Centre for Policy Development's Blog, page 96

The State of the Australian Public Service: An Alternative Report

The Centre for Policy Development releases The State of the Australian Public Service: An Alternative Report, as part of our Public Service program.

DOWNLOAD the report here.

 

 

The report's key findings include:

a widening gap between the anti-public servant rhetoric of some politicians and commentators and the positive attitudes held by Australian citizens about public servants and the services they deliver and
a decline in the ratio of public servants per capita in contrast to claims of public service 'bloating'.

Shadow Treasurer Joe Hockey has declared the Coalition's plans to slash public spending and axe at least 12,000 public servants' jobs if they gain government at the next election in a rush to bring the budget to surplus. In recent days it has been revealed the Coalition plans to cut public spending by $70 billion, shutting down entire government departments.

The Australian Public Service (APS) employs approximately 160,000 people across 133 agencies, making it one of our largest employers and most significant investments. The staffing of the APS generates heated debate in the media as well as in Parliament. Views are polarised.

But what do we really know about the APS? And does much of the rhetoric match up to the reality?

The State of the Australian Public Service analyses 20 years of opinion research on  the public service. The report finds evidence of a disconnect between frequent public service 'bashing' by politicians and commentators and generally positive views of the public sector in the general community.

Most Australians are willing to forego income to pay for public services. There's a strong preference for services to be provided by the public sector: twice as many people support public over private provision of health and education for example.

Our research into long term staffing trends also contradicts the portrayal by some politicians and media commentators of a public sector that is 'bloated'.

 

"To return the ratio of APS staff to Australian citizens to 1991 levels would require increasing APS staffing to approximately 214,000, an increase of approximately 50,000 staff."

Unless the community expects less of the public service or the APS is able to deliver its services with significantly fewer employees, the argument that we have a 'bloated' public service is baseless.

The report also finds that the APS is an increasingly top-heavy workforce that does not reflect the diversity of the Australian community, with Indigenous Australians and people with a disability under-represented, and women under-represented in the senior ranks.

Dr James Whelan, the report's author and Director of CPD's Public Service Program said, "British Prime Minister David Cameron's 'Big Society' vision entails cutting the public sector budget by ₤80 billion, freezing wages and calling for tenders for most services. At a time when the public service is under attack in the UK, Canada, New Zealand and the US, Australian politicians who are tempted to follow suit should be aware of Australian voters' strong support for the public sector."

CPD's  The State of the Australian Public Service offers an accessible handbook of all you need to know about attitudes toward the public service and staffing trends.

DOWNLOAD The State of the Australian Public Service: An Alternative Report here.

MEDIA | Public Service ideas in the news

James Whelan | Evidence please, not more bashing of our public sector

Online Opinion

With the Federal Government expected to announce major spending cuts as part of its mid-year economic forecast, debate on the size and role of the public sector has reignited.

CPD's James Whelan argues that the community does not support drastic cuts to public services. Read his response to Institute for Public Affairs Director Julie Novak's call for savage Budget cuts, published in Online Opinion last week.

James Whelan | Public Sector Cuts Don't Add Up
CPSU Works

With the Federal Government expected to announce major spending cuts as part of its mid-year economic forecast, debate on the size and role of the public sector has reignited.

CPD's James Whelan argues that the community does not support drastic cuts to public services. Read his response to Institute for Public Affairs Director Julie Novak's call for savage Budget cuts, published in Online Opinion last week.

David McLennan | Public Service 'Vulnerable'

The Canberra Times

"Far from being "bloated", public service numbers are actually lagging behind when compared with population growth… public servants were vulnerable to attack because much of their work was taken for granted."

Verona Burgess | Attack on Job Cut Plan

Australian Financial Review

"[The report] argues that the Coalition's planned cut of 12,000 jobs in its first year in office is based on a belief in smaller government and the capacity of private and communtiy bodies to deliver services that have traditionally been the responsibility of public service agencies"

Peter Martin | Public Service Same Size as 20 Years Ago

Fairfax

"our analysis contradicts the prevailing rhetoric about a bourgeoning public service"

Peter Jean | Warning on Simplifying Our Public Service

The Canberra Times

"Negative stereotypes of public servants reinforced by politicians and the media are creating political opportunities for Tea Party-style policies, including massive cuts in public spending, according to a report on the state of the Australian Public Service."

