Speech

CPSU Governing Council Meeting 2010
Future challenges for the Australian Public Service
19 March 2010

Mr Terry Moran AO

Introduction

Thank you for this opportunity to discuss the future of the APS, a core concern of both our organisations.

I’d like to take this opportunity to acknowledge the work of Stephen Jones as National Secretary of the CPSU over the past five years. We will certainly feel the loss when he steps down, but look forward to working with Nadine Flood as she steps into the role.

That contribution, and the ongoing involvement of the CPSU, is particularly welcome as we reach a critical turning point for the public service.

As you will be aware, in September 2009 the Prime Minister announced the formation of the Advisory Group on Reform of Australian Government Administration to develop a blueprint for reform of the public service.

The blueprint was finalised and handed to Government on 2 March.

Today I would like to take you on the journey the Advisory Group and I have taken over the past few months to develop this document, which I believe will position the APS to meet the complex challenges of the future.

I will also take this opportunity to share what we learnt from employees and stakeholders though the consultation process.

As you will understand, my comments must be kept to broad reform directions rather than specifics until the report is publicly released.

My talk today will focus on addressing four key questions, the questions we posed and answered in developing the Blueprint. These are:

  • What is the Australian Public Service and why is it important?
  • Why do we need to reform the APS?
  • What outcomes do we want to achieve from the reform process?
  • How are we going to achieve these outcomes?

What is the Australian Public Service and why is it important?

In order to contemplate reforming the APS it is first essential to understand the context we, as a service, work in.  This will ensure the reform process does not lose sight of our fundamental roles and responsibilities.

The Blueprint reminds us that the public service is critical to the lives of every Australian, and our shared direction as a nation.

Every day Australians interact with various levels of government in a vast number of ways.

Australians drive on roads that are funded by government, receive health care that is subsidised by government, drop children off at schools that are built and operated by government, check the weather which is monitored by government and are protected by legislation which is created by government.

The APS carries responsibility for a significant proportion of these services, playing a critical role in policy development, front-line delivery, and regulation.

It employs around 160,000 Australians, more than 60 per cent of whom work outside Canberra.

In undertaking this work, our roles and responsibilities stem from the Westminster tradition of government. 

As that tradition demands, the APS is a professional, non-partisan service dedicated to assisting the government of the day.

In this relationship, the APS is bound to provide frank and honest advice. It exercises authority on behalf of Ministers and must work effectively with them to develop policy and implement government programs and services. 

It is Ministers who hold ultimate accountability through Parliament, except where independence has been enacted through legislation for particular office bearers, such as the Auditor General.

As Ministers differ in the type of interaction and support they require from public servants, the APS must be flexible enough to meet different needs.

Our history has shown that the quality of the support provided by the public service and the economic prospects of the nation are closely entwined.

It would be impossible to list the many reform measures enacted by the APS, in partnership with the government of the day, which have contributed to the wellbeing of all Australians.

A small sample of these measures is enough to demonstrate the impact of a high performing public service. I would single out the central role of the APS in such key reforms as:

  • Opening up Australia’s economy through the reduction in import tariffs over the past 30 years;
  • Introduction of the superannuation guarantee in the early 1990s; and
  • Evolution of the Jobs Network, Medicare, and access to higher education.

In recent times, the vital role played by the APS in responding to the global financial crisis has again underscored its national importance.

Why do we need to reform the APS?

So why then do we need to reform the APS now?

Firstly and importantly, it is the nature of any good organisation that it periodically undertakes reviews to assess its performance, and identify what it needs to do to improve outcomes and to keep up to date with changing trends.

The private sector does it, the community sector does it and the public sector must do it also.

Throughout the history of the APS, Governments have periodically undertaken such reviews. 

The last significant review of the public sector in Australia was a decade ago - the review which led to the Public Service Act 1999 and the last overarching review of the public sector was the Review of Commonwealth Administration in 1983.

In light of the vast changes which have occurred over the past ten years, review is once again timely.

I have said before that I do not think the APS is broken.

We are in fact a very successful organisation.

The Advisory Group commissioned an international benchmarking study that compares the Australian Public Service with those in eight high performing countries: Canada, Denmark, France, New Zealand, Singapore, The Netherlands, United Kingdom, and the United States of America.

