The evolution of Public Service Bargains of Australian senior public servants

Abstract

The agreements between the Australian senior public service and the political executive have undergone several shifts during the reform era of the last thirty years. These have involved fundamental redefinitions of the role, responsibilities, identity and autonomy of the senior public servant.There has been a succession of challenges to the relationship focusing on the role and status of the public service on the one hand and the behaviour and resources of the political executive on the other. Over time the trend has been towards strengthening the political executive, but punctuated by debates about issues that slowed the rate of change and contained political pressures on the public service. This process has produced clarifications of central aspects of the relationship and a clearer articulation of the range of roles provided by departmental secretaries. The article examines the evolution of public service bargains centred on the changing roles of the secretaries of departments of state, and analyses the implications of the changing relationship for the role and functioning of the public service in governance and public policy.

Points for practitioners

The article addresses how the roles of departmental secretaries in Australia have varied in significance during the reform era. A new arrangement has now emerged which clearly articulates the roles and codifies them. One of the roles, stewardship, recognizes that secretaries have a part to play independently of ministers.

Keywords

central administration civil service departmental secretaries ministerial advisers political short termism relationships between ministers and senior public servants stewardship

Introduction

The relationship between senior public servants and the political executive has undergone significant change over three decades. The redistribution of responsibilities has tended to favour ministers, but the imbalance has been somewhat addressed by a new bargain that redefines the responsibilities of departmental secretaries. This article analyses how the public service bargain has evolved and the implications for the role and operation of the public service.

Framing and characterizing the relationship

The formulation of Public Service Bargains (Hood and Lodge, 2006) has provided a fresh framework for viewing and analysing the relationships over time and across countries. The Public Service Bargains (PSBs) between public servants and politicians are agreements that may be explicit or implicit. The main elements of the bargain are rewards, competencies and loyalty/responsibility, and they provide the basis for the exploration of a wide range of patterns internationally.

In an earlier consideration of bargains, they are represented as either systemic or pragmatic, the latter being more relevant to civil services operating in a British tradition (Hood, 2001). Within this category, the Schafferian bargain captures most clearly the implicit exchange relationship in which public servants receive permanency, trust and anonymity in return for offering ministers loyalty and competent advice and support. (The subsequent analysis has the serial loyalist as a type of agency bargain.) In contrast, under the managerial PSB the public servant has greater autonomy but is more directly held to account, and there are variations of a hybrid nature (Hood, 2001). PSBs may also develop in several ways with one plausible option being ‘messier hybrids’ in which a national system has multiple and complicated bargains (the UK being cited as having successively added various PSBs for different types of public employee) (Hood and Lodge, 2006).

In this article the focus is the relationship between ministers and departmental secretaries. The secretaries’ role as heads of ministerial departments imparts much of the character of the public service both through their departments of state (they ‘set the overall tone for the relationship with Ministers and their offices’; APSC, 2006: 17) and collectively as the corporate board for the service. While the evolving relationship between the political executive and the public service is broader than that between the two key players, the reverberations of changes at the top cascade downwards.

A range of primary and secondary sources were drawn on plus selected interviews with senior officials. For the purposes of tracking the bargains of the last 30 years, the definitions of the secretary’s role(s) in legislation and official documents provide one basis for the analysis as they were revised to reflect different reform environments. Formal stipulations are not by themselves sufficient to examine the operations of a bargain, for secretaries can be expected to be influenced by the nature of their organizations and their own role interpretation (e.g. secretaries have varied in their conceptions of governance; Edwards et al., 2012). The contributions of current and past secretaries on the roles of secretaries and the contexts in which they operate were another source, in particular valedictory statements (e.g. Podger, 2009; Wanna et al., 2012). A related consideration was the well-documented debates about the place of the political executive and how it relates to the senior public service (e.g. Podger, 2007; Shergold, 2007). During periods of significant change the engagement has often been intense, and the issues and trends in the relationship publicly debated. Discussions were also had with past and present senior public servants about roles and relationships.

The head of department’s responsibilities are conceived of as having three basic elements, each of which is present to some extent, but potentially of varying significance over time. This is not to suggest that other components may not be present, only that these three are usually relevant, and for the purposes here are sufficient to make comparisons over time (and between senior public services).

