Could that professional political pork barreller, Deputy Prime Minister Barnaby Joyce, have realised the fuss he'd cause when he announced during last year's election campaign that he would transfer the Australian Pesticides and Veterinary Medicines Authority from Canberra to his electorate? Probably not – long-term consequences might not be one of Joyce's strong suits. Fuss there has been though, a lot of it. As well as political controversy:
- Significant damage has been done to the pesticides authority's work, not least because, according to it, only 10 to 15 per cent of its staff "may consider relocating to Armidale".
- Finance Minister Mathias Cormann has needed to provide retrospective legal cover for the move by issuing a formal government policy order under the Public Governance, Performance and Accountability Act.
- Minister for Regional Development Fiona Nash announced in April a policy requiring ministers to "actively justify ... why all or parts of their operations are unsuitable for decentralisation". Reports to cabinet were due by August but with "business cases" being submitted in December using a "template" to be devised by the Finance Minister.
- The Senate finance and public administration references committee inquired into the authority's relocation while the select committee on regional development and decentralisation is examining "best-practice approaches to regional development", including the "decentralisation of Commonwealth entities or functions".
It's quite a meal. Let's start with the parliamentary inquiries.
Between them, at the time of writing, the two inquiries had attracted 224 submissions: 201 for the pesticides authority one and 23 for the general inquiry.
There are only a handful of submissions from federal government organisations: four to the authority inquiry and one (from the Cotton Research and Development Corporation) to the general inquiry. It is more than curious that other Commonwealth organisations, especially the Public Service Commission with its critical interest in the effective staffing of agencies, have not thus far bothered to favour these committees with submissions.
The vast majority of submissions are from regional organisations – shire councils and the like. Unsurprisingly, many are all in favour of placing Commonwealth agencies in their backyards; they spruik the virtues of their localities as they are rightly keen to see their regions develop further. On the other hand, and equally understandably, most submissions are muted on the national interest in locating Commonwealth agencies where they can be most effective and efficient.
There are exceptions. The Southern (Darling) Downs Regional Council says the need for close relations between ministers and officials will require many organisations to be where they are now and that, otherwise, questions about location need "to be considered on the merits of the community and the agency". The council says functions like administrative processing and call centres are more likely to be viable in regions rather than whole agencies.
Meat & Livestock Australia says there is "no regional or rural base that naturally puts the company closer to one stakeholder group without making it less accessible to another". That is to say, placing the pesticides authority in Armidale may raise the perception, and even reality, that those who depend on the authority in Joyce's electorate will get a better suck of the sauce bottle than "clients" in other parts of the country.
The Australian Dairy Industry Council expresses "strong reservations about relocating key government bodies to regional areas where the relocation will impose additional costs, put essential relationships at risk, result in possible loss of specialist staff and reduce effectiveness". It says "relocating a government organisation to a regional town may provide benefits in strengthening regional communities, but if it is done without regard to the organisation's ability to operate effectively, it will not be of net benefit to the agricultural sector", and that "the dairy industry has strong reservations about relocating government bodies to regional areas".
To help sort through the web of conflicting interests, the select committee published an "issues paper" in August. It includes a general outline of factors relevant to regional development and examples of successful cases that oddly forgets to mention one of the most successful in Australia's history: Canberra and the ACT; too inconvenient an example perhaps. The paper then goes on to talk about the decentralisation of Commonwealth agencies and concludes with a section on getting more private-sector organisations into the regions.
The issues paper is better than nothing but not by a wide margin.
First, it says "only a small number of Commonwealth government agencies have established rural or regional agencies". That's true but the paper would have been more helpful if it had gone on to consider, even if briefly, why this is so – it doesn't.
Second, the paper fails to outline the current dispersion of Commonwealth employees, including very large employers like the Defence Force and Australia Post, whose places of work are spread widely throughout the regions. Instead, it confines itself to the Australian Public Service (those organisations with staff employed under the Public Service Act), which makes up about 50 per cent of total Commonwealth employment. That is to say, the paper's baseline is misleading. While it's true that most Commonwealth employees are in the capital cities, the paper doesn't seem interested in establishing a clear understanding about the extent to which the existing workforce is dispersed, or exploring the lessons as to why substantial parts of a good number of Commonwealth agencies have been able to operate successfully in regions.
Third, the paper says the "success of any decentralisation policy needs to be measured with regard to the net benefit or growth achieved by the transfer of public and private utilities from one location to another" while in particular taking into account "growth in regional areas, economic growth, longevity of industry, services and functions, and population in regional areas". Hang on. Notice what's missing? There's not even a fleeting reference to the public interest in the effects of location on the effective working of organisations. That is, the issues paper has omitted the main issue.
