Julianne Schultz
How Morrison killed the public service

Two years ago, at the end of 2019, as the crises that would mark his tenure and demand an unprecedented public-sector response began to unfold, Prime Minister Scott Morrison announced an apparently innocuous decision. It is one that has quietly haunted his government ever since. For the first time in living memory, it will also make the state of public administration a political issue in the forthcoming election.

On the advice of his head of department, Phil Gaetjens, who chairs the Secretaries Board of departmental heads, Morrison rejected the ethos and most substantive recommendations of the Independent Review of the Australian Public Service chaired by David Thodey.

Our Public Service, Our Future declared there was an urgent need to transform the APS, to increase its independence, expertise, accountability and capacity. The Secretaries Board smothered many of the 40 recommendations in platitudes and rejected others out of hand: greater political independence for public service leaders, better regulation of ministerial staffers, the elimination of staffing caps and closer collaboration with the states.

The response was scarcely surprising. The review, the 19th in a decade and the most comprehensive, was highly critical of the APS. No doubt some secretaries took it personally.

The expert members of Thodey’s taskforce, most with private-sector experience, were “unequivocal”: the Australian Public Service needed “a service-wide transformation to achieve better outcomes”. It was not broken, but it was “not performing at its best”, “ill-prepared”, “falling short” and “lacking unified purpose and expertise”.

The accuracy of this assessment has become increasingly clear ever since, as the government scrambled to find the resources and expertise to respond to natural disasters, a pandemic and a litany of integrity issues. Rather than becoming the titular head of the whole APS, as Thodey recommended, Phil Gaetjens has instead been asked by the prime minister to investigate every transgression that could not be washed away in a day or two of media spinning.

Gaetjens has had a distinguished career, but his longest job was 10 years as Peter Costello’s chief of staff. This has led to the perception that he is, as Bernard Keane has put it, “Scott Morrison’s personal fixer” rather than the apolitical leader of the APS. As Keane, himself a former senior public servant, observes: “Public servants by now know that undertaking planning or policy work that may result in embarrassment for the government far outweighs any benefits that might flow from it, and act accordingly.”

Morrison rejected the Thodey recommendation that ministerial advisers be covered by a legislative code with enforcement provisions. At the time he suggested it was unnecessary, as the government expected “all ministerial staff to uphold the highest standards of integrity”. Yet just two years later the same prime minister, responding to Kate Jenkins’ “Set the Standard report on sexual harassment in Parliament House, acknowledged ministerial standards were too often honoured in the breach.

As the coronavirus made its way from animal to human, killing millions worldwide, stretching medical systems, wrecking economies and lives, it has provided a unique X-ray of the fractures and underlying fault lines in every society. In Australia one of the X-rays was of public administration. It showed signs of osteoporosis.

The corporatised public service – which eventually replaced the model that Nugget Coombs found in 1976 had become “excessively centralised, hierarchical, rigid, inflexible and resistant to change” – became much smaller. The core skill was no longer service delivery or policy advice but contract administration, and brought new opportunities for corruption.

The desire to make the APS more like business proved to be a goldmine for the big consulting firms and resulted in it shrinking by a third over several decades, to just under 250,000 people. The loss of corporate memory as a result means that one of the country’s core institutions suffers a form of organisational dementia; the tendrils of memory are weak and unreliable. This is exacerbated by dependence on consultants who are paid a lot but not enough to recall a lifetime of departmental knowledge about what works.

Tax, human services, security and home affairs remain big employers in the corporate public service, but even they are supplemented by consultants who are paid more to sit alongside full-time employees as the staffing caps prevent more cost-effective direct employment.

Under this model much advice and implementation is outsourced. Service delivery is contracted out to firms and charities that administer the money and grow plump on the margins but have no interest in solving the big policy questions of social dysfunction that the money they administer is designed to ameliorate. If the problems were eliminated, their businesses would collapse. Only defence remains relatively untouched, although consultants also populate the desks at the department’s headquarters in Russell. Still, with nearly 100,000 uniformed and civilian employees, it remains the only source of human capacity in the APS, hence the random deployments to nursing homes, fire zones, border patrols and suburban streets, a long way from its core mission.