The elements reflect what have been commonly understood to be the core responsibilities of secretaries. They are first a policy advisory role, second an implementation role, and third a public interest role. The conception and relative importance of each role can evolve and be redefined over time and circumstances (for example, the broader notion of management supplanting implementation).

Of the roles, the first two require little comment at this stage. The third covers the contribution that a professional impartial public service makes through addressing the interests of the public, whole-of-government matters and the long-term implications of public policy (and may go by other terms, such as public duty; Van Dorpe and Horton, 2011). This is not to suggest that secretaries should be seen as ‘Platonic Guardians’ and arbiters of the public interest (Rhodes and Wanna, 2007). Matheson et al. (2007: 9) conceive of a hierarchy of public service behaviours that supports the institutional legitimacy of government ranging from short-term responsiveness and performance to the long term. The medium to long term has two elements: an impartial and inclusive public service that serves collective and public interests; and constitutional respect and continuity in which ‘legitimacy is supported through stability and maintenance of trust in public institutions’.

The traditional compact

Under the Westminster model, relations between politicians and bureaucrats have traditionally centred on the coexistence of the neutral public service and responsible government (Aucoin, 1995; Boston and Halligan, 2012). The embedded tension between the two elements has been kept in balance by applying well-established principles. The modes of demarcating politics and administration range from a model that delimits political and public service careers to that in which the careers intermingle and boundaries are weak. The traditional British system approximated the former: an explicit separation combined with distinctive boundaries.

The relationship has been based on a neutral public service that served the political executive regardless of party. The political executive in turn respected the integrity of the civil service by maintaining its apolitical and professional character. Specific features were the career public servant, a permanent official who survived successive governments, and senior appointments drawn from the ranks of careerists.

The ministerial department was the repository of policy knowledge and the permanent head the primary official adviser to the minister. The head was also responsible for administration until management displaced this concept. In terms of rewards, the head held a permanent position and a special relationship with the minister that was relatively exclusive. The head controlled the resources of the department, and it was through this position that communications were funnelled. While the minister had the constitutional right to make decisions that applied ‘at every level of generality or particularity’ (Parker, 1960), in practice ‘the structures and procedures of the department’ were regarded as the permanent head’s affair (Spann, 1976: 231). The Public Service Act 1922 was said to provide statutory effect for responsibilities for the general operation of the department even if the preoccupation of permanent heads of the standard department was policy advice to the minister, and the primary source of their expertise.

The relative position of policy and management was expressed by a prime minister’s observation about the tendency ‘to think of the permanent head as a policy adviser and glamorous as this aspect of their work undoubtedly is, it should not be allowed to obscure the very real responsibility that permanent heads carry as general managers of departments under the ministers’ (Whitlam, 1974: 28–29).

The public servant’s first duty was said to be to ‘protect the Minister’. One expression of how loyalty operated came from John Stone (2011: 36–37), a former head of Treasury – and outspoken opponent of public service reform in the 1980s – who observed that public servants up until the ‘degradation of the public service’ gave ‘complete loyalty to the government of the day, whatever its political complexion’:

Ministers got lots of advice from external sources, but so far as their own offices were concerned, they felt no need to surround themselves with political ‘trusties’ because, with very rare exceptions … they trusted their officials. And since trust is a two-way relationship, the trust they gave was wholly reciprocated. As a consequence also, the private office staffs were very small in number; after all, a whole Department stood ready to satisfy the minister’s demands.

As for the public interest role of the permanent head, it had acquired a distinctive character. According to a royal commission (RCAGA, 1976: 18–19), the higher echelons had an:

… exaggerated conception of its proper role in the processes of government; that it believes, consciously or unconsciously, that, independently of Parliament or the government, it is the Guardian of ‘the public interest’ as opposed to sectional or vested interest, of continuity and stability in government administration, and of assumed consensus about certain basic ‘supra-political’ values.

Despite the British origins of the Australian arrangements, context and evolutionary path matter and there have long been significant differences between them, and between other former colonies (for a recent Australia–New Zealand comparison see Boston and Halligan, 2012; Halligan, 2001). It is doubtful that permanent heads thought much about foregoing politics or giving up party membership (although the exercise of influence from a relatively anonymous position was valued). The United Kingdom may well be the archetype of the Schafferian bargain (Van Dorpe and Horton, 2011: 234), but British formulations are not automatically reproduced elsewhere.

