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Ch 2 A new legislative framework

Development of the legislation, which ultimately became the Commonwealth Public Service Act 1922, occurred in two main stages, as a consequence of two Royal Commission reports.

Economies Commission

The Royal Commission on Federal Economies (commonly referred to as the Economies Commission) had been established at the end of the First World War to ‘consider and report upon the public expenditure of the Commonwealth of Australia with a view to effecting economies’. Along with the more narrowly focused McLachlan Commission, it represented a significant element of government actions designed to restore the Commonwealth’s administration to peacetime operations.

The Commission operated for two years, with its investigations covering only some of the federal departments.

The Commission comprised two successful business men—Sir Robert Gibson, ‘a leading member of the Melbourne Chamber of Manufactures and uncrowned king of the Victorian business world’ (Caiden 1965, p. 143), GH Turton, Chairman of the Royal Insurance Company, Melbourne–and GB Haldane, accountant of the Postmaster-General’s Department.

In broad terms, the Economies Commission reported that ‘considerable economies were possible under a system of management which should give closer attention to organisation and systematisation, and provide for continuous and far-reaching inspection in all departments, thus bringing to the light of publicity any evidence of extravagance and inefficiency’ (PSB AR 1924, p. 5).

The concerns expressed by McLachlan, and the then known general thrust of the Economies Commission’s reform proposals clearly struck a responsive chord with Prime Minister Hughes:

… I believe the Public Service of this country is in urgent need of reform; it is a cumbrous, costly, and ill-managed instrumentality of government. The Government proposes to introduce a Bill for the amendment of the Public Service Act which will enable us to give effect to a great many—the major portion, perhaps—of the recommendations of the Economies Commission (CPD 10 March 1920, p. 260).

Of direct significance, however, in the context of the ultimate content of the 1922 Public Service Act, is the Commission’s advocating the establishment of a three-person Board of Management rather than continuation of overall direction and management of the affairs of the Service by a single Public Service Commissioner, as favoured by McLachlan and recommended in his Royal Commission report.

The Government sided with the Economies Commission on the Board issue and, despite vigorous parliamentary opposition on both sides of politics, moved to legislate accordingly, with the introduction of the (short-lived) Public Service Bill 1920.

The 1920 Bill essentially dealt with only one issue—the proposed establishment of a three-person Board of Management, in place of a single Public Service Commissioner, in accordance with the Economies Commission recommendation. In the Second Reading Speech on the 1920 Bill, Minister Littleton Groom described the intended composition and functions of that Board and its genesis in the Economies Commission’s report (CPD 5 October 1920, p. 5295–300). The Minister foreshadowed a further Bill, dealing with the whole of the existing Act, and proposed amendments to it, along with a Bill to deal with superannuation in the public service.

The general amending Bill, subsequently becoming the 1922 Act, was introduced in the Senate in April 1921, superseding the 1920 Bill. It incorporated the Board of Management structure (but designated as the Public Service Board), with ‘efficiency and economy’ responsibilities along the lines advocated by the Economies Commission.

McLachlan Commission

The Royal Commission on Public Service Administration (commonly referred to as the McLachlan Commission) was established in October 1918. McLachlan’s task was ‘to inquire into and report upon the various Acts relating to the administration of the Public Service of the Commonwealth, and particularly in relation to the effect of such Acts upon the management and working of the Departments, and the steps necessary to adjust the position that has arisen by reason of the various authorities in existence for the regulation and working of the Public Service’ (Letters Patent 11 October 1918).

Despite his critics, McLachlan had unquestioned credentials for appointment as Royal Commissioner. When appointed, he wasted no time in communicating his views to the Government some four months later.

McLachlan’s reform proposals ‘were in many respects revolutionary in character’. His report identified defects in then existing public service legislation and administrative control and stressed ‘the urgent necessity for remedial legislation in order that serious anomalies might be dealt with and the condition of drift arrested’ (PSB AR 1924, p. 4).

In its 1924 annual report also, the Public Service Board summarised McLachlan’s principal proposals:

  • amalgamation of separate services (assumed to refer particularly to the then separate Defence administrative arrangements) under one Public Service Act, with control by a (single) Commissioner
  • repeal of the Arbitration (Public Service) Act, which had resulted in ‘disloyalty extravagance and reduced efficiency’
  • appointments to the Service to be made by the Public Service Commissioner instead of the Governor-General
  • introduction of a new numerically described divisional structure for the Service and a general reclassification of Service staff in accordance with that structure
  • promotions and transfers to be made by departmental heads instead of the Public Service Commissioner or the Governor-General
  • granting of the right of appeal against promotions
  • introduction of new provisions relating to disciplinary action, involving establishment of a Board of Appeal to adjudicate on punishments imposed by departmental heads (PSB AR 1924, p. 4).

