Speech

CPA Australia's 2010 Neil Walker Memorial Lecture
The future of the Australian Public Service: challenges and opportunities

Wednesday 13 October 2010

Mr Terry Moran AO
Secretary, Department of the Prime Minister and Cabinet

 

Neil Walker

Thank you for that introduction. And thank you for the opportunity to deliver this ninth lecture in memory of Neil Walker.

I'm very pleased to see here Neil's son, Simon Walker, and other friends.

Neil, as many of you know, died suddenly in 2001, aged only 55. He was an active and energetic public service leader.

I remember Neil as one of a committed group of reformers in the Department of Management and Budget in the eighties.

Neil was a generous man and respected for his wisdom and determination. He built solid relationships across the moats separating bureaucratic castles.

After studying at Harvard, Neil worked for two decades in public sector finance. This was a period of great change in public services in Australia, both at the state and federal level. Among the key changes were an increasing focus on results instead of inputs, and on improving management and accountability. Neil was an active participant in those reforms, as a senior manager in the Department of Management and Budget, now known as the Department of Treasury and Finance. Earlier, Neil was chief financial officer and then chief executive officer of Victoria's Tabcorp. Like others, Neil worked in a time of exciting reform which adapted new ideas to the task of improving public administration in Victoria. Victoria has been fortunate to have tribes of reformers each in succession and informed by the successes of earlier tribes.

At the time of his death Neil was the managing director of Frontline Defence Services, a government-owned company providing catering for Defence bases in Australia and overseas. He joined the Defence Department's Canteen Service in 1994. He was a dynamic leader who transformed the ailing organisation into a modern retailer that delivered a wide range of goods and services to the Army and RAAF. Under his leadership the organisation was completely reorganised to reflect modern business practises. A retail website and internet cafes were introduced and Frontline provided support to peacekeeping forces in East Timor and Bougainville as well as to ADF operations and exercises in Australia.

Neil Walker was an innovator and reformer. He saw the importance of public sector finance as a tool for ensuring both management and accountability of government. This interest was reflected in his commitment to the profession of accounting, demonstrated by the senior positions he held in the industry's largest professional body, CPA Australia, where at various times he was national deputy president and Victorian president.

Victoria

Public service reform, since the final decades of the nineteenth century, in Australia has come in waves. I have had the privilege of knowing all the great Victorian Premiers of modern times, beginning with Sir Rupert Hamer, who set themselves the task of reforming public administration in Victoria. They rode the waves of reform for their time. All had distinctive, sometimes dramatic, ideas which in their totality amounted to a consistent approach to extending and adapting the Australian version of the "Westminster tradition". Their purpose was always tied to the good of the State and reflected informed pragmatism not ideology; workable ideas, not flights of fancy.

John Cain as Premier insisted on an accelerated push to professionalism in Victorian public administration.

Jeff Kennett came to power in Victoria in 1992 advocating reforms since tagged New Public Management. Reform continued under the Bracks and Brumby governments – although by the time Steve Bracks was elected in 1999, the ideas driving reform had evolved into a new approach known as Strategic Government.

Tonight I'll talk about those big waves of the past three decades and the evolution of the philosophy driving public service reform, not only in Victoria, but also in Commonwealth-state relations, and in the Australian Public Service (APS).

In each of those three domains – Victoria, Commonwealth-State relations and the APS – under governments of various shades, we can see a common pattern. There has been an evolution in approaches to policy work and management of service delivery. Changes were, for their day, groundbreaking and built incrementally an up-to-date and innovative approach to contemporary government.

Victorian History

Let me flesh out some highlights of the story behind the recent waves of change in public policy in Victoria.

Until the 1970s, Victoria was a backwater in public service reform. But over the past forty years, Victoria has come from behind to take the vanguard among Australian governments in promoting reform.

