With billions of dollars wasted in botched privatisations and a key portfolio, Defence, in costly disarray, the Howard Government’s first three terms had yielded a regular series of large-scale bungles.
Things did not improve greatly in its final term. The construction of the Christmas Island Detention Centre saw big delays and a huge blowout in cost. The Education Department was mauled for not administering any of its private school funding agreements correctly. The Agriculture Department appeared to have not bothered keeping records as to how it handed out tens of millions of dollars in grants for the fishing industry.
There was an echo of the outsourcing debacle with a lengthy, expensive and ultimately unproductive tender process for building the new ADF headquarters at Bungendore (so located to try to save Gary Nairn’s seat).
But the really big bungles were increasingly rare, especially once the privatisation agenda was mostly completed. For all that Commonwealth departments are considered to have no program delivery expertise, the basics of good administration – planning, evaluation, establishing performance indicators, sound procurement process, risk management plans – were becoming embedded in most Public Service processes, and the practice of buying in expertise in areas like probity advice was becoming standard.
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There was no curbing politicians themselves, though, which is where some of the most damning audits of the Howard Government originated. Regional Partnerships was a mid-sized program, worth $400 million dollars over several years, which saw textbook examples of political interference as National Party ministers used the program as their own personal porkbarrel. This led to the comparatively rare phenomenon of blatant politicisation – the ANAO was asked to consider several Howard Government programs where questions had been raised about the allocation of grants between Coalition and Labor-held seats. Regional Partnerships was one of the rare examples where it found Coalition Ministers blatantly favoured their own side.
In fact, one of the key lessons of the ANAO’s scrutiny of the Howard Government was that the greater the role for politicians in program administration, the more likely there were to be problems. This led to the two Howard-era cases of maladministration bordering on outright malfeasance. One was the siphoning of government advertising contracts to Liberal Party mates, although it was a politicised and apparently illegal decision-making process that drew the wrath of the ANAO when it reviewed advertising in the Howard Government’s last two terms.
The other was the MRI scandal that should have cost the otherwise very competent Michael Wooldridge his job. In the 1998 Budget, the Government announced new arrangements for diagnostic imaging funding that substantially benefited owners of MRI machines acquired before Budget Night. On 6 May 1998, Wooldridge had met with representatives of the Royal Australasian College of Radiologists.
By Budget Night, four working days later, 33 machines had been ordered by College members. A number of college representatives told the ANAO Wooldridge had raised in the 6 May meeting the issue of machines purchased by Budget Night, but this was disputed by Wooldridge and his staff. The ANAO savaged the Health Department’s internal processes for handling negotiations with the College but was unable to find a smoking gun. Instead, it concluded “on the balance of probabilities, the evidence does at least suggest… an environment where some participants may have deduced, or actually become aware, that the Commonwealth was giving consideration to the inclusion of machines on order in the Budget measure.”
The MRI scandal also reflected another, growing problem throughout the Howard years that has received insufficient attention – the creation of pseudo-markets, hybrid areas of activity that resembled normal markets, with profit-driven private sector operators, but which were fundamentally dependent not merely on government funding, but on levels of government regulation to structure their operating environment, guarantee their access to finance and manage competition.
The product of a contradictory combination of desire to outsource service delivery and political determination to retain full government control, these pseudo-markets became a key service delivery model for the Howard Government not merely in health and aged care – where it was a long-established and relatively secure model – but in education and child care as well. The tensions inherent in such hybrid structures, and the problems for service delivery when those tensions could not be contained, would have a direct sequel in the collapse of ABC Learning in 2008 and the ongoing problems of the international education sector this year.
But the most frequent example of the havoc ministers could wreak on good administration was in their demands that things be done quickly. In a shock revelation, it appears rushing to do things can lead to them being done badly. Time and again, the ANAO blames time constraints for departments bungling programs. Problems with the gun buyback scheme arose because it was set up in an extraordinary hurry. The Work For the Dole scheme had significant administrative problems because of the rush it was set up in. The private health insurance rebate was rushed, costing millions of dollars. The dairy industry assistance package was set up too quickly and had a number of failings.
The $600m Australian Technical Colleges program was rushed out without the then-Education Department having enough time to plan the establishment of new colleges. The Communications Fund was established without an investment strategy because Communications didn’t have time to address serious concerns raised by Treasury. The problem of rushing programs that were often political fixes or efforts to bribe interest groups was particularly acute for the Howard Government in its final term – by then its profligate spending was so great there were literally insufficient public servants to oversee programs, despite the remorseless growth in bureaucrat numbers.
The consequences of rushing implementation were to become visible in the Rudd Government’s stimulus package too, of course: both intentionally – the premium the NSW Government paid for getting stimulus projects up and running well ahead of other jurisdictions was directly quantified by the first Orgill Report, and unintentionally – the Hawke Review of the insulation program specifically identifies the Environment Department’s inability to set up an independent accreditation process while the program was quickly rolled out as the key failing that saw so many crooks rush into the sector.
Ironically, in the insulation case, the Department had insisted on following good practice and setting up a laborious full tender process for the accreditation regime, leaving self-assessment processes in place for the months that it took to complete the tender.
That’s not to say that keeping politicians out of administrative process is automatically a good idea, whatever the democratic implications of that. Public servants find plenty of ways to bugger things up without help from Ministers. In fact, some of the most remarkable examples of grotesque maladministration in recent years were found in the Department of Environment by Patricia Faulkner’s review of the Green Loans program, which went on below the radar of even senior Departmental executives, let alone Peter Garrett (although, again, Faulkner suggested the need to meet ‘tight timeframes’ had contributed to the problems). Fear of scrutiny via Parliament, of “embarrassing the minister” is also a key driver for good practice in the bureaucracy.
Apart from the anodyne lessons of “haste makes waste” and keeping a balance between politicians and bureaucrats, what does over a decade of ANAO vigilance tell us about competence? One of the outcomes of the Terry Moran-led Ahead of the Game reform blueprint — now sadly defunded by both sides of politics in their absurd obsession with debt’n’deficits — was a recommendation to improve service delivery through a “revised policy implementation tool kit… that provides agencies with guidance on best practice implementation, particularly around program and project management.”
While this sounds a bit like bureaucratic waffle, it picks up on issue that long concerned senior Labor figures and Moran himself well before 2009, and which emerged in the Hawke Review of the insulation program, that there needed to be greater work to ensure that the lessons learned over the last decade sink into all areas of the Public Service, ensuring capacity to properly roll-out large programs, with effective compliance and evaluation structures in place from the outset.
Ultimately the policy advisers and program implementers in the bureaucracy can’t control what Ministers want to do, even if they’re determined to act in ways that border on corrupt. But they can ensure capacity and basic administrative skill sets are embedded in the Public Service across all departments, even in those without large programs to run, so that there is an ability to respond relatively quickly when politicians demand that things be done yesterday.
But then that costs money, and that’s one thing neither side will be giving the public service any time soon. The realistic challenge in the face of new efficiency dividends and threats of recruitment freezes is to ensure capacity for good administration doesn’t actually go backwards.
Read Part One of this series here.