In Search of Good Government

by Laura Tingle

  The periodic mass axing of public service heads upon the arrival of incoming conservative governments has created a caution in the culture. The bureaucracy has been cowed both by the prospect of being sacked and by a reward system which punishes taking risks.

  But just as important has been the loss of memory associated with the managerial changes of the past three decades. Increased opportunities – particularly for economists – in the private sector have robbed the public sector of many of the brightest minds it might have once claimed. Other changes have been eating away more insidiously. For example, ambitious public servants will tell you that the best path to promotion is to switch regularly between departments rather than stay in the one place, meaning no one develops deep expertise in anything, with just a few exceptions, such as defence, national security and foreign affairs. Bureaucrats going for a promotion are more likely to be assessed on the strength of how they have managed service-delivery contracts than on, for example, their institutional memory of the history of child-care policy and what worked or didn’t.

  Equally, going outside a policy department to get the best private-sector experts in a field to consider an issue has a lot going for it. However, it also means the department never gets the opportunity to develop that expertise itself. Contracting out the delivery of services to private-sector or non-government agency providers might suggest one will get better value for money. But it also means that not only does the public no longer know whether those services are being properly delivered, nor do the public servants responsible for their delivery.

  It is therefore no longer the case that public servants have longer memories than the meretricious players. And without memories, their capacity, their gravitas to advise politicians, is diminished or wiped out. Some senior public servants I have spoken to for this essay doubt that large swathes of the public service actually have the capacity, or memory, to provide policy advice to their political masters anymore, should it be requested. One of John Stone’s successors as secretary to the Treasury, Ken Henry, says simply: “I think many departments have lost the capacity to develop policy; but not just that, they have lost their memory. I seriously doubt there is any serious policy development going on in most government departments.” Martin Parkinson, who followed Henry as Treasury secretary, believes there has been an erosion of institutions, of both their independence and capability:

  The blurring of boundaries between the public servant and the political adviser, and the relentless focus on message over substance, results in a diminution of the “space” in which the independent adviser can operate. Becoming an effective policy adviser also requires “learning by doing” under the guidance of experienced hands – an apprenticeship, if you will. Today, in some institutions, smart people look around at their colleagues and find there is no one to talk to, to learn from, who has experience in delivering real reform. The combination of these two things is a decline in the quality of advice and an erosion of capability, to the detriment of good government.

  The loss of memory has been drastically exacerbated by the big redundancy rounds of the past few years under both Labor and the Coalition. Older public servants – the ones with the longest memories – have often comprised the majority of the departures.

  If public servants are asked how policies they oversee are being implemented, they are also constrained in their answers by the fact that the implementation is now being done by contractors, or even contractors to contractors. The lines of responsibility, accountability and reporting are not good.

  The point here is not to suggest that market-driven outcomes were, or were not, always the best; that the private sector does, or doesn’t, know how to do things better than the public sector; that governments in general are, or are not, all bad. It is to observe that, in practice, some of these changes have not been good; that they have had many destructive side effects. Yet we have not at any point stopped to look back and frankly assess what has been good and what has been bad, and whether we need to change not just policy but the way we think about entire issues, and how we think about the role of the public sector.

  Think of how events at Australia’s detention centre on Manus Island unfolded in 2014, leading to the death of one young man. And how we had a lot of trouble finding out what had occurred, because of the complex set of contracts in place to manage the centre. Would we accept a regime where people acting in our name are jailed for talking about what is happening on Manus Island quite so easily if they were public servants, rather than contractors, and therefore so much more obviously acting in our name?

  Think of how so much that was criticised during the Rudd government’s response to the global economic crisis came back to the fact that the government had so little real control over what occurred, whether in the school-building program or the home-insulation program, because the federal government simply doesn’t do such things directly anymore.

  Think of how utter horror at the idea of government voluntarily taking on any debt – for any purpose – has helped produce Australia’s disgraceful lack of physical infrastructure, despite the largest economic boom in our history.

  *

  “Reform” may continue as a fetish word, but the lust for economic reform, its centrality in the political debate, started to fade in the Howard years. John Howard came into office in 1996 with a couple of new constructs to shape the political agenda. His attack and potency was not on economics but on a culture he derided as “political correctness,” which was embodied in Labor’s social (not economic) policies. Reflecting both a growing revolt in some parts of the electorate, and a frustration at the dominance of Labor culture in conservative circles, Howard argued that a “political correctness” was at work in Australia which didn’t allow ordinary Australians to express their disquiet over welfare recipients or Asian immigration or Aboriginal people. Australia was being run by “elites” whose opinions didn’t reflect those of the “mainstream” or “silent majority.” Conservative commentators, with no sense of irony, complained about the “chattering classes.”