Redefining the relationship: a new bargain

The first revision to the traditional bargain occurred in 1984, although the harbingers were apparent a decade earlier, and the implications continued to be worked through over another decade. Traditional values had prevailed until the notion of responsiveness made an explicit appearance in the mid-1970s. A Labor-appointed Royal Commission saw the bureaucracy as being too elitist, independent, unrepresentative and insufficiently responsive (RCAGA, 1976). The reaction of the next Labor government was to challenge public servants’ position because ‘the balance of power and influence has tipped too far in favour of permanent rather than elected office holders’ (Commonwealth, 1983). This agenda was the first priority of the Labor government in 1983.

For the permanent head this meant a re-conception of the role in every respect and the principles in play also carried over to the public service. In terms of capacity, the policy role of the senior public service experienced progressive attrition from the traditional position of centrality. With the rise of managerialism, there was a reaction against the emphasis on policy work and the lack of management skills.

The question of rewards became more indeterminate with loss of permanency for departmental secretaries, and regular issues around tenure and appointments. The debate about the loss of tenure was intense, with changes to the standing of the secretary proceeding through four stages between 1984 and 1999: from permanence, through replacement of permanence by position contracts, to contracts to the public service and finally to performance review and pay.

The first formal change (1984) to tenure redesignated the permanent head as the departmental secretary on a fixed term, and became standard practice. In 1994, the fixed-term statutory appointment of secretaries was introduced. Of significance for rewards was the provision in the Prime Minister and Cabinet (Miscellaneous Provisions) Act 1994 for secretaries to relinquish ‘continuing tenure … in return for a salary loading determined by the Remuneration Tribunal’. The trade-off for losing tenure was a pay increase. By 1997 the contract was the employment basis of department secretaries (APSC, 2003b: 214), and the issue became the effect on Westminster principles of applying contracts as senior executives were placed on individual agreements.

In a further stage (after 1996), performance review was introduced for secretaries, and performance pay in 1999. The performance focus in itself was unexceptional, but the Howard government employed the review as a means of close scrutiny of secretaries and to reinforce vulnerability (cf. Podger, 2007).

The guidelines and practice for the appointment process for departmental secretaries moved from official input, somewhat akin to comparable countries, to political domination. Prior to 1976 the chair of the Public Service Board advised the departmental minister of possible candidates, consulting with the prime minister as appropriate before the nomination went to cabinet (Parker and Nethercote, 1996: 99–100). Under the revised process, the Board chair recommended candidates to the prime minister based on advice from a committee of mainly departmental heads, but subsequently this committee stage was omitted. Following the abolition of the Board in 1987, the Secretary to the Department of the Prime Minister and Cabinet was empowered to provide the written report. By comparison, other countries continued to have committee guidance, and more information about the selection process, including performance criteria.

At the same time as the secretaries’ privileged position was eroded, strains were placed on loyalty as it had conventionally operated. The Hawke Labor government installed an effective set of political mechanisms at the cabinet and ministerial levels (Campbell and Halligan, 1993), strengthening political direction to give more prominence to collective responsibility and its priorities. Labor’s proposal for a political tier within the senior public service represented the most significant challenge to the tradition of neutrality because it would place policy control with political appointees (Wilenski, 1986). The Hawke government eventually compromised with a new position, the ministerial consultant for augmenting ministerial resources. The minister’s office was expanded as an alternative to overt politicization. Governments did not seek to rely on political appointees for the public service: overt political appointments to top positions remained the exception, and most continued to come from within the public sector. However, political appointments were increasingly interposed between the bureaucracy and politicians. Ministerial staff took over roles previously undertaken by public servants, and could be routinely involved in departmental processes. The ministerial adviser became an institutionalized part of government (Dunn, 1997; Halligan and Power, 1992; Maley, 2000).

At the same time, boundaries were systematically eroded over time. The traditional identity of the public service derived from being clearly demarcated from its environment, particularly the private and political spheres, and being relatively closed. The assault on the senior public service was directed at the traditional career system. The political executive’s influence was expanded by transforming the officials’ position through abolishing permanency and introducing a Senior Executive Service (in 1984) that offered management flexibility and external entry.

Ministers increasingly relied on alternative sources of advice and their staff both advised and provided conduits for extra-government proposals. Over time the policy capacity of the ministerial office was strengthened and the public servant’s role became more limited. In addition, external advice was routinely relied on; contestable advice meant more competition than before. The overall effect was to transform the department’s policy role from a near monopoly to competing for government’s attention (Campbell and Halligan, 1993).