The first stirrings of change occurred under Sir Rupert Hamer, who became Premier in 1971. Public policy academic Deirdre O'Neill says the public service he inherited had an unprecedented degree of industrial harmony, but it was hidebound and insular. Recruitment in the old Victorian public service was at the school leaver level other than in case of professionals such as engineers, medical practitioners and lawyers.

Hamer appointed former Defence Department secretary Sir Henry Bland to review the Victorian service. Bland produced a series of reports that culminated in a new Public Service Act which led to greater recruitment of graduates, more appointments above base level, creation of a promotions appeals board, and improved internal mobility.

But many of Bland's proposed reforms were left undone, and when John Cain came to power in 1982 he tackled some of the unfinished business. Cain introduced corporate management principles, established a Senior Executive Service, introduced program budgeting, and undertook extensive internal reorganisations within departments which provided an opportunity to recruit many executives from the APS, the private sector and Universities to the Victorian Public Service. John Cain also reorganised the Cabinet system and instilled rigour into its operation.

Reform gathered momentum during the Kennett government. The changes to the public service during this period were transformational.

Among the key changes to the public service during the Kennett era were:

  • within government, separating regulation and policy development from service delivery: the so-called purchase provider split;
  • beyond government, outsourcing many service delivery functions, and provision of infrastructure, to the private sector;
  • combining 22 departments and 18 administrative offices, first to 13, later to eight mega-departments – all this in the cause of greater efficiency and effectiveness;
  • setting department and agency budgets according to their outputs;
  • introducing performance management, along with bonuses of up to a fifth of base salary, for managers; and
  • promoting the use of other tools and techniques from business.

At its heart, Kennett's agenda was aimed at remaking the public service from an economic perspective, using the tools of the market, while still insisting on traditional concepts of how Ministers worked with public servants. These were the days of 'letting managers manage', when the business of government was to 'steer not row'. Public servants were given more freedom to act, more responsibility and clearer accountability.

The amalgamation of departments and agencies was a means to improve efficiency. One aim of this process was to let government focus on policy development, while contracting out service delivery or assigning it to agencies within government that specialised in delivery. Another motive for changes was the view that strategic policy coordination was better done in large multidisciplinary departments.

The Kennett approach – which became the exemplar of the New Public Management model – was influential throughout Australia. For example it provided a spur for changes in the Australian Public Service made by the Howard Government, particularly as reflected in the new Public Service Act of 1999.

In essence, Kennett's goal was to transform the public service to reflect the principles of the private sector and the marketplace, ensuring contestability among providers of services and policy advice.

This approach brought significant benefits. But there were also some weaknesses.

The New Public Management theory rightly identified the importance of the three Es – economy, efficiency and effectiveness. There is no question that each of these elements is important. The public expects the public service to be economical with their resources, and to use them efficiently and effectively. But the three Es aren't as simple as they sound.

In particular, the goal of effectiveness carries some hidden baggage. The question is, Effectiveness at doing what? How do you measure it? What metrics do you use?

Effectiveness is particularly a challenge when New Public Management, especially within the Commonwealth, has led to narrow programmatic responses disconnected from a broader strategic purpose, and from measurable outcomes (a problem sometimes called programmatic confetti). How do you conceive of the ultimate targets of public policy? The answer to that question illuminates a key difference between the New Public Management and Strategic Government approaches.

A narrow economic model – and I acknowledge there are wider economic models – has a focus on members of the public as consumers.

This idea of the focus of policy has been broadened in recent years. There has been a healthy evolution of this dimension of public policy that recognises the importance of taking a broader conception of the public as citizens.

Implicit in this is the recognition that government contributes to public value beyond simply providing services. By focusing on citizens instead of customers, we acknowledge that a purely market conception doesn't do justice in all settings to the whole role of government.

To address this broad agenda the public service needs to be good at strategy – that is, at effectively deploying resources to promote the wellbeing of the community.

