Reform in the Australian Public Service 1983-1996

• on the supply side -

The Labor government adopted a policy of progressively opening up the provision of common services to competition from the private sector. In 1988, 23 principles were approved to guide changes proposed for DAS. (See Exhibit I for selected principles; the full set of principles is reproduced as Appendix C .) In 1995, their continuing relevance was noted by the DAS Secretary:

These 23 principles laid the foundation for the reforms which have taken place since 1988. Although the detail of the department's operating framework has been adjusted in the intervening years, the underpinning elements remain largely as outlined in [those principles] (J. Mellors 1995: p. 4-5).

A former senior official summarized the origins of commercialization and the development of the 23 principles as follows:

The genesis of [commercialization] goes back to 1987 [when] the megadepartments were created. [There was] a philosophy, and a trend towards deregulation, decentralization, devolution, [known as] the new managerialism, which was basically letting the managers manage, providing, from the centre, guidance rather than control, and a focus on accountability. In the case of [DAS], there was an argument, right at the outset, about whether it would be better to devolve provision of most of the common services or whether these services should continue to be provided centrally. And in the end it was decided to form [DAS] but in so doing to raise the question as to whether services could be provided more cheaply, more efficiently, more effectively, by exposing the provision of services to competition from the private sector. So one of the early things that happened was the development of a set of principles that would relate to the provision of common services. There were 23 of them and they were virtually the first policy framework [for DAS] (1993 interviews).

In 1992, experience with competition in DAS was described by the then secretary:

...four years down the track, most DAS businesses are untied or becoming so, requiring that they compete on the open market for government business...[they] must quote and tender competitively against the private sector...Most DAS businesses experienced, or expect to experience, a significant downturn in business as clients, newly untied, experiment with alternative suppliers...Some departments [have established] "in-house" provision of services. On the other hand, the preparedness of some DAS businesses to pursue market share aggressively has been regarded with
mixed feelings by [the] private sector... (N. Tanzer, in P. Weller et al. 1993: p. 51).

The DAS commercialization framework was reviewed in 1991 and again in 1992 when, in the view of the then departmental Secretary, DAS was "at a mid point in its journey towards full commercialization" (N. Tanzer 1992: p. 15). These reviews concluded that "while fully commercial performance (e.g. full private sector rates of return on capital) was not a realistic objective for a number of DAS businesses... many... would be expected to provide a positive rate of return and... all of them should at least break even by 1995-96" (DAS 1993: p. 4).

To that end, the medium-term strategy for DAS' commercial operations included the following parameters:

• in setting performance targets, account should be taken of the advantages and constraints inherent in operating in a Department of State;
• services should be exposed to increased competition through continued untying optionality;
• there would be development of credible business plans and quarterly financial reporting to the Department of Finance on progress against them;
• any transitional subsidy required to implement business plans was to decline to zero after 1994-95, except where ongoing budget funding was provided for explicit reasons; and
• the future of individual business units and the continuation of transitional funding was to be subject to an annual review of progress against business plans (DAS 1993: p. 4-5).

Initially, DAS business units operated on a semi-autonomous basis in a department with two major streams of activity: commercial businesses and other, budget-funded departmental operations. The focus was on addressing the particular challenges to improving the efficiency and effectiveness of the individual businesses.

Experimentation and learning - a pragmatic approach - has been a central feature of DAS' move to commercialization. Thus, for example, Purchasing Services was shifted out of commercial operations when it was determined that such an approach was not appropriate to government requirements.

As commercialization progressed, a focus on increased co-operation among, and integration of, the business units - a "one-stop shop" approach - began to develop. Nineteen small programs were combined into four.

Another feature of structural change was the establishment of business-specific advisory boards, with customers, unions and private sector representatives, to provide input to senior managers on commercial strategies and directions.

In the operation of the business units in particular, attention has been focussed on business planning, commercial objectives and outcomes, and the use of business accounting practices, including the preparation of full accrual financial statements. 34 Funding arrangements and performance targets generally have been negotiated through resource agreements.

In recognition of the changed environment under commercialization, risk management techniques have been introduced, and an increased customer orientation developed. As one senior official indicated,

...the benefits of commercialization [include] the introduction of competition [and] of commercial principles for service delivery, [which] have resulted in real efficiencies... In each of our service lines, we have commenced quality improvement programs... Everything we do in the way we send proposals to our customers [is] commercially focussed...[to] meet the customer's needs (1993 interviews).

The financial performance of the commercialized units has improved markedly from 1987-88, when a substantial notional loss (one estimate being $A 68 million) was incurred. By 1991-92 the trust account showed a modest profit, with DAS cost reductions totalling some $A 200 million per annum. However, several of the business units making up the account incurred losses over the period and since, including DAS Distribution (a moving and storage service), Asset Services (which maintains Commonwealth property and assets), and DAS Interiors Australia (accommodation planning and design). Overall, profits of about $A 2 million in 1991-92 increased to $17 million in 1992-93 and to $45 million in 1993-94. Annually, a decision has been made on whether to return any profits to the consolidated fund based on "the general principle that (net) surpluses will often need to be retained...to finance future requirements" (principle 19 of the 23 principles referred to above).

Corporate culture change represents a major challenge in entities that, as the Australian National Audit Office noted, "remain accountable directly to Minister[s] and [are] subject to most public service administrative and financial controls and processes", but "operate outwardly in a commercial manner" (Audit Report No.16 1992-93). Traditional public service approaches have, to varying degrees, been found wanting in a commercial environment. An OECD case study on Australian commercialization noted, "The scale of the task involved in changing staff attitudes...[was] in hindsight underestimated" (OECD 1993: p. 35). Our interview with a former top official illustrated what went on:

We have done some very tough things in public service terms...we spilled most of the general manager positions [heads of business units], and they were opened to private sector competition...Not all of these positions were vacant...[To be] competitive, we needed to test whether or not we had the best skills...We went through a series of quite devastating reorganizations. In the early days [of commercialization] we took sizeable chunks of the operations and just dissected them...and turned them into businesses (1993 interviews).

To 1992, the elimination of non-viable services from commercial business units (where over 80 percent of the department's staff worked) resulted in a 32 percent decline in staff numbers in these units (from 14,560 in 1987 to 9,850 in April 1992). According to a DAS report, these cuts were achieved mainly through natural attrition and voluntary redundancies. As further cuts ensued, however, this could not be sustained. The average staffing level in the business units fell to about 5,200 for the 1995-96 fiscal year. In terms of overall financial performance and future directions, the DAS Secretary stated in mid-1995:

Performance outcomes for DAS' commercial services in aggregate have demonstrated substantial progress towards achieving commercial financial returns by 1995-96 although some individual businesses have performed less strongly. In 1995-96 the government will undertake a comprehensive review of the commercialization framework for DAS to determine what further changes (if any) should be made 35 (J. Mellors 1995: p. 5).

User Charging

User charging, however, has been used increasingly in a variety of other circumstances where, for example, charges may not reflect full cost recovery and/or clients may still be tied to the service provider. Indeed, Department of Finance directions were amended, "making user charging between agencies the norm rather than the exception" (TFMI Evaluation 1993: p. 301). As well, user charging has been applied within departments - for example, between administrative service providers and program units - and to external users. An example of the latter is charging by the Department of Defence to cover its full costs whenever possible, such as in providing assistance to the civil community.

User charging has been identified as a means of regulating demand for government services through a price mechanism, in addition to its use in revenue raising: "The [user charging] system has proven useful not only in reducing the cost to the Budget of external users, but also in the rationing of supply between agencies and within agencies" (TFMI Evaluation 1993: p. 306).

Accrual Accounting

By then, accrual reporting already applied to government entities controlling "some 90 percent" of Commonwealth assets, excluding those held by Defence - that is, Government Business Enterprises, statutory authorities and certain agency commercial operations such as common service providers (MAB-MIAC 1991: p. ix).

Accrual reporting was aimed at providing information "relevant to a wider range of assessments by users"; in particular, to:

• facilitate an assessment of program performance by showing the full costs of resources used in program delivery;
• facilitate an assessment of financial position by showing all resources and obligations; and
• enhance the accountability of management for its performance...acting as a spur to better management performance, e.g. in relation to the management of assets, creditors, etc. (Department of Finance April 1993: p. iii, 3).

In a 1993-94 audit report on the subject of departmental readiness for accrual accounting, the Auditor-General found that "many agencies have not been well prepared for accounting and reporting reforms to date; and are not [as of mid-1993, the date of the ANAO survey] well prepared for the introduction of full accrual accounting." Agencies needed to take concerted action in the areas of recruitment and training, and in the development and implementation of accounting and financial management information systems capable of satisfying full accrual reporting requirements (Audit Report No. 32, 1993-94).

Program and Policy Reviews

Reviews took account of expenditure trends across all portfolios, together with ministers' own reviews of their portfolio priorities. Most reviews were conducted by interdepartmental committees, including the line portfolio(s) and one or more of the central co-ordinating departments: Finance, Prime Minister and Cabinet, and Treasury.

Reviews focussed on areas of rapid expenditure growth, and other areas where, for a variety of reasons, there was scope for program improvements. Many reviews emphasized value for money and "finding ways of doing things better for the same or reduced cost" (Department of Finance 1994: p. 6). Approaches to efficiency improvement included benchmarking, commercialization and cost recovery. Many reviews entailed the collection of new evaluation information; others involved the synthesis of a range of available evaluation and review findings.

The 1993-94 cycle of reviews (comprising 48 individual reviews) related to aspects of programs that collectively covered over 50 percent of federal government expenditures. About half of these reviews were completed by the time of the 1994-95 Budget, when several additional reviews were launched. 36

Proposal for a New Legislative Framework for Financial Management and Accountability

The Financial Management and Accountability (FMA) Bill was intended to modernize the legislative base for financial administration. It would not have made major changes in existing financial management practices, but rather would have brought the underlying legislation up-to-date to reflect the reforms instituted to that time.

The Audit Act (1901) , as the fourth piece of legislation passed following federation, gave effect to the provisions of the Constitution relating to parliamentary control over public money and established a framework for financial administration. In spite of its title, less than half of the Act's provisions deal with auditing. Although amended, and supplemented in important respects by subordinate legislation (regulations and directions), the Act's narrow view of financial activities (e.g. the physical handling of and accounting for moneys and stores) needs to be expanded to reflect the full range of financial tasks performed by government today. 37 The Joint Committee on Public Accounts recommended in 1989 that the Act be repealed and replaced with more modern legislation.

The FMA Bill was described by the Labor government as incorporating the Audit Act's financial control principles, simplifying and clarifying them where possible, and applying them "in ways that support...reforms in public sector financial management." In scope, the Bill covered the activities of persons in organizations that, financially, are agents of the government (that is, departments or statutory authorities whose enabling legislation does not give them legal ownership of money or property separate from the government). The traditional role of the Minister of Finance as custodian of public money was specified, as were the responsibilities and powers of chief executives (that is, the secretaries of departments and head of agencies) for the day-to-day management of the government's financial affairs.

Improved accountability within government was expected from provisions of the FMA Bill requiring chief executives to, among other things, manage resources in an efficient, effective and ethical manner, prepare fraud control plans, and establish high-level audit committees within their agencies. Better external accountability (from government to Parliament) was expected to flow from the restructuring of fund accounting arrangements by creating two purpose-related funds: a commercial activities fund and a reserved moneys fund (that is, the accounting category for moneys set aside - by legislation, trustee arrangements, or by the Minister for Finance - for specific future spending purposes).