Even though overt political appointments were not much used in Australia, governments’ desire for greater control was substantially realized. The combination of strong political direction and changes to the employment basis and insularity of the senior public service redistributed power between ministers and public servants and produced greater responsiveness. Careers were no longer guaranteed. The promotion of a climate of insecurity for senior officials during the Howard Government’s first two terms moved beyond ‘new government’ behaviour. Australia was less successful than New Zealand in insulating the senior public service from political influence (Boston and Halligan, 2012; Mulgan, 1998).

Formalizing the evolving relationship with new legislation

The Public Service Act 1999 redefined the secretaries’ role. The legislation both strengthened the secretaries’ powers with the greater devolution of operational responsibilities (particularly concerning employment of staff), while making them more explicitly subservient to ministers. In other words, secretaries were being put in their place, but being empowered to operate more effectively as departmental managers.

The secretary’s role set was made quite explicit under the Public Service Act 1999, the Financial Management and Accountability Act and other legislation. The secretary’s management and advisory roles were expressed as follows:

(1) The Secretary of a Department, under the Agency Minister, is responsible for managing the Department and must advise the Agency Minister in matters relating to the Department.

(2) The Secretary of a Department must assist the Agency Minister to fulfil the Agency Minister’s accountability obligations to the Parliament to provide factual information, as required by the Parliament, in relation to the operation and administration of the Department. (Public Service Act 1999: 57[1 & 2])

The Public Service Act 1999 did endorse ‘an apolitical public service’, and also acknowledged that its responsibilities extended beyond the government of the day through requiring the APS to be ‘efficient and effective in serving the Government, the Parliament and the Australian public’ (emphasis added). While the legal employer of APS employees was the Commonwealth, staffing powers under the Public Service Act were vested in agency heads. Section 20 of the Public Service Act gave agency heads all the rights, duties and powers of an employer in respect of APS employees in the agency, subject to the statutory framework.

Under the 1999 Act, the prime minister made the appointment of secretaries, not the governor-general on the advice of the PM as in a 1984 amendment. This seemingly minor matter had more than symbolic significance.

Towards a reformulated bargain

Issues that laid the groundwork

The debates were sustained by a succession of issues about dimensions of the relationship between ministers and senior public servants. These included the handling of senior appointments and separations, interactions between ministerial advisers and officials, and a lack of consistency between political rhetoric and behaviour.

Terminations, turnover and appointments

This issue concerned continuity and specifically the association of turnover with loss of tenure. Increases in secretary turnover in the 1990s assumed significance because loss of position now meant termination of employment. Early in Keating’s prime ministership, several senior departmental secretaries were replaced because ministers wanted someone else, and another secretary was summarily sacked, indicating that exits could now be peremptory and rapid. Of great significance was the turnover associated with changes of government because it represented the ultimate departure from convention. The Coalition disposed of six secretaries in 1996 for reasons that remained unexplained.

Even more telling was the readiness of successive governments to dispense with their chief adviser (the secretary of the Department of Prime Minister and Cabinet). Since 1993, three have resigned with a change of prime minister leading to expectations that the incumbent would not continue with a new government. A partial exception occurred with the change of prime minister in 2010 during the Labor government’s first term, when Terry Moran remained for a year at the behest of the new prime minister.

The reduction in the length of contracts for secretaries in the 2000s from five to three years signalled questions about the values of continuity and the perils of too much emphasis on responsiveness (Podger, 2007).

Ministerial advisers

The nexus between the political executive and senior officials became frayed and there continued to be public debate about the character of the relationship. A particular focus was the impact of ministerial advisers on public servants (Barker, 2007), their lack of accountability when involved in major public policy issues and the lack of a governance framework for the staffers (Tiernan, 2007).

A Senate Finance and Public Administration References Committee (2003) inquiry into the conduct, management and accountability of ministerial staff received evidence about difficulties in relationships between advisers and public servants, the need to clarify roles and responsibilities and the dangers of politicization. It recommended that all departments provide written guidance to staff about how to interact with ministers’ offices and that senior staff and ministerial advisers should receive training about appropriate relationships and protocols.