AAP | Study Rejects Federal Public Service Bloat

"..the federal public service was no bigger now, per head of population, than it was two decades ago."

AAP | Study Finds Cuts to Federal Public Service will put Community Services at Risk

"The opposition's plan would involve retrenching "7.5 per cent of the staff who deliver services, develop policies, make rules and laws, monitor and enforce laws and regulations, collect taxes and manage government finance".

702 ABC | Small Public Service 'An Easy Target'

"Dr Whelan says the views of many politicians are out of step with community attitudes, with 70 per cent of Australians in support of delaying a return to surplus."

Cheryl McGregor | Paying our Respects to the Bereaucrats

The Newcastle Herald

"As long as information about what the community wants from the public service is intermittent, one-issue or having different criteria, it will be vulnerable to politicians who deliberately summon negative stereotypes to gain an electoral advantage."

Alex Sloan | Interview with James Whelan

ABC Local Radio Canberra

Listen to Dr James Whelan chat with Alex Sloan about the findings in the report

ABC The Drum | Dr James Whelan discusses the report

Watch online to hear what James has to say about the report

MEDIA INQUIRIES

For all media enquiries or to arrange an interview with our Public Service Research Director and report author, Dr James Whelan, please contact our Communications Director, Antoinette Abboud on 0414 920 801 or antoinette.abboud(at)cpd.org.au

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Ben Eltham | Gillard's Cabinet Rejig Settles Her Debts

This article originally appeared in New Matilda here.

Only a fortnight ago, it seemed as though Labor would end the year on a roll. The talismanic carbon tax legislation had passed the lower house, the polls were inching in the right direction, and the Government had engineered a cunning tactical manoeuvre to take advantage of disgruntled Liberal-National MP Peter Slipper, making him Speaker and gifting the Government an extra vote on the floor of the lower house.

But for the modern Labor Party, no victory is quite safe. The ALP followed its positive end to the parliamentary year with a confused and divided party conference, in which vigorous debates about issues such as gay marriage and the sale of uranium to India served mainly to remind commentators and journalists that the party remained firmly in the grip of factional warlords and the various unions that fund them. For reasons no-one quite can quite understand, the Prime Minister ended up the on the side of the uranium exports and against gay marriage, which roughly equates to being on the opposite side of the bulk of Labor's ordinary members.

Gillard gave a lacklustre speech to the party conference, neither energising her party base — nor doing anything to heal the deep rifts between her supporters and those of Kevin Rudd (yes, he apparently still does have some friends left in the party). Understandably, she looked tired. Less understandably, she seemed to lack any spark of inspiration, a problem for a leader of a party that embraces progressive causes and that feeds off the desire of its members for a better society. Her curiously ungrammatical phrase of "we are us" was widely ridiculed.

Then again, who really cares about political party conferences? Certainly not ordinary voters, most of whom have rather little interest in the internal policy debates of the ALP about how to reform itself, who should get a conscience vote on what, and whether to sell uranium to India. The issue of gay marriage is certainly important, affecting as it does a large and important part of the community on a matter of clear discrimination. Even so, there is a difference between the position of a political party, and an actual debate on the legality of the issue on the floor of Parliament. This latter has not even happened yet, and won't until next year.

The general irrelevance of politics just now seems to be born out by the main non-event of this week in Canberra, the government's ministerial reshuffle.

Ministerial reshuffles are one of those time-honoured set-pieces of Westminster government. They are as inevitable as taxes, and at least as boring. Generally pursued by a government every 12 months or so, they are an opportunity to reward friends, punish foes, and move dud performers out of harm's way. This being a government less patient than most, the reshuffle means that this is actually Gillard's third ministry since becoming Prime Minister, less than 18 months ago.

This week's reshuffle is no exception.

Ostensibly triggered by the decision of Tasmanian Nick Sherry to step down from his junior ministry portfolio dealing with Small Business and Superannuation, Gillard and her backers have taken the opportunity to move a number of ministers around the cabinet table. As often happens in Labor reshuffles, the victims are not so much Julia Gillard's enemies, such as Kevin Rudd and his supporters, but rather the hapless and friendless, like former Industry and Innovation Minister Kim Carr and Attorney-General Robert McClelland.

McClelland is the big loser in the reshuffle, losing the prestigious role of Attorney-General to the former Health minister, Nicola Roxon. McClelland becomes the new Minister for Emergency Management, which presumably means he keeps the emergency management roles that are currently housed in the Attorney-General's department, but loses everything else.

