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Australian Public Service's wobbly cart teeters into 2017

Our leaders and institutions are taking us on a bumpy path, heading nowhere useful.

The Department of the Prime Minister and Cabinet's secretary, Martin Parkinson, the Senate's education and employment references committee, the Treasury and Australia Post are all finding it hard to keep the Commonwealth governance cart on the straight and narrow.

Let's start with the nation's top public servant.

Martin Parkinson

Portrait of Martin Parkinson, secretary of the Department of Prime Minister and Cabinet.

PM&C secretary Martin Parkinson. Photo: Rohan Thomson

A couple of months ago, Parkinson made a speech titled "annual address to the public service". In it, he said innovation must be "our friend", public servants should "embrace it" and the public service "will lead" on it.

After asking himself "What do I mean when I talk about innovation in the APS?", Parkinson's speech drifted into vagueness and cliche. He talked of not "squirming about failure" so much, the need to "create better frameworks to test ideas", an "ideas ecosystem" and being "prepared to fail fast and then decide to persevere and pivot". Perhaps recognising these sentiments as not being sufficiently definitional, Parkinson quotes a consultant, Scott D. Anthony, an innovation urger and managing partner in a firm called – wait for it – "Innosight", who reckons innovation is "the courage to choose, the clarity of focus, the curiosity to explore and the conviction to persevere". In a technical sense, that's bullshit. None of Anthony's notions are invariably related to innovation and anyone could do all he suggests and decide to do nothing new.

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Parkinson and Anthony's attempts at lexicography are confusing and misleading. They should have consulted a dictionary. It would have told them that to innovate is to "bring in new methods, ideas", etc and "make changes". That is to say, innovation doesn't have inherent value and its often unpredictable consequences can be good, bad or indifferent. Nuclear weapons, as much as ever an existential threat to life on the planet, were a remarkable innovation. So were financial instruments like sub-prime mortgages and collateralised debt obligations that did much to cause, deepen and extend the global economic woes that begun in 2008. Centrelink's apparent outsourcing of its debt recovery to a computer is causing enough squirming to last a lifetime, including for some of its "clients".

As it has no inherent value, innovation is not in itself a proper public policy objective and no amount of agonising consultant-speak can make it otherwise. The focus should be on policies most likely to advance the public interest and how they can best be implemented. Sometimes that may require innovation and sometimes it may not. And it should be recognised that an innovative mindset can disparage highly successful policy and operations, usher in alteration and newness for their own sakes, and worsen things. It would be disastrous, for example, if a quest for innovation were to wreak constant change in things like basic taxation, superannuation, social security laws and many other areas of government activity. As Harvard historian Professor Jill Lepore has pointed out, "innovation and disruption are ideas that originated in the arena of business but which have been applied to arenas whose values and goals are remote from business". Yeah, like the public sector.

Lepore adds: "Disruptive innovation is a theory about why businesses fail. It's not more than that. It doesn't explain change. It's not a law of nature. It's an artefact of history, an idea forged in its time; it's the manufacture of a moment of upsetting and edgy uncertainty. Transfixed by change, it's blind to continuity. It makes a very poor prophet." Parkinson would do well to reflect on that. His notion that innovation should be "embraced" in the public service for its own sake should be resisted.

Prime Minister Malcolm Turnbull often seems to regret that his innovation mantra has not been well enough understood to transfix the nation. It's more likely that many understand it only too well.

On a happier note, the government has undertaken to remove the PM&C secretary from investigating allegations of ministerial misbehaviour and providing secret reports to the Prime Minister thereon. Section 7.4 of the "statement of ministerial standards" says: "The Prime Minister may seek advice from the secretary of the Department of the Prime Minister and Cabinet on any matters within these standards." This tautological provision had been twisted into an investigative role for the secretary. So, after former health minister Sussan Ley recently gave the government a political scalding when she bought a Gold Coast unit on the spur of the moment while travelling on the taxpayer's tick, Parkinson was instructed to investigate, an invidious and inappropriate task for him.

As is well known, after the Ley "incident", Turnbull announced that the "work expenses of parliamentarians, including ministers, will come to be administered and overseen by a four-member independent agency", which will "monitor and adjudicate on all claims". The aim is to ensure that expense payments will, according to Turnbull, not only be "in accordance with the rules but also in a manner that gets good value for money". How the agency's members will assess "good value for money" will cause a good deal of noggin scratching. But if governments are to minimise the risks of political thrashings they've got on account of some politicians' extravagance, the rules should be tight and the authority's adjudications on cases should be made public. As the United States' sixth president, John Quincey Adams, said: "To form principles of government upon too advantageous an estimate of human character is an error of inexperience."

Australia Post

Australia Post chief executive Ahmed Fahour says letters will never make money again.

Australia Post chief executive Ahmed Fahour: almost certainly our highest-paid public servant. Photo: Luis Ascui

But while politicians are going to have their remuneration fully open to public scrutiny, that of Australia Post's chief executive, Ahmed Fahour, is being kept entirely secret. It is almost certain that Fahour is now the highest-paid public servant, in both real and nominal terms, in Australia's history – the last reports of his annual pay being about $5 million. It's likely Fahour's remuneration now exceeds Parkinson's by 500 to 600 per cent.