The extensive contact with the political executive (ministers and their staff) was recorded by an APSC (2003a) survey of APS staff: 26 percent of public servants reported contact during the previous two years (including 88 percent of SES and 47 percent of executive-level staff). In view of the salience of this interaction the Public Service Commissioner proposed measures for channelling the behaviour and improving the professionalism of ministerial advisers, in this case articulating their role through specified values and a code of conduct (APSC, 2003a: 4). The demands on public servants have been reported in subsequent surveys (cf. the balancing challenges reported in APSC, 2011: 64–65), and issues with the conduct of advisers have continued to arise (see Moran, 2011, below).

Tensions at the interface

Questions about political–bureaucratic relationships followed on from earlier debates about the role of ministerial advisers, particularly in the aftermath of the children overboard affair (Maley, 2000, 2010; Weller, 2002). The press continued to accept some degree of ‘politicization’ as a given (e.g. Grattan, 2007, on how public servants were constrained under the Howard government), and the debate surfaced again in the exchange that followed former Public Service Commissioner Andrew Podger’s (2007) reflections on the handling of senior appointments and defence of the record by the head of the public service, Peter Shergold (2007).

The dangers of simultaneously mishandling political responsiveness and departmental governance emerged when fundamental weaknesses were exposed in the operations of the Department of Immigration and Multicultural Affairs (DIMA). The department had acquired a high profile because of the Coalition government’s focus on keeping illegal immigrants out and locating and deporting those already in Australia. The failure of governance in the DIMA was revealed through a succession of inquiries into the handling of the detention of citizens (see Edwards et al., 2012). Eventually 247 immigration matters were referred to the ombudsman for investigation. Shergold described ‘the cases as the worst thing that has happened in the public service in recent years’, blaming public service deficiencies, including poor executive leadership and public administration (quoted in ABC Online, 2006). The combination of new public management and political management produced a department that was vulnerable when placed under political pressure.

Political short termism and policy roles

The weakened relationship between politicians and public servants was exposed as private discussions among senior officials about the short-term focus of politicians became public comment about ad hoc decision-making by the government in an election year. Treasury secretary, Ken Henry (2007, 13–14; Borthwick, 2012) observed that:

2007 will test our mettle as apolitical public servants … The legislated APS values make it clear that the public service is apolitical, yet responsive to the government of the day … Our capacity to ensure that our work is ‘responsible,’ and not just ‘responsive,’ will be put to the test. How successful we are will impact on our integrity as public servants and our long-term effectiveness.

The unsettled nature of the relationship was exposed through the head of the Treasury’s declaration that a key agency was bypassed by the government even though it had developed frameworks for considering climate change and water reform. He exclaimed that:

All of us would wish that we had been listened to more attentively over the past several years in both of these areas. There is no doubt that policy outcomes would have been far superior had our views been more influential. That is not just my view; I know that it is increasingly widely shared around this town. (Henry, 2007: 6)

Context for change

The context was provided by the new activist Rudd government with its highly ambitious policy agenda. The government’s agenda reinforced traditional values (a professional public service and accountability and transparency) while cutting the size of the service and making heavy demands on public servants, including renewed emphasis on organizational performance (see the Appendix). The trade-off for the consolidation of the public service and reaffirmation of Westminster principles was higher expectations for a modernized public service. Five dimensions of the agenda can be noted (Halligan, 2010a).

First, the integrity and accountability comprised two elements: the government’s view of the future public service and reinvigorating the Westminster tradition (independent and professional public service, merit-based selection, and continuity of employment), and abolition of performance pay for departmental secretaries. The Office of the Special Minister of State was used to pull together and strengthen a range of integrity and governance responsibilities under one minister: the public service, codes of conduct, privacy and various procedures for handling transparency and accountability.

Second was the focus on ‘One APS’. A lament across the service had been the limitations of a devolved agency structure for conditions of employment. The head of the service, Terry Moran (2009), asserted that the APS is a ‘mutually reinforcing and cohesive whole’, and the Prime Minister argued for a stronger collective identity and a greater esprit de corps (Rudd, 2009). The public service was also being consolidated by reductions in dependence on external consultancies, particularly ICT and legal services.

Third, the Rudd government promised to preserve traditional continuity, and retained the existing departmental secretaries. This meant that when changes were eventually made at the top they did not attract public debate about the process. Five new departmental secretaries were appointed 20 months after the 2007 election in a process that involved the movement of 11 senior executives as the government sought to place appropriate officials in significant positions.

