The Australian National Audit Office (ANAO) in its recent report on the Housing Insulation Program (HIP) returned findings that were highly critical of the Department of Environment, Water, Heritage and the Arts (DEWHA), but effectively absolved the minister, Peter Garrett of any blame.

On the face of it, this outcome sits oddly with reforms to the Public Service Act introduced in 1984 by the Hawke government, with the stated aim of involving ministers more directly in the management of their departments. The consequences of this and other reforms need to be understood in order to understand the behaviour that gave rise to the HIP imbroglio.

This amendment to the Public Service Act introduced into Commonwealth public administration a diffusion of responsibility between minister and secretary, and confusion about the roles and accountabilities of ministerial staff, the numbers and roles of whom were at the same time to be enlarged by a parallel reform — the Members of Parliament (Staff) Bill, which empowered ministers to engage their own staff and to have assistance in key projects from “people who share the government’s values and objectives”.

The next step towards the mess in which we now find ourselves was Paul Keating’s decision to convert department secretaries from permanent public officials to officers on limited-term contracts, which substantially weakened their capacity to deliver to governments the advice that they need rather than the advice that they want.

A more corrosive step was taken by John Howard who decided, and transacted through the Parliament with little demur, that we no longer needed to have department secretaries appointed by the Governor-General (a sign that they were servants of the Crown, above politics). In future they would be appointed by the prime minister, a corollary of which was that any secretary who earned his displeasure could easily be terminated by him.

All that was needed to make this a really toxic brew was the arrival on the scene of a prime minister, Kevin Rudd, who was such a centralist and micromanager that he made Howard look like a master delegator.  Rudd concentrated huge power in the Prime Minister’s Office (PMO), and transmitted instruction, if not direction, to departments and ministers alike per medium of the inexperienced young persons who peopled his office.

The effect of all these changes, including the centralisation of power around the PM, is (i) ministers are more like ministers assisting the prime minister than real ministers, and (ii) there is no incentive whatsoever for department secretaries to give to their ministers the undivided loyalty they gave in the days when they were permanent heads. They now stand or fall on how the prime minister feels about them, and they know it, so what the prime minister wants the prime minister gets — even when, from the point of their minister’s responsibilities, they should be advising caution or a different course.

It is in the light of these changes that we can understand how stimulus measures such as the HIP could be developed “with a sense of urgency by PM&C within a compressed timeframe and with minimal consultation with DEWHA”. We can understand also, given the prime minister’s known wish to make haste and the urgings of the Co-ordinator-General to that effect, why the department was not in the business of giving bad news.

No full risk assessment explaining the breadth and scale of the risks was ever provided to ministers, there was no formal advice to ministers from DEWHA relating to its capacity constraints, and DEWHA gave to its minister advice that ANAO found to be overly optimistic.

I see this problem as a systemic one — a systemic problem that, mutatis mutandis, goes a long way to explain why every jurisdiction in the country has trouble with effective program delivery. Accordingly, there is no point in hanging either the minister or the departmental officials out to dry.

My solution is simple and radical, for both of which reasons it is unlikely to be implemented. We could start by returning to effective cabinet processes, in which ministers are treated like grown-ups who do not need close supervision from the Prime Minister’s Department or unelected prime ministerial staff.  Once the strategic decisions are sorted out in cabinet, ministers should be left to get on with the business for which they have been commissioned.

We should also return to the pre-1984 situation in which department secretaries have unambiguous responsibility for “the department and all the business thereof”.  They should be appointed by the Governor-General on the advice of the government of the day, and having been appointed, should be removable from office solely on the grounds of proven incapacity or misbehaviour.

*Paul Barratt is a former Secretary to the Departments of Defence and Primary Industries and Energy

Peter Fray

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