Professor Geoff Gallop, the director of the Graduate School of Government at Sydney University, argues insightfully that public policy is evolving, and now takes a broader approach to strategy. This new approach to public policy builds on and extends the ideas of New Public Management. Gallop there are five characteristics of this Strategic Government approach. This approach involves:

  • developing major themes for government;
  • setting priorities around sustainability-type objectives;
  • setting targets or strategic outcomes;
  • involving the people; and
  • monitoring performance.

This approach widens the ideas of both the ends and means of government. It sets for government a broader set of goals, and a broader set of methods for achieving them, than the New Public Management approach with its focus on economic instruments and markets.

In Victoria, the shift in thinking from New Public Management to Strategic Government was demonstrated by the approach taken by Steve Bracks and then John Brumby.

Steve Bracks unexpectedly defeated Jeff Kennett in the election of 1999, and, equally unexpectedly, embraced many of Kennett's management and financial principles.

But although he continued many of the earlier government's approaches, Bracks argued that the market model should not be applied holus bolus for all government services. Bracks' strategic approach meant taking stock of and enunciating a broader set of goals for government. He set these goals out in 2001 in a statement called Growing Victoria Together - which detailed the government's objectives for its economic, social and environmental programs, and detailed specific targets against which progress could be measured. This was a strategic approach because it explicitly set out the broadest goals of government and the means for achieving them, it formed judgements based on a robust analysis of the evidence, and it insisted on the measurement of progress towards these goals.

An important benefit of having an explicit strategy is to help make decisions about tradeoffs. Deciding to do one task necessarily means there will be fewer resources available for other tasks – whether they're dollars in the Budget, or hours in the Cabinet room. As business management authority Michael Porter has argued, effective thinking about strategy is hard. Porter argues that `a strategic position is not sustainable unless there are trade-offs with other positions'. He notes that `trade-offs are frightening, and making no choice is sometimes preferred to risking blame for a bad choice'. But he is unflinching in his view that trade-offs are not only necessary but form the core of a sustainable strategic position. This is a key lesson from private sector strategy which is not often well understood in government.

As well as sound strategy, governments need to be effective in implementing the decisions they have made.

Premier Bracks was alert to this challenge. He promoted collaboration across all elements of government and improved the skills and capabilities of public servants by reinforcing the role of the all Secretaries Coordination and Management Group, creating the State Services Authority (the SSA), and playing a key role in creating the Australia New Zealand School of Government (ANZSOG).

The aim of the State Services Authority is to provide a centre of excellence for improving the Victorian public sector, by improving services, standards, governance and workforce development. It fills a gap in the new institutional arrangements created by Premier Kennett. It reports directly to the Premier and is separate from the daily activities of departments and agencies. It is not in the business of attempted micro-management from the centre of the operations of Departments and Agencies. This is the essential difference between the Public Service Board under Sir Rupert Hamer and John Cain and the SSA under Premiers Bracks and Brumby.

Later, the SCAM (Secretaries Coordination and Management Group) and the SSA spawned the Victorian Leadership Development Centre to promote leadership skills among Victorian public servants.

ANZSOG was set up in 2002 to teach strategic management and policy to public sector leaders. It provides executive education courses, a case study program and a research program.

Bracks also reviewed the Public Sector Management and Employment Act, and replaced it in 2004 with the Public Administration Act, which set out for the first time the key values, principles and behaviours that were required across the whole public sector, including agencies and boards. Another change made during the Bracks years was the development of mechanisms for ensuring public service accountability to achieve the government's goals.

In sum, Steve Bracks' public service reforms maintained many of the core elements of the Kennett approach and adapted them. He continued the focus on economy and efficiency, while extending the scope of effectiveness to a broader set of goals.

John Brumby, Premier since 2007, and a partner with Bracks in these reforms, continued the reforms of the Bracks Premiership. In particular, he has pursued the National Reform Initiative begun by Bracks and himself, which became the blueprint for a critical, nationwide reform effort known as the National Reform Agenda. He has placed additional emphasis on the outcomes to be delivered through Government's activities defined by outputs. This emphasis on outcomes has required an incremental shift to more and more emphasis on strategic policy. Outcomes only make sense if they take you where an informed Government and community want to go. There are already signs of success through this approach, for example, rising completion rates at year 12 or equivalent in education.

