Public service stuck in the hole Abbott dug for it

Originally published in Crikey | Subscribe to Crikey here

Public service stuck in the hole Abbott dug for it

Bernard Keane, Crikey politics editor

In February last year, we reflected on a rotten year for the Australian public service, the reputation of which had been badly damaged by a series of scandals and bungles, especially in Immigration — actively engaged in attempts to cover up the rape and assault of asylum seekers in its care — but also in other agencies, including Treasury. Would things improve under Malcolm Turnbull, who unlike his predecessor has a good understanding of the importance of a quality public service and whose first act was to bring back the excellent Martin Parkinson, whose services Tony Abbott so foolishly dispensed with?

A year on, the answer is clear: things have gotten worse.

While the Centrelink fake debt debacle has occupied media attention in recent weeks, it’s worth keeping in mind that it is only the latest major public service disaster of recent months.

It is clear, for example, that the Immigration Department has overseen the wastage of tens, and possibly hundreds, of millions of dollars through poor contracting processes at both the tendering and management stages of its implementation of offshore processing — money that has accrued primarily to the benefit of Transfield. The mismanagement of detention contracts by Immigration — which is now in its third decade of administering detention services — is the subject of two of the most scathing Australian National Audit Office reports of recent years, and covers a period from 2012 through to the end of 2016, under two governments and four ministers, with the most egregious failures occurring in the last two years.

The Industry Department was also the subject of a scathing audit that showed extraordinary ineptitude in its administration of the North West Shelf royalty revenue, possibly costing taxpayers hundreds of millions of dollars in unjustified tax offsets by industry.

The census debacle — for which Australian Bureau of Statistics heads, promised by the Prime Minister to roll, remain firmly affixed — was only one of a number of recent, serious IT stuff-ups by the public service: the Australian Tax Office suffered a massive and damaging IT outage in December that lasted nearly a month and then another significant outage more recently, which it professed to not understand the cause of; the Department of Health — which has overseen a decade-long debacle over e-health records — was embarrassed last year when it released Medicare information that could be re-identified.

The government has in effect now sacked the Department of Finance from overseeing politicians’ entitlements, promising a new, independent body to vet them, in the wake of the resignation of Sussan Ley, who acted in accordance with Finance advice on her travel entitlements but still wound up out of a job. In effect, the Prime Minister has admitted that a government department was not sufficiently independent to offer ministers reliable advice about the use of travel entitlements. Given that the stewardship of Jane “kids overboard” Halton — who pre-emptively defended Bronwyn Bishop before being asked to investigate her travel rorts — has only recently ended at Finance, it’s perhaps not surprising.

Nor is Finance the only central agency that has prompted questions about its reliability. Treasury was recently embarrassed when it was found to have wasted $16,000 on a paper from a far-right academic that was recycled from a study Treasury itself had demolished in 2014. Understandably, Treasury, under Abbott appointee John Fraser, has effectively been sidelined from economic leadership under Malcolm Turnbull. Indeed, economic leadership is now to be found not in Canberra but in Martin Place in Sydney, at the Reserve Bank, given the absence of a serious economic agenda from the Turnbull government and the dearth of quality thinking under Fraser at Treasury.

What’s happening? Virtually none of these problems, apart from the Centrelink disaster, have been the result of ministerial ineptitude or poor political judgement. The cluster of IT-related problems reflects a couple of long-standing problems: long-run underinvestment in IT (Veterans’ Affairs, for example, has been waiting several years to undertake an IT overhaul that will cost hundreds of millions; ABS required a quarter of a billion dollars for a critical IT upgrade in order to undertake the 2016 census — and still stuffed it up). Worse is the continuing learned helplessness of the public service on IT matters. In both the census and ATO debacles, service providers were at fault, and while the ATO investigation continues, we know that ABS shares a significant part of the blame for IBM’s failure given its inability or unwillingness to properly interrogate IBM’s proposed back-up plans.

That theme continues into Immigration’s remarkable failures to manage offshore processing contracts, where Transfield was given virtual free rein in a number of areas relating to performance monitoring and billing. The conclusion is, as the APS has become ever more dependent on contractors, its capacity to effectively manage those contractors has diminished, leaving some of the world’s and Australia’s largest companies to their own devices in important and, often, extremely expensive, contracts.

But another problem is specifically attributable to the Coalition: more than two-thirds of public servants are currently without up-to-date enterprise bargaining agreements — and have been without them for nearly three years — due to the unwillingness of public servants to accept the government’s wages cap (originally 1.5%, lifted by the Turnbull government to 2%). Dozens of “no” votes by agency staff have occurred across the public service in response to efforts by the government and departmental executives to impose what amounted to, for most of that time, real wage cuts on staff. In response, some APS managers admit, staff are simply no longer bothering to put in the kind of effort they normally would in the workplace, and certainly not bothering to make any extra effort to achieve government priorities. As of November, there has also been industrial action at 27 agencies, including most of the largest departments such as Defence, Human Services and Defence. The government’s lack of success in forcing public servants to accept real wage cuts wasn’t helped by far-right industrial relations hardliner John Lloyd, bizarrely imposed by Tony Abbott on the Australian Public Service Commission, blaming the CPSU for a lack of progress and justifying pay rises for senior officers.

Again, Lloyd’s approach wasn’t a one-off. The ABS’s denialism about its census disaster — and its aggression toward critics of its attack on Australians’ privacy — was self-defeating. And Centrelink’s rejection of the idea that there is anything problematic about its fake debt collection attempts — even dismissing, as the particularly clueless Centrelink spokesman Hank Jongen has repeatedly done, that they are even debt notices — has exacerbated the anger and sense of illegitimacy of the entire process.

There’s also a sense that Martin Parkinson hasn’t provided the sort of service-wide leadership that the APS needed at a critical time. Parkinson has continued the hard work he began at Treasury of lifting female participation at the very top of the APS, but the APS hasn’t really had a dynamic, reformist head since Terry Moran left (and the less said about the unfortunate interregnum of Michael Thawley, the better).

As the Abbott years — all two of them — illustrated, a demoralised, demonised public service will make things even worse for a poor-quality government. So far, Turnbull and Parkinson haven’t managed to turn around the cruise liner that is the federal bureaucracy.

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