Former Human Services minister Tanya Plibersek gets the Health portfolio, promoting another woman into cabinet and rewarding a consistent media performer in an increasingly marginal inner-city Sydney electorate. Greg Combet also gets more responsibility, despite having his work well and truly cut out with the implementation of the carbon tax, adding Kim Carr's old portfolios of Industry and Innovation to his current portfolios of Climate Change and Energy Efficiency. Carr has been kicked out of cabinet altogether, retaining the vestigial junior ministry title of "Manufacturing and Defence Materiel". Then again, losing your job is probably appropriate for a minister representing the manufacturing sector, which has been contracting for years.

Chris Evans also loses out. The former Immigration minister had been in charge of Employment, Workplace Relations Tertiary Education, but now becomes Tertiary Education, Skills, Science and Research minister, a kind of omnibus higher education portfolio that combines the teaching aspects of universities with scientific research agencies like the CSIRO, the ARC and so on. Evans makes way in industrial relations for none other than Bill Shorten, who is the new Employment and Workplace Relations minister. With the business community signalling that it is prepared to push back hard against any union militancy in the wake of the Qantas imbroglio, the thinking seems to be that Shorten's reassuring media presence and proven negotiating nous will be needed in coming months, as the Fair Work Act comes under renewed pressure.

The other big winner was NSW Right faction apparatchik Mark Arbib, who has been promoted to Assistant Treasurer and Minister for Small Business. Arbib is of course one of Gillard's key factional allies. The Queenmaker controls a significant power base in the Right of the party, but unlike Shorten has no plausible leadership ambitions of his own.

Mark Butler also enjoys a promotion, entering cabinet with his current portfolio of Mental Health and Ageing, and picking up Social Inclusion along the way. Butler is a smooth and likeable South Australian powerbroker whose meteoric rise has been little noticed; unlike many of his colleagues, Butler has a knack of avoiding emnities and has performed well in mental health.

Oh, and Peter Garrett seems to have been whacked over the head again: there are reports that Gillard wanted to sack him altogether, but that he refused and threatened to resign his seat in Parliament if fired. Garrett has been given a minder in the form of Gillard-backer Brendan O'Connor to make sure he doesn't upset the powerful private schools lobby in his ongoing review of schools funding as Schools Minister.

A number of struggling ministers survived. Tony Burke keeps Water. Chris Bowen keeps Immigration and Citizenship. Joe Ludwig keeps Agriculture. It might have been wiser to have moved one or more of these three, particularly Ludwig, who was manifestly out of his depth during the cattle export crisis. But Joe Ludwig is the son of Bill Ludwig, the powerful boss of the Australian Workers Union in Queensland. He is, as they say, protected.

What does it all mean? Not much, really. A number of commentators have argued that it signals that Gillard is under pressure and is struggling to retain her authority. Well, tell us something we don't know. The Prime Minister has never enjoyed a period of plain sailing — indeed, scarcely even any break in the storm clouds — so her current embattled status should come as no surprise. Nor is it surprising that rumours continue to mount of a possible challenge by Kevin Rudd sometime in the new year. In the end, such rumours are simply the inevitable by-product of the current political situation.

Probably the best way to understand this reshuffle is as the inevitable realignment of factional interests within a government that is really a type of confederacy, endemically at war. The demotion of McClelland might have happened under any leader, as he has few factional allies and has been an underwhelming performer. The elevation of Arbib and Shorten, meanwhile, is simply the final fulfilment of promises made when Kevin Rudd was removed last year.

 

 

Fiona Armstrong | Rolling The Dice at Durban

"In the final week in Durban a sense of frustration is permeating the COP, where aspirations for a global deal remain high, but expectations swing between mildly hopeful and almost absent."

 

The 2011 Durban Climate Change Conference is in its final week and its organisers are hopeful of hammering out a deal that finally makes it a legal obligation to tackle climate change. CPD fellow Fiona Armstrong is attending the event and has given her report to the Climate Spectator.

You can read Fiona Armstrong's full article in Climate Spectator here.

Ian McAuley | The Blight Of Isolation

This article originally appeared on New Matilda here.

Britain has never been comfortable with its geographic and economic location. Many British refer to "Europe" as some other place, ignoring their own ethnic, linguistic and religious heritage.