There has been also a renewed focus across Government on implementation given the size of the capital program the Victorian Government is undertaking. There has also been a continuing emphasis on collaboration across major Government agencies to deliver on complex policy and service delivery reforms, for example, domestic violence.

I contend therefore that Victoria has experienced, since the Hamer Premiership, a continuous process of reform and renewal of the State Government under a succession of Premiers. The boundaries of the Westminster tradition have been explored but not breached. This long, positive approach to Government has contributed to Victoria's success as a State.

COAG and National Reform

The third wave of reform called initially the National Reform Initiative is another example, in Commonwealth-state relations, of the evolution from New Public Management to a Strategic Government approach. Where the initial Victorian reforms occurred under a conservative state government, the changes to Commonwealth-state relations in the early 1990s were driven by the Labor government of Paul Keating.

Keating set up an independent inquiry under Professor Fred Hilmer, which recommended a National Competition Policy that would promote the efficiency of publicly provided goods and services by minimising restrictions on competition. The National Competition Policy also proposed steps to promote competitive neutrality – the idea that significant Australian Government business activities should not have advantages, arising from their public sector status, over private sector competitors.

The National Competition Policy of the 1990s was built on similar principles to the Victorian reforms of that period – the use of economic and market approaches to drive change. In particular, it injected into Commonwealth / State relations, the idea that financial incentives might be used to create alignment between the Commonwealth and the States. COAG was the vehicle for managing the divergent interests of Commonwealth and State Governments on the National Competition Policy and subsequent reforms.

COAG's Reform Agenda represents a further wave of reform in the domain of Commonwealth-state relations.

The relationship between the Commonwealth and the States is one of the most difficult but important issues in Australian public sector service delivery. Ensuring this relationship works well is critical to achieving many of the goals that affect Australians most directly – good health, sound education, useful and efficient infrastructure and a vibrant economy.

The policy areas where responsibility is shared between the Commonwealth and the States – and often where results are less than they should be – are among the most crucial in ensuring personal wellbeing. They span almost every area of government service delivery touching citizens most directly. Demands from business for a more seamless national economy and more uniform standards for Government service delivery sit in the centre of this shared policy space.

It is sometimes argued, especially within the business community, and especially when stakeholders want more money from the Commonwealth, that we should reform the federation to remove these shared policy responsibilities – often in the direction of the Commonwealth taking responsibility. My view is that this argument is flawed - an enduring and continuing feature of our federation is our shared endeavour in relation to key areas such as health and education. The COAG Reform Agenda, and the National Reform Initiative from which it developed, were explicitly designed to get more effective outcomes out of shared endeavour, even when Governments change and political persuasions differ.

The evolution of COAG's Reform Agenda follows a similar pattern to the changing approaches to reform that occurred in Victoria. Just as the Kennett-era reforms in Victoria relied on clearer definition of institutional roles, reflecting New Public Management approaches, the first goal of the COAG Reform Agenda is to give better definition to the respective roles of the Commonwealth and States, especially where there is shared endeavour. But the reform agenda also takes a more strategic approach by seeking to define more clearly and more broadly the outcomes sought by the Commonwealth and states, including but extending beyond the economic domain.

The initial work on this ambitious project was begun under Premier Bracks in 2003. In 2005, Bracks and his Treasurer, John Brumby, proposed a new partnership between Commonwealth, State and Territory governments to address three critical issues: residual issues in competition reform, regulation reform and human capital reform. This work evolved into the National Reform Agenda agreed to by COAG under Howard. In a more expansive form, as the COAG Reform Agenda, this became the blueprint for the Rudd government's goal of revitalising the Australian federation.

