Martin Parkinson’s Address to the Australasian Implementation Conference

Martin Parkinson’s Address to the Australasian Implementation Conference

PM&C Who We Are The Secretary
Thursday, October 6, 2016

Department of the Prime Minister and Cabinet

Check against delivery

I would like to begin by acknowledging the Traditional Custodians of the land on which we meet today and pay my respects to their Elders past and present. I extend that respect to all Aboriginal and Torres Strait Islander peoples here today.

It’s a pleasure to be here with you today. The focus of my remarks is how all of us here, both government and non-government, can better integrate policy design and implementation. And not just in a linear way, but in an adaptive and flexible feedback loop which captures learning of the past and embraces future opportunities.

I’d like to start by drawing on the recent experience of my own Department.

As some of you may know, in 2013 Prime Minister Abbott consolidated the, until then, widely-dispersed Indigenous Affairs policy and program delivery functions and moved them into the Department of the Prime Minister and Cabinet.

Following the 2013 election, PM&C grew from approximately 700 central agency policy staff to over 2500 staff all across Australia, with responsibility for not only its traditional areas of policy coordination and development but on-the-ground service delivery to some of Australia’s most vulnerable groups. We went from working primarily from a single office just down the hill from Parliament House, to operating from over 110 locations and with a presence in almost 200 communities.

To say this has been an adjustment in the way PM&C has traditionally operated is an understatement.

Not only were our IT, business processes and management information systems found lacking, but so was our focus and culture. If we were to have any chance of succeeding with the task given to us, we needed to think about things differently. In particular, we needed to think a lot more about implementation.

Only recently, an executive from the Indigenous Affairs Group of the Department stood up to remind her colleagues that implementation is 150 times harder than policy, a fact too often forgotten by policy officers. 

For some reason, many of us involved in the design of new policies think that the work we are doing is somehow harder or more intellectually challenging than the work of those operating at the coal face; the people ensuring that policies actually deliver outcomes that they were intended to achieve on the ground. As a result, there is a tendency to either not seek the input of those with implementation expertise or, perhaps even worse, to ignore this input when it is provided.

Implementation should never be seen as the poor cousin of policy development, in the Public Service or anywhere else; yet too often it is.

It’s my firm view that changing this perception will go a long way to improving the effectiveness of public servants and the community sector alike as we serve the Australian people.

The integration of Indigenous Affairs into PM&C is a daily reminder to me that policy development and implementation of policy are unavoidably linked.

Organisations succeed when policy and implementation are linked through their connection to a shared set of values, and a clear mission or purpose.

For the Australian Government, an important policy and implementation challenge is delivering social policies that are just and reflect Australian values.

We are living in a fast changing world with many risks facing our economy, particularly for some of our most vulnerable.

As the Prime Minister said in his recent speech to CEDA, a just society that supports its disadvantaged and where everyone has the opportunity to reach their potential, contribute, and participate to the extent they can in society and the economy is one that will deliver the greatest gains in prosperity and wellbeing to people, to families, and to the nation as a whole.

Supporting those who are vulnerable or disadvantaged in our society and ensuring that we all have the opportunity to lead lives that we value are core beliefs shared by most Australians. “A fair go” continues to resonate across our communities.

An adequate safety net and high quality education and health services are essential for empowering Australians to realise their potential and for generating the capacity, opportunity and incentives to engage in the community and economy.

Yet no matter which way you look, the context in which we are operating is changing.

Changes in the economy mean the Government is working in a much tighter fiscal environment than in the past. Global growth is mediocre and falling terms of trade mean only weak or negative improvements in living standards.

Our ageing population means that the demand for health and aged care services will rise significantly, requiring policy and practice change or ever increasing growth in the size of government. 

Digital disruption is changing how citizens want to engage with us and is raising their expectations of digital service levels.

No sector is immune from these challenges, but the way we respond to these challenges, and indeed, the way sectors work together in doing so, presents an opportunity to improve policy implementation and outcomes for citizens.