  But just as economic rationalism first changed the economic debate and then hollowed it out, Howard’s push back against what he saw as a self-censoring Australian political discussion had its own fallout. It gave room for people like Pauline Hanson to emerge. There was a new intolerance for those advocating for asylum seekers, or indigenous people, or the marginalised. Such advocates were characterised as “bleeding hearts,” or in more recent years the ultimate insult: “lefties.” It seems there is no one in the middle ground anymore. You are either a “mainstream Australian” or a “leftie.” The new political correctness has been fuelled by the morphing of Rupert Murdoch’s Australian media into something more closely reflecting that of his British and American operations. In the post-Watergate period there had been a general delusion that while media proprietors might have clear political biases, their newspapers reported events as papers of record, and that the media have a role to play in holding politicians to account. But then the media went tabloid and became ideologically divided and shrill (as they often have been in the past). The astonishing speed of the rise of social media as a platform for news increased the chances that voters could choose to hear news only through the filter of their own prejudices, whether of the “left” or “right.” In such an environment, history and memory are no longer anchors but selectively chosen and lethal weapons.

  This ideological division and the capacity to filter what you want to hear has only made worse the loss of institutional memory that the changing media landscape has fuelled. The web and the electronic news cycle means we are perpetually looking forward to the next bit of the story, never pausing to consider where it has come from, and whether we have been here before.

  History and memory have long been the plaything of politicians, myth-makers and propagandists. There is a rich academic literature on the politics of memory, mostly associated with memories of war. And Tacitus and Shakespeare are part of a lon
g tradition of using history to frame more modern politics and collective memory. But the spectacular boldness and the almost instantaneous rewriting of history that seem to be part of a frenzied national debate these days are reasonably new in Australia. Without the ballast of any sense of continuity, and without the anchor of a strong “push-back” against political whim, politics and policy have spun down into a series of reactions and counter-reactions that play out in vacuous daily news grabs and zingers. It is an opportunity for the politically adroit, and the philosophically bankrupt, to exploit.

  No essay on the role of memory in politics would be complete without the famous words of Spanish-American philosopher George Santayana, who said in 1905:

  Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement: and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it.

  Santayana said something else pretty important too:

  Fanaticism consists in redoubling your efforts when you have forgotten your aim.

  From where I sit, that is how our political discourse feels: the banging on a hollow vessel that comes when you repeat something so often that you can’t remember why you were saying it in the first place. There are big, dangerous questions that flow from these observations. Can we fix it? Where does it lead us if we don’t? How is power in our society, as well as our discourse, being rebalanced by these profound changes in our institutional structures?

  Malcolm Turnbull’s pitch for the prime ministership rested on his pledge to fix what is wrong with the way government works. The fact that so many of the key institutions in our society are suffering their own interlinked but different lapses in memory makes that hard, and leads to shoulder-shrugging and head-shaking about how bad things are.

  What to do? Nothing is impossible to change. But first we must understand how it has come about.

  Memory Is Power

  John Phillips, a tall, angular, still man who wore his double-breasted suits with a style that always seemed to speak of another age, joined the Commonwealth Bank from school in January 1946. He worked as a teller in a city branch in Sydney. When the Commonwealth Bank was split in 1960 into two very separate operations – commercial and central – Phillips went to the new Reserve Bank and became a central banker. In the days before the floating of the dollar, if you wanted to buy or sell Australian dollars in exchange for foreign currency, you had to buy them from, or sell them to, John Phillips. Phillips sat on the committee of Treasury and Reserve Bank officials that, each morning, set the exchange rate for the Australian dollar, and in so doing set the most important price in the economy, one that had knock-on effects for every other price, including wages. He left the bank in 1992 as deputy governor – having earned the displeasure of Paul Keating for daring to contradict government mantra on economic policy – for a new and successful life as a company director. But he continued to serve the public as the chair of the Foreign Investment Review Board from 1997 until 2012 – just two years before his death – sixty-six years after his career had begun as a fifteen-year-old.

  The huge Sydney funeral for John Phillips in 2014 was held in the same week as the state memorial service for Gough Whitlam. The two men represented links, of different sorts, back through the history of post-war Australian policy-making and a changing relationship between politicians and the public service. Whitlam had grown up at the very centre of the new federal government machinery in Canberra as the child of the solicitor-general. As prime minister, however, he started the rupture of the cosy and trusting relationship between politicians and the public service that had begun after World War II, survived the change of government from Labor to Liberal in 1949, and run the country through the sleepy prosperity of the Menzies years. John Phillips had an institutional memory of Australian monetary policy – and economic policy more broadly – going back half a century.