Fourth, the Rudd government recognized the effect of the increasing numbers and roles of ministerial staff on the relationship between ministers and public servants, and the lack of consideration to formalizing their responsibilities. A Code of Conduct for Ministerial Staff was introduced, which stipulated that ‘ministerial staff do not have the power to direct APS employees in their own right and that APS employees are not subject to their direction’, and that ‘executive decisions are the preserve of Ministers and public servants and not ministerial staff acting in their own right’. A main intent was to curb the activities of political advisers for which they were not accountable (APSC, 2008a, 2008b: 186). Yet the number of advisers grew during the term as ministerial offices sought to handle the demands (and they were formally increased after the 2010 election to cope with the more fluid political environment) (Kerr, 2010).

Finally, although the institution of the public service was potentially being strengthened by attention to boundaries, political and private sector relationships and traditions, there were elevated expectations for performance and improved innovative policy capacity. The perceived deficit in capacity was a factor in the major review of the public service (AGRAGA, 2010). The report addressed system coherence and balance and sought systematic refurbishing of the components. The most relevant aspect for this article was the articulation of stewardship (discussed below).

This period provided the circumstances for secretaries’ roles to be addressed, even if the contradictions in the Rudd style were a defining feature of the term. There was commitment to enhancing the public service but eventual reliance on court politics of a few advisers (cf. Savoie, 2008), and political advisers were favoured over public servants in his private office (Mulgan, 2011; Waterford, 2008).

One final factor relevant to the codification discussed later is the legislative precedent provided by Britain with its Constitutional Reform and Governance Act 2010, which provided a statutory basis for civil service appointments.

Reformulation of the role

The relationship between secretaries and ministers has at times been fraught with issues about boundaries (leaving aside variations in ministerial styles). Under Westminster tenets there has been a tendency for successive governments to claim ownership of the public service. This can have significant implications for transitions between government when tensions arise with a public service perceived by new political leadership to have been too close to its predecessors.

However, the elements of the bargain mentioned at the beginning have now been subject to careful scrutiny. Apart from the issues arising from the relationship with politicians, other factors were being accorded greater significance. The secretaries’ role was argued to have become more complex as had the extent of their accountabilities (Egan, 2009: 11). The Commonwealth Remuneration Tribunal (2010: iii) also argued that ‘the termination of an appointment as Secretary can be effected extremely quickly. As cause need neither be given nor demonstrated, termination can be more expeditious than in the private sector. In the Tribunal’s assessment, under the present arrangements for appointment and termination, too much of the risk lies with the Secretary.’ In terms of financial rewards the position of secretary was now remunerated at a much higher relative level than in previous times.

A significant clarification of the secretary’s role was the introduction of the stewardship function, which had previously been recognized (e.g. ANAO, 2003; Egan, 2009), but not accorded official significance. According to the recent Blueprint for Reform (AGRAGA, 2010), APS-wide stewardship is a core role of the secretary, and one that is ‘discharged in partnership with other secretaries and the APS Commissioner’.

Politicians’ lack of strategic focus and ‘short termism’ during the fourth term of the Howard government indicated that an alternative was needed to relying heavily on political direction. The stewardship role was designed for the public service to have ‘the capacity to serve successive governments. A stewardship capability must exist regardless of the style of any one Minister or government.’ Stewardship covers ‘financial sustainability’ and efficient resource management, as well as ‘less tangible factors such as maintaining the trust placed in the APS and building a culture of innovation and integrity in policy advice’ (AGRAGA, 2010: 5).

The absence of any reference to policy development or advice in core legislation was reported by a Review of Work Value for the Office of Secretary prepared for the Commonwealth Remuneration Tribunal (Egan, 2009: 7). On the other hand, financial management (and associated accountabilities) was an explicit responsibility of secretaries. It was also observed that the ministers’ constitutional role is to administer departments of state. ‘There is no legislation that describes their responsibilities further or defines the boundaries between the responsibilities of ministers on the one hand and Secretaries on the other’ (Egan, 2009: 8). Finally, explicit recognition was being given to the competencies of departmental secretaries.

Revisionist bargain?