The Commonwealth Authorities and Companies Bill aimed to implement a standard framework for reporting, auditing and ethical requirements for directors of federal government statutory authorities and Government Business Enterprises. It would have supplemented obligations in corporate law respecting the accountability of those directors to ministers and Parliament.

The Auditor-General Bill was described by the government as intended to respond to the recommendations of the Joint Committee of Public Accounts to enhance the Auditor-General's effectiveness, scope and independence from government. 38 The relevant parts of the Bill were outlined as follows, in the summary accompanying its presentation in the House of Representatives:

[The Bill] defines the powers and functions [of the Audit Office] to support its functional independence [from government through] parliamentary involvement in the appointment [of the Auditor-General and]...through the mechanism of his right to report to Parliament on any matter, and by clarifying and strengthening his mandate.

Structural Reforms

Restructuring of the Cabinet/Departmental System

Underpinning this restructuring was a plan developed by Michael Codd, then Secretary of the Department of the Prime Minister and Cabinet, and Peter Wilenski, then Chairman of the Public Service Board, after intensive consultations with all of the departmental secretaries during the electoral period. The plan hinged on a "logical grouping of programs and services" that was intended to create a stable structure, overcoming past practice of over-frequent, often politically motivated changes in ministerial portfolios and departmental structures (1993 interviews).

The number of departments was initially reduced from 28 to 18, organized in 16 portfolios (departments of Veterans' Affairs and of Aboriginal Affairs were retained but made part of a larger portfolio). Among the major changes at that time were the previously discussed merging of common services in the Department of Administrative Services, and two matters discussed hereafter, namely: the abolition of the Public Service Board and its replacement by a smaller, less powerful Public Service Commission; and the creation of a statutory Management Advisory Board to advise government on significant public service management issues.

A new two-tiered ministry also was introduced, with 16 portfolio ministers comprising the Cabinet, and 14 junior ministers outside the Cabinet, acting in support of the portfolio ministers. A two-tier system had previously existed but, as noted by a former senior official, "a cabinet of fifteen to seventeen consisted of the more senior ministers responsible for what could sometimes be an arbitrary group of portfolios, others being left unrepresented" (S. Hamilton, in A. Kouzmin et al. 1990: p. 65). The 1987 changes, while having little impact on the size of the ministry or of the Cabinet, ensured that all portfolios were represented in Cabinet.

As well, under this new arrangement, subject to the over-riding authority of the portfolio minister, non-Cabinet ministers assumed responsibilities in the portfolio that focussed on either program administration or relatively discrete policy areas. They also assisted with such matters as corporate management and parliamentary duties.

Various objectives have been identified for the restructuring:

• a determination to create structures supportive of the government's policy reform agenda (identified by Prime Minister Hawke as the major reason);
• broader perspectives and greater coherence in policy advice, program development and delivery;
• an improved Cabinet structure - one of more manageable size but with all portfolio interests represented;
• enhanced ministerial control of departments (through sharing of ministerial workload within a two-level ministerial structure);
• improved decision-making and budget processes, enhancing departmental co-ordination and providing the institutional framework for portfolio budgeting (with fewer units, each representing wider, related interests, expenditure and policy trade-offs could more readily be made internally); 40
• greater flexibility in portfolio operations and potential stability in the machinery of government;
• creation of enhanced opportunities for the devolution of administrative functions (larger entities having greater capacity to assume more responsibility); and
• the removal of overlap and duplication of functions among departments, and savings from economies of scale (together involving the elimination of up to 3,000 public service positions, about 2 percent of the total) (M. Codd 1988: p. 26; R.J. Hawke 1989: p. 11-12; S. Hamilton, in R. Kouzmin et al. 1990: p. 64-65; M. Keating 1993: p. 2).

Writing five years after the changes, the then Secretary of the Department of the Prime Minister and Cabinet, Michael Keating, although noting significant transition costs, considered that each of the objectives of the 1987 restructuring had been attained in some measure. In his view, the most important of these was "clarity of policy purpose", that is, a sharper focus on government policy priorities (M. Keating 1993: p. 2). Keating felt that larger departments were not "submerging" the policy viewpoints of their constituent elements.

Further evidence of the success of this initiative is that there have been only relatively minor changes in the basic portfolio structure since 1987. 41 As of March 1994, there were 18 portfolio departments, each of which was represented in Cabinet by a minister. Following the March 1996 election, the coalition government returned the structure to 16 portfolio departments, broadly in line with the 1987 model. 42 Appendix D shows the 1987 changes and the portfolio/departmental structure adopted in March 1996. 43

In conjunction with the 1987 restructuring of departments and the ministry, three new policy development committees were established: The Structural Adjustment Committee and the Social and Family Policy Committee (later the Social Justice Committee) have been described as the "two policy think-tanks in the Cabinet" (C. Campbell, J. Halligan 1992: p. 78). The third new committee was the Public Service Reform Committee.

One of the important benefits arising from these new committees, particularly the first two mentioned, was horizontal policy integration - the "much greater ability for ministers collectively to engage in policy development..." (R.J. Hawke 1989: p. 9).

Although very active during the 1987 restructuring, the Public Service Reform Committee met infrequently thereafter. In 1991, after 18 months without a meeting, it was abolished, as it had become "generally peripheral to the main currents of change" (C. Campbell, J. Halligan 1992: p. 170). Senior officials noted that the Committee "never really lived up to its potential use":

The real driving force for Cabinet consideration and a lot of public service changes really came through the Expenditure Review Committee. The role of the Public Service Reform Committee [was] more in terms of the administrative effects rather than the budgetary effects. It had an assessment role rather than a policy development role. It didn't work anything like the Structural Adjustment Committee or the Social and Family Policy Committee, [which] sat as a group of ministers, serviced by officials from [the Prime Minister and Cabinet department, with] programs, agendas, and the ministers responsible for driving the focus of the committee. The public service reform committee assessed papers as they came forward rather than pushing the direction in which [reforms] went (1993 interviews).

It was bureaucrats who were driving the reforms, but whenever you needed to have the support of ministers, it was fought [for] and it was gained (1993 interviews).

The significance of the Cabinet committees is further illustrated in the following comments of senior officials:

In Australia, the Cabinet system and its structure...has been an extremely important element in the whole of the reform process...The Cabinet committee system [showed] how, in partnership with officials, the Cabinet could be used in a constructive way to help advance the reform agenda (1993 interviews).

ERC [has been] instrumental [in linking "micro" and "macro" decision-making] - so that Cabinet is concerned with high-level issues, ministers in their portfolios with the next level of issues, and managers in departments [with] operational matters (1993 interviews).

The Abolition of the Public Service Board

The Public Service Board, established under the Public Service Act (1922), had been accorded broad powers over all aspects of personnel management, including pay, job classification, staffing, establishments, position approvals, professional training, industrial relations and grievances. The Board acted as the guarantor of the merit principle, with a statutory independence from the government of the day. It exercised centralized controls over departmental staffing decisions and staff ceilings.

These controls were viewed by one authoritative source as having created "an incredibly unhealthy culture in the public service." The extent of the centralization was such that departments typically could neither staff nor classify positions, particularly at senior levels, without specific approvals from the Board, which were often difficult to obtain (1993 interviews).

The Board also had responsibilities for efficiency, economy and management improvement; it was "the most important agency in the management of the public service" (C. Campbell, J. Halligan 1992: p. 166). For example, the Board acted as co-sponsor with Finance of the Financial Management Improvement Program, and also produced guidelines for the streamlining of personnel management launched in 1986.

A senior official described the origins of the centralized system, noting both the significant formal powers of the Board and the informal power of secretaries of departments within this regime:

In 1922, the first year of the Public Service Board, over 80 percent of APS staff worked in what was then called the Postmaster General's Department. Those people are now [in] statutory authorities that are quite outside the scope of the APS. Until 1975, the Public Service Board was very much driven by the industrial organizational problems of running the post office and the telegraph system. That's where the strikes were, that's where you had classification [actions]. There was always a tremendous amount of centralized power, but provided the forms of those powers were recognized, departmental secretaries did what they liked. When I joined the public service, it didn't matter that my promotion had to be approved by the Public Service Board, that was what you might call a centralized formality. We can overly emphasize the role of that central agency, because the rules were such that departmental secretaries had independent discretion: they didn't have to advertise jobs, they didn't have to advertise competitions [and so on]. There were some realities behind the Board which frustrated a lot of heads of departments, [but they] operated powerful, very independent fiefdoms. In the old days, the departmental secretary was virtually immune from sacking by the government, and the worst the government could do was break up the department and reorganize it. And what happened in the 1980s is that the Australian public service has been democratized; what you have now is a public service which is responsible to the elected government of the day (1993 interviews).

Among the factors accounting for the demise of the Board were an increased emphasis on the responsibilities of departments, rather than central agencies, for resource allocation and management, the pre-eminent role assumed by the Department of Finance in this area (C. Campbell, J. Halligan 1992: p. 168), and the pressures for further devolution to line departments (J. Alford 1993: p. 1-2).

What came through from the submissions [to the Efficiency Scrutiny Unit] was that the Board had practically no supporters around the line departments. The perception of the Board was that it was overstaffed, over-intrusive, unhelpful, more an impediment to improving administration than a benefit. The perceptions were so strong that for that reason alone something dramatic had to happen to it. The [Efficiency Scrutiny Unit] recommendation, to cut it back to a much smaller commission, was what was needed to bring about a massive cultural change - to put a shock wave through (1993 interviews).

The Public Service Commission was made responsible for policy advice in relation to recruitment, promotion, transfer, mobility, discipline and retirement, and was given a monitoring role in respect to employment equity. Almost all operational aspects of personnel matters, excluding the Senior Executive Service (which remained with the Commission), were devolved to individual departments.

Devolution in personnel administration has included:

• departments and agencies interpreting and applying the basic policies and standards established by central agencies, although staff can appeal some matters under the Merit Protection and Review Agency legislation;
• departmental secretaries having specific responsibilities and powers (other than for the SES) in areas such as the creation and abolition of offices, appointment of officers, reclassification, promotion and transfer, discipline and reduction in classification and retirement of officers; and
• local managers within departments being given more authority to approve expenditure and staffing matters, such as promotions, according to local conditions (M. Codd 1991: p. 8; Conference on Civil Service Change 1990: p. 3).

The Management Advisory Board

The members named in the Act are the Secretary of the Department of the Prime Minister and Cabinet (designated as Chairperson), the Public Service Commissioner, and the secretaries of the departments of Industrial Relations and Finance. Other statutory members include "such other Secretaries as are nominated...by the Prime Minister", and "at least two other persons", one nominated in consultation between the Prime Minister and the Australian Council of Trade Unions and another who must have "management expertise in the private sector." MAB had nine members as of October 1994.

The functions of the Board are to advise the Commonwealth Government on significant issues relating to the management of the Australian public service, and to be a forum for consideration of major management activities affecting the public service as a whole.

As a policy advisory and information-sharing body operating at the highest bureaucratic levels, MAB has greatly facilitated Australia's gradual but persistent approach to public service reform.

A Management Improvement Advisory Committee (MIAC) was formed by MAB in 1989 to prepare discussion papers (for the Board and for publication) and to advise on issues referred to it by the Board. MIAC is made up of Senior Executive Service staff from central agencies and line departments, with emphasis on representation from the regions, and a Chair from a line department. In October 1994, MIAC had 10 members. It is a working group with access to project staff, as MAB itself does not have staff assigned to it.

