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"Evolution of the APS, and the APS Values"

Graduate Lunchtime Seminar - "A Taste of Government"
Andrew Podger
6 March 2003

(with thanks to Helen Williams, the previous Commissioner whose historical material I have extensively purloined)

1. Introduction

Seeing you all here today reminds me of when I came to Canberra as a graduate.

I was in fact a State Cadet, and first came here in January 1968 as an undergraduate to do some holiday work and training. We helped run a household survey for the National Capital Development Commission. But it wasn't hard work and we spent a lot of time at the Civic pool and in various pubs around town.

I came here as a graduate in January 1970. Whereas in 1968 we lived in the dreadful fibro hostels that used to be north and south of Civic pool, we moved upmarket to the brick hostels around town. I was at Havelock House in Northbourne Avenue for a year. We were allowed to bring wine to have with dinner if we gave prior notice, and we could sometimes sit at tables other than the one designated for each of us.

It was nonetheless a great time. Most of my group continued study at ANU while also undergoing a lot of training in Stats. We played hard, and learned heaps, though I doubt we worked all that hard.

Interestingly, I remain close to many of those who came to Canberra with me in 1968 or 1970. Dennis Trewin, now the Statistician, was in our group in 1968; David Chessell, head of Access Economics, was also there in 1968 and came to Canberra with me as a graduate in 1970.

A few stayed in Stats for their career, many moved on to Treasury, or Social Security or other areas of the Service, a number moved into the private sector mostly in finance or consultancy; the one woman in our group is now head of Coca Cola's marketing research in Asia.

It was a fun time. But it was also a great chance to make life-long friends and to think about careers and commitments.

My plan today is to:

• describe the APS you have joined
• give you some history, drawing from our Centenary publication "Serving the Nation"
• explain the APS Values and how they now provide the basic framework for the APS instead of the detailed rules that used to be laid down by the old Public Service Board, and
• show you parts of a video to illustrate how values must guide behaviour, and the importance of ethics in the APS

2. The APS

• The APS consists of 123,500 staff (at 30 June 2002) in 70 different agencies
• The biggest agencies - Defence, ATO, Centrelink - account for just over half of the APS
• 34% are in Canberra, with most of the rest in State capitals, but many work outside the capitals, and nearly 1% work overseas.
• APS employees have an extraordinarily wide range of roles and functions. I am always impressed by the people who receive Public Service Medals in the Australian Honours system. This Australia Day, they included the Australian Government Solicitor's Chief Executive, an officer in Customs responsible for cargo management, an officer working in western NSW with Indigenous communities, a scientist working in Kakadu, a Defence officer managing logistical support for our forces in East Timor, an IT specialist responsible for our Electoral Office systems, a Queensland officer supporting education services for Indigenous people, a deputy secretary in Health with enormous experience in aged and community services across Australia, the mathematical statistician who heads the Australian Institute of Health and Welfare, the Foreign Affairs officer who negotiated Australia's interests in the Law of the Sea, the Quarantine Office's director of its Detector Dog Service.
• Commercialisation, privatisation and contracting out has affected the size and scope of APS over the last decade but
  • there has in fact been some increase over the last 3 years;
  • so the APS does not reflect the "hollow government" model, limited to policy advising and managing contracts, but retains a very diverse range of functions, requiring a wide spread of skills;
  • women now represent over 50% of APS employees, though still just under 30% of the SES (but this is steadily improving and may be much nearer to 50% in the few years hence when I expect quite a number of you will be thinking seriously about that).
  • the picture for disadvantaged groups is far more mixed. Generally, the APS does better than the private sector, and better than the States - but that isn't a particularly good benchmark
    • about 2.1% of employees are Indigenous, mostly at junior levels, and with some serious risk of decline - we in the Commission are looking at this issue closely;
    • the number with a disability has been declining for nearly 10 years now;
    • the number with a non-English speaking background is reasonably steady, but I am not sure our data is very accurate on this.

Size and scope of the APS June 1987- June 2002	Representation of women
Trends in diversity 1993-2002

3. History

On 1 January 1901, the first Governor-General (Lord Hopetoun) created 7 departments of the Commonwealth and seven permanent heads were appointed: - and they were permanent (as against their Ministers) - even Collins who at 9 years had the briefest time as permanent head, outlasted 9 Ministers for Defence.

Three of the Departments (the larger ones) were transferred from the States:

• Trade and Customs;
• Defence; and
• Postmaster-General's in fact Postmaster-General's, called by its first Minister the "leviathan amongst the minnows" dwarfed the rest, making up 89% of the Service.

