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Public administration in the new democratic state

The Hon. Dr David Kemp MP
Minister Assisting The Prime Minister For The Public Service
Address to the 1997 National Conference of the Institute of Public Administration Australia
Canberra, 21 November 1997

I am pleased to be speaking to the 1997 National Conference of the Institute of Public Administration Australia.

The Institute has a long and distinguished history in contributing to the future of public administration in Australia. I am pleased to have the opportunity to share ideas with you at a time of significant developments in the practice of government and to discuss the directions of reform which are currently under way.

In my remarks I want to focus on the challenges facing public administration in a liberal democracy such as Australia and make some comment on the significance of the responses which are being made to these challenges.

The challenges emerge from a number of developments including the increasing globalisation of our society and economy, the speed and scale of change, and the increasing standard of educational attainment of our populace. We are also seeing the further advance of the democratic spirit . There is growing demand for more recognition of equal dignity and equal opportunities for all, and increasing resistance to closed positions of privilege.

Any consideration of the future of public administration must recognise the context provided by global developments and the evolution of our democratic society at home.

These developments demand responses in both the structure and management of government and in the nature of leadership within organisations. They place a premium on characteristics of adaptability, responsiveness, accountability and best practice. The current legislative public service reforms of the Government aim to promote each of these characteristics in Australia's public service.

In such an era of rapid change strategic leadership becomes critical to assisting organisations and societies to maximise the opportunities change brings, and to manage its complexities.

The challenges of change

The challenges faced by governments and the public services who support them in this environment include:

adapting government services to a society in which patterns of daily life and social roles are undergoing dramatic change and in which consumers expectations are more focussed on consistently high quality service. People are more demanding and expect more, and government must respond
making the most effective use of the skills and knowledge available within Australia and internationally - identifying and making accessible the best thinking and the most productive policy ideas from both domestic and international sources, and utilising the diverse expertise which our remarkable society is generating
ensuring best practice provision of governmental services and regulatory frameworks which will make Australia competitive in the striving for global capital and markets
providing the level of accountability demanded by an increasingly well informed populace.

I am sure no one here underestimates the economic, social and political complexity of governing a liberal democracy. A central role of the public service in a democracy is to consider ideas, understand and interpret the future, and give expert advice to governments about the strategies that will best deliver the outcomes of democratically elected governments.

In providing strategic leadership the intellectual capital which is held by the public service is critical. In successfully directing and managing change the quality of the analysis and the ideas to which leaders - governments and others - have access is crucial. Governments and Ministers that do not seek quality advice are condemned to failure.

However, the public service is more than an instrument to implement government policy. I believe that the public service must have a corporate commitment to the betterment of the society in which it exists - in addition to its obligation to the democratic government of the day. That commitment manifests itself through the consideration of policy within a framework that recognises the worth and rights of citizens and responsibility of the public service to the community.

Governments that maintain a philosophical predisposition to individual choice and a preference for the private sector over the public sector have sometimes seemed to be ambivalent over the role of the public service, and restrained perhaps by this ambivalence in developing to the full the policy partnership which is potentially available. This ambivalence has undoubtedly been intensified in the past by the recognition, that over the course of Australian history, government through war and peace has managed to accumulate many functions, and established many laws and regulations which have fitted poorly with traditional liberal beliefs in freedom of choice, the capacities of private enterprise and the decentralisation of knowledge and skills throughout the broader civil society.

As governments respond to the challenges I have mentioned; as the role of public administration shifts from service provider and prescriptive regulator to the role of managing change, providing frameworks, and overseeing the protection of the public interest, governments of liberal and conservative persuasions, I believe, will find increasingly that the fit between their own philosophies and the nature of Australian public administration becomes closer and more productive. The foundations for a strong and productive partnership are being set firmly in place. Indeed, it is true to say that the remarkable policy revolutions of Thatcher's Britain and New Zealand were driven as much by the respective civil services as by any political processes.

In making this point I do not in any way suggest that the changes we are seeing are partisan in character. They are changes which result from the actions of both sides of politics and which respond to global developments. They reflect the capacity of our society to learn - to learn from experience, to learn from mistakes, to learn from history.

In the late twentieth century we are seeing a new flowering of the democratic state after the collapse of the immensely distracting socialist experiments of eastern Europe and the substantial disappearance of ideological challenge to the liberal democratic framework. This is having immensely positive consequences for our society and its public administration.

