With Malcolm Turnbull’s lengthy list of innovation announcements receiving plaudits from the business community, CSIRO funding restored to the merely dire state it was in when Tony Abbott was elected, and the promise of a more permissive environment for failure and risk-taking, Australia is indeed set for an ideas boom — which, happily, will go on forever, unlike other annoying booms that tend to stop booming at some point.

If Tony Abbott’s prime ministership will always be marked by an ever-expanding array of flags at national security announcements, the Turnbull era equivalent seems to be buzzword-laden backdrops, with slogans like “Stop the Boats” and “Daesh Death Cult” replaced by “We’re investing in the ideas boom” and “Science Needs Business, Business Needs Science”.

There are, of course, some things the government would prefer not to talk about when it comes to innovation. Turnbull is eager to talk about how “the internet and the technologies it enables mean we are now part of a truly global marketplace. It means there are fewer barriers to entry for Australian businesses, no matter where they are located, right across Australia they can sell their products and services to just about every corner of the globe.”

Except, this government has conducted a ferocious war on the internet. The NBN has become a debacle dependent on a decrepit copper network, an internet censorship scheme has been introduced at the behest of the copyright cartel — probably the industry that is the most defiantly anti-innovative on the planet — and a massively expensive data retention scheme has been imposed on the entire communications sector, with the bureaucrats charged with implementing it seemingly doing their best to make life difficult for smaller ISPs who are still struggling to meet the extraordinary regulatory hoops through which the government is making them jump. And Malcolm Turnbull, as communications minister, was front and centre on each of these attacks on the internet.

Nor should we forget, he has reneged on the government’s commitment to establish a mandatory data-breach notification scheme this year (meaning business customers, as well as individuals, don’t have to be told when critical data is lost or stolen) and has flagged that security agencies will be asked to investigate encryption — a product he freely admits to using himself. Innovation? When it comes to the internet, the Abbott-Turnbull governments are about stultification.

As Turnbull correctly pointed out when deigning to answer one of Leigh Sales’ questions on 7.30 last night, one element he’s been talking about since his last stint as Liberal leader, in 2009, is changes to Australian bankruptcy laws to make them a little more like US Chapter 11 laws. Our current laws, Turnbull argues, are too punitive and we must become more tolerant of failure in order to encourage people to take more risks. A successful businessman, investor and serial career-changer, Turnbull is far better placed than virtually anyone in recent federal political history to talk about the culture of risk-taking and how to strengthen it.

And Turnbull wants that culture of risk-taking to go further, to pervade government itself. “[O]ne of the aspects of the political paradigm I’m seeking to change,” he said yesterday, “is the old politics where politicians felt that they had to guarantee that every policy would work, they had water everything down so there was no element of risk. Let me tell you: I’m not guaranteeing that all of these policies will be as successful as we hope they will be.”

Let’s leave aside that, even before Tony Abbott took Australia into an era of relentless negativity in which even successful policies like the carbon price were demonised, Malcolm Turnbull was not exactly the most charitable opposition leader — this is the man, after all, who charged Kevin Rudd and Wayne Swan with corruption over one of the Rudd government’s stimulus programs. Let’s leave aside that, in effect, Turnbull is asking for a free pass on political scrutiny — that when a policy goes wrong, he can merely shrug and say, “Hey, we took a risk, we were being nimble and it didn’t quite come off.”

Politics and hypocrisy aside, the conceit underlying Turnbull’s argument is that the economic environment is now so extraordinarily different to that of the past that not merely does business have to be more agile and willing to take risks, but so does government. This sounds fine. Hell, as a former bureaucrat who endured the risk-aversion and process obsession of the Australian Public Service for over a decade, I’m all for a more nimble, innovative public sector, so sounding a caveat about this is personally a little counter-intuitive. But there are two problems.

First, when investors or businesses take risks, it’s investors and businesses that get hurt. Everyone involved has signed up to the deal — any private sector venture may conceivably go broke. When governments take risks, taxpayers get hurt, if it involves wasted money. The intangible asset self-assessment proposal in yesterday’s package, for example, may offer tax-avoidance opportunities for IP-based companies. And we all get hurt if it involves regulatory failures.

Turnbull’s proposals for less punitive bankruptcy laws — reducing from three years to one year the freeze on a bankrupt operating a business, enabling trading while insolvent under certain conditions — are already being flagged as opportunities for unscrupulous figures to game laws around phoenixing companies and ripping off suppliers and workers. All regulatory change can be gamed, of course, and current bankruptcy laws themselves are exploited by shonks and spivs, but the point is governments have much wider responsibilities than business when they take risks. Just ask the families of the victims of the crooks who exploited the Home Insulation Program.

Second, and this is more arcane, but important nonetheless, there is, it must be reluctantly acknowledged, a point to risk-aversion in the public service. This is traditionally contrasted with the demand for “responsiveness” from governments, who want public servants to enthusiastically implement their decisions without cavilling or quibbling, rather than a more traditional approach of offering ministers a sceptical take or raising issues that are likely to occur in implementation or outcomes. But enthusiasm, rather than scepticism, has its own risks. As Paul du Gay, one of the pre-eminent sociologists of bureaucracy wrote about the UK in 2011 :

“The political positivities flowing from this bureaucratic ethos derive in large part from its imperviousness to particular forms of enthusiasm … [T]his commitment … to behaving constitutionally, within the confines of their office, as servants of the state … precisely excludes enthusiasm for particular policies. As recent events in the UK have demonstrated, most notably, perhaps, those surrounding the decision to to war in Iraq, enthusiasm for a particular course of action, combined with impatience with due process and the minutiae of bureaucratic record-keeping, can have the gravest consequences … existing patterns had not been developed without practical reason … departing from them might have serious costs that necessitated careful consideration beforehand. In particular, seemingly banal, ‘old-fashioned’ forms of bureaucratic administration turned out to play an important role in constituting the political landscape.”

And if you want to see how that lesson played out in Australia, consider the policy chaos of the Rudd years, in which due process was chucked out the window in favour of a bunker-style command mentality.

All of du Gay’s observations apply equally to the idea that government itself must now be innovative, nimble, etc. When it comes the bureaucracy’s resistance to agility, it’s not the automatic negative that we all assume it to be. Process obsession, laborious and ritualistic implementation, over-the-top record-keeping, are the necessarily frustrating tools of democratic accountability and sound policy. Abandoning them in the quest for Government 2.0 will have costs that merit more consideration than can be obtained from some slogan-laden backdrops.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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