Once upon a time Canberra would have been bristling with scenario and risk-management plans and strategies prepared in case fires or floods closed highways, pandemics swept in, or trading partners pulled up the drawbridge. Twenty-five years of outsourcing and number crunching means this advice about unpredictable events is surplus to the immediate requirements of day-to-day, politically driven administration. The experts who once prepared them were given handsome redundancy payments, leaving their out-of-date scenario plans sitting unread in filing cabinets in the national capital, at precisely the time they were most needed.

There are still repositories of medical and economic expertise, and they rose to the challenge when the pandemic upended the old orthodoxy. The public initially welcomed the new embrace of experts, and the levels of trust in the public service reached fresh highs in 2020. Trust has been eroding ever since, as people feel increasingly abandoned by a government that failed to order vaccines and rapid antigen tests in a timely manner, paid consultants billions of dollars to do core public service work, bungled contracts to support the neediest, blamed the states and became more secretive, corrupt and unethical.

Accepting the recommendations of the Thodey review would not have prevented this catastrophe, but it was an early-warning system of structural problems that have become infuriatingly obvious since.

The 18-month review had been commissioned by then prime minister Malcolm Turnbull, who worried that the public service was in thrall to the “cult of consultants”, and his departmental secretary, Martin Parkinson, who by the time the review was delivered had left the APS. Even before the report was completed, the new prime minister made clear his preference for a command-and-control, minister-knows-best model of public administration. A week before rejecting the review’s plea for greater transparency, another five secretaries were added to the list of 13 who had been terminated without explanation since 1996, when the newly elected John Howard sacked six department heads before he was  sworn in.

The environment in Canberra has become increasingly febrile. The pandemic stretched the limited resources almost to breaking point, scandals undermined moral authority and the penchant for secrecy made oversight of the expensive response uniquely challenging. When Senator Rex Patrick criticised the deputy secretary who had decided not to make national cabinet documents available in response to his freedom of information request, the response from Phil Gaetjens and APS Commissioner Peter Woolcott was an outraged letter to the president of the senate. It suggested Patrick misused his parliamentary immunity to criticise the deputy secretary for making the decision – which was  eventually overturned by the Administrative Appeals Tribunal. Not everyone agreed, as the former departmental heads who write for John Menadue’s Pearls and Irritations declaimed.

This is a pattern that has been repeated everywhere that the simple and apparently appealing notion public administration should behave more like business has been adopted. As the American journalist George Packer noted, the Republicans under Newt Gingrich’s congressional leadership turned “the goal of limited and efficient government into the destruction of government. Without a positive vision, his party used power to hold on to power and fatten corporate allies. Corruption – financial, political, intellectual and moral – set in like dry rot in a hollow log.”

Where America goes, Australia often follows. The problems Thodey warned about, the precursors of the American experience, have only become more pronounced since the recommendations of “Our Public Service, Our Future were rejected. Experts and reviewers, former secretaries and perhaps, quietly, the current leadership, now consider the APS the most dysfunctional in living memory, stretched by the pandemic response and ill-equipped to advise on implementing a more ambitious agenda.

The notion of an expert, apolitical public service that serves but doesn’t steer, that brings deep knowledge and acts as a co-ordinating node for a wide range of community, civic and private enterprises, is hard to envision and will require serious rebuilding. At least there is no need for another inquiry to say how.

This article was first published in the print edition of The Saturday Paper on February 12, 2022 as "Public service industry".

For almost a decade, The Saturday Paper has published Australia’s leading writers and thinkers. We have pursued stories that are ignored elsewhere, covering them with sensitivity and depth. We have done this on refugee policy, on government integrity, on robo-debt, on aged care, on climate change, on the pandemic.

All our journalism is fiercely independent. It relies on the support of readers. By subscribing to The Saturday Paper, you are ensuring that we can continue to produce essential, issue-defining coverage, to dig out stories that take time, to doggedly hold to account politicians and the political class.

There are very few titles that have the freedom and the space to produce journalism like this. In a country with a concentration of media ownership unlike anything else in the world, it is vitally important. Your subscription helps make it possible.

Select your digital subscription

Month selector

Use your Google account to create your subscription