The other four departments started from scratch and were very small:

• Home Affairs;
• External Affairs; and
• Attorney-General's which, even three years later, contained only 10 people.

Of these first seven permanent heads, the one I would like to single out was Robert (later Sir Robert) Garran.

Garran was appointed to head the tiny Attorney-General's Department at the age of 33, having worked with Barton in the campaign for Federation - indeed he had worked so closely with Barton that his appointment was initially somewhat controversial and viewed as patronage.

But there is no doubt that Garran was hugely influential in the establishment of Commonwealth administration, and of Commonwealth law - he remained a highly respected (both by politicians and the public service) head of Attorney-General's for 31 years.

He spoke later about being "both head and tail" of his department in the early days - with his first duty, on 1st January, being "to write down in longhand the first number of the Commonwealth Gazette and send myself down to the Government Printer with it".

Garran really epitomises the high ideals, enthusiasm and excitement of the times - he has described the thrill of drafting, from the beginning, a new book of national law.

It was thrilling to open a new statute book with the freedom that comes from not being tied to the forms and idioms of a long line of predecessors. (Garran 1958)

In fact he even wrote a hymn entitled "Song of the Commonwealth" that was published in the Sydney Morning Herald.

More broadly he demonstrates the belief of those early players in 1901 that a new, professional public service would help to make history - the new Public Service presiding at the birth of a nation.

The other early force I want to mention was the first Public Service Commissioner and Head of the Service, Duncan Clark McLachlan - he was recruited from the NSW Public Service with the strong support of the NSW Public Service Staff Association which talked about his "unflagging industry, zeal and promptitude".

Such support from the Staff Association was especially interesting in that McLachlan was a strong disciplinarian with high goals and expectations. It was really McLachlan who established the structure, guidelines and administrative framework for the Service itself.

McLachlan was a true Victorian in his respect for discipline, obedience and high standards of conduct, and was indefatigable in the pursuit of them: - but, in particular, he was clearly aware of the need for a fresh start in reaction to the nepotism and corruption of the former State Services -it was necessary to recreate public confidence in a public service, a confidence that had been badly damaged.

In a large Service such as this, the necessity for maintaining strict discipline, loyal obedience to authority and purity of administration, with a staff above reproach , must be apparent. (McLachlan 1906)

McLachlan didn't mince words. Indeed his reports give an acerbic and often startlingly frank account of his attitudes and expectations: - he had a clear vision of a high quality, professional, productive body of people; - and was determined to accept no less.

The Commonwealth must not be looked on as an asylum for the indolent or incompetent. (McLachlan 1904)

The starting point in achieving this new professionalism was appointment by merit; it was the crucial building block - again, the emphasis was to make a clear move away from the patronage and political influence of the former State administrations.

Ability and merit should be the indispensable and only conditions of appointment and promotion . (McLachlan  1904)

Interestingly, in view of some later dilution of this principle in practice, it was clearly stated in the 1902 Act that seniority was relevant only where efficiency was equal.

And also interestingly, in view of its central importance, until the 1999 Act, the concept of merit in employment tended officially to be defined as the process of getting there.

For the first part of the century, this process for the protection of merit involved a system of open, competitive examinations: - handwriting, arithmetic and spelling in particular; - in the early days, even labourers were recruited through competitive exams (hopefully not this one).

Indeed the 1902 Act provided that no person should be admitted to the Public Service unless he had successfully passed the examination prescribed for each of the divisions except the top, administrative division.

In the five years between 1903 and 1908, 135 examinations were held attracting nearly 24,000 candidates.

But coming back to the concept of merit, it had some important limitations: - in particular, it didn't embrace women.

Even when [women] continue in the Service, it is found that they reach their limit of usefulness at a comparatively early age... women are physiologically unfitted to carry responsibility at an age when men are improving and developing their capacity.... (McLachlan  1904)

Indeed this has been seen as McLachlan's great failing.

As this advertisement shows, women were forced to follow the typewriter route to progress.

Indeed "merit" for women was some time in coming:

• women couldn't be appointed permanently to clerical and administrative positions in the old Third Division until 1949;
• the marriage bar wasn't removed until 1966; and
• equal pay was not in place when I joined the Service in 1968.

The administrative system set up in those early days was remarkably stable - there were changes, of course, but little fundamental rethinking for the first 60 years or so. At the political level, however, the span of interests of the Federal Government increased markedly:

• first, as Deakin had foretold in 1902, the power of the purse was a major factor (and still is today, despite the hypothecation to the States under the New Tax System); and
• secondly, the three great crises of the 20th century - WWI, the Depression of the 1930s, and WWII - required a national approach and a policy response on a national basis
• the power and influence of the Commonwealth increased commensurately.