A number of considerations therefore produced the conditions for a new bargain. These factors have been reinforced by the movement towards consolidating the ministerial department within the machinery of government. The multi-purpose department thrives again; the outer agencies have been brought in closer to the department; portfolio management is being emphasized (the portfolio encompassing all agencies attached to the department); and the specialized delivery agency, Centrelink, the one significant symbol of Australia’s acknowledgement of northern hemisphere agencification, has been absorbed into a monolithic department (Halligan, 2011).

The four roles now delineated for secretaries start with the traditional one of advising the minister on policy (termed ‘Principal official policy adviser’). This is followed by the early reform era addition, at least in terms of language, of ‘manager’, to ensure the delivery of programmes plus the more recent extension of collaboration within the portfolio in order to achieve whole-of-government outcomes. Of particular interest here are the remaining two roles centred on stewardship, one being within their department, the other public service-wide, which is to be ‘discharged in partnership with other secretaries and the APS Commissioner’ (AGRAGA, 2010: 47). The argument therefore is for a multi-skilled position where the three (or four) types of role are equally recognized.

In terms of rewards, top public servants in Australia (along with New Zealand and the United Kingdom) receive annual compensation that is significantly higher than those of other OECD countries (OECD, 2011: 116–117). Following the implementation of pay increases for secretaries the head of the public service increases by 53 percent between March 2012 and July 2014 ($AU825,000). There is now also acceptance that the appointment terms for secretaries should be standardized at five years rather than shorter terms that had also been used (Public Service Amendment Bill 2012). As for loyalty, the standard refrain on apolitical behaviour, trust in the public service and serving the government of the day has been reiterated (Sedgwick, 2011).

The new mix of elements has been digested through leadership forums and the recent reform process, the results of which were endorsed by the government. This position is being ratified by amending legislation, the Public Service Amendment Bill 2012, to receive the final political imprimatur.

Traditional verities modernized but still contested

There has been a succession of challenges to the relationship focusing on the role of the public service on the one hand and the behaviour and resources of the political executive on the other. Over time the trend has been towards strengthening the political executive, but punctuated by debates about issues that have slowed the rate of change, constrained political pressures on the public service, and produced clarifications of aspects of the relationship. These points of challenge included debate about loss of permanency for departmental secretaries (1980s), the rise and roles of advisers (1980s–2000s, 2012), turnover of secretaries (1996), and the demands on the public service from a new government (1996, 2009). The dynamics of change have progressively redefined the relationship.

Under the traditional bargain, the main components were well understood and by and large worked well, with one exception. It assumed that ministers were either disinclined or poorly equipped to take directive responsibility. When those conditions no longer existed the new imbalance made the arrangements vulnerable. The result, however, of the first reformulation of the bargain was also to stack the arrangement too much in the political executive’s favour. Having responded to the era of guardian mandarins by addressing the imbalance and the authority of the political executive, the political executive moved into a contested zone in its drive to assert the role of ministers and to relegate that of secretaries.

Two fundamental issues were central, the first being the concern of governments with responsiveness to their policies (the main issue from 1972 to 1983) and the issue of public responsibility of the public service in relation to the government of the day. If responsibility was only to the government, it became a mere political instrument, at worst, politicized as well. This raised a third fundamental issue, the existence of an apolitical service based on professionals.

The concept of an apolitical public service has been maintained across bargains by successive governments. Even the leader of the government at times least sympathetic to the public service declared commitment to a ‘non-partisan and professional public service’ (Howard, 1998). If the rhetoric was consistent, the parallel language and action provided the guide to changing government thinking about the bureaucracy. While requiring this highly responsive system, governments continued to assert the integrity and apolitical character of the public service, and the 1999 Public Service Act enshrined this central value.

The strength of an Australian administrative tradition has been apparent where governments have overstepped the limits of acceptability (Halligan, 2010b). This produced Labor’s back-pedalling on political appointees in 1983–84, the backlash to the purge of secretaries by the Coalition in 1996, and the response to the role of political advisers in the mid-2000s. System correction was again apparent in the 2010s with Labor’s evolving agenda (Halligan, 2010a).

There are indications that the long-term processes of change in the reform era have produced a return to traditional verities. There are several strands to this argument. The pressures over time for politicians to focus on the short-term considerations in particular programme delivery have pointed to the neglect of the medium and long term, and reflected on public policy. One impact of the loss of permanency has been that it has taken a generation to articulate a means of compensating for this core feature of the traditional arrangements. The collective side was neglected for secretaries and the broader public service, and this was further expressed in the loss of coherence and identity of the public service with disaggregation, but without a career service. On the one hand management devolution and then the workplace agenda required agencies (i.e. secretaries) to be responsible for employment and other matters (the Balkanization of the public service being one consequence of a strong agency focus). On the other hand, there was a lack of countervailing mechanisms for fostering public service integration and identity.

