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Treasury succumbs to political platitudes

Date

J R Nethercote

Senior Treasury executive Dr David Gruen, head of its domestic macroeconomic group.

Senior Treasury executive Dr David Gruen, head of its domestic macroeconomic group. Photo: Nic Walker

More than two decades ago, there was a seminar in Canberra, at the Lobby Restaurant, located conveniently close to the Treasury building. In those days, lodgers in the building included the Finance Department and the Taxation Office as well as the Treasury itself.

The topic of the seminar was program evaluation. Evaluation was then the hot topic among evangelists of reform and innovation in the public sector, not least in Finance. Departments and other agencies were expected to have comprehensive evaluation plans embracing all programs. So strong was advocacy of evaluation that, very shortly afterwards, the Australian National Audit Office even published a major report in two volumes on agency evaluation plans.

The thinness, even superficiality, of the Treasury's endeavours provides yet further evidence that the modern public service is too vulnerable to fads and the intellectual fickleness which they bring. 

In these circumstances, it was unsurprising that the main address was delivered by a senior officer from Finance. With an audience of about 100, he did so with conviction and zeal. The task of leading discussion fell to an official of even more senior rank from Treasury. It was relatively rare, at least in those far-off days, for luminaries of Treasury to feature in meetings on fairly mundane aspects of public administration.



The Treasury official was, alas, unable to share the enthusiasm, let alone the zeal, of his Finance counterpart. His remarks were dour and hardly suggested much confidence or even a hope that program evaluation methodologies had much to offer.

As the meeting broke for morning tea, the session chairman expressed a measure of relief at the proceedings. In a world where there was so much change and activity, it was reassuring that there were some parts of the firmament marked by stability and constancy. Amid much laughter, he confided his gratitude for the Treasury: while ever there was a Treasury, he concluded, all could not be lost.

Today, a compelling speculation is whether some of what many would regard as extra-mural ponderings by senior officials of the Treasury would engender similar sentiments of reassurance. One senior Treasury officer, Dr David Gruen, the executive director of its domestic macroeconomic group, has in some recent speeches certainly made a bold fist of emulating the zeal and enthusiasm which Finance officials brought to their mission on evaluation.

In Gruen's case, the object of his devotion is ''well-being'' (aka TWOTAP: the well-being of the Australian people). It formed the subject of an address to the 2010 NatStats conference: ''From measuring production to measuring well-being.'' Late last year, he returned to the pulpit with a homily on ''the need for well-being measurement in context''.

Treasury's gospel of ''well-being'' is more than a decade old. Back in 1999-2000, the department's mission statement declared: ''Treasury's mission is to improve the well-being of the Australian people.'' A few years later, its Economic Roundup included a paper titled ''Policy advice and Treasury's well-being framework''. Subsequently, Treasury's annual report included early reference to ''well-being'' but there was rarely much elaboration. The 2007-08 report did contain some text under the heading ''Staff well-being framework''.

Treasury's 2012-13 strategic framework, in the secretary's message, talks about the department seeking ''to play a vital role in an evolving Australia, always striving to formulate policy advice that incorporates both the full range of economic issues and a broad well-being framework''.

The framework continues: ''In undertaking its mission, Treasury takes a broad view of well-being as primarily reflecting a person's substantive freedom to lead a life they have reason to value. It gives prominence to respecting the informed preferences of individuals, while allowing scope for broader social actions and choices. It is open to both subjective and objective notions of well-being, and to concerns for outcomes and consequences as well as for rights and liberties.''

The various dimensions with important implications for well-being embrace:

■ The set of opportunities available to people.

■ Distribution of those opportunities across the Australian people.

■ The sustainability of those opportunities available over time.

■ Overall level and allocation of risk borne by individuals and the community.

■ Complexity of the choices facing individuals and the community.

According to Gruen, ''the nature of democracy suggests a positive relationship between the service of ministers and improving societal well-being''. Further, the ''Treasury well-being framework reminds Treasury staff to inform their advice with an understanding that well-being is driven by several distinct considerations and trade-offs will often be required. This assists ministers to make value judgments, taking into account community preferences and hence supporting well-being.''

He recognises, however, that ''there is no common all-encompassing conceptualisation of well-being''. Moreover, ''it is not the purpose of the well-being framework to allow staff to simply point to options that maximise well-being; this is impossible given the absence of an agreed approach to measuring well-being. Rather, the well-being framework helps staff set out some dimensions of wellbeing to hopefully help ministers make well-informed value judgments consistent with improving well-being.''

One curious contention by Gruen is that ''Treasury's well-being framework also requires us to undertake objective and thorough analysis using the best available frameworks''.