The maintenance of an apolitical public service should not however be interpreted as providing to governments a 'value-free' public service. Indeed the new legislation aims to enshrine for the first time a coherent and explicit statement of the values which must underpin a professional public service in a democracy. I believe the community service obligation of the public service is to continually test how the development and implementation of government policy will actually improve the lives of people. That obligation exists regardless of the political persuasion of the government.

If it is not appreciated that we all bring our values and predilections to the consideration of policy we misunderstand human nature. The dimensions of a career public service: professionalism, organisational memory; and understanding the links between the elements of policy and programmes, are critical to supporting strategic leadership to meet the needs of citizens in a democracy.

The public interest policy analysis skills of the career public service in the next century must be exceptionally strong. There has been a growing importance of analysis from private think tanks and the offices of lobby groups. Policy advice itself today is increasingly contestable. From being the sole source of advice the public service of today must increasingly have the capacity to manage multiple source of advice - and this means that the skills of the public service itself must be higher than ever.

Theglobal context

Quality advice to Governments provided by the public service must take account of the fact that globalisation is changing the nature of what governments do and indeed the role of governments within Western nation states.

Nation states are no longer self-sufficient - if indeed they ever were. The state still defines the policies and rules for those within its jurisdiction, but global events and international agreements are increasingly affecting its choices. The globalisation of economies is placing pressure on governments to improve their competitiveness, including the cost and relevance of government itself, and the relative efficiency of its taxation regulatory framework.

Let me quote from our Government's White Paper on foreign and trade policy:

'Globalisation offers huge opportunities for internationally competitive economies, but also brings in its wake challenges for political and economic management....It blurs the division between foreign and domestic policy, increases competitive pressures in markets, and makes globally based trade rules and disciplines even more important.'

What the global economy is teaching us is that it is rigidity arising from excessive prescription in our organisations and regulatory frameworks, and inefficiency in our taxation and public spending arrangements which undermines security in an age where everything or almost everything is contestable. The greatest security we have comes from excellence and adaptability. The pursuit of best practice is not a fashion. It is a survival technique. It still requires conscious choice because, as someone said, it is not compulsory to survive.

International competitive pressure is hastening change at the same time as the Australian political economy is maturing.

The maturing political economy

During last century and early this century Australia was heavily reliant on government for its development. At that time Australia had a relatively weak private market sector. It fell to governments to raise the resources for an immense continental strategy to develop Australia's natural infrastructure. Governments built roads, railways, established communications and regulated land, business, and many of the structures of society. But those times are now gone. Australians now have a large and vibrant private sector and access to massive private investment capital. They no longer need rely on government to build their roads, provide their telephones, or run their electricity services, their railways, or their airlines.

In the process the old model under which government services were delivered by governments through their own employees and agencies is disappearing. Governments have learned new ways of delivering services - through outsourcing, through purchaser provider models, through privatisation - drawing on new policy architecture to achieve their aims.

In doing so Governments are both acknowledging the huge increase in knowledge and skills in the wider civil society beyond government and also providing opportunities for those with the relevant knowledge and skills to contribute to the delivery of public goods. It seems to me unlikely that a democratic society with the capacities which have now developed would permit anything else, for democracy abhors monopoly which equates to privileged access to opportunity.

Historically Australia's democratic culture led to an emphasis on democratic access to bureaucratic positions. The impact of such a culture is still evident. Today's democracy however demands more. It increasingly seeks the right of fair and equal access to public resources to deliver government services or public goods.

It is not surprising that public administration in Australia is pushing ahead rapidly into this new policy terrain. We in Australia are the heirs of one of the great democratic initiatives of the last century. This country provided the environment for the establishment of a fully democratic society that recognised that democracy required educated citizens and a moral and ethical society. Democratic societies are continually lifting their levels of education and the quality of their communication to equip their citizens with the power to choose and choose wisely.

While many of the institutions of our society are being questioned, and while many feel they are working harder and longer, or while others are underemployed or unemployed, Australia has changed for the better. It is more tolerant - immigration into Australia has occurred peacefully and with goodwill. Australia is now a highly diverse society of many cultures.

Citizen choice and diversity are key tenets of liberal democracy. A key determinant of citizen choice is education. Education enables individuals to take command of their lives, to build self- confidence, to manage the interaction between themselves and their environment.

Education produces better citizens, better parents, better relationships. People are empowered to explore choices and make decisions.

Citizens are calling for responsive and efficient services while, at the same time, exerting significant pressures on governments to reduce deficits and control public expenditure. In a democratic society there is a limit beyond which democratic governments cannot go in relation to the levels of taxation revenues it can raise. Demands from citizens are increasingly diversified and sophisticated.