In December 2007, COAG set six challenges for its reform agenda. They are:

  • boosting productivity;
  • increasing workforce participation and mobility;
  • delivering better services;
  • contributing to social inclusion;
  • closing the gap on Indigenous disadvantage; and
  • improving environmental sustainability.

Commonwealth and State leaders tasked the COAG Reform Council (CRC) – effectively COAG's accountability arm – to report on progress. This independent oversight and reporting is itself a key reform, keeping pressure on COAG to drive reform.

The CRC delivered its first report last month. It shows progress has been made, but also makes clear that much more needs to be done.

The report argues that the COAG reform agenda is the 'most comprehensive economic, social and environmental reform agenda ever contemplated in the context of intergovernmental relations in Australia'. It notes that although there have been problems implementing some specific reforms, 'the overarching objective and specific aspirations of the COAG reform agenda remain worthy'.

On the credit side of the ledger, the CRC notes that a broad range of initiatives have been agreed covering education, skills, standards and licensing, infrastructure, competition and regulation, healthcare and water. It notes the strong focus on reform in the education and skill systems. And it reports good progress on harmonising regulations. All these measures will help improve productivity. Still on the credit side, first steps have been taken to improve workforce participation.

But the report also lists areas where more work needs to be done. These include competition reform, especially in transport and infrastructure, and the relative paucity of data available to underpin a stronger focus on performance in the National Partnership agreements.

It is worth noting that the CRC in its report talks about the benefits of the reform agenda in the future tense. In other words, there is a lot of potential, but we have yet to achieve substantive results in improving delivery of services. It is true that we have taken the first steps. We have begun the work of setting up the systems to manage these complex issues. This will be a long grind, and it will take time to deliver big results. But potentially they will be very big, and it will be worth it. Meeting the goals of the COAG reform agenda is one of the biggest challenges facing both Commonwealth and State governments in improving the way we deliver services to our citizens and contributing significantly to economic growth.

Overall, the delivery on the COAG agenda relies on a strong public service across all governments, which have strong professional and technical skills. This aligns with the work that has been undertaken in the VPS and APS. One of the key features that is important in this area is the development of a strong degree of respect and trust in relationships.

Ahead of the game

The changing philosophy of public service reform that I've described in Victoria and in Commonwealth-state relations can also be seen in the APS. Some of the reforms of the APS in the 1980s were similar to those adopted by the Kennett Government in Victoria – in particular the 1987 transition from 28 departments to 18 departments in 16 portfolios. The Labor Government of Bob Hawke privatised several government business enterprises – notably Qantas and the Commonwealth Bank – and made greater use of user charges. These changes were taken still further by the Howard government elected in 1996, which widened the use of private sector management and industrial relations principles to the public service, and introduced accrual based accounting.

However the changes outlined in the reform blueprint launched in March, entitled Ahead of the Game, Blueprint for reform of Australian Government Administration, take reform in a new direction, in line with Strategic Government approaches of the sort followed in Victoria and in the new COAG agenda for Commonwealth-State relations.

Ahead of the Game reflects the Strategic Government agenda by taking a broader view of the goals of government, and by building and reinforcing mechanisms for measuring and reporting performance.

Ahead of the Game sets out an ambitious and comprehensive reform agenda for the APS. It provides a thorough assessment of the two key roles of the APS – delivering services and providing high quality policy advice. To achieve the two goals that make up that mission, we need to tackle two more challenges –drawing out the best in our people, including our leaders; and making the public service fully efficient and effective. The 28 recommendations of Ahead of the Game grew from an extensive consultation process undertaken by the Blueprint's Advisory Group, which I chaired. All 28 of the recommendations were agreed to in full by then Prime Minister Rudd in May.

Since the election the Government has reaffirmed its support for APS reform. The Public Service Commissioner, Steve Sedgwick, is now the principal implementer of the reforms, which all Secretaries agree are critically important for ensuring the APS does its job as well as possible.

I want to touch on the two key goals of the APS – delivering services and providing the best policy advice – and on the two key ways we achieve those goals – developing our people and leaders, and improving our efficiency and effectiveness.

