 9 of safety, so should departmental secretaries and agency heads understand that they are

similarly constrained.
Leadership, particularly in the public sector, is another matter. To paraphrase the work of

Ronald Heifetz, professor of leadership at Harvard’s Kennedy School of Government,
leadership involves:
a set of activities involving the mobilization of the resources of an organization or
people to make progress on the difficult problems it faces7.
Leadership is not confined to any one person (Heifetz avoids use of the term “leader”). It

does not necessarily involve the issuing of orders (that’s the task of those in authority).
Rather, it’s about helping people deal with painful adaptive change, which is why his theory

is particularly relevant in the context of public policy. An example may help illustrate

Heifetz’s theory.

Tariff reform – a case study in public sector leadership

Economic reform during the Hawke-Keating administration (1983 to 1996) provides a case

study of Heifetz’s theories in action.
By the 1970s most economists agreed that Australia’s policy of high tariff protection was no

longer serving its purpose, and was freezing the country into an uncompetitive and

outdated economic structure. In the 1973 Commonwealth budget the Whitlam Government

introduced a 25 per cent tariff cut, but such was the reaction among those affected that

over the next ten years, under both Labor and Coalition administrations, there was no

further progress on tariff reduction.
The Whitlam tariff cut was a clear exercise of government authority, but in failing to bring

the affected parties on board, and in failing to establish momentum for further reform, it

was a failure of leadership.
The approach of the Hawke-Keating Government was quite different, and in line with the

Heifetz model of leadership. The industry minister, John Button, initiated a process whereby

many people would be called upon to exercise leadership by helping those affected by

possible changes in policy – workers and investors in manufacturing – understand the need

for change. Those included staff in his own department – not only senior staff, but all staff in

policy-related areas who would meet with businesspeople in their own premises, learning,
asking questions, explaining, exploring hypothetical options, rather than giving directions.
Union officials, staff of lobby groups were involved. Independent academics who had no

agenda of self-interest were involved. Often in roundtable discussions those in the most

senior positions, including the minister, would leave it to people down the line to make

suggestions, as those in high authority have the burden of an expectation that they have to

be firm and resolute. As Heifetz points out, positions of authority have certain assets that

allow for the exercise of leadership, but they also have certain liabilities.

7
Ronald Heifetz, Leadership Without Easy Answers Harvard Belknap 1994.
10 Ian McAuley

The process took many years, and there was pain for many workers and investors. But that

work having been done – the work of leadership – the government was able to exercise its

authority and legislate a program of tariff reductions.
It is informative to compare this approach with the more recent approaches taken on two

important issues – implementation of a resource-rent tax and development of an energy

policy. In spite of a copious body of economic research supporting such policies, both failed

politically. Leadership has been found wanting.
It is possible that the governments involved would have succeeded had they followed a

process more in line with Highways’s model, and have used the public service as a means of

connecting with the community, well before developing any specific legislative proposals.
A strong presence outside Canberra would have helped – a problem identified almost a half-
century ago when the Combs Commission reported. More recently that problem has been

manifest in the failure of the home insulation scheme, which was managed by Canberra-
based senior public servants, with little technical knowledge and no connection with

regional industry networks.
The Combs Commission made a number of recommendations in relation to the regional

reach of the Commonwealth public service. Some of their recommendations are dated: for

example, with lower-cost travel there may be less need for reliance on a permanent

physical presence in the regions, but there is still a need for more contact with the

communities affected by, and who can help shape, public policy.
The need for such presence and consecutiveness has probably increased since 1976,
because since then there has been a significant concentration of lobby groups in Canberra.
While some lobbies can represent broad interests, they often are dominated by established

interests, and some seem to be more concerned with sustaining their own legitimacy than

with representing their members. Public servants whose main contacts outside their own

departments are lobby groups are easily subject to the bias of regulatory capture.
In years of consulting for Commonwealth, state, local, multinational and foreign

governments, I found Commonwealth public servants to be very detached from the people

whose interests they are dealing with. State public servants, while often having less formal

qualification and less sophistication in ideas of public policy, seemed to have much more

awareness of how government policies take effect in and are received by the community.
Also, they tend to have more administrative discretion and delegated authority than their

Commonwealth counterparts.
If the Commonwealth’s role were confined to a minimum set of functions necessary for

federal-state coordination, isolation in the so-called “Canberra bubble” may not be a

significant problem, but ever since the reforms of the 1940s both Coalition and Labor

governments have been becoming more involved in functions that were once state

preserves. If the Commonwealth is to be so involved it should have much more presence in

the states, at a practical working level and not just through high-level bodies such as COAL.
Comments on Review of the APS 11

This is not to make a case for decentralization of administration. For example, moving the

Pesticides and Veterinary Medicines Authority to Armidale solves no problems, because

Armidale is no more connected with the rest of Australian than Canberra is, and, of course,
it makes coordination with other departments more difficult.
Rather, it is about reaching out to the community, in realization of the “public” aspect of the

public service, and in the process contributing to good public policy.