The report scored Australia in the top one third of countries when it came to having a highly independent public service with a robust values-based culture.

As well as for being highly responsive to changes in the economy.

But this does not mean we can’t be better.

We have the opportunity to get ahead of the game and ensure that we are prepared to address the challenges we will come up against the future, those we can already predict and those which have yet to emerge. 

Both the policy environment we work in, and the tools we can employ, are evolving rapidly.

The recently released Intergenerational Report highlighted the profound changes we will observe in Australia’s demographic profile and economy over the decades to come.

Whilst these trends are undoubtedly complex, the Blueprint explores some of their implications for the APS.

An ageing population will place greater demand on health, aged care and social services, and at the same time, will reduce the proportion of the population participating in the workforce.  

A larger Australian population will require careful planning to ensure that the infrastructure, education systems and social services are in place to support the increased number of people, most of them living in urban settings.

Increasing fiscal pressures will force Government and the APS to shape policy responses within a context of limited resources. 

The Government has already committed to hold growth in real spending to no more than two per cent until the budget returns to surplus.  That means that in the years ahead the public service will need to be more creative in its policy approaches – getting the best outcome for the least cost.

Finally, as global economic power moves towards Asia, Australia moves from the periphery of world economic power to the midst of the world’s biggest markets.  We must be ready and able to take advantage of the opportunities that come with this.

At the same time, the APS must recognise the new constraints and opportunities it will face both as an employer and an organisation dedicated to serving the Australian people.

As an employer, the APS is looking at a tightening labour market. It is clear that changing workforce demographics, associated with the ageing of the population, will create greater competition for talent with the external labour market. The APS must be well positioned to attract and retain quality staff.

These staff must possess the skills to thrive in the new technological environment.

The pace of technological change is profoundly reshaping the way the APS has to work and the demands placed upon it. As more and more electronic information becomes available to government the requirement for the APS to improve its information management processes grows.

Citizen expectations of government also continue to increase, changing the nature of the relationship between the Government and citizens.

Citizens now expect and demand to be more involved in government decision-making. And as customers, citizens expect government to be more responsive.

For example, there is increasing demand for diversity in service delivery such as the use of text messaging for communicating with young people. Already, more than 31 per cent of Australians use the Internet for most of their contact with government.

These are all areas where we know the APS must adapt and improve.

But there will inevitably be events and policy challenges that we have not and cannot anticipate. 

To perform at our best we must be ready with the skills and the flexibility to address the challenges which will come our way in the future.

What outcomes do we want to achieve?

With this context in mind we reached the most important and most time consuming part of the review process.  We needed to know what staff, stakeholders, and the public wanted from the APS and how they thought it could improve.

The Advisory Group sought public input into the reform process, particularly from APS employees, unions, state, territory and local governments, academia, business groups, the not for profit sector, and overseas experts.

Before I go into detail on what we learned from this process, as an aside, I wanted to highlight that the work of the Advisory Group generated extensive public interest.

The level of engagement from across the public sector has been outstanding.  I was encouraged to see that there is a genuine desire among staff and stakeholders to see the APS performing at its best.

The active public engagement has provided strong momentum for the reform process.

In October last year the Advisory Group prepared a discussion paper and called for public submissions. Over 200 submissions were received from many different organisations, including the CPSU. 

Impressively, 107 of these submissions were from individuals who took the time to articulate their views on APS reform and share them with us.

The content of the submissions ranged widely but some issues were more commonly raised than others. Four commonly raised topics include:

  1. the need for greater collaboration both among APS agencies and other sectors and jurisdictions;

This was highlighted in your own submission which raised the need to address structural issues that create a silo mentality in the APS.  No one issue sits in isolation of the work of other departments and agencies and we must work together to achieve coherent policies.

  1. the need for a greater investment and structured approach to workforce issues, including learning and development, and recruitment and retention;

57 submissions supported reform to recruitment processes.  Dr Ann Villiers noted that the APS selection criteria are nearly incomprehensible to non public servant applicants.

The CPSU submission supported reform in these areas, emphasising the importance of a systematic approach to training and development opportunities across the APS.