The Euro zone crisis has reinforced this isolation. The British are smug in the belief that they are not bearing the public debt of the Mediterranean countries or the pressure on the northern European countries to bail out their profligate southern neighbours and save the Euro. (The reality is that at 80 per cent of GDP Britain's public debt is higher than Spain's, and its rate of economic growth slower than that of most other European countries.)

The Euro's problems go back to the 1992 Maastricht Treaty which established the ground rules for membership of the single currency zone. That treaty imposed tough entry rules — countries had to keep annual government deficits to less than 3 per cent of GDP and to keep accumulated public debt below 60 per cent of GDP. These were sensible rules of fiscal coordination to underpin a common currency.

The trouble with the Maastricht Treaty is that once countries were admitted to the club, no-one thought to go on enforcing the rules. In fact there was no mechanism to do so. After all these were all prosperous "developed" countries with responsible governments.

In the Mediterranean countries responsibility was short-lived. Governments on the left spent without raising taxes to match, while governments on the right let tax revenue slip — in the case of Greece and Italy by turning a blind eye to widespread tax evasion.

Last week's agreement, signed by 26 out of the 27 European Union countries is essentially an imposition of the Maastricht rules on an ongoing basis, made effective through agreed sanctions, with support from the non-Euro countries in the European Union such as Sweden and Denmark which also have a strong stake in European fiscal integration.

The burden of saving the Euro will fall mainly on German and French taxpayers, and their governments have reasonably insisted that conditions apply to the debtor nations before they are bailed out. Those taxpayers need assurance that fiscal discipline will accompany their generosity. Both Germany and France face elections within two years, and, for the Germans at least, the easy option of "printing money" to let inflation erode the debt is strictly verboten — they still remember how inflation wiped out the Weimar Republic, making way for Hitler's rise to power.

Whatever the cost of a rescue, the cost of abandoning the Euro would be far greater. In itself the ease of a single currency covering 17 countries is a huge benefit for businesses and consumers, as any Australian who travelled in Europe before 1999 would know.

Much more important is the accumulated investment which has gone into the European project. The last 66 years, two thirds of a century, have been an extraordinary period in modern European history, for, with the exception of the Balkans, they have marked a period of peace and shared prosperity among countries with a bloody history of wars and unrest. It has drawn on people's reserves of goodwill, forgiveness and a willingness to place the collective interest above short-term opportunism — a willingness the UK was unable to demonstrate last week.

The stakes last week were high. A collapse of the Euro would most likely be followed by emergence of beggar-thy-neighbour policies in European states — competitive devaluations, competitive austerity, and trade barriers. These are the very conditions which contributed so strongly to the economic misery and thus to the armed conflicts of last century.

Populist politicians in Britain are exploiting anti-European sentiment, and thwarting European cooperation has become a mark of national loyalty with talk of a "bulldog spirit", to use Cameron's words. It's easy to appeal to the emotions by talking about handing over power to bureaucrats in Brussels. It's easy to appeal to the short-term interests of London's financial sector who would find a transaction tax rather stifling — never mind the fact that speculators in London's finance sector bear a large proportion of the blame for the European financial crisis. And, no doubt those same bankers were hoping for a return to the good old days when they could take their commissions exchanging Deutschmarks to Francs, Liras to Guilders and so on.

The more fearsome appeal, lying just below the surface, is to longheld British hostility to France and Germany. So long as there was tension between these two countries, the British were relaxed, but the displays of strong unity between Sarkozy and Merkel would have sent shivers up the spines of those British who look back with nostalgia to days when King Henry's archers thrashed the French at Agincourt and when Spitfire pilots repelled the might of the Luftwaffe. It's not hard to give legitimacy to those sentiments, particularly in a country which so strongly glorifies its naval and military traditions.

Australia would do well to support those seeking to keep Europe together, and not to assume some sentimental alignment with British interests. Perhaps, in order to communicate that message, our government should assert our independence and resume Paul Keating's progress towards severing constitutional links with the UK.

 

 

John Menadue | Fraser and Whitlam's fruitful rivalry

Fred Daly, the irrepressible ALP Member for Grayndler whose first campaign slogan was 'Give us this day our Daly Fred', once said that today's political enemies may turn out to be friends tomorrow. Who would have thought in 1975 that that could be true of Gough Whitlam and Malcolm Fraser in 2011.