Has it not ever been thus? ''Objective and thorough analysis'' etc, especially by a Treasury, is hardly so new as to be attributable to adoption of the well-being framework. Likewise, can it really be that a requirement that Treasury staff ''gather the best available empirical evidence'' derives from the well-being framework - surely it has a much longer lineage!

Gruen's conclusion is that ''in the absence of precise well-being measurements, public service and government decision-making are not blind. They continue to be guided by the democratic process, economic theory, and conscientious analysis. This is the context for the Treasury's well-being framework, and it leaves the Treasury as an eager, rather than dependent, user of well-being measures.''

It is strange that the well-being framework has not previously had some rigorous analytical attention. This is probably because, notwithstanding the fuzzy language, the well-being framework generally seems to be a statement of much that is both obvious and also of long standing, if not necessarily written on tablets of stone.

Most departments, if they thought about it, would claim their purpose is to enhance the well-being of the Australian people. And astute policy advisers have long been alert to thinking about proposals in terms of who benefits, who loses and who pays, in the long term as well as the short.

The framework has the feel of a fairly rudimentary working out of important precepts of the philosopher Thomas Hobbes: ''the office of a Counsellour, when an action comes into deliberation, is to make manifest the consequences of it, in such manner, as he that is Counselled may be truly and evidently informed; he ought to propound his advise, in such forme of speech, as may make the truth most evidently appear; that is to say, with as firme ratiocination, as significant and proper language, and as briefly, as the evidence will permit.''

Likewise relevant to a consideration of the Treasury's well-being framework is Hobbes's later view that, as ''the businesse of a Common-wealth is this, to preserve the people in Peace at home, and defend them against forraign Invasion, we shall find, it requires great knowledge of the disposition of Man-kind, of the Rights of Government, and of the nature of Equity, Law, Justice and Honour …''

It cannot thus be surprising that when the well-being framework eventually came under examination, it did not fare well.

According to the University of Adelaide's Professor J. J. Pincus, who has lately spent more than five years at the Productivity Commission, for those outside the Treasury, the well-being ''checklist is almost completely useless (or worse): it does not permit outsiders to test the appropriateness of any specific Treasury recommendation or series of recommendations''.

''For those inside Treasury, the existence and standing of the checklist should be a source of confusion and dissent. The 'well-being' checklist can justify Treasury's advocacy of almost any plausible policy.''

Instead, he saw the framework as a charter for those in Treasury ''with bees in bonnets'' - whatever is a desired line of policy, there is always something in the framework to invoke in its support. ''Without a clear indication of rank ordering or weights, it is impossible to show that well-being has improved, unless there is an improvement in every single dimension of the checklist. Treasury is the premier public service department, staffed by top-rate people, experienced in making difficult judgments on behalf of others.''

He found the language of the framework very revealing: ''informed preferences''; ''reason to value''. He asks whether there is not a ''tone of patrician superiority'' in the well-being framework. ''Who better to pass judgment on the reasons of ordinary Australians - most of whom, it must be said, lack the education and experience of senior Treasury officials - who better, than senior Treasury officials? Who better to know which preferences deserve respect, because they are informed preferences - not to be mistaken for the uninformed, presumably ignorant preferences of ordinary Australians - who better to know than senior Treasury officials?''

Pincus is especially critical of the proclaimed objective, under distribution, ''that all Australians have the opportunity to lead a fulfilling life and participate meaningfully in society''. This sentence, he writes, is ''cant (that is, a 'pious, sanctimonious platitude') and, in particular, political cant''.

A like critique could be applied to other parts of the Treasury's strategic framework. Words like ''vacuous'', ''bland'', ''vague'' and ''facile'' come repeatedly to mind when reading the document.

Take Treasury values: ''Treasury people are skilled professionals, committed to providing quality advice, thinking analytically and strategically, and striving to achieve long-term benefits for all Australians. We uphold the important values and behaviours that shape the Treasury culture. These values influence all aspects of the way we work.''

But just how does this formulation elucidate Treasury values? And what is meant by ''the Treasury culture'' in this context?

It is a fashion in public administration these days to engage in lengthy indulgences setting out values, goals, aims, mission statements and the like. These activities are mostly self-serving. The finished products are not infrequently more honour'd in the breach than th' observance.

They have often been defended not on the basis of their content but on the ground that the process of composition fostered a unity and a common commitment among staff. This may still be so. But the thinness, even superficiality, of the Treasury's endeavours provides yet further evidence that the modern public service is too vulnerable to fads and the intellectual fickleness which they bring. They are like a virus in a computer network.

In Treasury's case, it is just possible that ''well-being'' comes under the heading of public relations and should not be taken as a sign that the venerable institution is succumbing to political correctness.

J. R. Nethercote is an adjunct professor with the Public Policy Institute at the Australian Catholic University.

john.nethercote@acu.edu.au

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