In the social services sector you are transforming your service offerings rapidly in response to newly established market demand, knowing that this transformation will have knock-on impacts for your business models, and sometimes your governance arrangements.

We know that what Australians look for from their service providers when choice opens up to them is changing, which means that what you are doing now, or how you are doing it, may not be what you will be doing two, five, or ten years from now.

How you do things is very likely to be shifting already. Perhaps you are marketing your services for the first time, and focusing energy on communicating with customers, rather than generating government tender applications and pitches to philanthropists.

These changes are essentially market adjustments, but the introduction of competitive forces and consumer choice into areas where they have not previously been are likely to be hugely significant disruptors to the way social services are delivered in Australia.

Amid so much change, it’s often very easy to forget the lessons from the past, dismissing where we haven’t got it right. This is as true for government as for anybody else, and often more so. 

Too often, government mistakes come from a failure of policy makers to properly understand unintended consequences of implementation and associated risks.

From my perspective, good public servants are always asking how things can be done better, what changes could be implemented to improve effectiveness, reduce risk, and deliver better outcomes for the people of Australia.

This means learning from the past and maintaining meaningful engagement with implementers. It also requires policy officers to ask hard questions — like what happens after this painstakingly crafted policy leaves my desk and enters the real world.

What we should be aiming for, rather than a ‘set and forget’ linear approach to policy making and implementing, is a continuous and adaptive feedback loop between policy design and implementation.

An obvious failure, where this feedback approach was lacking, is the Home Insulation Program, where rapid policy development, a lack of consultation with the sector and the failure to adequately scope risk led to the worst possible outcome; the entirely preventable deaths of four young Australians.

Or we could look at VET Fee Help, where cost blowouts and provider negligence were an unintended, but entirely foreseeable, outcome of poor policy design.

Policy makers wrongly assumed that the clients of VET Fee Help were well placed to operate as market agents, making choices that would maximise their long-term earning potential. Some providers responded in a profit-maximising way to the incentives that were set, albeit in ways that wouldn’t pass a basic “pub test” of ethics.

The consequence of VET Fee Help for the Government was a massive blowout in the size and costs of the program. But even more troubling were those who were taken advantage of by questionable provider practice, many of whom were young people at the point of making critical choices for their long-term prospects. In some cases they now face significant debts as they enter their adult lives, with no improvement in their future earning potential.

As we embark on the next stage of the NDIS rollout, which is estimated to cost $22 billion a year when it reaches full scheme and whose focus is highly vulnerable Australians, we frankly must learn from these mistakes and our accumulating knowledge of the ‘on the ground’ experience. The stakes are too high not to do so.

A former Secretary of the Department of the Prime Minister and Cabinet, Dr Peter Shergold, recently released the ‘Learning from Failure’ report, which outlines lessons from the Home Insulation Program.

Peter advocates that the public service embraces uncertainty and risk, evaluates for future benefit rather than simply summing up a program’s outcomes and values, and enhances our project management skills.

Peter exhorts us to further embrace adaptive approaches to government: as he says ‘adaptive government calls for greater organisational flexibility’. It demands more willingness to experiment.  Starting small, testing what works and (in the worst case) ‘failing quickly’.

But more than this, Peter asks us to be honest about our failures —what are we learning? What are we taking away from our policy and implementation experiences?  And, this one’s from me, what are the data telling us?

Federally, we are thinking a lot about what this looks like in action, particularly in relation to the Government’ s Australian Priority Investment Approach to Welfare.

The Australian Investment Approach is currently focussed on the welfare domain, and seeks to assess the effectiveness of spending in delivering better life outcomes for individuals. Rather than providing a series of short-term fixes, the idea is that interventions are assessed on the long-term impact, on what will support people to have greater control over their lives, more self-reliance, and more connection with, and contribution to, their community.

I hope that this developing Australian Investment Approach will also help us get closer to that agile, experimental approach that Peter Shergold encourages the public service to embrace.