Service Delivery

Delivering services to citizens is the first of the two key tasks of the APS. Services in health, welfare, education, transport and justice are among a long list of services touching most Australians. Commonwealth Human Services agencies alone receive 220,000 phone calls, have 361,000 face-to-face contacts and 70,000 online transactions every day.

So we have to get the relationship right. But too many Australians remain confused and frustrated by the task of identifying and using services that insist on multiple forms, interviews and points of contact with the customer. Too many service delivery agencies still do not link their operations with those of other agencies in order to deliver a better product.

The Blueprint proposes three main reforms in the area of service delivery.

First, Department Secretaries will develop a strategy to simplify services for citizens throughout all government operations. The strategy will consider how to deliver more services in partnership with state and local governments, and with the private and community sectors. And it will develop a life events approach to service delivery.

Second, to help citizens most effectively, we need to know much more detail about what they expect, want and value from government services. We propose to establish a regular national survey that captures citizens' views on government services, programs and laws. This will help us improve front-line service delivery by discovering what does and doesn't work and adjusting our services and programs accordingly.

Finally, we need not only to consult citizens, but invite them to collaborate in the design of services and of policy. Citizen engagement in service and policy design is not only the right thing to do but will provide a rich new source of ideas to government.

We face some big practical challenges in ensuring we always deliver services well. We are working hard to improve the ways we actually deliver programs – all along the action chain, from scoping the issue, to deciding to act, to planning and implementing a policy, and then to monitoring the results.

The Government will want the APS to demonstrate we have delivered outcomes effectively to all Australians – including those who live in regional areas. The National Broadband Network, for example, will be a key test of our ability to deliver results. The Blueprint's approach to delivering services reflects the Strategic Government approach by setting priorities and targets, involving citizens, and monitoring outcomes.

Policy advice

The second of the two key roles of the APS is to provide the highest-quality policy advice to government. We need to strengthen the capacity of the public service to provide strategic, big picture advice that addresses the most difficult challenges of the day.

This is part of our core business; it directly affects the lives of Australians, and we must do it well. We must help ministers to make rapid but also far-reaching decisions on the challenges of climate change, of our ageing and growing population, of national security in a time of transnational terrorism, and of cementing our place in an Asia-Pacific region that is becoming the economic powerhouse of the world.

These challenges – among many others – cross departmental divides, state lines and, often, national borders. They are challenges that are so complex, and their solutions so contested, that they call for the brightest thinkers and the best advice that the public service can produce.

Under our reform proposals, secretaries will be required to ensure a strong strategic policy capability in their portfolios. And they will be required to share responsibility for achieving outcomes in priority policy areas such as climate change, national security and Indigenous affairs – areas that cross portfolio lines. Essential to success is foresight, strategic leadership, a disposition to collegial behaviour, courage and management skills within the leadership group of the APS – the APS200.

A new Strategic Policy Network will share best practice throughout the APS on strategic policy problems. Cross-agency strategic policy teams will be created to work on difficult policy challenges. And because good ideas must be delivered as well as devised, there is a new cross-portfolio Policy Implementation Network to share best practice in policy implementation.

We will also provide practical guidance on the elements that make up the best strategic thinking, including problem definition, data analysis and project management. As with our other proposed reforms, we plan to produce better policy through greater openness and collaboration across the APS, and outside the APS. We want to give leaders clearer responsibilities, but also better resources so that they can meet them.

A strong focus on policy reflects the broadest goals of the Strategic Government approach – it will reinforce APS capability for achieving the major goals of government and setting specific priorities to support those goals.

People and leadership

I've talked about the two key goals of delivering services and providing the best policy advice. One of the key ways to achieve those goals is by developing our people and leaders.