  Ironically, perhaps, the very institution where Phillips spent so much of his life – the Reserve Bank – has been far less affected by the changes I will discuss here, because central bank independence – bestowed by politicians – has made the bank largely immune to them. As a result, it serves as a living reminder of what happens when you don’t stuff up the public sector. It has maintained its institutional memory, a clear sense of purpose and the capacity both to develop and to rethink policy.

  There has been much talk in the past thirty years about the politicisation of the public service and the rise of the ministerial adviser. But what has happened to the public service – and as a result to the quality of our policy-making – is a much more complex story than mere politicisation. We once scoffed at the Sir Humphrey-esque world of the senior mandarins of the public service, so out of touch with the real world, whose apparent view was that they were the ones really running the country, if only those wretched politicians who came and went would stop interfering. But I fear we have lost more than a caricature over the past thirty years. We have not just lost frank and fearless advice; we have lost the memory of how policy has been made before, of the history of the groups and issues with which government must interact every day. Government in the broader sense of the word, therefore, has lost much of its capacity to remember and thus to learn from past mistakes.

  Deregulation of the economy unleashed a process of structural change to what the public sector does, and how it interacts with the rest of Australia. Much of the change was well-intentioned and, indeed, necessary. But some of it, sometimes unwittingly, has been destructive of the public sector – and it is only beginning to dawn on people just how destructive. The changes of the past thirty years have left us largely bereft of an institutional memory of government policy, let alone a memory of how relationships between politicians and the public service could be different. Yet the speed of political debate means the need for that working memory has never been more important.

  *

  To understand what has happened, we need to go back to the period from 1945 to 1972, which saw the rise of a public service culture encapsulated in the legend of a group of civil servants known as the Seven Dwarfs. As Nicholas Brown notes in his book The Seven Dwarfs and the Age of the Mandarins, they were “‘the new mandarins’ – a wider company of senior bureaucrats – who rose to prominence in that period, and were associated with a distinct ethic of independence and authority.” Brown notes that who exactly the Seven Dwarfs were ended up being a debate moderated by the Australian Dictionary of Biography – the list always included Sir Roland Wilson, Nugget Coombs and Sir John Crawford, but there were many others. The reality was that it was a great name to give a small group of sometimes stature-challenged public servants. Brown writes:

  The seven dwarfs symbolise the transformation of government under the pressures of the Second World War … This element is exemplified by the Keynesian paradigm: government transformed by young, university-trained, and theoretically informed reformers. These figures sought to translate a broad domain of civic concern formed in contexts of depression and unemployment into careers spent dealing with pressures first of wartime mobilisation and reconstruction, then of inflation and full employment, and with the expanding role of public investment in general.

  Brown says these men “were emphatically not the economic rationalists of the 1980s, with their deference to the discipline of the market. They were instead conscious – as Coombs would put it – of using ‘other people’s money’ to achieve a range of social outcomes within the context of a tight bargain between stability and growth, prosperity and regulation, the respective roles and responsibilities of the government and the people.”

  Whatever they were trying to achieve, the Seven Dwarfs’ influence was as much about human relationships as it was about the role of government. Don Russell, a former Treasury officer and chief of staff to Paul Keating as treasurer and prime minister, observed in a 2014 spee
ch that:

  The Prime Minister of the day and the Prime Minister’s Office spend a very large amount of their time managing individual Ministers and dealing with their problems. Using a cricket analogy, Chifley spoke of the long tail of the batting line up of his Ministerial colleagues; Menzies too had doubts about the calibre of his Cabinet. Having a diversity of talent in the Cabinet is not necessarily a bad thing but it needs to be managed. Chifley liked to be surrounded by clever people who could do things; the post WWII elite of Secretaries in Canberra [that is, the Seven Dwarfs] was the result. Menzies inherited Chifley’s public service. To Menzies it was preferable to have power in Canberra tied up in the hands of a senior cadre of talented high officials answerable to him than to have it dissipated through a collection of Ministers for whom he had only modest regard.

  Russell argues, however, that the next generation of secretaries – by which he means the generation that had reached the zenith of its power in the 1960s and early 1970s – “misunderstood the basis of their power and overreached.” This produced a bipartisan consensus among politicians that “the policy agenda should belong with Ministers; that they should be equipped to develop policy proposals; and they should no longer be hostage to powerful officials dictating what was and what was not acceptable.”

  When he came to office in 1972, Gough Whitlam began the process of challenging the all-powerful mandarins by introducing policy advisers into ministers’ offices – a move reflecting Labor’s suspicion of the public service after twenty-three years of Coalition government. “The Prime Minister giveth, and the Prime Minister taketh away,” Russell says. “Advisers with policy responsibilities in all Ministers’ Offices were the result. Ministerial advisers strengthen Ministers and can perform a very useful role working cooperatively with officials to make sure that the Minister makes the best use of the department, but they have changed the way Canberra operates.”