Whitlam has said he hasn't had a significant disagreement with Fraser for 30 years. There are outward signs that the bad blood of the past has been purged. At 95, Whitlam has already written (and probably pre-recorded, just in case) the introduction he will give when Fraser presents the Whitlam Oration on 6 June next year.

Bitter rivals though they were, Fraser and Whitlam in fact displayed unity on many issues. The fraught events of November 1975 notwithstanding, it is pertinent to consider how these political enemies contributed, not perhaps jointly, but separately to a much better society than we had in 1972.

Both were supporters of the US alliance , but sceptical of a lot of US policies. They were cautious about any US resolve to protect Australia when US relations with regional countries such as Indonesia were involved. Both were certain Australia's future depended less on North Atlantic protection and more on developing close relations within our region.

Following Whitlam's breakthrough in establishing diplomatic relations in 1972, Fraser's first overseas visit as prime minister was to China and then to Japan, where he continued the negotiation of a Treaty of Friendship that Whitlam had initiated.

Both sought to reduce sectarianism in Australian public life. Through state aid, for Catholic and other private schools, Whitlam turned the tide on sectarianism in Australia. Fraser was always critical of Billy Hughes for playing the sectarian card against Irish Catholics in Australia in WWI.

Both were concerned about Indigenous rights. The implementing bill on land rights was awaiting introduction in the Senate on the day of Whitlam's dismissal. In the first year of the Fraser Government, Parliament passed the Aboriginal Land Rights (Northern Territory) Act, 1976.

But the most effective unity ticket was race relations — ending the White Australia policy and cooperating in the settlement of Indochinese refugees.

Whitlam, Don Dunstan and others campaigned successfully to remove the White Australia plank from the ALP platform. The Whitlam Government removed racial discrimination from the statute book. But the new policy was never put to the test. The immigration intake under Whitlam was minimal — the lowest for 30 years and, excluding the Depression and war years, the lowest for 70 years.

In accepting 150,000 refugees from Indochina and with the 90,000 family reunions that followed, Malcolm Fraser broke the back of White Australia. We are now proud of what he and we did together — although it must be said that race relations and refugees remain difficult issues, with populists always ready and willing to exploit fear of the foreigner and the 'other'.

The Whitlam Government was cautious about taking evacuees after the fall of Saigon, limiting the intake chiefly to persons associated with Australia and to orphans. The Fraser Government faced a larger outflow from 1976 onwards, with many Vietnamese forced into harsh 're-education camps'.

Whitlam in Opposition and later Bill Hayden supported Fraser in his leadership on the Indochina intake; because of our commitment to troops in Vietnam we felt we had a particular moral obligation to act decently and generously. And we did. We are now proud of what we did at a difficult time.

The successful Indochina resettlement in Australia could not have occurred without the cooperation of regional countries. They provided temporary asylum for 1.4 million who fled Indochina.

Our dependence on those countries back then provides a lesson that we still have to learn today. Just imagine how Australia would have responded during the Fraser years if 50,000 to 100,000 boat people from Indochina had arrived directly on our coast — which they likely would have, if not for the intervention of countries such as Malaysia.

As Australians, we are still self-righteous in our attitudes to countries such as Malaysia who carry a much higher burden of asylum seekers than we do. Malaysia is making great progress in human rights protection, particularly when it comes to protecting vulnerable people fleeing Burma.

The betterment of society is always a work in progress. The fruitful rivalry between Whitlam and Fraser provides a salient contrast to the more destructive negativism that seems to be the hallmark of the Julia Gillard/Tony Abbott contest. They could learn much from these elder statesmen.

 

This article first appeared on Eurekastreet here

 

 

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PUBLIC SERVICE IN THE NEWS | Evidence mounts against the efficiency dividend

Agency staff report increased mistakes > A NEW survey reveals that more than 50 per cent of staff from agencies including Centrelink, Medicare and the Child support agency are reporting that more mistakes are being made because of the Gillard Government's efficiency dividend.

Nice work if you can find it > The UK's ambitious, well-intentioned welfare-to-work programme is struggling against the economic current. Some believe that the payment-by-results system itself is failing. Ian Mulheirn of the Social Market Foundation, a pro-reform think-tank, says the scheme is in danger of financial collapse because many contractors are missing their targets: "The only question is when ministers will face up to it." He estimates that even the most efficient schemes can move only 10% more people to jobs who would not have found work by themselves.