Other McLachlan proposals included procedures for dealing with incompetent or inefficient officers by reduction or dismissal, a more equitable and economical basis for the regulation of sick leave, special salary scales for females, more economical administration of temporary employment, extension of hours of attendance, and review of the quantum and justification for extraneous payments by way of allowances.

Aside from opting for a Board of Commissioners in preference to McLachlan’s single Commissioner model, and choosing not to vary the new Commonwealth Public Service arbitration framework, the government essentially accepted the substance of the McLachlan proposals.

It is worth noting also, however, that in its 50th anniversary publication The Public Service Board 1923–73, the Board noted that the Bill for the 1922 Act was ‘hotly debated and substantially amended’ in the 18 months preceding Assent to the Act (see below) and that, by then, in Caiden’s words, ‘it bore little resemblance to either the original draft or the Reports of the two Royal Commissions’ (Caiden 1965, p. 167).

Introduction and passage of 1922 Public Service Bill

The Public Service Board noted that, from the two Royal Commission reports, ‘ample material was made available to the Government upon which to frame a policy for new legislation and future management of the Service’ (PSB AR 1924, p. 5).

Consequentially, the Bill ‘to consolidate and amend the law regulating the Public Service and for other purposes’, introduced in the Senate in April 1921, progressed to be considered by the House of Representatives in October 1922.

In detailing the key provisions of the Bill in his Second Reading Speech, Minister Groom included comments particularly on the following matters:

  • The public service was to be divided into two parts, composed of the ongoing Commonwealth Service (essentially the same as the current APS) and the Provisional Service (comprising ‘any Department or branch of the Public Service, of a provisional
  • or temporary character, which is specified by proclamation’), which would be subject to the control of the Board—the still enduring Repatriation (now Veterans’ Affairs) Department was cited as an example!
  • A numerically described four Division structure was to replace the Division titles used in the 1902 Act and would reflect McLachlan’s view that the old generic titles were ‘not invariably appropriate to the qualifications and work of the officers concerned’ and had become ‘an irritating distinction of ‘caste’ based only upon nomenclature’.
  • Service salaries would in future be fixed by regulations, to overcome the previous rigidities of prescription in schedules to the Act.
  • The 1902 Act ‘British subject’ requirement for appointment to the Service would be supplemented by the requirement for an oath or affirmation of allegiance to the Crown—in the earlier Second Reading Speech on the Bill in the Senate, Senator Russell had indicated that this measure was designed to prevent the admission to the Service of ‘persons who are opposed to constituted authority’ (CPD 13 April 1921, p. 7366).
  • The new disciplinary provisions would distinguish between minor and other than minor offences, with procedural differences appropriate to that distinction.
  • The Public Service Board would exercise greater control over temporary employment (CPD 28 September 1922, p. 2842–6).

The Bill attracted more than 90 proposed amendments in the two Houses. In the event, probably the most significant of those accepted was the returning to the Board of the authority to make promotions on permanent head recommendations, contrary to McLachlan’s recommendation and the terms of the Bill as drafted. The proposal for permanent heads to exercise the power featured in Senator Russell’s Second Reading Speech (CPD 13 April 1921, p. 7359–60) but the provision attracted significant opposition in the later Representatives debate ‘mainly on the ground that a series of water-tight compartments would be created, thus preventing promotion of officers from one department to another’, apparently without regard to the provision in the Bill of a promotion appeal right (PSB AR 1924, p. 10). The amendment, carried on the voices in the Lower House, was not subsequently contested in committee debate in the Senate, and no further explanation was given of the government’s reasons for accepting it (CPD 10 October 1922, p. 3422–3 refers).

The Board subsequently made successful representations to the government for reversal of the decision of Parliament on the promotion matter, and this was addressed in an amending Public Service Bill, still under consideration in Parliament at time of submission of the Board’s 1924 report.

The amended 1922 Bill was finally passed by both Houses in October 1922, receiving Royal Assent on 18 October 1922. It was proclaimed to commence on 19 July 1923, a federal election having intervened late in 1922, resulting in the Hughes Nationalist Party Government being replaced by the Bruce–Page Nationalist/Country Party Government.