Of the secretaries’ roles (see Table 1), the ‘public interest’ aspect had become stunted because of the day-to-day emphasis of departmental operations, but has now received a new expression through stewardship. The official reformulation of roles is designed to provide a comprehensive and explicit depiction of the secretary’s role for the first time. There is also the prospect that the stewardship role might allow the leaders of the public service collectively and individually to engage more explicitly in matters deemed to be in the public interest.

Table 1.

Changing roles 1970s–2010s

Role\Bargain	Original	Reoriented	Reformulated
Policy advice	Centrepiece	Secondary or implicit	Principal official Policy adviser
Management (administration)	General operations and business	Prominent: Manager service delivery	Manager – programme delivery
Public interest	Public duty	Implied	Stewardship

Yet political realities as ever disturb the neat picture, and can be expected to attenuate the impact of the new scheme across portfolios. Despite the Rudd government’s commitment to curtailing the unaccountable interventions of ministerial advisers in public policy, the head of the public service (Moran, 2011) in his swan song maintained that the

… mechanisms for holding advisers accountable are murky. Unlike other public sector employees, they are not called before parliamentary committees, nor are they subject to some of the other bodies that oversee public servants … The real issue here is actually best viewed through the prism of ministerial responsibility. The doctrine of ministerial responsibility has contributed to the rise of advisers and lies at the heart of uncertainty about their role … In seeking to track so many matters through advisers it is possible that ministers find themselves accepting a very broad view of ministerial responsibility, a view at odds with the reach of all the other mechanisms established by the parliament to hold the administration accountable.

Considerable meaning, grounded in recent experience, can be attached to Moran’s (2011) exhortations to ‘strive for the right balance in the exercise of executive power, and clarify ministerial responsibility’. The implication is that the behaviour of advisers (or the ‘teenagers’ as they have been termed by a senior departmental secretary) has not been contained, despite the code of conduct. Similarly, the chief executive of the Business Council of Australia has argued that the public service is undermined by inexpert and unaccountable political gatekeepers (Westacott, 2012). The Public Service Commission’s annual survey of employees indicated that 35 percent of SES and EL staff in direct contact with a minister and/or advisers experienced challenges ‘in balancing the need to be apolitical, impartial and professional; to be responsive to the government; and to be openly accountable’ in their dealings (APSC, 2011: 65).

Moran’s successor as head of the public service, Ian Watt, has proclaimed his vision for the APS ‘to be and to remain the first choice for policy advice, policy implementation and program and service delivery for Australian governments’. This notion of being ‘first choice’ dramatizes how one change to the relationship between ministers and departmental secretaries had become apparently immutable (Mulgan, 2011; Watt, 2011). Australia has also been one of a group of countries, generally Anglo-US, that have relied substantially on external consultants for a range of managerial and technical tasks, including policy (Saint-Martin, 2004).

Conclusion

The article has argued that the secretary’s responsibilities have generally been regarded as having well-understood components that cover advice to the minister, administration and/or management, plus a ‘public interest’ element. The formulation of the three roles has also evolved. The significance of each can vary with governments and reform environments. At the present time all three have been accorded prominence in official documents to produce a rounded and modernized conception rather than specialized and narrow approaches of the past when aspects were implied and ambiguity often prevailed.

The basis for a new bargain now exists with the dimensions of capacity being more explicit, the remuneration aspect of rewards is based on the roles, loyalty to the minister remains fundamental, while the secretary’s opportunities for stewardship provide a more explicit incentive. However, the PSB as indicated by Hood and Lodge (2006) is not a static arrangement. The Australian experience has indicated that it has been prone to being buffeted as loose bargains come under pressure from contending forces. The emerging bargain provides a more secure basis for a balanced and durable approach to the secretary’s roles.

Footnotes

John Halligan is Professor of Public Administration, ANZSOG Institute for Governance, University of Canberra, Australia. His research interests are comparative public management and governance, specifically public sector reform, performance management and government institutions. His latest book is Public Sector Governance in Australia (ANU Press, 2012).

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