Exhibit 3 , based on data from 1987 to 1992, and Exhibit 4 , listing MAB-MIAC publications, illustrate the range of matters that MAB and MIAC have considered.

MAB-MIAC's publication program is designed to provide to public service managers up-to-date guidance and information on key management issues. These papers are often based on case studies from line departments and examples of "best practice". By mid-1996, 21 papers had been issued.

The creation of MIAC has had a number of benefits:

Since the establishment of MIAC...a majority of issues considered by MAB involve this working group, allowing an opportunity to draw upon extensive executive experience from across the APS, through a group chaired by a line manager...The involvement in recent times of senior officer project staff has further increased the potential for achieving a practical, diverse base for MAB-MIAC projects (TFMI Evaluation 1993: p. 535).

MAB has been very useful in making sure that agencies are working together and talking to each other, and so on, at the highest level. In terms of promoting new management practices [MAB started to] work effectively [when] MIAC came in [and] started to produce the sets of papers [in the publication series]. These papers stimulate discussion and debate on various [important] topics. [They] can be built upon as a vehicle for correcting mistakes and garnering input from the operating departments, [most of which are] represented in the membership of MIAC (1993 interviews).

Several senior officials we interviewed characterized MAB and MIAC as "change agents", advancing best practices and opening up the process of reform, notably in the regions. The "major strength" of MAB is seen as "its capacity to take a high level, APS-wide perspective, effectively involving those outside the formal centre" (TFMI Evaluation 1993: p. 537).

As one senior official expressed it:

MAB was established with two real roles. One was to encourage and lead the further development of management reform in the public sector; the other was to provide a vehicle for the various institutions that have a management role in government, that is, the Department of Finance for financial management, the Public Service Commission for people management, and the Department of Industrial Relations on the employer side, to ensure that they each understood what the other was doing and to co-ordinate their activities in a constructive way. MAB would also receive feedback from operating departments, from the union movement and from the private sector (1993 interviews).

Government Business Enterprises and Statutory Authorities

Following a 1987 White Paper - "Policy Guidelines for Statutory Authorities and Government Business Enterprises" 46 - a series of reforms has significantly altered accountability relationships with ministers and the public service, replacing "hands-on" ministerial control and involvement in day-to-day operations with a greater commercial and customer orientation. These reforms are considered to have influenced later public service reforms. In addition, since 1988, in line with the commercialization thrust, a number of functions previously within the public service have been transferred to GBEs and statutory authorities. 47

The overall objective of GBE and statutory authority reform was to improve economic performance, which had been lacklustre. For example, through the 1970s, GBEs such as Australian National Railways and Australian Shipping performed "neither well nor consistently", as measured by rates of return (E. Harman, in P. Weller et al. 1993: p. 26). One common thrust was "corporatization", that is, the adoption of an institutional structure and mode of operations akin to those of private corporations, which is now widespread among GBEs (R. Clare, K. Johnston 1993: p. 2). Initiatives included a requirement for improved quality of information and corporate planning to promote more efficient and effective management and government oversight at a strategic level, the setting of ministerially agreed target rates of return combined with market valuation of assets, and a requirement for GBEs to pay dividends to the government (TFMI Evaluation 1993: p. 319).

The effort in GBE corporate planning 48 came just as similar reforms within the public service were receiving greater emphasis. As a result, GBEs' use of corporate plans served to some extent as a model for departments and agencies in the public service. GBEs' increased focus on their customers, and consequent changes in management processes and corporate culture, were also relevant to commercial functions within the public service. The results since 1987 have been promising: "For many GBEs there have been large improvements in financial and productivity performance" (R. Clare, K. Johnston 1992: p. 43).

The department that initiated many of these structural reforms was Transport and Communications. After the 1987 restructuring, the department initially grew but then shrank, as many of its functions were transferred to GBEs or statutory authorities. The process was described by senior officials in the following terms:

We ended up with almost all the government's business enterprises of any note within this portfolio. As part of the restructuring of the economy - the restructuring of the portfolios themselves - we pulled together 12,000 people. We then said, what needs to be done by the Department of State? What can be done by full cost recovery - in a regular agency - and what can be done by corporations? We were given a mandate to implement very extensive policy reform in all parts of the portfolio.

That was inextricably linked to the GBE reform process: trying to improve the efficiency [of] GBEs by increasing the competition that they faced in a number of sectors. [These reforms] required a corporate planning process, including financial targets, and performance indicators...payment of dividends [and] substantial improvements in productivity and return to the shareholder.

In a structural sense, what happened was that we went from 12,000 people to 1,200. We hived off two very large operational and safety industries in the aviation sector - the Federal Airports Corporation, responsible for the management of our airports, and the Civil Aviation Authority, which was responsible for the control [safety] of the airways. We also hived off what became the Maritime Safety Authority, which was responsible for navigational aids, lighthouses and sea safety. We introduced competition in telecommunications, and set up a new regulatory body, AUSTEL, to administer both the technical and economic regulation in that area. In the broadcasting sector, we changed the nature of regulation (1993 interviews).

Evaluating the Reforms

• Running costs system. The system had generally contributed to improving resource management, but needed to be better linked to program outcomes. The efficiency dividend was considered by departments to be imposed upon them, and was viewed as a disincentive to good performance.
• User charging. In some cases, essential information systems (for example to produce costing information) were deficient; in other cases, there were concerns about public interest factors such as equity and access.
• Devolution. Public sector managers had been given greater scope and flexibility in financial administration, but further devolution needed to be based on demonstrated improvements in information systems, evaluation and accountability practices. 50
• Performance information. A concerted effort was required to improve this information, as well as the related areas of management information systems and evaluation. Most departments had a considerable way to go in achieving systematic and comprehensive evaluation.
• Accountability. The need for parliamentary scrutiny of FMIP changes was emphasized. Greater co-operation was needed from public servants appearing as witnesses before committees. The role of the Australian National Audit Office in accountability, through its efficiency audits, was supported but the ANAO needed more resources to conduct these audits.
• Resource management training. Central agency co-ordination and funding to supplement departments' responsibilities for staff training and development were required.

Task Force on Management Improvement

... to provide an overview of all significant changes in the personnel, financial and industrial relations framework, directed at improving the government's programs and services, to evaluate their overall outcomes accordingly, and to report on directions for the 1990s (p. 46).

• a survey of agencies (30 agencies, covering all portfolio departments and a number of others);
• a survey of staff (a 63 percent response rate from a sample of some 10,000 public servants, about one out of every 15, at all levels and locations);
• a survey of users of programs and services (a population sample of some 2,400 people);
• specific submissions (40), case studies (46) and research reports (10);
• interviews (including of senior management, other staff and union representatives); and
• seminars and workshops.

• What are the management improvement strategies, and how do they relate to each other?
• Have these strategies been implemented?
• What have been the outputs of the strategies; has a new management environment been created?
• What have been the resulting changes in program performance, including agency, staff and client perspectives?
• Are the current objectives relevant for the 1990s and beyond?
• Are there better ways of achieving the relevant objectives, including experience in Australian states and other countries?

A second dimension of the evaluation was to consider the relevance of reform objectives to the 1990s and to question whether there were better ways to meet these objectives. The focus of this part of the report encompassed service to the public; improving performance at the agency level, from the central agencies and from staff; accountability; the management of change; and the need for co-ordination of continuous reform from the centre.

The evaluation report, entitled "The Australian Public Service Reformed, An Evaluation of a Decade of Management Reform", was released in July 1993. Prime Minister Keating, speaking on the release date, referred to this evaluation as an "ambitious undertaking" and "a comprehensive survey of management change" (P. Keating 1993: p. 4). 51

Conclusions. The TFMI Evaluation 1993 offered three general conclusions about the decade of reform:

• the direction of the reforms has been correct;
• they have been well accepted 52 and have had many positive effects, as well as some costs (especially in implementation); and
• more needs to be done, especially to extend them across the Australian public service, and to incorporate them into the culture of the entire administration (p. 1).

1. Have the reform strategies been implemented? The answer is yes. The reforms as a whole have been successfully incorporated into their respective work areas, although some concerns were expressed about the need for better consultation and evaluation procedures and for greater devolution within agencies, in addition to what has been devolved from the centre. The findings also raised questions about whether accountability arrangements - seen as a necessary concomitant of devolution - were in place and operating successfully. Submissions received from the public indicated that the reforms had been moving in the right direction, but neither far nor fast enough.

2. What have been the outputs? There was a general view by agencies and staff that the reforms have had a positive impact on agency management and performance. Senior executives perceived an increase in service quality, but also noted an increase in the costs of service delivery. Results orientation has improved, although there was still too much emphasis on process and inputs. Reforms to the budgetary and resource management framework - the forward estimates, running costs systems, program management and budgeting (but not the efficiency dividend) - were widely supported by agencies. People management needed more attention - although what was needed was seen differently, emphasizing either more training and recognition or more streamlining and devolution.

3. What have been the resulting changes in program performance? Most staff surveyed believed that the quality of work done in their agencies was high and that performance was improving both in quantity and in quality. An increased client focus was also noted, with most agencies having taken initiatives to increase this focus, for example, through commercial reforms. The evidence on quality of service (based in part on a structured survey of the general population) was uneven, although direct service agencies tended to do better. No definitive way was found to measure overall savings from the reforms. However, some specific areas, such as the efficiency dividend, were known to have produced significant returns, and there were many examples of cost savings in individual departments. 53

Findings. The main findings of the evaluation, as presented in terms of specific reform topics, were as follows:

1. Human Resource Management

• Improvements in morale and job satisfaction have flowed from the reforms. Of all the areas surveyed, however, morale received the lowest favourable rating (34 percent) and the highest unfavourable rating (20 percent). Adverse effects on morale were attributed to concerns about job security, declining career opportunities, raised performance expectations, the rate of change and, in some cases, problems with implementation of reforms.
• Training has played a key role in assisting with the implementation of management reforms. The breadth and depth of the reforms required extensive training, which was not always forthcoming from departments and agencies.
• The priority for maximizing performance is to integrate and extend the reforms across the public service and to incorporate the new culture of performance into all agencies - especially focussing greater attention on people management.

• Budgetary and financial management reforms have improved effectiveness and efficiency, through a greater results-orientation, managerial flexibility and devolution. Although expenditure restraint in the late 1980s was attributed primarily to the government's exercise of political will, measures such as forward estimates tightened control over budget outlays, and lowered the level of projected expenditures.
• Commercial reforms have offered managers an alternative set of management tools that have contributed to innovative management practice. While specific, aggregate amounts of savings from commercial reforms, such as user charging, have not been readily identified, "an increased cost awareness would suggest that savings have resulted."
• The reforms, including their major component - the FMIP - are seen to have improved the long-term cost-effectiveness of the public service, including the outcomes for taxpayers and clients, at some short-term implementation cost.

The reforms from the 1987 machinery-of-government changes involved only broad conclusions because the changes were considered still too recent. The likely impact was seen to be "greater stability, improvements to program delivery and the efficiency of the policy and decision-making process, and benefits to policy." At the same time, the evaluation noted:

Although disruption was anticipated in 1987, it is now apparent that its extent was underestimated. Attention at the time was focussed successfully on the desired state to be achieved by the changes, and by the concurrent management improvement initiatives, and less so on the change strategies which would assist people across the APS to put them into effect. For example, many agencies and staff believe that the machinery changes diverted effort from management improvement rather than achieving the reverse (p. 84).