Public sector 'wary of Private-Public Partnerships' > These are the findings of a new report by the Hay Group, entitled Relationship Counselling, which shows that six in ten public sector leaders believe the trend will harm the morale of staff, and half believe that key skills, abilities and knowledge present in the public sector will be lost.

Serco Signs 10-year Contract with Peterborough City Council > The 10-year deal, with the option of two further five-year extensions, will see all 370 city council staff who currently work in these services transfer to Serco.

Effective delivery of public services key for poverty alleviation: CS > Speaking at a one day orientation workshop of Intensive Training Programme (ITP) under the theme "Training for all" organized by J&K Institute of Management and Public administration and Rural Development here, Lal said, "Effective delivery of public services is the key for poverty alleviation since poor spend considerable time, effort, and money for finding alternative to services which ought to be provided by the government.

 

 

 

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John Menadue | Media Missing the Boat on Asylum-Seeker Coverage

There is a real myth surrounding the public's warped perception on asylum seekers arriving by boat, and CPD's Director John Menadue holds Australia's media highly responsible. With asylum seekers arriving by boat being caught up in a media frenzy based on little fact, certain realities are imperative for public knowledge:

76% of asylum seekers in the past decade came by air.
There are 50,000 real illegals in the country who have overstayed their visas. They are headed by citizens from the US, China and Britain. They are rarely mentioned in the media.
More boat people arrived in Italy in one weekend in August than in six months in Australia.
Relying on the media, the public believes, according to Essential Research, that 25% or more of our migrant intake are asylum seekers. The correct figure is nearer 2%.

"The Finkelstein media inquiry should have examined the role of the media in the so-called debate on asylum seekers and refugees. With some exceptions, we have not been well served."

After the Federal Government finally decided to start processing asylum seekers arriving by boat and air in the same category, hopefully government policy and media attention will begin to focus on the 44 million vulnerable "people of concern" to the UNHCR.

This article was first publish by Crikey here.

Miriam Lyons | Big Ideas and the Battle of the Think Tanks

Progressives and conservatives don't agree on much, so what happens when you put four leading figures from each side of the ideological scale in a room and ask them to fight? A Battle of the think tanks. And strangely enough, a productive, intelligent discussion, though admittedly not without it's heated moments.

CPD Executive Director Miriam Lyons joined forces with Per Capita's David Hetherington to defend and highlight the merits of a progressive agenda against conservative think tank panelist's Dr Oliver Hartwich from the Centre for Independent Studies and Tim Wilson of the Institute of Public Affairs. The issues discussed ranged from the traditional 'nanny state' battleground to the role of free-market libertarianism in the GFC and the recent debt-crisis. 

WATCH the full event on ABC's Big Ideas here.

 

Ben Eltham | Murray-Darling plan: not a fix, an abject policy failure

Ben Eltham undertakes a survey of a vexing and divisive policy problem: the Murray Darling Basin.

"If you want a textbook case of how not manage a river basin, the Murray-Darling Basin is probably it…"

Spanning two states, the Murray-Darling river system has a long history of poor management and exploitation. As the life-source of many rural towns, changes to water allocations and basin management plans are always political and controversial. Most recently, the Labor Government has begun to down play advise from the scientists like the Wentworth Group, CSIRO and the Goyder Institute for Water Research, that a minimum of 4,000 gigalitres needs to be returned to the environment. Pre-industrial waterflows are estimated to have been around 12,200 gigalitres, but are now at 4,700 gigalitres. Strong reactions by local communities have led the Government to reach a compromise of between 1,000 and 2,700 gigalitres, far less than the estimated amount required to return the river system to health.

CPD's Ben Eltham writes:

"The environment is not a human actor with which a sensible compromise can be reached. Water is simply water, and if there isn't enough of it, rivers will dry up and wetlands will die. Some aspects of environmental policy are truly a zero-sum game, in which gains for the environment can only be won at the expense of irrigators' livelihoods and the economic well-being of inland towns.

But if the problems of water over-allocation aren't fixed, many of those towns will die anyway. Indeed, the current system is so broken that it amounts to a massive cross-subsidy from a sick and dying lower Murray, to the environmentally unsustainable agriculture further up the system.

The tragedy of the current approach is that we will end up with the worst of all worlds: after spending $9 billion, we still won't return the Murray-Darling to health, or move to a sustainable system of inland agriculture. That's not a "fix" at all: it's a policy failure."