In its 1924 report, the Board identified 13 principal features of the new Public Service Act, involving departure from conditions established under former legislation (PSB AR 1924, p. 5–6). Some of those features have already been mentioned above, but a copy of the Board’s complete listing has been reproduced at Appendix 1.

Structure of 1922 Act

The 1922 Act was structured in four parts as follows:

  • Part I—Preliminary (including formal provisions and definitions, exclusions from Act coverage and provisions relating to officers of the Parliament)
  • Part II—Composition and Administration of the Public Service (separate Commonwealth and Provisional Services, the Public Service Board and its duties and powers, including power to deal with excess staff, and a requirement to keep and publish annually a record of all officers of the Service).
  • Part III—The Commonwealth Service (including the Divisional structure, permanent head and chief officer provisions, classifications and salaries of offices and officers, creation and abolition of offices and basic staffing provision relating to the engagement, movement, separation and employment conditions of staff, incorporating the special ‘returned soldier’ provisions).
  • Part IV—The Provisional Service (and the basis for employment in that Service)–it appears that these provisions were never used and they were repealed ultimately by the Public Service Act 1954.

The previous section has summarised key provisions, and no attempt has been made to spell out detailed coverage or content. The history rather seeks to identify the significant changes which subsequently occurred to these provisions over the life of the Act.

Appointment of Public Service Board

The Government had opted for establishment of a three-member Board, as recommended by the Economies Commission, in preference to continuation of the single Public Service Commissioner model, strongly advocated by McLachlan.

One of the most useful and concise statements of the government’s position was given by Minister Groom in his Second Reading Speech on the 1920 Bill. After recounting the differing practices which then prevailed in the Australian states and New Zealand in relation to public service controlling authorities (a Board of three in NSW, a committee of Cabinet in Queensland and single Commissioners in Victoria, South Australia, Western Australia and New Zealand), Groom commented as follows:

… the proposed Board will have added duties of a different nature, and of a character not hitherto undertaken by any Public Service administration in the Commonwealth. The idea is that there shall be business management as well as control of the Service, and this, obviously, cannot be obtained by means of one Commissioner; this necessitates calling in aid from outside in order to bring some additional ability and strength to bear on the general control and the expenditure of the Service (CPD 5 October 1920, p. 5297).

The first Commissioners of the new Public Service Board were appointed by the Governor-General with effect from 11 June 1923, with varying terms of office:

  • Major-General Sir CBB White, KCMG, KCVO, CB, DSO, for a term of five years (also appointed Chairman of the Board).
  • WJ Skewes, for a term of four years.
  • Brigadier-General JP McGlinn, CMG, CBE, VD, for a term of three years.

In the earlier Public Service Bill debates, the Government had indicated that the (then proposed) differing terms of office were adopted to ensure continuity of administration since all Commissioner positions would become vacant at the one time if a common term of office applied.

In terms of background of the Commissioners, Major-General White had previously had a distinguished military career and was Chief of the General Staff at the time of his appointment to the Board. He is described as a person of great personal charm, with great powers of work, a quick brain and ‘a remarkable grasp of essentials’, which enabled him to deal with matters and make decisions quickly (Australian Encyclopaedia 1962, vol. 9, p. 294).

Skewes held the office of Public Service Inspector (Central Staff) in the Public Service Commissioner’s Office at the time of his appointment as a Commissioner of the Board, and thus provided continuity and expertise from the previous administration. He had joined the Commonwealth Service in August 1902, from the Victorian Service, as a member of McLachlan’s staff. The Board later observed that he was ‘actively and intimately associated with all subsequent Service legislation and administration until his retirement’, the latter taking place in June 1931 after a total of 44 years state and Commonwealth service. The Board also referred to his administrative abilities–‘conspicuous industry and unflagging energy, in his rendering of invaluable service to the Commonwealth’. (PSB AR 1931:16)

Skewes’s contribution as a Commissioner is further acknowledged by Caiden, who cites particularly his ‘unequalled knowledge of the Service’ and his roles as the Public Service Commissioner’s advocate in arbitration cases from 1913, and in the development of the new Act and most of the Regulations. Caiden also contends, however, that he was ‘one of the most hated public servants of his day, mainly because of his shrewd, cunning and forceful approach towards witnesses in the Arbitration Court’, in which situation he viewed any gain by the staff associations as ‘a calamity which threatened the whole fabric of society’. In contrast, outside the court he had been ‘honest, impartial, and on occasions quite generous’ in matters of classification, appeals and interpretations, and had worked to modify the ‘extreme approaches’ of McLachlan and Edwards (Caiden, 1965, p. 175).