Its flexibility in meeting the government's requirements has been proven over five years of machinery of government stability unprecedented in recent decades. Over this time there have been a number of examples of rapid and effective integration of functions and cultures, and still more for whom real integration at operational levels has taken longer but is in effect or showing promise now (p. 84).

In terms of service to the public, the evaluation's general finding was that there was scope for improvement. It was suggested that Australians tended to have low expectations regarding the quality of government services. Moreover, the majority of those surveyed were largely unaware of improvements. However, those aware of a change in quality were positive about it. A client focus in commercial areas, and an awareness of other stakeholders in non-commercial areas, has taken root in some departments but was not fully in evidence service-wide.

In terms of leadership, the evaluation noted the need for more activity at the centre; for example, by giving the Management Advisory Board a higher profile. More could also be done in line agencies, including the promotion of best practices. There was a need for a continuing focal point, so that the Chair of the Management Advisory Board (who is also the Secretary of the Prime Minister and Cabinet Department) and the Public Service Commissioner could speak for the public service in their respective areas, and ensure a wider appreciation of reform issues.

The evaluation noted that the expectation of "doing more with less" was having a "disquieting effect" on staff. Many public servants were not satisfied with the measures in place in the areas of management of underperforming staff, career development and training. Although nearly three-quarters of staff felt that their job made good use of their skills and abilities, about one-third did not believe they were given sufficient opportunities for skill improvement. With regard to improving the performance of agencies and of the centre, departments and agencies were seen as having undergone some corporate culture change, but more was needed to complete the reforms and develop a true focus on results. Central agencies could play a stronger role in facilitating reform, but there was no support for a single central management agency.

With respect to accountability, the evaluation offered an overall finding, namely, that public service reforms have had a positive impact on accountability. Both staff and agencies were cited as expressing strong views to this effect. However, another finding was that public servants needed to better appreciate the multiple obligations involved. For example, an increased focus on clients, coupled with a less clear assignment of responsibility and lack of information about policy goals, was seen as possibly leading to over-identification by staff with customers, although there was no evidence that such problems had increased since 1983.

Responding to the Evaluation

• "Building a Better Public Service"; and
• "Accountability in the Commonwealth Public Sector".

"Accountability in the Commonwealth Public Sector" was linked to the evaluation in that the latter assessed reaction to a 1991 "exposure draft" document intended to stimulate discussion on this critical issue. Further work on accountability issues and the related area of ethics has been undertaken, as reflected later in this section.

"Building a Better Public Service" provided a number of summary comments on the whole body of public service reforms, including the following:

In the Board's view the financial, human resource management and industrial relations reform frameworks in the public service are close to current best practice in many other public services, and in some instances they clearly exceed it (p. 10).

Ministers are now in a better position to set the strategic directions for their portfolios and to direct the efforts of their departments. Fewer matters need to be resolved by the Cabinet. There is improved co-ordination, and [there are] clearer lines of control and accountability [for] related activities within the consolidated departmental structures.

The essential professional ethic of the public service - to serve all governments with equal dedication and loyalty while maintaining the highest standards of behaviour and discretion - has been reinforced.

The corporate planning, program management and budgeting and associated reforms have given public service agencies a much clearer understanding of their objectives, the ways in which resources are to be deployed to meet those objectives, and the results of their policies and programs...There is no doubt that government programs now secure better outcomes and represent better value for money.

The working environment for staff has been improved by the devolution of authority, better job design, more participative approaches to work and fairer personnel management policies and practices (p. 9-10).

At the same time, "Building a Better Public Service" stated that there was "absolutely no room for complacency." MAB-MIAC then set forward a three-pronged strategic base for the ongoing reform program:

• making performance count - by looking closely at client needs and service quality, evaluating achievements, rewarding good performance at all levels, learning from and building on past performance, and being accountable;
• leadership - emphasizing the key responsibility of agency heads in managing for results, and clarifying the roles of the central agencies and other mechanisms for sharing knowledge and experience; and
• strengthening the culture of continuous improvement - through better people management and development, and by embedding attitudes and a culture that continually seeks to find better ways to achieve desired results (p. 11).

Making performance count. In regard to making performance count, MAB-MIAC noted that client focus and service quality represent another challenge for public service performance, including a need to improve service standards, to better co-ordinate agencies' service delivery to achieve a "whole-client" approach, and to develop a more sophisticated approach to measuring service quality. 54

In regard to improving service delivery, it noted the growth in the use of information technology:

The imaginative use of technology continues to play a significant part in achieving quality service...The rapid growth of new systems is changing the way government does business. A number of departments and agencies are already using, or are moving to adopt, data networks (such as the Internet) as a means of improving communication and information transmission within government, and of delivering services to clients and industry more effectively and efficiently (MAB-MIAC October 1994:
p. 2, 14).

In "Ongoing Reform", MAB-MIAC noted a "thrust...to a new collegiate leadership", consistent with greater devolution:

[This new] leadership is being developed [to allow] the experience of line departments and agencies [to] contribute to setting the management environment and framework for the public service. This is important to ensure the capacity of the APS for following through in implementing the policies that the Cabinet has decided (p. 11).

Since the public service is a service industry its greatest assets will always be the knowledge, skills and capabilities of its people. As performance improvement generally is pursued, the focus will strengthen on the quality, skills and training of the people in the service and their performance - this means how people are selected to join the service, how they are trained to carry out their responsibilities, how they are developed and promoted and how they are motivated to improve their performance (p. 19).

• Change in organizational culture and attitudes. This was an area where change could not be "simply mandated." It was to be pursued through the Public Service Commission's human resource management framework and the 1992 workplace bargaining framework agreement between the government and the public service unions. The 1992 agreement put the foundations in place, but it needed to be fully implemented. The development of team and participative approaches was suggested as being important in this regard. Public servants' positive attitudes and commitment to a better public service needed to be "brought more clearly to the forefront and used to underpin a real culture of continuous improvement" (MAB-MIAC 1993: p. 19). 55 In "Ongoing Reform", MAB-MIAC noted "recent developments" in workplace bargaining, including "some [greater] devolution of authority for, and greater flexibility in, pay arrangements and the organization of work through negotiation at agency level" (p. 8).
• Merit. The public service will need to continue to recruit, promote and develop its people on the basis of merit. Some personnel practices, however, could be administered more efficiently and "there is scope to review some of the basic processes underpinning the personnel system" (MAB-MIAC 1993: p. 23). Such concerns, voiced in mid-1993, led to the review of the Public Service Act , begun a year later, and to the MAB-MIAC studies on cost-effective personnel services (an examination that compares costs in the Australian public service with those of best private sector practices) and on innovative ways of organizing people.
• Contracts of employment. Wider and better use could be made of contract employment for senior executive service staff by providing greater flexibility in remuneration packages and other terms and conditions of employment. Such contracts would be for a reasonable period and would be made with the government and not a particular minister. Termination would be for reasonable cause and by a specific due process. In increasing the use of contract employment, it will be important to ensure that values such as "free and frank" provision of advice are protected.
• Training and development. Agency heads need to give greater attention to quantity, quality and effectiveness. Training should increasingly develop relevant skills to help people work together more effectively and help spread the culture of continuous improvement. Training needs to be seen as a means to an end - better service to government and the public - and not as an end in itself.
• Individual performance management. Continuing emphasis on productivity and quality of service to the public requires greater attention to the link between individual and organizational performance. These pressures will require "a much more coherent and strategic approach" (MAB-MIAC 1993: p. 21). Standards and systems need greater refinement, and more options are needed for rewarding outstanding performance, in addition to performance pay. Remuneration should not lag behind levels elsewhere in the public or private sectors - which is perceived as a risk to the quality of the public service - but should not lead those sectors either.
• Mobility. Staff will expect to attain career objectives by working in more than one agency, and this will require greater attention to career planning by managers, supervisors and staff themselves.
• Working together. All staff need to have a shared understanding of program objectives and a shared acceptance of approaches. MAB-MIAC emphasized the importance of enhancing the good relationships between staff and management that currently exist in many organizations. Better liaison and communication with the regions was also seen as an important challenge.

• responsiveness to governments - serving ministers and the government loyally and impartially, and providing frank, honest and comprehensive advice;
• a focus on results - pursuing efficiency and effectiveness at all levels, and delivering services conscientiously and courteously;
• merit as the basis for staffing - ensuring equality of opportunity, and providing fair and reasonable rewards as an incentive to high performance;
• the highest standards of probity, integrity and conduct - acting in accordance with the letter and spirit of the law, dealing equitably, honestly and responsively with the public, and avoiding real or apparent conflicts of interest;
• a strong commitment to accountability - contributing fully to (a) the agency's accountability to government, (b) government's accountability to Parliament, and (c) Parliament's accountability to the people; fully supporting the related administrative and legal measures; and recognizing that those who delegate responsibility for performance may still be called to account; and
• continuous improvement through teams and individuals - striving for creativity and innovation, and making individual and team performance count (p. 5). 56

• updating by the Public Service Commission of the "Guidelines on Official Conduct of Commonwealth Public Servants", to take account of reforms in recent years and to give added emphasis to the values/ethics framework. This project involved consultations with the public and with the public service unions; 57 and
• a paper on implementing public service ethical standards and values, which "will assist [senior and middle] managers to implement [these standards/values] by giving [them] an understanding of the ethical framework within which they operate, including the role of law, guidelines [etc.]...and a range of practical steps [to take]" (p. 13). 58

This second report reaffirmed ministers' responsibility to Parliament and public servants' accountability to their minister through the chain of command. As the former Prime Minister noted:

Public servants are the employees of Government, not Parliament. A large measure of their direct accountability should therefore be seen in the context of the normal employment obligations that any employee has to his or her employer (P. Keating 1993: p. 8).

• it is insufficient to see accountability mechanisms within agencies involving simply a one-way flow of information and reporting. In a devolved management environment, staff at all levels need to have readily available information (including) statements of objectives (and) resources available;
• it is important that those devolving powers, right up to the Parliament, are provided with timely, relevant and accurate feedback on the performance of public servants; and
• the concepts of success and failure are less clear-cut in the public service than in private enterprise. Yet sustaining effective accountability without rewards and sanctions would be difficult. The main question is, what are appropriate rewards and sanctions (MAB-MIAC 1993: p. 15, 20)?

Another relevant MAB-MIAC project was related to delegated authority, and was intended, among other things, to assist public servants in understanding the legal issues involved. Topics addressed included the design of administrative systems to reflect the consequences of different ways of delegating authority, and the development of principles to guide the recipients of delegated authority.

MAB-MIAC's strategy in "Building a Better Public Service" (that is, making performance count) seeks to ensure that managers, given greater flexibility to manage through devolution of authorities, are made to manage for results within the resources allocated to them, and are more clearly held to account in that regard. The report emphasizes that "facilitating effective strategic oversight of program effectiveness by Ministers, Cabinet and the Parliament is a major issue for program managers" (p. 5).

Several factors come into play to enable this better matching of authority and responsibility. The government's strategic oversight of budget priorities and program objectives requires improved performance information, including higher-quality program evaluation. Effective strategic oversight also requires that high performance programs and good management be identified and rewarded, by ensuring that resources are not reallocated from more efficient to less efficient managers, in effect "bailing them out". While underlining the improvements already made in performance information and program objectives, MAB-MIAC suggest some improvements. Parliament could benefit from an examination of the use of this performance information, and performance pay could be extended from an individual to a group or team basis.