Putting citizens first requires us also to invest in our own people. We need to invest in the capability of the public service workforce:

  • through better recruitment and training;
  • through greater mobility within the public service and beyond;
  • through a better approach to developing talent within the APS from our graduates through to aspiring Secretaries; and
  • through building links and networks across Departments, and with others in civic society – academies, non-government organisations and others, all with the purpose of opening minds and encouraging creative thought.

Public servants who feel fulfilled in their jobs will be committed to delivering the highest quality services and policy advice – and to creating a more efficient, accountable APS.

The Blueprint proposes a major effort to expand and improve learning and development. Secretaries will be required to reaffirm the right and obligation of every APS employee to undertake learning and development every year. We need a diversity of skills and capabilities among our managers; we need people who understand and value project management, business case development, and other key skills in which business often excels.

This brings me to our two most important vehicles for leadership change across the APS. One, we have created a new body – the Secretaries Board – a group of peers collaborating to manage, direct and provide stewardship of the whole APS. And two, the Australian Public Services Commission will broaden its role to strengthen the efficiency, accountability and unity of the APS, and to lead the reform process in partnership with the Secretaries Board. The Secretaries Board, comprising all Secretaries and the Australian Public Service Commissioner, will identify strategic priorities for the APS, be the preeminent forum for public service debate, and model leadership behaviour for the SES.

Supporting the Board is a new senior leadership group – the APS 200. The APS 200 will champion critical projects such as improving service delivery, expanding access to government information and boosting the APS employment of Indigenous Australians and other under-represented groups.

Systematically developing the capabilities of all our people and our leaders is another dimension of the Strategic Government philosophy; it will give them better tools to cope with a more complex strategic agenda.

Efficient and effective

The second way we need to achieve our overarching goals of delivering the best services and the best policy is by improving our effectiveness. One way to do this is to set up processes for measuring the performance of our public service leaders. Our new leadership structure will play an essential part in producing an APS that provides accountability to the citizen and value to the taxpayer. For example, secretaries will not only have their roles and responsibilities clarified in the Public Service Act but will have their performance assessed against them. That will include their performance in the achievement of shared policy outcomes and in the stewardship of the whole APS.

But we recognise that secretaries need support to drive their organisations to ever improving performance. Accordingly, regular capability reviews of agencies will be introduced. These externally-led reviews will collect data on agency performance in areas such as strategic policy advice, workforce planning and employee management. The agency head will then develop a capability improvement plan in partnership with the APSC, with progress against the plan factored into the Secretary's performance agreement.

Capability reviews are one of the reforms that seek to create a culture of self-improvement inside the APS, a culture of continuous evaluation and innovation. They are one of the reforms that seek to produce more efficient and effective agencies over the long term.

Another force for change will be better workforce planning, which will create significant efficiencies in staff hiring and procurement of training courses. We will also be active in reducing red tape and streamlining the corporate functions of small agencies.

Improving efficiency is the final key goal of the Blueprint. It is part of the trifecta of goals shared by both New Public Management and Strategic Government approaches. But it means much more than using market mechanisms. We need to use the widest range of tools and techniques to set goals and measure performance. The Blueprint's approach to improving efficiency and effectiveness reflects the broader conception of our goals captured by the Strategic Government approach. The reforms will strengthen accountability of all levels of the public service for achieving more clearly-defined goals.

Conclusion

The themes of the Blueprint that I have just outlined build on the lessons of earlier reform efforts, in Victoria, in Commonwealth-state relations, and the earlier waves of reform at the national level.

The Blueprint broadens the New Public Management model of the 1980s and 1990s by taking a Strategic Government approach that explicitly recognises the new challenges we face, and provides the tools to manage them.

As in other domains, reform in the public service is a constantly retreating horizon. But we have to keep moving towards that horizon. As the experience in Victoria shows, and more recently in Canberra, persistence and leadership are critical features of successful reform. There is no question that the Government is determined to pursue this agenda – and recognises it is a critical element in its goal of delivering better services for all Australians. And I'm also confident that we in the Australian Public Service have the persistence to reach our goal.

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Last Updated: 14 October 2010