The Board’s report records subsequenty, the appointment of Brigadier-General McGlinn (PSB AR 1924, p. 6). His retirement is recorded in March 1930, noting that he had served in state and Commonwealth Services for 47 years, but providing no other background information (PSB AR 1930, p. 6). After his abovementioned comments on Skewes, however, Caiden notes that McGlinn had an electrical engineering background in the Postmaster-General’s Department (and its predecessor in NSW), had been Deputy State Engineer for NSW at the time of his appointment as Commissioner and was little known to Board colleagues, White and Skewes. He was known as a ‘strict disciplinarian but human’ and was reputed to possess ‘administrative ability combined with abundant energy’. His war service had occurred both in South Africa and in World War I, and Caiden asserts that the appointments of two military men, in White and McGlinn, had ‘pacified the Returned Servicemen’s League, which had believed that the old regime had neglected the interests of returned soldiers’ (Caiden 1965, p. 174, 175).

The first formal meeting of the new Board was held on 25 July 1923 at the Customs House, Flinders Street, Melbourne, where the Board’s office was located until August 1928, when it transferred to Canberra.

Implementation of 1922 Act

From July 1923, the Board undertook the detailed work necessary to allow proclamation of the new Act. Its principal tasks were the development of new Public Service Regulations (on which Skewes had already been working for some months), the preparation of instructions to provide guidance for departments in relation to the new Act and the Public Service Regulations, and the framing of new organisational structures for the Board’s central and state offices. The work was completed quickly and the Act was proclaimed to commence on 19 July 1923, six days before the Board’s first formal meeting. The new Public Service Regulations (180 in number) received Executive Council approval on 11 July 1923.

… the utmost effort was put forth to frame Regulations liberal in their incidence, helpful to those responsible for the internal control of the great public departments, and at the same time having due regard to the policy enunciated by the Legislature in passing the Public Service Act of securing efficient and economical administration of the Public Service (PSB AR 1924, p. 7).

As already noted, the Board had observed also that the origins of the 1922 Act were to be found largely in the conclusions and recommendations of the McLachlan and Economies Commissions. While they were ‘on the whole well conceived,’ difficulties identified in the early months of the operation of the Act had pointed to the need for certain legislative amendments.

The 1924 report details, at the pages indicated below, the range of matters addressed by the Board in its first year, with the following being of particular interest and immediate or ongoing significance:

  • Classification of the Service (34–5)
  • Service basic wage (45–57)
  • Training of officers (58–61)
  • Efficiency and economy (63–7)
  • Management of temporary employment (67–8)
  • Preference to returned soldiers (77)
  • Problems with the Arbitration (Public Service) Act 1920 (84–7).

Additional comment on these issues is included in Appendix 2.

The first report records also the action already taken, and then proceeding, for bringing back under Public Service Act employment staff of the Defence Department, previously brought under Defence Act control as a war-time measure, or otherwise employed under provisions of that Act and the Naval Defence Act 1910–11 (PSB AR 1924, p. 7, 8).

Of greater interest in an ongoing sense, however, is that the report registers a then unresolved conflict between the Board and the Institute of Science and Industry (later to become CSIRO) concerning whether that Institute should become a branch of the Commonwealth Public Service (PSB AR 1924, p. 93–5). The Board’s arguments for integration into the service (in the first instance, possibly as a branch of the Provisional Service, as recommended earlier by McLachlan) and the Institute’s contention that it should be outside the Service with independent staffing powers under its own legislation were to be canvassed many times throughout the life of the Board, in relation to many different independent statutory bodies and their existing (or proposed) enabling legislation. The Board’s concluding observations on this particular situation essentially encapsulates the views it maintained and the advice it tendered to the government, with limited success, over the ensuing 60 years:

The Board has only to add that the objects aimed at by the Parliament in passing the Public Service Act 1922 will be largely frustrated if control of sections of departmental service is to be removed by special legislation from the operation of the Public Service Act. Economical and efficient administration will certainly be prejudiced by a splitting up of the Public Service under separate controlling authorities and the public interest is bound to suffer (PSB AR 1924, p. 95).

Although unable to prevent the establishment of independent agencies, the Board’s objectives were met in part, probably in the majority of cases, by inclusion in the enabling legislation for individual statutory agencies the requirement for such agencies to obtain the Board’s approval for their terms and conditions of employment. That mechanism, in turn, was to begin to disappear with the Board’s demise in 1987. By the end of the 20th century, the almost universal Public Service Act coverage of Commonwealth staff in the early years of the Service was to be reduced to a level of about 45 per cent.