Perhaps the best way to sum up the approach to accountability taken during the period under review is to note some of the key linkages advocated by MAB-MIAC, namely, that the goals of greater responsiveness to government, quality service, high standards of ethics and improved accountability are all essential: "It is an important priority to ensure that public servants understand that these goals do not conflict but are complementary" (MAB-MIAC 1994: p. 12). 60

Conclusion

The Australian and Canadian governments were each confronted by radically changing economic circumstances combined with increasing and shifting public expectations of government. In each case, it was recognized that the structures, systems and practices of public service management had to be modernized. At the same time, there were a number of important differences in the domestic environments of each country. Three need to be emphasized, given their effects on the reforms pursued as well as the priority accorded them.

First, by the early 1980s, the Australian government had lagged behind Canada and some other countries in its efforts to modernize its management regime. Most notably, its expenditure management system was still characterized by a line-item budgeting approach that had long since been abandoned in Canada. In areas such as the use of performance pay and related performance appraisal systems, it was also well behind Canadian developments.

However, the realization in Australia of the extent of change required to catch up with best practices elsewhere produced a commitment and momentum that served to propel changes across a wide spectrum. Considerable progress was thus achieved during more than a decade of reform begun in 1983.

Second, the Labor government that came to power at the beginning of this period was committed to a harmonious working relationship with the union movement. Its Accord with unions, renegotiated throughout this period, in combination with a national wage-setting scheme that served as a backdrop for public service wage determination, contributed to reaching relatively amicable settlements with the public service unions. As a consequence, in broad terms the public service became subject to the same legislative framework for wage determination as the private sector, and other reforms ensued. For example, workplace bargaining (that is, second-tier departmental bargaining) was introduced with a view to enhancing productivity; and "industrial democracy" initiatives were undertaken in order to improve consultation with employees and their representatives and the participation of employees in decision making. It would be inaccurate, as well as misleading, to suggest that their implementation did not involve stresses and strains on the system. However, heavy emphasis by the Labor government on reforms of this nature reflected a belief that they would lead to a more efficient and effective workplace.

Third, the fiscal circumstance of the Australian government was markedly different from the Canadian situation. Simply put, Australia has neither accumulated the level of debt extant in Canada nor did it face the continual pressure of substantial deficits throughout the period. Indeed, surpluses were achieved each year from 1987-88 to 1990-91. As a consequence, in developing its reform program it was able to adopt a relatively coherent and consistent approach based on a philosophy of continuous improvement.

The objectives of reform in Australia, beyond the need to improve leadership and responsiveness and to cut the costs of government (both operating and program expenditures), were clearly focussed on the following:

• increased attention to results, including cost-effectiveness, service quality and program outcomes;
• enhanced delegation and devolution of authority, combined with strengthened accountability; and
• streamlined and simplified administrative systems, encompassing efficiency measures, increased flexibility and a more commercial approach to the management of resources.

The first key factor was the extent to which the political leadership, in government and in Parliament, recognized and accepted the need for public service reform, broadly defined, in order to pursue a more general reform of government and its role in managing public affairs. In particular, ministers were aware, or came to appreciate, that significant government reform required major administrative reforms. Improved performance of government was seen to be dependent, in large part, on a well-functioning professional public service.

Australian reformers did not begin with a fully developed "grand plan", nor did they entirely avoid problems in communicating and implementing their evolving program. While senior public servants played a critical role in shaping the reform agenda, much of what was achieved relied on political impetus and ongoing support. The critical roles in this regard of the two Labor prime ministers, and other key ministers, have been acknowledged both by those who were engaged in reform and by outside academic analysts.

This strong leadership, and indeed engagement in the reform program, were complemented and supplemented in Australia by continuing parliamentary interest, scrutiny and prodding throughout the period.

The second key factor was the extent to which Australian reformers sought to develop a program that aimed at improving the effectiveness of government rather than simply a narrow focus on efficiency. This focus on results in the broadest sense meant that ministers and officials alike recognized the need to enhance their capacities to pursue a strategic approach to both government and public service reform. This, in turn, required a good measure of central direction, combined with central oversight of implementation by departments and agencies. Accordingly, while the reforms were incremental in nature, and proceeded at a pace and in a manner determined largely by individual departments and agencies, they were not disjointed.

Furthermore, while it would be an exaggeration to suggest that everything has fallen into place, their strategic approach has resulted in significant strides being made, as evidenced, for example, by the extensive devolution of administrative authority that came with efforts to better manage financial and human resources in departments and agencies. It has also been evidenced by the extent to which program evaluation has become an integral element in budgetary decision-making.

Finally, and not unrelated to Australia's strategic approach, their record illustrates the importance of evaluation in the process of continuous learning. This was best exemplified by the creation of the Management Advisory Board and its Management Improvement Advisory Committee. In creating the Management Advisory Board as a statutory body, the Labor government sought coherent advice on the public service. This structure produced a series of studies on various aspects of reform. Most crucial, however, based on its responsibility to advise government on the measures necessary to ensure the long-term health and capability of the public service, it was the vehicle for an unprecedented comprehensive evaluation of a full decade of reform. More so than the evaluation efforts in any other country, this evaluation project and report provided the political and public service leadership with a thorough assessment of what had been accomplished and where shortcomings remained, with signposts for future directions. The Australian experience demonstrates that evaluation is central to organizational learning and that a reform program is but one part of continuous improvement.

Bibliography

Administrative and Clerical Officers Association, Essential Services: Keep Them Public , 1989.

Agreements Between the Commonwealth Government and Public Sector Unions: Improving Productivity, Jobs and Pay in the Australian Public Service, 1992-1994 , 1992; and Continuous Improvement in the Australian Public Service , 1995.

Alford, J. "Thinking About the Demise of Public Service Boards" in M. Gardner, ed., Human Resource Management and Industrial Relations in the Public Sector , 1993.

Allan, W., Department of Finance, FMIP and Program Budgeting, A Study of Implementation in Selected Agencies , 1987.

Aucoin, P. and H. Bakvis, "Consolidating cabinet portfolios: Australian lessons for Canada", Canadian Public Administration , vol. 36, no.3, Fall 1993.

Auditor-General, Annual Reports of the Australian National Audit Office , 1989-90, 1990-91, 1991-92, 1992-93, 1993-94, 1994-95.

-- Audit Report No. 26 1991-92, Efficiency Audit, Program Evaluation in the Departments of Social Security and Primary Industries and Energy .

-- Audit Report No. 37 1991-92, Efficiency Audit, Management of Central Office Training in Selected Departments.

-- Audit Report No. 6 1992-93, Efficiency Audit, Auscript, Commercialization of the Commonwealth Reporting Service .

-- Audit Report No. 16 1992-93, Efficiency Audit, An Audit Commentary on Aspects of Commercialization in the Department of Administrative Services .

-- Audit Report No. 35 1992-93, Efficiency Audit, Program Evaluation Strategies, Practices and Impacts, Industry, Technology and Regional Development portfolios .

-- Audit Report No. 43 1992-93, Project Audit, Department of Administrative Services, Conflict of Interest: A Matter of Principle .

-- Audit Report No. 16 1993-94, Project Audit, Pay for Performance .

-- Audit Report No. 17 1993-94, Efficiency Audit, Underperforming Officers.

-- Audit Report No. 32 1993-94, Efficiency Audit, Accrual Reporting.

-- Audit Report No. 43 1993-94, Parliament's Right to Know - Legislation to replace the Audit Act 1901.

-- Audit Report No.16, 1994-95, Follow-up Audit, Accrual Reporting - Are Agencies Ready?

Australian Labor Party, Labor and Quality of Government , 1983.

Baker, J. "From Management to Leadership", Australian Journal of Public Administration (AJPA) , September 1989, p. 249-264.

-- Some Private Sector Models for New Directions in Public Sector Human Resource Management: An Australian Public Service Perspective , Public Service Commission, Occasional Papers, No. 2, 1989.

Bashford, G. "Going Commercial in the Department of Administrative Services", AJPA , June 1990, p. 157-165.

Beale, R. "Strategies for Management Improvement in the Commonwealth Public Service", AJPA , December 1985, p. 376-383.

Bottomley, S. "Regulating Government-owned Corporations: A Review of the Issues", AJPA , December 1994.

Campbell, C. and J. Halligan, Political Leadership in an Age of Constraint: The Australian Experience , 1992.

Clare, R. and K. Johnston, Economic Planning Advisory Council, Profitability and Productivity of Government Business Enterprises , 1992, and An Update , 1993.

Codd, M. Federal Public Sector Management Reform , Public Service Commission, Occasional Papers, No. 11, 1991.

-- "Recent Changes in Machinery of Government", Canberra Bulletin of Public Administration , May 1988 (from a paper presented in November, 1987).

-- The Role of Secretaries of Departments in the APS , Public Service Commission, Occasional Papers, No. 8, March 1990.

Cole, R. "The Public Sector: The Conflict Between Accountability and Efficiency", AJPA , September 1988, p. 223-232.

Commonwealth of Australia, Reforming the Australian Public Service , (White Paper) December 1983.

-- Budget Reform , (White Paper) 1984.

-- Policy Guidelines for Statutory Authorities and Government Business Enterprises , (White Paper) 1987.

-- Working Nation , (White Paper) 1994.

-- Creative Nation , (White Paper) 1994.

-- Budget Statements, Budget Papers , 1989-90, 1990-91, 1993-94, 1994-95, 1995-96, 1996-97.

Conference on Civil Service Change, Current Trends in Public Sector Administration in Australia , 1990.

Considine, M. "The Corporate Management Framework as Administrative Science: A Critique", AJPA , March 1988, p. 4-18.

-- "Managerialism Strikes Out", AJPA , June 1990, p. 166-178.

Cook, P., Sen., Minister for Industrial Relations, Media Release, "Workplace Bargaining in the Australian Public Service", 6 August 1992.

Costello, P., Treasurer of the Commonwealth of Australia, Charter of Budget Honesty , Ministerial Statement in connection with the 1996-97 Budget, 20 August 1996.

Davis, G., J. Wanna, J. Warhurst, P. Weller, Public Policy in Australia , Sydney, 1988.

Davis, G., P. Weller, C. Lewis, eds., Corporate Management in Australian Government , Melbourne, 1989.

Department of Administrative Services, Annual Reports , 1990-91, 1991-92, 1992-93.

-- Commercialization of Common Services , departmental paper, 1993.

-- 1996-97 Portfolio Budget Statements , Budget Related Paper No. 1.6B, (Finance Portfolio) August 1996.

-- Budget Overview , August 1996.

Department of Finance, Australian Public Service Statistical Bulletin , 1992-93, 1993-94, 1994-95.

-- Briefing on the Audit Act Replacement Legislation , 1994.

-- Corporate Plan , 1991.

-- Evaluating Government Programs - A Handbook , 1987.

-- 1988 FMIP Report , December 1988.

-- Financial Statement Guidelines for Departmental Secretaries (Accrual Reporting) , April 1993.

-- Management Perspectives on Devolution , 1989.

-- Running Costs Arrangements , 1991, 1995.

-- Trends in Public Sector Financial Management , A Briefing for Senior Managers and Decision Makers, July 1994.