The Costitution left [the States] legally free, but financially bound to the chariot wheels of the central Government. (Deakin 1968)

Another thing those crises did (particularly the third) was to bring to prominence in the Service some really exceptional people: - seven of whom were later to be characterised by some wit (not identified) as Menzies' (or Snow White's) seven dwarfs.

These men stood out as clear leaders of their day. Interestingly, leadership was there in the early permanent heads but there seems to have been a bit of a hit and miss affair - it was said of Malcolm Shepherd, for example, Secretary to the Prime Minister's Department under Billy Hughes, that he had "few qualifications beyond ambition and a high shorthand speed".

The seven dwarfs were all men of high quality and strong character who were determined to contribute to the development of Australia: - and although many came to prominence during the wartime and post-war Labor Governments, they continued to be influential under Menzies, demonstrating the ideal of the apolitical public service by successfully serving, and being accepted by, governments of different persuasions.

Menzies, of course, brought a certain stability, even though some change did occur.

But the actual structure and management of the Service itself through this period really started to be questioned in the late 60s and 70s:

• there was a growing conviction on both sides of politics that the management of the public sector was no longer appropriate for the demands placed upon it and that it needed fundamental revision;
• this led to almost a decade of review, reaching from the mid-70s to the first half of the 1980s;
• in particular, of course, the Coombs Royal Commission on Australian Government Administration which recommended change across a wide range of structures and behaviours that had governed the life of the Service for 50 years.

The Coombs Royal Commission was accepted as needed. But its advent was treated with some nervousness by the leaders of the Service who generally favoured cautious reform: - and were rather afraid that Coombs himself would go for much more radical reform.

And indeed the 70s can be seen as ushering in real change in the Service: - often flowing from the Coombs recommendations, which some have linked to three themes - better responsiveness to the elected Government, better effectiveness through improved management, and greater community participation; - change in these three directions has continued, at an increasing pace, for the rest of the century.

At about this time there was a dramatic change in the size and composition of the Service

• the departure of Postmaster-General's Department in 1975 (about 45% of the Service) reduced numbers very significantly - its removal from Service coverage had been recommended a number of times, primarily in recognition of the need for PMG to be far more commercial if it was to be efficient and effective. But the move hadn't been made until the 70s with its climate of change;
• but the PMG also was a major contributor to the occupational diversity of the Service, and its departure also changed the range of its occupational categories (which used to include farmers, smiths, stablers);
• technology change and automation of tasks also began to pick up pace around this time.

The focus on the need for change in the second half of the 70s, brought increasing calls for greater openness and accountability to the public:

• The administrative law reforms of the late 70s and early 80s forced the APS to be more open about its decision making processes and its use of administrative power
  • 1976: the Administrative Appeals Tribunal was established;
  • 1977: first Ombudsman appointed; and
  • 1982: Freedom of Information Act was passed
• now accepted as part of the system but then seen with a degree of angst - particularly because they were seen as heavy in complexity and resource usage.

Commonwealth Public Service - All staff 1904-2002

"Savoir c'est pouvoir' (Knowledge is power)"

A further major change at this stage - and flowing in part from the Coombs Report - was growing adherence to the "let the managers manage" catchcry which speeded up the tentative moves that had already been made towards devolution to Departments:

• in 1984, for example, the use of staff ceilings, applied on an agency basis, was removed and staff numbers integrated into the financial budgeting process, giving agencies more power to decide resource use;
• over the next decade and a half a wide range of financial and people management responsibilities were devolved to agencies subject to tighter overall budgetary constraints and improved reporting on performance.

By the second half of the 1980s, the reforms to improve efficiency were really taking hold, and the overall numbers in the Service began a significant period of decline. This was due to:

• the 1987 restructuring of Departments - efficiency of decision-making;
• the annual "efficiency dividend" - forcing agencies to get rid of the fat;
• market testing and contracting out of functions - most efficient delivery; and
• savings exercises with bringing reduced government funding - increasing focus on the core role of the APS.

Indeed, it is only in the last three years that the APS numbers have bottomed out and, as I mentioned earlier, there has been modest growth recently.

And, of course, it was not only the service delivery or program management that became contestable. Alternative sources of policy advice increasingly competed with that provided by the Service - in what was increasingly being seen as its central role.