Fourth, the paper doesn't properly represent the major attempt by the Whitlam government to foster regional development by relocating Commonwealth employees. It deals with this program in seven lines and describes it as being confined to Albury-Wodonga – it was not. Moreover, the paper shows no curiosity about either the huge amount of development work done at the time in support of the program or the reasons why it eventually sputtered out. As ever, experience unhelpful to contemporary causes must not be allowed to intrude.
There can be little doubt that Joyce's rush-of-blood-to-the-head decision on the pesticides authority was taken without due cabinet process, consultation with interested parties or proper regard to consequences for the agency and those in the agricultural sector who rely on it and who now face, at least in the short to medium term, lower standards of service. It was boilerplate political pork with oink, oink, oink all over it. Why couldn't the Deputy Prime Minister have been more subtle and decide to put the authority in a National Party electorate other than his?
The government must now try to make a silk purse from a sow's ear. It won't be easy as hounds are baying and many want to get in on the act.
Nash's announcement in April seems like an attempt to clothe the Joyce push for the bush with a veil of policy and political respectability. It's not all that convincing and, if it is implemented, it will please a few and disappoint many more. Rather than starting at what may best suit the needs of government agencies, Nash is requiring her ministerial colleagues to "actively justify" why all or part of their empires are unsuitable for decentralisation. Thus, she puts the cart before the horse. She's also asking ministers to report to cabinet in August about bits suitable for decentralisation although robust "business cases" based on the Finance Minister's "template" are not due until December. The cart again seems to be before the horse.
Nash was asked: if she could provide a copy of the criteria she said she would provide ministers to help them assess prospects for decentralisation; how many reports have gone to cabinet in line with the August 2017 deadline; and when she might anticipate making an announcement about progress. She did not respond. She's probably overly distracted by questions about whether she was legitimately elected to Parliament.
Cormann was asked if he could provide a copy of the "template" he's developing as a basis for decentralisation "business cases". His office advised: "At this point in time, the business case template cannot be made public as it is being considered by government as part of the cabinet process." That comment is a little opaque but it seems as if the "template" is not yet approved, about five months after Nash's policy announcement and with two months to go before it is to be used as a basis of "business cases" to cabinet on decentralisation opportunities.
Whatever, cards are being kept very close to chests. In a sense, that's not a bad idea if room for political manoeuvre is to be maximised. In all, however, the omens are not promising.
What would be the best result?
The finance and public administration committee reported on June 9. It said Cormann's order under the Public Governance, Performance and Accountability Act was "deficient" and noted that the pesticides authority's move was opposed by "stakeholders, the agricultural sector" and the authority itself. It said the government's cost-benefit analysis "finds no strategic or other benefits in the move". It therefore recommended that:
- Cormann's order be revoked;
- the authority's move be "paused" until it "can review its business model";
- the Finance Minister apply greater scrutiny to future requests for such orders; and
- there should be a broad inquiry of representatives of both houses of Parliament "into the merits of decentralisation and the appropriate policy mechanisms for undertaking it".
The government should accept these recommendations, noting it was good enough for the Hawke/Keating government to cancel a pork-barrel decision to move the Australian Maritime Safety Authority from Canberra to Newcastle when it became obvious that the costs outweighed any benefits.
As indicated, the Senate select committee on regional development and decentralisation is in effect inquiring into the "merits of decentralisation" and related matters. This committee should recommend that:
- Commonwealth agencies be located where they can operate in the most efficient and effective way, be that in Canberra, another capital city or a regional area;
- in instances where the location of an agency is more or less immaterial to operational effectiveness, consideration be given to placing it where national interests are most likely to be advanced, including interests in the long-term development of regional centres;
- particular attention be given to decentralising parts of agencies, especially those involved in processing-type work, as per the Southern Downs Regional Council's suggestion;
- any proposals for relocating existing agencies or parts thereof should be able to demonstrate clear advantages of longer-term benefits over costs, meet the reasonable expectations of those dependent on their services, and avoid giving unfair advantage to some clients; and
- close attention be given to the location of new agencies.
The government should also accept recommendations along these lines.
Anything less than this would have the public buying a pig in a poke. Taxpayers have been asked shell out about $30 million on the pesticides authority's move. Calling a halt now may enable some of that to be recouped; the rest can be put down to a bad experience whose lessons are obvious enough to be learned.
Paddy Gourley is a former senior public servant. firstname.lastname@example.org