-- The Use of Evaluation in the 1992-93 Budget , Discussion Paper, 1993.

-- The Use of Evaluation in the 1993-94 Budget , Discussion Paper, 1994.

Department of Industrial Relations, Response to the Recommendations of the Standing Committee on Finance and Public Administration of the Senate on the Introduction of Performance Pay in the Public Service , 1990.

-- Workplace Bargaining: The First 100 Agreements ; and A Best Practice Guide , 1992.

-- Report to the Prime Minister on Industrial Democracy in the Australian Public Service , 1991.

Encel, S. "Public Administration: Then, Now and in the Year 2000", AJPA , September 1988.

Enfield, J., Public Service Commissioner, "Under New Management: Changes in the Structure and Administrative Ethos in the Australian Public Service", Conference on Civil Service Change, Ottawa, 1988.

-- Public Service Commissioner, "The Civil Service Post 2000 A.D.: An Australian Perspective", Conference on Civil Service Change, Dublin, 1990.

English, L. and J. Guthrie, "Public Sector Auditing: A Case of Contested Accountability Regimes", AJPA , September, 1991.

Forster, J. and J. Wanna, eds., Budgetary Management and Control , 1990.

Galligan, B., J. Nethercote, C. Walsh, eds., The Cabinet and Budget Processes , 1990.

Galligan, B. "The 1988 Referendums and Australia's Record on Constitutional Change", Parliamentary Affairs , October 1990.

Gardner, M., ed., Human Resource Management and Industrial Relations in the Public Sector, 1993.

Gregory, R. "The Attitudes of Senior Public Servants in Australia and New Zealand: Administrative Reform and Technocratic Consequence", Governance , July 1991.

Gruen, F. Managing Government: Labor's Achievements and Failures , 1993.

Hawke, R. J. "Challenges in Public Administration", AJPA , March 1989 (Text of the 1988 Garran Oration. Mr. Hawke was then Prime Minister).

-- Statement to Parliament by the Prime Minister on Public Service Reforms, 25 September 1986.

Hazlehurst, C. and J. Nethercote, eds., Reforming Australian Government , 1977.

Holmes, M. "Financial Management Reform at the Commonwealth Level", paper presented to the National Institute of Accountants, July 1990.

Holmes, M. and D. Shand, "Management Reform: Some Practitioner Perspectives from the Past Ten Years", Governance , October 1995.

House of Representatives Standing Committee on Finance and Public Administration (now Banking, Finance and Public Administration), Report, Review of the Financial Management Improvement Program , 1990 (other title: Not Dollars Alone ).

-- Report, Keeping the Customer Satisfied: Inquiry into the Devolution of Running Costs Flexibilities , 1995.

-- Report, Stand and Deliver: Inquiry into the Efficiency Dividend Arrangements , 1994.

Ives, D., Public Service Commissioner, "The New Professionalism - APS Culture under Reform", opening remarks to Middle Management Module, Canberra, 1 September 1992.

-- "Next Steps in Public Management", AJPA , September 1994.

-- International Reforms in Personnel Management - The Australian Experience , Address to International Personnel Management Association Conference, Philadelphia, 9 October 1991.

Isaac, J. "The Arbitration Commission: Prime Mover or Facilitator?" The Journal of Industrial Relations , September 1989.

Jans, N. and J. Frazer-Jans, Careers and Culture in SES , Public Service Commission, Occasional Papers, No. 10, 1990.

Johns, G. "A New Public Service Act, Progress Report to the House of Representatives", November 1995 (Mr. Johns was then Assistant Minister for Industrial Relations and Minister assisting the Prime Minister for Public Service Matters).

Joint Australian Public Service Training Council, Middle Management Development Program , 1991.

-- Research Paper on National Training Agenda , 1991.

Joint Committee of Public Accounts, Inquiry into Human Resource Management in the Australian Public Service, Submissions , vols. 1-9, 1992.

-- Report 202, Selection and Development of Senior Managers in the Australian Public Service , 1982.

-- Report 296, The Auditor-General: Ally of the People and Parliament , 1989.

-- Report 323, Managing People in the Australian Public Service: Dilemmas of Devolution and Diversity , 1992.

-- Report 336, Public Business on the Public Interest: An Inquiry into Commercialization in the Commonwealth Public Sector , 1995.

Joint Council of the Australian Public Service, "The Composition and Outlook of the Australian Public Service", Canberra Bulletin of Public Administration , April 1993.

Keating, M. "Quo Vadis? Challenges of Public Administration", AJPA , June 1989.

-- "Mega-departments: The Theory, Objectives and Outcomes", in P. Weller et al., eds., Reforming the Public Service , 1993.

-- "Managing for Results in the Public Interest", AJPA , December 1990.

Keating, M. and M. Holmes, "Australia's Budgetary and Financial Management Reforms", Governance , April 1990.

Keating, P. "Performance and Accountability in the Public Service", 1 July 1993 (a statement by the then Prime Minister).

Kelly, P. The Hawke Ascendancy , 1984.

Kennedy, P. "Streamlining the APS", AJPA , June 1981.

Kouzmin, A. and N. Scott, eds., Dynamics in Australian Public Management: Selected Essays , Melbourne, 1990.

Kouzmin, A., J. Dixon, J. Wilson, "Commercializing `Washminster' in Australia: What Lessons?" Public Money & Management , April-June 1995.

Lansbury, R. D. The Accord Between the Unions and Government in Australia : A New Experiment in Industrial Relations ? Sloan School of Management, 1984.

Layt, J. "Economic Growth, Industry Restructuring and National Development: The Role of Government", AJPA , September 1990.

Liberal and National Parties Coalition, Policy Statements: Public Administration; Privatization; and Industrial Relations , 1996. (Internet: http://www.liberal.org.au)

Lyon, K. "Contracting out and Internal Markets: A Scorecard", AJPA , September 1994.

Macdonald, P. "Financial Management in a Changing Environment: An Australian Perspective, Public Fund Digest , Vol. II, No. 1, 1987.

Management Advisory Board (MAB), Management Improvement Advisory Committee (MIAC), Task Force on Management Improvement, The Australian Public Service Reformed, An Evaluation of a Decade of Management Reform , December 1992.

MAB-MIAC, Accountability in the Commonwealth Public Sector (Exposure Draft), 1991.

-- Accountability in the Commonwealth Public Sector , 1993.

-- Achieving Cost Effective Personnel Services , 1995.

-- Budget Flexibility: Carryover Provisions between Financial Periods , 1991.

-- Building a Better Public Service , 1993.

-- Contracting for the Provision of Services in Commonwealth Agencies , 1992.

-- Delegated Authority Handbook , 1995.

-- Devolution and Regional Offices , 1991.

-- Devolution of Corporate Services , 1992.

-- Ethical Standards and Values in the Australian Public Service , 1996.

-- Guidelines for Managing Risk in the Australian Public Service , 1995.

-- Improving Asset Management in the Public Sector , 1991.

-- Innovative Ways of Organizing People in the Australian Public Service , 1996.

-- Legal Issues - A Guide for Policy Development and Administration, 1994.

-- Ongoing Reform in the Australian Public Service , 1994.

-- Performance Information and the Management Cycle , 1993.

-- Performance Management: The Integrated Use of Recognition, Rewards and Sanctions , 1994.

-- Raising the Standard: Benchmarking for Better Government , 1996.

-- Resource Agreements , 1991.

-- Strategic Planning for Training and Development , 1993.

-- The Management of Underperforming Officers in the Australian Public Service , 1992.

Mellors, J. "Commercialization of Administrative Services: Who Gains When Users Pay?" paper presented to National Accountants in Government Convention, Hobart, May 1993.

-- Running Business in Government: Lessons from DAS Experience , DAS Occasional Paper, 1995.

Milazzo, C. "Annual Reports: Impediments to their Effective Use as Instruments of Accountability", AJPA , March 1992.

Minister for Finance, Statement, Changes to Budget and Related Documentation: 1994-95 Budget , 1994.

National Commission of Audit, Report to the Commonwealth Government , June 1996.

Nethercote, J. "The Changing Shape of National Government in Australia", a paper presented at the University of Victoria, 1987.

-- "PS Personnel Lacks the Personal", Canberra Times , 11 June 1989.

Nolan, D. "Industrial Relations and Labour Productivity", AJPA , September 1990.

Noon, A. "Accounting for Results: Portfolio Explanatory Notes Become Program Performance Statements", AJPA , March 1992.

O'Connor, D. "Devolution - Pitfalls and Potential", Management Perspectives on Devolution , Department of Finance and Australian Society of Accountants Seminar, 1989.

O'Reilly, D. "Political Soldiers of Fortune", The Bulletin , December 1991.

Organization for Economic Co-operation and Development (OECD), Flexible Personnel Management in the Public Service , 1990.

-- Public Management Development, Update 1991.

-- Public Management: OECD Country Profiles , 1992.

-- Economic Survey, Australia , 1992.

-- Internal Markets , Occasional Papers on Public Management, Market-type Mechanisms Series No. 6, 1993, article on Australia, by J. Mellors.

Painter, M. "Public Management: Fact or Fallacy", AJPA , 47(1),1988.

Palywoda, S. and D. Martin, "DAS - The Commercialization Experiment", Royal Institute of Public Administration of Australia, Seminar on Business Units in the Public Sector, March 1992.

Preiss, B. "Enterprise Bargaining in the Public Sector", AJPA , September 1994.

Public Service Act Review Group, Report (the McLeod Report), December 1994.

Public Service Board, "Recruitment, Appointment, Probation", Circular on Streamlining of Personnel Management, 1987.

-- "Staff Selection Guidelines", Circular on Streamlining of Personnel Management, 1987.

Public Service Board and Department of Finance, Financial Management Improvement Program (FMIP), Diagnostic Study , 1984.

-- FMIP Report , 1986.

Public Service Commission, Annual Reports , 1989-90, 1990-91, 1991-92, 1993-94, 1994-95.

-- Corporate Plan , 1990-1993.

-- Developing People in the Australian Public Service: Reports on the PSC's Human Resource Development Survey, 1989-90, 1990-91 .

-- Equal Employment Opportunity , 1992.

-- Executive Development Scheme , and Senior Women in Management , 1992.

-- A Framework for Human Resource Management in the Australian Public Service , 1992, (rev.) 1995.

-- Guidelines on Official Conduct of Commonwealth Public Servants , 1995.

-- Human Resource Development in the Australian Public Service , 1989-90.

-- Human Resource Development Model for the APS (Draft), October 1991.

-- (Interdepartmental Working Party), APS 2000, The Australian Public Service Workforce of the Future , 1989.

-- Senior Executive Management Program , and Senior Executive Leadership Program , 1991.

-- SES Selection and Placement Branch, A Guide for Senior Executive Selection Advisory Committees , 1991.

-- Submission by the Public Service Commissioner to the Review of the Public Service Act 1922, October 1994.

-- Submission to the Joint Committee of Public Accounts Inquiry into the Efficiency and Effectiveness of the Management of Human Resources in the Australian Public Service , 1992.

-- Summary of Recommendations and Government Decisions, Public Service Act Review Group , August, 1995.

Privatization - How it Affects You (booklet produced by public service unions and community organizations, 1989).

Radbone, I. "Innovation and the Bureaucrat", AJPA , June 1987.

Reith, P. Towards a Best Practice Australian Public Service , Discussion Paper issued by the Minister for Industrial Relations, 1996. (Internet: http://www.psmpc.gov.au/aps)

Review of Commonwealth Administration, Report , 1983.