  1. discussion around whether the APS Values needed revising;

A clear majority were in favour of streamlining and simplifying the Values so they can be a practical tool for staff as they navigate difficult decisions in their professional lives.

  1. The need to improve service delivery through better integration of service design, delivery and policy formulation.

The Smith Family told us that ‘a contemporary and relevant public sector is required to be part of the community, working in partnership with its members to help solutions emerge from within society rather than imposing them upon it.’

A number of other consultation processes have also been undertaken.

We held six Employee Meetings last November with randomly selected employees across Australia.  These were held in Perth, Brisbane, Melbourne, Newcastle and two in Canberra.

We also held four online discussion forums on the PM&C website – around 800 comments were received and analysed by the Advisory Group’s project team.

Suggestions to improve the public service from the online forums and face to face consultations with APS employees included:

  • Improving recruitment and career progression practices.
  • Strengthening the quality of leadership and management in the APS – I will talk more about leadership shortly; and
  • Balancing the need for specialist and generalist skills.

A number of submissions also called for review of current APS classification frameworks and pay and conditions, suggesting greater standardisation across the APS.

The consultation process was clear in highlighting the key issues from the point of view of not just APS staff, but also from the academic, community and private sectors.

The Advisory Group’s job was then to consolidate what we had learnt and form them into a coherent set of reform proposals that would address the concerns raised by staff and set the APS on the path to becoming a strong, agile, well resourced and unified organisation.

How are we going to achieve these outcomes?

I turn now to the Blueprint, an ambitious reform agenda that reflects the breadth of the challenges we face.

First and foremost it aims to improve outcomes for the Australian people, through improved services, better policy advice, better value for taxpayers’ money and closer alignment of government activity to the community’s needs and preferences.

At the same time, it recognises the importance of building the capability of the APS workforce and driving change from the top through strong leadership.

The blueprint identifies four main components of a high performing public service.  These four areas provide overarching themes which encompass the key areas for reform highlighted through the consultation process. These components of a high performing public service are:

  • Meets the needs of citizens;
  • Provides strong leadership and strategic direction;
  • Contains a highly capable workforce; and
  • Operates efficiently and at a consistently high standard.

Allow me to briefly explain what each of these envisages for the future.

‘Meeting the needs of citizens’ aims to simplify access to high quality and tailored public services.  It will look to establish one face of the government through joined up service delivery across portfolios and jurisdictions to make accessing services as simple as possible for the user.

It also envisions greater partnering between government, private and community sectors and more open government.

The second theme, ‘Provides strong leadership and strategic direction’, focuses on enhanced policy capability as well as reforms to support senior leadership in the APS, which I will come to in more detail later.

Workforce Capability includes a focus on streamlining recruitment and working conditions and strengthening workforce planning.  It also focuses on learning and development and encourages employees to expand their career experiences.

Finally, efficiency and quality focuses on arrangements for supporting cross portfolio outcomes and mechanisms for driving efficiency.

Let me go into more detail on two elements which may be of particular interest to you.  These are leadership and workforce capability.

Leadership

In order to help Australia rise to the challenges and opportunities it faces and deliver in the areas I have just outlined, Australia needs a public service where leaders foster a culture of innovation and collaboration.

Leaders must display behaviours that build trust and integrity.

They must have passion for their organisation’s mission and for public service.

They must identify future challenges and develop forward looking policy and delivery improvements.

This kind of culture can only flourish if leaders at all levels support such practices, and senior leadership is particularly critical.

There is scope to strengthen leadership across the APS and support service wide cultural change.

For example, at present less than 40 per cent of the 3000 SES identify themselves as part of the APS wide leadership cadre.  This inhibits the capacity of the APS to work as one towards common goals.

We have a tendency to get so caught up in the day to day demands of the job that we don’t focus as much as we should on developing departmental and service wide capabilities for the long term.

During the consultation process, leaders told us that there is a need to clarify their roles and responsibilities and improve support mechanisms to assist them to discharge their responsibilities.

The Advisory Group has proposed new leadership structures that will support APS leaders to fulfil their stewardship role and take ownership for the development and implementation of reform strategies.

The expectations of leaders must be reset and they should be held to account for the achievement of reform directions.