Unfortunately, that must remain a matter of speculation, as Australia Post now refuses to divulge Fahour's remuneration because "it relates to the commercial activities of the corporation" and there is "no public interest in the disclosure of personal information pertaining to officers of Australia Post".

Australia Post is a company wholly owned by the public through the agency of the federal government. That is to say, the company is now refusing to tell its owners how much it pays its chief executive.

Australia Post's owners have a clear interest in staff's remuneration, especially Fahour's. For example, they have a right to know, as is the case with senior staff in listed private companies, how much money is being diverted from investment, dividends and operating costs to pay for Fahour. Australia Post's refusal to disclose his remuneration because it "relates to the commercial activities of the corporation" is exactly why it should make it public. Examples of more brazenly arrogant behaviour by public sector organisations don't readily come to mind. The relevant minister should direct Australia Post's board to come clean and, if it doesn't, appoint a board that will.

Senate employment committee

The Senate chamber in Canberra's Parliament House. Senate voting has changed this election.

The committee displayed "colossal intellectual incompetence". Photo: Andrew Taylor

And speaking of remuneration, the Senate's education and employment references committee made a complete hash of its inquiry last year into the enterprise bargaining fiasco in the Australian Public Service.

It received more than 600 submissions, most being heartfelt complaints from individual public servants. With the exception of a submission from a former public service commissioner, Professor Andrew Podger, all other submissions were unhelpful. Podger tried to lead the committee to the sensible position of fixing public service remuneration by attempting to match it to the outside labour market. He was ignored.

In a display of colossal intellectual incompetence, the committee also ignored the basic texts on public sector remuneration – rather like trying to write a report on Christianity without referring to the Bible's New Testament.

The committee was not helped by Aaron Lane, a "legal fellow" from the Institute of Public Affairs, who sticks up for the current policy. Based on anecdotes, he asserts that public service pay and conditions are so generous they would not satisfy "the pub test". The "pub test"? Is Lane suggesting it makes sense to determine public service pay on the basis of what might get the approbation of a pub crowd, many of whom may be as pissed as parrots? Lost in his own La La Land, it doesn't seem to occur to Lane that market comparisons are irrelevant to the policy he supports and that turning a blind eye to the market may be why some of the overgenerous conditions he alleges have come about.

Not allowing itself to grasp the point that the current bargaining policy is incapable of honest and rational implementation, it's no surprise that all of the committee's recommendations, including those in a minority report, are useless. Wrong through and through, the committee ends up recommending that the "Public Service Commission and the CPSU [one of the relevant unions] consider a range of approaches for future enterprise bargaining and settle on the best and most productive approach". That is, it has dished up a recommendation the government can dismiss because any revision of the current policy is beyond the remit of the commission and the union. Moreover, after all its huffing and puffing, the committee hasn't had the wit or courage to make any suggestion about what a better and workable policy might be. And it seems not to appreciate that neither the commission nor the union seems to have the faintest idea about something better, practical and in the public interest.

The Treasury

The Treasury in Canberra reflects what William Coleman argues is one of Australian life's institutions: a lofty prominence bestowed on an 'official family' of senior bureaucrats and 'independent statuary authorities'.

What's the point of the Treasury Research Institute's partisan reports? Photo: Jeff Chan

Finally, when the Treasury gets its hands on the wheel of the governance cart, it's off the road and into the scrub.

Towards the end of last year, it paid $16,500 for the preparation a paper by Griffith University professor Tony Makin. It can now be found on a "Treasury Research Institute" website. Makin has a reputation as a fiscal conservative and has been a trenchant critic of the Labor government's fiscal response to the economic difficulties that developed in 2008. Parkinson put down one of his earlier papers, saying its criticisms were "based on a theoretical model that does not apply in Australia's case and assumptions that did not hold during the global financial crisis".

True to his known views, Makin's paper is highly critical of the Labor government's fiscal stimulus during the global financial crisis. It has outraged the ALP and thrilled the Murdoch press and other commentators; one said: "ALP spending binge during the GFC has wrecked our economy ... now the official Treasury view."

What is this Treasury Research Institute? It's part of the Treasury and is directed by the department's executive committee. It's a Potemkin institute that has failed to avert the impression that the Treasury is taking sides in a partisan debate. In short, the department is politicising itself, a risk Treasury secretary John Fraser must have realised when he commissioned the Makin paper. It's all very well to try to promote debate but all this paper has done is encourage partisan anger, including about the Treasury's role in commissioning it. It would have been better if the department had stuck more to its knitting: providing advice and support to the government of the day. The institute should be shut down before it causes further havoc.

So the governance cart rolls into 2017. It will no doubt bring some good stories but, for the moment, there are enough crook ones to make your hair stand on end like, as Hamlet's ghost has it, "quills upon the fretful porpentine". Sad.

Paddy Gourley is a former senior public servant. pdg@home.netspeed.com.au

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