Richardson, T. "Managing People Is Managing Change", AJPA , June 1987.

Robinson, M. "Program Budgeting: Costs and Benefits", AJPA , March 1992.

Rowat, D. "Comparisons and Trends" in D. Rowat and M. Dekker, Public Administration in Developed Democracies: A Comparative Study , 1988.

Royal Commission on Australian Government Administration, Report , 1976.

Russell, E. "Not by Surprise... A Paper on Futures for the Australian Public Service", Canberra Bulletin of Public Administration , April 1993.

Ryan, M. "Communicating with Parliamentarians: Lessons from Australian Experience", Opinions , vol.10 no. 4, 1992.

-- "Setting New Directions in Government Entities: Business Units", presentation to conference on "Commercialization: New Directions", Sydney, August 1991.

Saunders, C. "Appeal or Review, The Experience of Administrative Appeals in Australia", paper prepared for a workshop on Administrative Law in South Africa, February, 1993.

-- (writing as President, Administrative Review Council, Australia), "Tribunals in Australia", paper prepared for the seventh annual conference of the Council of Canadian Administrative Tribunals, Ottawa, 1991.

Second Tier Wage Agreement, between the Australian Government and the public service unions, 1987.

Senate Standing Committee on Finance and Public Administration, Report, Development of the Senior Executive Service , 1990.

-- Report, Estimates Committee Documentation and Procedures , April 1991.

-- Report, Public Service Reform (Conference Proceedings),1994.

-- Report, The Development of the Senior Executive Service: Performance Based Pay , 1990.

Shaw, J. "The `New' Powers of the Australian Industrial Relations Commission", The Journal of Industrial Relations , March 1989.

Sloan J. and M. Wooder, "The Structural Efficiency Principle in Action", Australian Bulletin of Labour , September 1990.

Stanton, M. The Merit Principle , Public Service Board, Research Papers, No. 1, 1978.

Statement to Parliament by the Prime Minister on Public Service Reforms, 25 September 1986.

Tanzer, N. "Commercialization and the Efficient Delivery of Services by the Department of Administrative Services", in P. Weller et al., eds., Reforming the Australian Public Service, 1993.

-- "How Commercialization Has Helped in the Efficient Delivery of Services by the Department of Administrative Services to the Australian Public Service", paper presented at Griffith University, 3-4 July 1992.

Task Force on Management Improvement, Evaluating Management Improvement in the Australian Public Service, 1st Report, Background and Methodology , April 1992.

Task Force on Management Improvement, Glossary , 1992.

Thompson, E. "The Boyer Committee on Public Service Recruitment in Retrospect", AJPA , June 1989.

Thorn, E. The Commonwealth Approach to Commercialization within a Department of State , 1990.

Uhr, J. "Rethinking the Senior Executive Service", AJPA , March 1987.

Volker, D. "Caring for Clients in a Changing Environment: The Department of Veterans' Affairs", AJPA , June 1987.

Waldron, C. and L. Smith, Performance Appraisal, Questions and Answers , Public Service Commission, Occasional Papers, No. 9, 1990.

Wanna, J., C. O'Faircheallaigh, P. Weller, Public Sector Management in Australia , 1992.

Weller, P. First Among Equals , Sydney, 1985.

-- "Politicisation and the Australian Public Service", AJPA , December 1989.

-- Public Sector Management in Australia , 1992.

Weller P. et al., eds., Reforming the Public Service, 1993.

-- "The Role of the Public Sector, Implications for the Australian Public Service", Canberra Bulletin of Public Administration , April 1993.

Wilenski, P. "Administrative Reform - General Principles and the Australian Experience", Public Administration , Autumn 1986.

-- "Social Change as a Source of Competing Values in Public Administration", AJPA , September 1988.

Williams, T. "Office Structures Implementation, Work Design and New Technology", AJPA , June 1989.

Yeatman, A. "The Concept of Public Management and the Australian State in the 1990s", AJPA , 46(4), 1987.

-- "The Reform of Public Management: An Overview", AJPA , September 1994.

Footnotes

2 Two of the last six general elections (in 1983 and 1987) have involved a dissolution of both the Senate and House of Representatives.

3 For example, following the 1987 election the 30-member ministry comprised 16 Cabinet ministers and 14 junior ministers.

4 There are several types of parliamentary committees. These include standing and select committees in both the Senate and House of Representatives, and joint committees of both houses, some of which have been established by statute. An example of the latter is the Joint Committee of Public Accounts, which examines the reports of the Auditor-General. Standing Committees in each house have oversight responsibilities related to appropriations and other matters, including the performance of programs, departments and other agencies. Certain of them have spent a significant part of their time on public service management issues.

5 M. Codd, "The Role of Secretaries of Departments in the APS", Public Service Commission, Occasional Papers, No. 8, 1990: p. 5, 6. The outline of the constitutional provisions presented here relies on Codd's discussion. At the time Codd's paper was published he was Secretary, Department of the Prime Minister and Cabinet, and Secretary to the Cabinet (responsibilities that parallel those of the Clerk of the Privy Council in Canada).

6 The net reduction in the size of the Australian public service resulting from changes in Public Service Act coverage between July 1987 and June 1995 was approximately 21,000, which amounts to 67 percent of the total over the same period.

7 The new coalition government's 1996-97 Budget (August 20, 1996) foresees a decline of some 10,500 in the number of people employed (permanent or temporary) under the Public Service Act during the budget year.

8 The public service is heavily unionized (about 70 percent). The major unions are: the Public Service Union, by far the largest, with some 85,000 members (1992); and several other trades unions, with membership mostly outside the public service, such as the Building Workers' Industrial Union and the Metals and Engineering Workers' Union. The national umbrella organization for trade unions is the Australian Council of Trade Unions.

9 In response to Coombs, 1979 amendments to the Audit Act (1901) authorized discretionary efficiency audits to form "an opinion concerning the extent to which ... operations are being carried on in an economical and efficient manner" (s. 2(4)). The efficiency audit mandate has been applied to departments and agencies within the public service, but not to government business enterprises (L. English, J. Guthrie 1991: p. 350-355). Efficiency, regularity (financial and compliance) and "project audits" (relating to "the better collection and payment of public money") are considered to provide a comprehensive auditing mandate.

10 Following the election of a new government in March 1996, with different industrial relations policies, the Accord no longer exists.

11 In 1991 Prime Minister Hawke had a personal staff of 32 advisors, and the Hawke ministry had a total of 370 specialist staffers (advisors), with an annual wage bill of some $A 19 million (D. O'Reilly 1991). The total number of advisors may be compared with the staff used in 1991-92 by the central agencies; in particular, the 370 advisors were equal to some 40 percent of the 917 staff used by the Department of Finance in that year.

12 Previous practice placed obstacles in the way of a minister who wanted to move a permanent head (secretary), including obtaining the latter's agreement. Although a report prepared for the Coombs Commission noted that it was doubtful whether "most permanent heads could resist long-continued pressure for their replacement", the ultimate means available to the government was abolition of the permanent head's department (M. Codd 1990: p. 85-86).

13 "The great majority of secretaries elected to take up fixed-term appointments with a 20 percent [increase in remuneration, as determined by the Remuneration Tribunal] in recognition of their loss of [tenure]" (MAB-MIAC 1994: p. 10-11).

14 The Second Division of the Australian Public Service was composed of higher-level managerial, policy and professional positions, and ranked below the First Division, that is, the top-level or departmental secretary posts.

15 The Joint Committee of Public Accounts, "The Selection and Development of Senior Managers in the Commonwealth Public Service", 1982.

16 The Management Advisory Board struck a task force - the Task Force on Management Improvement (TFMI) - to carry out an evaluation of reforms. Its report, "The Australian Public Service Reformed, An Evaluation of a Decade of Management Reform", dated December 1992, was released in July 1993 and is herein referred to as the TFMI Evaluation 1993.

17 A 1993-94 ANAO audit found that in the first round of performance pay (1992-93), 90 percent of departments and agencies paid performance pay to 90 percent of their senior officers and SES staff. There was a need to determine whether performance pay was to be used to reward exceptional performance or in recognition of attainment of normal requirements; in the first year, ratings of "fully effective" as well as "superior" and "outstanding" qualified for performance pay. The agencies surveyed were not meeting quality control and other guidelines for the appraisal process used for performance pay. Officers in higher classifications, who were eligible for larger payments, attracted higher performance ratings ("Pay for Performance: Performance Appraisal and Pay in the APS", Audit Report No. 16, 1993-94).

18 The Joint Training Council was set up in 1990. Chaired by the Public Service Commissioner (with Commission staff support), its 11 other members were divided roughly equally between senior officials and union representatives (and one member from the education sector).

19 In May 1996 the coalition government introduced a Bill - the Workplace Relations and Other Legislation Amendment Bill - to amend the Industrial Relations Act , 1988 and other Acts. The Bill, described as "a significant step in the reform of the industrial relations system" (Australian government media release, 23 May 1996), is intended to provide further labour market flexibility and to alter the role of the AIRC in the setting of awards.

20 House of Representatives Standing Committee on Banking, Finance and Public Administration, "Keeping the Customer Satisfied: Inquiry into the Devolution of Running Costs Flexibilities", October 1995.

21 Several authoritative sources have made this point. One referred to the "neglect of people" in connection with the Financial Management Improvement Program, a major reform thrust during this period (J. Baker, in G. Davis, P. Weller 1989: p. 126); another called for "renewed emphasis on the human dimensions of management", and noted "we (the public sector) have tended to neglect...people" (P. Wilenski 1988, cited in TFMI Evaluation 1993: p. 431).

22 Joint Committee of Public Accounts, "Managing People in the Australian Public Service: Dilemmas of Devolution and Diversity", December 1992.

23 A 1993-94 ANAO audit of procedures to deal with inefficient staff found that the procedures introduced in 1987, which were aimed at making it easier for management to move quickly to remove such staff, were considered by many agencies as "complex, difficult, lengthy, expensive and biased towards the individual." New procedures, introduced in 1992, were intended to reduce the time and administrative complexity of the process, and "have been accepted with cautious optimism" (p. xii). While the ANAO estimated that there could be up to 2,250 underperforming staff (1.5 percent of the workforce) who were candidates for inefficiency actions, only 220 such actions had been initiated since 1987; many more staff had been released through measures related to discipline, excess staff and fitness for duty ("Underperforming Officers in the APS", Audit Report No. 17 1993-94).

24 Report of the Public Service Act Review Group, "Summary of Recommendations and Government Decisions", Public Service Commission August 1995.

25 "A New Public Service Act : Progress Report to the House of Representatives", G. Johns November 1995.

26 The coalition's election platform (Public Administration Policy) indicated, "A Coalition Government will continue the process of reform and implement the broad thrust of the recommendations of the McLeod Report" (p. 2). Subsequently, in a November 1996 discussion paper, the coalition government affirmed its intention to revamp the Public Service Act as part of broader measures to "achieve better governance through improving the quality of the APS." That paper further states:

The focus of the Government's far-reaching public service reform agenda is to shed the cultural baggage of the past. Its goal is to simplify and streamline unnecessary process, prescription and central control. In part this will involve rewriting the legislative framework; in part simplifying APS awards and agreement-making processes; and in part transforming management culture. The Government seeks action on all fronts (P. Reith 1996: p. 4, 7).