This cultural change is a powerful force leading to the reconstruction of the democratic state. We are beginning to recognise that not everything citizens want necessarily can or should be provided by government. New policy technologies allow us to differentiate between governments 'being responsible for' the provision of services and governments actually 'providing' services to our citizens. The desire for choice and the need to recognise diversity provide the foundations for a new approach to government. The challenges of reform are not only to develop high performance organisations.

The challenges of reform are also policy challenges. An egalitarian society such as ours is affronted by the wide gap between rich and poor, by unacceptably high unemployment, by persistent social and individual disadvantages which undermine the life opportunities of individuals. It is a challenge for the public service advisers of governments is to design the policy architecture which successfully addresses these affronts to the democratic spirit and does so in a way which makes optimal use of the intellectual and skill resources available to governments today.

The pre-eminent demand within an effective career service in the new millennium is quality leadership - leadership that identifies the rationale for, and sets the directions to achieve, the great public purposes of governments.

At the most strategic level, governments themselves - Ministers - must provide that leadership. They must communicate with clarity the objectives of government. When Government has determined its outcomes the leaders of the public service must then be able to set the purpose and direction of their organisations in a way which will best achieve those objectives.

Choice and public administration

Many of the government reforms being undertaken in Australia are concerned with giving citizens greater choice. We are doing this at three levels. Firstly, by transferring functions to the private sector and enlisting the knowledge and skills of the private sector in delivering government services. Secondly, by reducing costs and increasing value for money to the citizen by a more effective public service. Thirdly, by improving government responsiveness to citizens needs by increasing the opportunity for citizens to influence the services they receive and reduce consumer frustration.

The transfer of government services to the private sector through privatisation, commercialisation, corporatisation, or outsourcing allows market conditions and consumer choice to come into play. This means applying what we call the 'Yellow Pages' test - if you can find suppliers of a particular service in the Yellow Pages you may ask why is the government providing it?

One might sometimes get the impression from the political debate that the application of these principles is being driven solely by some narrow fixation on economy and efficiency. This is not the case. The driving force is to establish better ways of achieving all our values. The new policy architecture is as important in achieving social equity as it is in achieving efficiency.

One of the landmark reforms of the Howard government will be the new employment services market. A previously monopolistic service provided through the Commonwealth Employment Service is being tendered to a competitive market with the aim of helping more unemployed people find jobs and increasing sharply the effectiveness of assistance to long-term unemployed people.

This radical new approach to a central social equity policy will expand the proportion of job vacancies readily accessible to eligible jobseekers far beyond the 20 per cent registered with the CES. Prescriptive labour market training programmes will give way to specifically tailored assistance to meet the jobs needs of each individual jobseeker. Policy success and the payment of public funds will be linked to job outcomes, not programme placements.

The competitive provision of services will ensure that the most successful providers will get the business, while choice of provider will enhance the dignity of the jobseeker.

It is a fallacy to suggest, as some have, that the cause of social equity is best served by the monopolistic and prescriptive provision of services where public expenditure is not related to outcomes. Every citizen can benefit from the strategic use of the knowledge and service skills available outside government, while government acts as an informed and watchful purchaser and monitor and provides an appropriate regulatory framework.

Another example of a similar approach is to be found in the development of the national training market, in which public and private providers operate on a playing field which is increasingly level. I am pleased that the new national framework for the recognition of providers and qualifications has been agreed this year, and contestability of up to $500 million of public funds for the off-the-job training of apprentices commences on 1 January 1998. In schooling also we are seeing enhanced opportunities for educational choice for low income families, with consequent upward pressure on standards arising from an improved framework for the provision of public funds.

Departments and agencies are now being asked to identify those functions or services that could be contestable and transferred, in whole or in part, to the private sector. Only when it can be shown that the public sector clearly adds greater value than might be elsewhere achieved is service delivery being retained in the public sector. For services that are contestable, market mechanisms are likely to generate significant competitive pressures for improved delivery and reduced costs.

The existence of alternative suppliers gives them the freedom of choice of a number of service providers - a choice which should offer better services. They exercise their judgement with their feet: to buy or not to buy - to transfer their custom elsewhere - to exit.

Citizens want outcomes. There are only a limited number of occasions when the deliverer - public, private or voluntary - matters to citizens. What matters most is quality, access, responsiveness and cost.