 Read the entire article from ABC's The Drum here

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James Whelan | Public Service Race to the Bottom

This article was first published on ABC's The Drum here.

The Gillard Government's announcement last week to cut public sector spending by $1.5 billion is unwise fiscal policy, out of step with community attitudes and a significant broken promise.

Increasing the efficiency dividend from 1.5 per cent to 4 per cent will tighten the vice on Australian Public Service agencies that are already stretched after two decades of belt-tightening. The direct consequences will include contracted services and increased workloads.

The shaky rationale for increasing the efficiency dividend has received widespread criticism from economists and other commentators. This is not an intelligent or evidence-based strategy to motivate innovation, economy and creativity but a blunt instrument that can reduce or compromise agencies' outputs. After 20 years, few agencies have further room for further cuts without reducing their core functions. Government reviews of the mechanism in 1994 and 2008 found that it places significant stresses on agencies and recommended alternative measures be investigated.

Treasurer Swan last week justified the increase in the efficiency dividend by invoking the bipartisan obsession with a rapid return from a modest deficit to modest surplus. This is now widely recognised as an unhealthy fetish. Australia has a remarkably low level of public debt and a low level of public sector investment. A survey conducted by Essential Media just this month found that more than 70 per cent of Australians support deferring the return to surplus in order to maintain public services. Other surveys during the last 20 years have found strong support for increasing public sector spending, even if it means increasing taxes.

Before releasing the Mid-Year Economic and Fiscal Outlook (MYEFO), Treasurer Wayne Swan admitted that it would be, "counterproductive to take an axe to the budget in these uncertain times for the global economy". This was echoed by Deloitte Access Economics Director Chris Richardson who argued that the fate of our surplus was in Europe's hands and that, during turbulent times spending cuts are unwise. Peter Martin observed that a $40 billion deficit was inconsequential in the context of the Commonwealth's budget of one third of a trillion dollars and that OECD forecasts have Australia's economy growing faster than any other developed nation in the coming year.

Describing the increase as a 'one-off' measure was no more than spin. Last year's budget included a 'one-off' increase in the efficiency dividend from 1.25 per cent to 1.5 per cent, and there was another 'one-off' increase to 3.25 per cent in 2008. In July 2010, Prime Minister Gillard pledged that the Government had "no agenda or plan to cut overall public service numbers". In July this year the Treasurer committed to maintaining the efficiency dividend at 1.25 per cent and ensuring that efficiency gains are realised "without resorting to job cuts". This week's announcements contradict these prior commitments and indicate a change in Labor's public sector policies.

How will public service cuts affect the Australian community?

Firstly, services are likely to contract. The workforce of the 130 agencies that comprise the Australian Public Service has not kept pace with the growth of the Australian population. This week's budget cuts have been predicted to result in up to 3,000 retrenchments, further widening the gap between growing community expectations and diminished agency capability. This will be experienced soonest and most acutely by community members who rely most on public services, increasing social and economic disparities.

Secondly, a protracted program of retrenchments would have direct and visible economic consequences, especially in cities and towns with significant numbers of public servants. Between 1997 and 1999, the Howard administration retrenched almost 30,000 public servants. Four years later, the impact was still visible in closed businesses and empty shop fronts, according to the Member for Canberra Gai Brodtmann.

Thirdly, despite Minister Wong's assertion that some savings might be found by reducing spending on consultants, the job cuts prompted by the increased dividend could be more likely to increase the Government's long-term dependence on expensive consultants for policy advice. Governments of both persuasions have relied heavily on consultant advisers: the Rudd government spent almost $800 million on 6,534 consultancy contracts during its first 18 months. If the rollercoaster trend in public service firing and rehiring in the last two decades is repeated the short-term cost saving will be costly in the longer term. After gutting almost one-third of the public service and spending $300 million on redundancy packages in its first year, the Howard government steadily rebuilt agencies to restore the required capability.

Deferring the return to surplus is one of several obvious alternatives. Cutting fossil fuel subsidies could save more than $10 billion and reduce carbon emissions. Restricting the first home buyers grant to new housing could save up to up to $600 million a year. Redirecting the private health insurance rebate to direct spending on hospitals (Treasury's advice) could save over $1 billion.

We need strong and capable public services to build Australia's resilience in times of global uncertainty. Instead, Australia's major parties are locked in a race to the bottom.

James Whelan is the Research Director for Public Service Research Program at the Centre for Policy Development.