From the time of the Whitlam Government, Ministerial Offices began to grow, with a substantial proportion of their staff being drawn from outside the Service.

Later, advice from public policy think tanks and lobby groups was also increasingly sought by governments: - although the Service remains the government's key advisory voice in the public interest — under notice that it must perform.

These changes can be seen to have been given legislative effect by the current government through the new accountability framework set out in the Public Service Act 1999.

The Government came to power with the clear policy that the growth in international competitiveness meant that nations had to reform and streamline their public sector in order to survive - globalisation was forcing governments around the world to upgrade their performance.

The new framework:

• removed regulation and prescription, and devolved employment powers to Agency Heads so that they could use these flexibility in the interests of their business plans;
• but balanced this devolution by greater accountability for the use of the devolved powers.

Agency Heads were made more clearly accountable for the performance of their agencies than ever before.

As the clear basis for this accountability, the new Act articulated the APS Values and gave them legislative effect.

And these Values combine the traditional principles of an apolitical, professional and ethical public service:

• with the more recent values of responsiveness, achieving results and managing performance;
• the new devolved framework removes the rules and regulations that were restricting, but also gave you a fair confidence you were on the right track;
• the Values now stand as the basis for work and decision-making in the APS.

Most importantly for the APS, there has been continuity running through this change. Amidst the very significant change of the last 25 years, there have been some enduring themes (merit-based employment, an apolitical culture, high ethical standards, and the accountability to Ministers of the government of the day) that define the Public Service - and define the public interest aspects of public sector employment, important principles in the use of public money and public power.

And, as this statement by McLachlan a century ago attests, the best system is only as good as the people in it.

Its future will necessarily depend upon the intelligence, the character, the zeal, and the efficiency of the individuals who constitute it. (McLachlan  1904)

4. Values

These days, the enduring themes are set out in the Public Service Act as the APS Values. They do not come with all the rules and regulations we used to have, but they are expected to guide agencies and APS employees.

They are also reinforced by the Code of Conduct set out in the legislation, breaches of which are subject to various sanctions that can be applied by agency heads.

The Values and the Code are essentially about relationships and personal behaviours.

I won't go through them all in detail but I would like to explain them in terms of our key relationships and behavioural standards.

In terms of our relationship with the Government, certain Values effectively define us as an institution in our democratic system

• apolitical professionalism
• merit principle
• open accountability within the framework of Ministerial responsibility to the Government, the Parliament and the Australian public;
• responsiveness to the elected government.

Our relationship to the public is also highlighted by the Values requiring us

• to deliver services fairly, effectively, impartially and courteously, and to be sensitive to the diversity of the Australian public, and
• to focus on achieving results and managing performance.

Workplace relations are picked up in a number of Values, most particularly of course the merit principle, but also in requirements such as for

• relations that value communication, consultation, cooperation and input from employees;
• a fair, flexible, safe and rewarding workplace;
• achieving results and managing performance; and
• equity in employment .

Personal behaviour is required to be of the highest ethical standards - this requirement is not just a motherhood statement that might apply to anyone anywhere; - it is critical in the APS because we are paid for by the public, the programs we manage are also paid for by the public, and the powers we administer are entrusted in us by the public through the Parliament : the public rightly expects us to perform our duties to the highest ethical standards.

Ethics

The legal framework based on principles (or Values) rather than rules, is backed up by various systems and procedures developed within each of your agencies

• your Chief Executive Instructions;
• your performance management system;
• your corporate governance arrangements, and so on.

But they also rely on each and every APS employee considering carefully ethical issues, and making considered judgements when ethical issues arise, as they inevitably do, sometimes with a real dilemma requiring a balancing of conflicting Values.

Let me now show you an excerpt of a Hypothetical Video developed a few years ago when I was Secretary of Health

[VIDEO]

That video was part of an ethics awareness program called "The Fork in the Road Café"

• the imagery is important;
• when faced with a dilemma or fork in the road, the message is to stop at the café, talk openly to your colleagues and people you respect, find out about precedents, legal factors, any guidelines that are available, and then decide;
• if, with hindsight, it later turns out your choice was wrong, there is no basis for criticism as the dilemma was identified and openly considered at the time;
• in my experience, the cases that go really bad, are when the dilemma was not even identified, let alone openly considered;
• my personal experience is also, as I said in the video, that when you are really uncertain, think carefully about how you would feel if questioned by a Parliamentary Committee - a Mrs Bishop, or a Senator Ray. If that prospect makes you decidedly uncomfortable, you probably have the answer to the dilemma right in front of you.

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