In Praise of the Public Sector

It’s always a challenge to get your first proper job. In the 1970s, when I was looking hard, the professional employment office of the old Commonwealth Employment Service helped a lot. Like much of the public service of those days, the CES no longer exists, replaced in the Howard era by a Job Network of commercial and not-for-profit organisations contracted to the government to place unemployed people. Over its lifetime, the Job Network underwent many changes, ultimately becoming Job Services Australia.

Few would argue for government-owned airlines or banks (although a number of overseas banks were effectively nationalised during the global financial crisis). And recruitment practices, like so much else, have been transformed by the internet. But in a time when governments find it difficult to believe in themselves, the advantages of direct public sector provision are worth recalling.

The CES had a very wide remit. It catered to both employed and unemployed people. It had an extensive network of regional offices, with specialised services for migrants and for unemployed people with special needs. Its staff were proud of their work, and over many years the agency built up a great deal of experience and expertise.

Perhaps even more importantly, it was a relatively easy operation for governments to manage. The costs of running the organisation were met by the taxpayer, and balancing activities within the agency was achieved through policy directives and management action. With a privatised network, those advantages disappear.

Differential pricing is clearly required, because it is much easier to place an unemployed person with some skills who has been unemployed only a short time, than someone who has a disability, or is unskilled, or who has been out of the workforce for a long time. The market (that is, organisations competing for contracts) is supposed to help set these “prices”. In practice, because their remuneration depends on outcomes, it is extremely difficult to ensure that contractors are not focusing on easy-to-place clients at the expense of those that are difficult to place.

It was expected that not-for-profit organisations with community sector experience would be well suited to the work of the Job Network. Not-for-profits were seen as being more agile than the bureaucracy they replaced, their personnel more likely than public servants to be dedicated to the needs of clients. The reality has proved a little different.

Hybrid organisations (not-for-profits reliant on government payments) have a hard time reconciling conflicting values. They either become more professionalised, more bureaucratic, so as to meet the performance criteria that governments demand of them; or they choose to stay loyal to their founding spirit and lose their funding.

The effects on the public sector of several decades of this kind of outsourcing have been pervasive. Public agencies are much leaner than they were, because most skilled tasks are handled by contractors. Many contractors are themselves managed by other contractors. The core tasks, such as preparing Cabinet submissions, remain closely guarded. But not many public servants get to do these.

As governments have withdrawn from more and more activities, the jobs become duller, and the knowledge of how to do things atrophies. This is unfortunate, because public institutions continue to do many things well. When agencies are well led and adequately resourced, they build up considerable esprit de corps and expertise.

The best public hospitals and public schools are at least as good as their private sector counterparts. I remember my Mum saying she went to a private hospital when she gave birth to me, but found the nurses so patronising she resolved never to go back. So she had her subsequent children at the precisely named King George V Memorial Hospital for Mothers and Babies—a public institution and, in her view, a far better one.

As Joni Mitchell put it, “You don’t know what you’ve got till it’s gone.” When public institutions are dismantled—often for reasons of budgetary economy—it takes many years for their services to be replicated. The major mental hospitals (closed by state governments from the 1980s onwards) were not the hell-holes many might believe them to have been. In fact they were a good deal better than many private clinics which (then as now) were more interested in the worried well. There is always just a whiff of self-interest in the for-profit private health sector. For too long, many who would have benefited from the care of dedicated public-sector mental-health professionals have ended up in jail, rejected by families who could not cope with them.

Meanwhile, the public service itself has undergone a revolution. The big ponderous behemoth of forty years ago is no more, replaced by employment practices that at least try to be businesslike and flexible.

But the winds of politics blow ever closer. And it is a confused, media-dominated politics from which virtually every shred of bipartisanship has been removed. As a result, we now have a highly political public service. I do not mean by this that public servants are political appointees (in the sense of being political “insiders”), although in the senior echelons this is increasingly the case. Rather, the ethos has changed. The non-political professional public service now believes that its raison d’être is to be responsive to ministers, which sounds like a good thing, except that, too often, in practice it means telling ministers what they want to hear, rather than what they need to know.

It is odd that this has happened, because ministers are much better supplied with “political” advice (from their own teams of advisers and minders) than was traditionally the case. Indeed, ministers’ offices have expanded steadily in numbers and influence over the last forty years. Whether you think this a good thing or not depends on your point of view. Former Treasury Secretary John Stone famously described ministerial advisers as “meretricious players who flit across the private ministerial advisory stage”. But as a group, they were there to stay.

One of the main differences between the British system and our own is that the British civil service still dominates the advisory apparatus of British ministers. Even Sir Humphrey would have a hard job controlling an Australian minister, because Australian ministers do not work in the same building as their public servants. Years ago, in the department I then worked for, a special room was set aside for the minister’s use, should he ever choose to drop by. But he never did. The secretary always visited the minister. When the ministerial advisers speak, the public servants jump.

Citizens are rarely asked what they expect of their public servants. But sometimes, as a citizen, I hope public servants dig their heels in. Some of my special heroes are people who said “No”. If Gough Whitlam had heeded Sir Frederick Wheeler’s advice about observing due process in relation to the loans affair, he might not have got in the mess that he did.

Then there are public servants who, by paying attention to their inner voice, saved the lives of their fellow citizens. The American doctor who refused to license thalidomide, despite the fact that she had been working for the Food and Drug Administration for only a month, is surely one such.

Just when they are fading away, more than ever we need old-fashioned public servants who will give tough advice. Who else is there to give the lie to the army of private-sector consultants, contractors, lobbyists and PR merchants whose self-interested posturing is irresistible to many politicians?

With so much ethically-challenged behaviour around, the community demands more of its regulators, without realising that good regulation requires experience and confidence. Good administrators have a feel for the underlying reality and can come up with a rough approximation of a fair decision. But paradoxically, they need some latitude in order to do so. When lines are drawn, and the fine print invoked, there will always be someone who slips in, someone who gets left out, and someone who spotted the loophole.

Meanwhile, here in Canberra the days are drawing in and the bus drivers are starting to get restless, or at least, there are more restless drivers on the job. (We have a large network that covers the entire city, and the bus drivers are all Territory government employees.) There is an air of preoccupation, and the buses are being driven harder than before. It’s an interesting phenomenon, usually indicative of something happening in the world of politics, which in this particular year is marked by a federal and, later, a Territory election. Mark my words. Change is on the way.