27 Dr. Michael Keating and Dr. Malcolm Holmes, at the time Secretary and Principal Advisor, respectively, of the Department of Finance.

28 House of Representatives Standing Committee on Banking, Finance and Public Administration, "Keeping the Customer Satisfied: Inquiry into the Devolution of Running Costs Flexibilities", October 1995.

29 House of Representatives Standing Committee on Banking, Finance and Public Administration, "Stand and Deliver: Inquiry into the Efficiency Dividend Arrangements", March 1994.

30 The coalition government's 1996-97 Budget also imposed a general running costs reduction additional to the efficiency dividend.

31 The Senate Estimates Committees, established in 1970, are now called Legislation Committees. They divide the portfolios among themselves and carry out an examination of the estimates at two times in the annual budget cycle -- when the budget is tabled in Parliament and when additional (supplementary) estimates are issued; with the changes introduced by the Labor government, in May and November. The November period, when annual reports become available, also focusses on a review of program performance, although some informed observers question the effectiveness of the scrutiny process. They see the Committees as more interested in scoring political points than in carrying out a careful, systematic review (1993 interviews).

32 Among the examples cited by MAB: evaluations of the Access and Equity strategy, and of the Newstart, Child Support and Jobs Education and Training programs (MAB-MIAC 1994: p. 8).

33 Hawke defined economic restructuring as "no longer assume[ing] that greater prosperity results simply from shearing more sheep, harvesting more wheat, and finding new minerals. To a large extent...restructuring relie[s] upon improving the performance of the private sector [through] being more productive and competitive" (R.J. Hawke 1989: p. 7-8).

34 The concept of accrual accounting, standard practice in the private sector, requires that revenues and expenses be reported in the period in which they occur rather than when the related cash is received or paid. Implicit in this notion is the valuation and depreciation of capital assets and the recognition of liabilities. Accrual accounting brings with it the ability to account for the real costs of government resource use.

35 In its August 1996 Budget the new coalition government announced its acceptance of the recommendations of a review of commercial businesses in DAS. The 1996-97 Portfolio Budget Statements for Administrative Services indicate that planned reforms will include: the sale of six businesses and corporatization of another with a view to sale within two years; and restructuring of five businesses, with substantial market testing of non-core activities.

36 In its 1996-97 Budget the coalition government adopted a fiscal strategy aimed at securing a balanced budget within three years, primarily through expenditure restraint: "The focus in achieving expenditure reductions [is] on reassessing existing spending priorities, ensuring greater efficiency and effectiveness in the delivery of public services and enhancing accountability mechanisms" (1996-97 Budget, Statement 1, August 1996: p. 7). Savings measures include a two percent reduction in running costs for departments and agencies (in addition to the ongoing one percent efficiency dividend).

37 The coalition government has committed to establish, through legislation, a new fiscal framework (a "Charter of Budget Honesty") aimed at producing "better fiscal outcomes by putting in place institutional arrangements to improve the discipline, transparency and accountability applying to the conduct of fiscal policy." The legislation will incorporate many of the recommendations of the National Commission of Audit, established following the March 1996 election to investigate and report on the government's financial position and issues related to the management of government finances. The main features of the fiscal framework are to include:

• a requirement that fiscal policy be formulated against a set of principles of sound fiscal management contained in the legislation;
• regular reports on fiscal performance including an independent pre-election report on the economic and fiscal outlook, prepared by the Treasury and Finance Secretaries (that is, Deputy Ministers); and
• a provision that "consistent with the principle that governments should not have privileged access to the public service during the caretaker period following the calling of an election]... both the Prime Minister and the Leader of the Opposition [may] request that costings of their announced policies be prepared [and be publicly released] by the Secretaries to the Treasury and Department of Finance" (1996-97 Budget, Statement 1, August 1996: p. 16, 29).

39 The Australian National Audit Office (Audit Report No. 43 1993-94) expressed several concerns: the Bill establishes the ANAO as a statutory authority ("symbolic separation from the Executive"), but without authority to determine staff terms and conditions of employment; it does not allow the ANAO to conduct performance audits of GBEs, except as authorized by Parliament; it does not make provision for a parliamentary audit committee to oversee ANAO funding (the Labor government's proposal to establish such a committee by parliamentary resolution was seen to lack stability and permanence); and it continues the existing practice of auditees paying fees for attest audits although, in the view of the ANAO, Parliament and not audit fee receipts should determine the ANAO's future levels of funding.

40 Australian Cabinet statistics show that in 1985-86, the last full fiscal year before the machinery of government changes, and a pre-election year, there were 221 Cabinet meetings that dealt with 1,040 Cabinet papers, producing 636 budget decisions. These data may be contrasted with the situation six years later, well after the restructuring, that is 1991-92, also a pre-election year, when there were 184 Cabinet meetings, 835 papers presented, and 189 budget decisions (cited in P. Aucoin, H. Bakvis 1993: p. 420).

41 P. Aucoin, H. Bakvis (1993) noted: "In the nearly six years following the 1987 reorganization, there have been no major changes, despite two elections and the arrival of a new prime minister" (p. 400).

42 The coalition Cabinet of March 1996 numbers 15 and the ministry 28. Two portfolios are not represented in Cabinet (Attorney General's and Immigration and Multicultural Affairs) and one (Foreign Affairs and Trade) is represented by two ministers.

43 A significant public service structural initiative was announced by the newly elected coalition government in its August 1996 Budget - the creation of a new service delivery agency, representing a significant organizational separation of operational and policy roles. Initially, the agency will deliver all programs and services of the Department of Social Security (DSS), and some services of the Department of Employment, Education, Training and Youth Affairs (DEETYA). It will be managed by a Chief Executive and Board of Directors that will report to the Minister for Social Security, and operate under formal agreements specifying what the agency must do. It will have a budget of $A 40 billion and a staff of more than 20,000. Ultimately, the agency will "become a one-stop-shop for a wide range of government services" currently delivered by various departments (DSS Budget Overview 1996-97: p. 2). DSS and DEETYA will continue to exist but as much smaller organizations responsible for policy development.

44 As earlier noted, in 1995 the Public Service Commission was amalgamated with the Merit Protection and Review Agency to form the Public Service and Merit Protection Commission.

45 Over the 1987-88 to 1992-93 period, the federal government raised $A 3.3 billion from asset sales and privatization; a further $A 2.5 billion was estimated for 1993-94 and an equivalent amount planned for 1994-95. The privatization of Qantas began in 1992-93 and was completed in 1994-95 (1994-95 Budget, Budget Paper No. 1: p. 3.267-3.268).

46 These reforms evolved from the early 1980s, when several GBEs were restructured and FMIP required accrual accounting in such entities.

47 Two major transfers involved some 1,300 staff who moved from the Transport department to the Federal Airports Corporation, and 7,200 more from the same department who went to the Civil Aviation Authority.

48 "The boards of GBEs must now focus clearly on achieving agreed performance targets over a set time period which are reflected in corporate plans" (TFMI Evaluation 1993: p. 320).

49 House of Representatives Standing Committee on Finance and Public Administration, "Not Dollars Alone, Review of the Financial Management Improvement Program", September 1990.

50 The Committee's report noted: "The Auditor-General has emphasized the importance of having in place systems that facilitate monitoring of operations and accounting for performance. Without these systems there is a risk of inadequate accountability and of `risky management'."

51 The TFMI Evaluation 1993 was regarded at the time of its release as unique in the world. To our knowledge, little review of it has appeared in print. Though some have expressed the view that as an internal study it may be less than objective, the evaluation appears generally to have been accepted as authoritative, and its findings used with confidence.

52 Another philosophical perspective may be mentioned here: the critique of "the new public management" or "managerialism". This critique is considered by its proponents to apply to the body of managerial techniques and approaches underpinning the reforms presented in the TFMI Evaluation 1993. The examples of this point of view mentioned below were cited in an article by a then top official, who also analyzed and replied to each (see M. Keating 1990: p. 388):

• [The] ancient virtues of accountability - simplicity, convenience, visibility, accessibility - are not central to the modern scheme [the new public management or managerialism]...economy, not efficiency, parsimony, not productivity have been the touch stones of this movement (J. Nethercote 1989).
• [The new public management orthodoxy]...strives for higher productivity (above all else) through improved efficiency and cost-effectiveness. Matched with this is a conception of the public not as citizens but as consumers and taxpayers [with predominantly economic interests]...the universal acceptance of a private business model for public administration has many dangers (M. Painter 1988: p. 1-2).
• [The] indicators are that the "people" and "process" emphases run a poor second within the general culture of public service management to emphases on economy, efficiency and effectiveness (A. Yeatman 1987: p. 246).
• Corporate management...elevates economic rationality to primary status in the organization of the work of the public sector, and in so doing attempts to replace the legal and procedural framework of the classical model [of public administration] (M. Considine 1988: p. 10).

• Over the last decade, despite the growth of an extra 1.5 million jobs in the Australian economy, the number of people in the Commonwealth public sector has fallen by some 60,000 to less than 370,000 today. At the same time there has been a significant shift in resources, particularly to the key areas of social security and welfare, health, education, and labor and employment.
• Agency productivity gains are recorded in part through the efficiency dividend [which, since its introduction in 1987-88] has returned [$A] 500 million to the taxpayer...[the dividend currently] returns [$A] 80 million...each year.

• The Department of Finance is involved with several large service delivery agencies, viz. the departments of Employment, Education and Training, Social Security and Veterans' Affairs, in benchmarking service delivery.
• The Department of Social Security has published service standards covering claims processing, accuracy, and service levels at public contact outlets.
• As announced in the "Working Nation" White Paper, the Commonwealth Employment Service is expanding case management services, which is expected "to greatly improve service to clients, by having regard to their individual needs."

56 In November 1995, the Labor minister then responsible indicated his desire to see these values included in the new Public Service Act (G. Johns 1995: p. 2). In a November 1996 discussion paper the responsible minister of the coalition government also indicated that "...much simplified and streamlined, the Act will articulate the key ethical values, standards and principles of public service..." (P. Reith 1996: p. 2).

57 These guidelines were issued by the Public Service Commission in mid-1995. In related correspondence the Commissioner described them as follows:

The revised guidelines are the product of a comprehensive review of the 1987 guidelines and outline the responsibilities of ... public servants to the government, Parliament and the public. They focus particularly on the efficiency, effectiveness, professionalism and integrity of public servants, and on recognizing and avoiding conflict of interest situations...They [also] contain new chapters on issues such as fraud [and] whistleblowing.

58 This paper, titled "Ethical Standards and Values in the Australian Public Service" was issued in early 1996.

59 An exposure draft of a paper titled "Guidelines for Managing Risk in the Australian Public Service" was issued in mid-1995.

60 The coalition government indicated in November 1996 that, as one element in reforms aimed at furthering accountability for results, it was considering the introduction of formal performance agreements for all heads of departments and agencies, and their reclassification as "chief executive officers". These changes would address the need to explicitly recognize their "responsibility to the minister for their agency's performance" and the need for "the exercise of their wide-ranging managerial powers... to be set in an accountability framework which articulates criteria for the measurement of performance." Another proposed reform is the introduction of "a new integrated planning and accountability mechanism known as the Charter of Government Performance." Ministers would be required to publish the performance plan for their portfolios, and these would provide a "cohesive and comprehensive overview of the Government's priorities" as well as a basis for performance assessment (P. Reith 1996: p. 14, 15).