Leaders must also build organisational capability including:

  • Developing all employees;
  • Identifying and managing talent;
  • Creating an environment where new ideas can be generated; and
  • Engaging with and managing risk.

Critically it is incumbent on all leaders to ensure employees are given access to appropriate learning and development opportunities.

Workforce capability

As well as developing and supporting leaders, maintaining a highly capable workforce at all levels will be critical to the ongoing success of the APS.

In many ways we are only as good as our people.

Capability and skills gaps across the APS have been exacerbated by sporadic workforce planning and a lack of clarity about capability requirements.

The Australian Human Resources Institute submission to the Advisory Group said that striving towards a world’s best public service will require, “the world’s best human capital framework, founded on research, metrics and active assessment.”

Agencies have been able to identify skills shortages but they have been unable to address them adequately.

A central human capital framework has been identified during the consultation process as important to bring together data, research and analysis on:

  • Workforce planning;
  • Leadership;
  • Attraction, recruitment and retention;
  • Talent, succession and performance management; and
  • Learning and development.

Such a framework could be used to support agencies to develop strategies that address their unique organisational challenges – and support coordinated approaches to systemic issues.

The introduction of a human capital framework would allow agency performance in these areas to benchmarked and reported on, in order to identify cases of good practice, and areas where improvement is needed.

It will also be an important tool in driving coordinated and individual agency action.

An important aspect of workforce capability is the ability for APS staff to be mobile across the public service. Greater staff mobility promotes diversity in career experiences and strengthens the sense of a one APS.

The Advisory Group noted that the APS classification profile has changed dramatically since the devolution of wages and conditions bargaining occurred in 1997. 

For example, the Advisory Group reviewed State of the Service figures which show significantly less staff numbers today at the APS 1 level, with a drop of 95 per cent since 1995.  The overall SES group has increased on the other hand, by 50 per cent since 1995.

Accompanying these changes in the make-up of the APS workforce, the dispersion of wages within classification levels has also increased - gaps have emerged between minimum and maximum salaries for a given level.

For APS level three staff for example, the gap between the minimum and maximum salary level has increased from 8 per cent to 22 per cent since 1996. For SES Band Two, the range has increased from 24 to 37 per cent.

The Advisory Group’s recommendations will be targeted at promoting greater APS staff mobility, including considering how enterprise bargaining arrangements can be streamlined or strengthened.

Strong central leadership is needed to unite the APS and collaboratively respond to such complex workforce challenges.

But we must also ensure individual agencies remain fit for purpose and can capitalise on their specific institutional strengths.

Further to this, if the APS is to develop a human capital framework, it will need to be based on robust underlying data about the APS workforce.

The State of the Service Report and the APS Employment Database do a good job of capturing and communicating many key data sets and provide a good basis on which to build our future evidence base.

And the difficulties of building on this evidence base are well-known. Both the APSC and the KPMG international benchmarking report commissioned by the Advisory Group have highlighted the dearth of agreed metrics to gauge effectiveness.

But we must go further in trying to build an evidence base from which we can track our performance and workforce planning needs into the future.

The gains would undoubtedly justify the time and effort invested.

Dialogue with other countries can help us to establish consistent data sets to help benchmark performance in more reliable ways.

Building comparable data sets between different APS agencies will help us more easily identify where we can learn from each other.

Extending these data sets to the whole-of-public service level will also help the APS identify areas where it can improve, and areas where it may be well positioned to assist other countries.

Conclusion

In conclusion, while there are areas in which the APS is performing well, there are areas where it needs to improve if we are to achieve our vision for a public service that:

  • Is better at policy advice, service delivery, regulation and implementation;
  • Involves citizens more centrally in the work of the public service; and
  • Better manages technology and information on an APS-wide basis.

A commitment to systemic reform is crucial because many measures are highly interdependent, some may require new investment and some require the development of APS-wide cultural change.

We have identified reforms that will, when viewed together, have a transformative impact on the way the public service operates and the outcomes it achieves.

As such, it will have a positive impact on the services the Australian Government provides, and ultimately the lives of all Australians.

I hope the CPSU will remain a partner in this journey.

I am happy to respond to any questions you have.


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Last Updated: 19 March 2010