As taxpayers, citizens question the tax they pay when they receive poor or unresponsive service. In the private sector they see a range of convenient alternative service delivery models such as extended shopping hours, and access to services electronically, which make service independent of the supplier's workplace, such as home banking and telemarketing. Many citizens see no reason why government services cannot be delivered, at a time and in a way that suits their convenience.

An example of this is Centrelink, an initiative of this Government, which is the 'One Stop Shop' providing an integrated range of services to customers. It is worth making the point that the employees of Centrelink constitute 20 per cent of the entire Commonwealth public service.

Centrelink is being established with an emphasis on customer service. Counters and barriers have been removed to provide an environment that is more alive to customers needs. Clients will have appointments instead of waiting in queues and case management is expected to deliver a more personalised service. Local offices can extend business hours and take other customer service initiatives to meet local needs. 1200 of the most experienced staff have been placed on the front counters.

As a key element of its Quality Service Framework, Centrelink has developed a 'Balanced Scorecard.' The Scorecard measures the agency's success against what its customers, client departments, the community, agency staff, and the Government expect Centrelink to deliver. Added to this is a goal to deliver innovative and personalised solutions - an indication of the cultural change underway. Performance at all levels of the organisation will be measured by local, area, and national targets, and performance improvement targets will be negotiated with stakeholders - governments and the community - and staff.

Benchmarking as a tool to measure performance of government services is fairly recent in Australia. In those areas where the public service no longer holds a monopoly it will need to benchmark their services with alternative service deliverers in a competitive market. In contracting out services, the government will choose the most efficient deliverer after taking into account the accountability and community service obligations attached to delivery.

It is critical for those of us in government to think ahead, to think about the forces which might shape our society, ask how they can be influenced by governments and the community, and how they, in turn, will influence the shape of government, including the public service.

This is a dilemma for governments. If we focus on the now - we are short sighted. If we try to predict the future we have a good chance of being wrong. What we must do is to ensure that our organisations and our policy frameworks can adapt flexibly as circumstances change. The question then for those of us who want to govern, and who want to help governments govern, is how can we prepare Australia for the future.

At a policy level, the public service must, in the future, balance three quite complex issues.

Firstly, it must view policy from the perspective of choice. Strategies which assume limited choice or monopoly in the consumption of service by citizens are unacceptable for many activities of government.

Second, the process of policy development and strategy will demand greater sophistication. Choice based policy options will be more transparent, more creative and more subtle. There will be more dimensions to consider. The primary dimension will be how the citizen can have the maximum freedom within a market of services. Policy will comprehend both supply and demand issues.

Third, the clear identification and articulation of outcomes will become even more critical. Freedom of choice may introduce more variables into the processes that transform intent into effect.

In an environment where there is freedom of choice, evaluation will be even more important because the impact of government will be less easily attributable. The evaluation of outcomes will have to comprehend the contribution of multiple players and multiple relationships. Whether policies and strategies have maximised the citizen's capacity to exercise their freedom of choice in a way which met their needs, and the public interest, will be a critical question.

Integrating freedom of individual choice and the public interest in the long term cost and quality of health services requires very sophisticated analysis.

There is one issue in this scenario that governments must acknowledge - creativity is not risk free.

One of the very real challenges is what has been seen as a tension between creativity and accountability because creativity involves risk taking and, inescapably, mistakes and failures. But the market is an institution that is well-suited to the management of risk for not everything is concentrated in the one organisation, and that therefore we are not completely dependent on one provider alone to get it right. And the market provides incentives for organisations not to be complacent, but to instead devote time to consider possible dangers, and to find ways of avoiding them or limiting the possible harm. If they don't do this, then they will lose their business.

New ideas and directions must be developed and tested. Waiting until enough information is available to remove all risk from policy and programme options, or going down the policy path of least resistance, may not be relevant to the challenges of the future. This is not to say that expediency is the way of the future. It is not to say that cutting corners to save time or money - without putting in place structures which identify and quantify risk - are acceptable. They are not. They are just examples of poor judgement. Governments and Parliament must shift their accountability focus to outcomes achieved within a proper process, and be able to manage the tensions between creativity, risk and accountability.

The alternative - of slow, 'safe', lowest common denominator advice and policy direction - is not an option.

A strong and influential public service is a key element of Australia's future. I see this public service as a place where policy analysts, advisers on future scenarios and program managers, can build satisfying rewarding and challenging careers. Ultimately, the public interest demands a high performing Australian Public Service, and the Government is working to create the environment in which this will happen.