One initiative which might help us get there is the $96 million ‘Try, Test and Learn’ fund which will seek innovative ideas from experts within and outside government, including the social sector, on interventions to achieve the Investment Approach goals and rigorously evaluate them before broader implementation. 

This is a new approach to policy implementation for government.

So is the Baseline Valuation report prepared as part of the Investment Approach.

This report applies actuarial analysis to 15 years’ worth of social security data, ABS data and longitudinal survey data to identify which groups in our community are the most vulnerable in terms of long-term welfare dependency over the projected course of their lives.

It’s important to remember that the main goal of this initiative is to ensure people are not trapped on welfare for a lifetime. This is why the initial focus of the Australian Investment Approach is young people.

One of the groups most vulnerable to long-term dependence on welfare is the 11,000 young Carer Payment recipients under 25. As the Minister for Social Services recently outlined at the National Press Club, the reliance on welfare payments by a carer is ideally meant to last only as long as the care relationship.

However, the data we now have suggest that over the next 70 years a minimum of 40 per cent of these 11,000 Australians under 25 can be expected to access income support payments. Indeed, on average the 11,000 young carers are expected to be on income support at some point each year in 43 separate years over their future lifetime.

Sixteen per cent of this group, about 1,800 young people, will access income support each year for the remainder of their lives.

The baseline valuation estimates that the future lifetime cost to the budget of these 11,000 people is $5.2 billion. And, of course, that does not factor in the opportunity cost to the young people themselves or the social cost of their unrealised potential.

With insights like these, all of us, government, the public service social services providers, and the Australian public at large, may need to update our ideas and understanding of which Australians are most in need of our support, and what the most effective and life-transforming supports might be.

Building and interrogating data is essential to developing and implementing policy that effectively responds to need in the community.

And while the Australian Investment Approach is a major step in the right direction, we have to do much more to harness the information at our disposal. Digital transformation is a critical input to this.

A fundamental shift in policy thinking has been made possible by our developing capacity to mine, link, and align data across our systems.

The Federal Government’s Digital Transformation Office is working on digital delivery to make engaging with government easier.

The Public Service is increasingly making public government data sets available so that researchers and others can better understand policy interactions and program outcomes.

And within PM&C we have a unit working on behavioural economic initiatives, so we can design policy that is more sensitive to a citizen’s likely interaction with that policy.

In the most fundamental sense, the focus of each of these initiatives is the citizen and their experience of our implementation of policy.

And what’s really important as we move to a social services environment which is increasingly consumer focused and where we are finding ways to deliver more choice and control to people, is that we are able to maintain a dialogue between policy and implementation, and between the government and the social services sector.

No one person or organisation has all the answers — but surely the collective experience in this room is worth exploiting further as both governments and the social services sector encounter a changing framework of contestability, competition and user choice.

In my view, creating ‘policy communities’ of those who are making policy, those implementing policy on the ground or those working in think tanks, enables us to be constantly environment scanning, allowing us to see earlier and more clearly the opportunities for better outcomes, as well as identifying the emerging or inherent risks in our approaches.

Such communities would allow lessons to feed back into the policy process and create constituencies for positive change.

If we are operating in this way, innovation is not a shock. Rather, it becomes the product of iterative experience which allows policy makers to operate at the forefront of policy thinking and implementation design, bringing lessons with us from the past while simultaneously thinking about new approaches for the future.

I am interested in exploring how the public sector might better engage with the social services sector.

One model that I’ve found intriguing is the WA Partnership Forum. Comprised of government leaders and experienced social services sector CEOs, the Forum presents a model connecting policy makers and implementers to work through complex social policy issues, with a very strong focus on implementation.

It looks from afar to be a successful way to maintain a regular and, most importantly,  meaningful information flow. But are there other models which could work?

And on that note, I would like to throw to you, to hear from you on how your sector and mine can work better together to deliver the outcomes for Australians to which we are all committed.

Thank you very much.