Public sector overhaul welcome news, but is everyone on board?


The announcement this week by Finance and Public Service Minister, Katy Gallagher, that the Federal Government will review public sector board appointments to end 'jobs for the mates culture' is welcome news, but will require a significant commitment from the rest of her Ministerial colleagues to turn into reality.


When is an appointment to a public sector board politically driven? Always, occasionally or never? I suspect all three are probably true at some point for all public sector boards.

Which is why the announcement this week by finance and public service minister, Katy Gallagher, that the Federal Government will review public sector board appointments to end 'jobs for the mates culture' is welcome news, but will require a significant commitment from the rest of her Ministerial colleagues to turn into reality.

By way of background, Australia has thousands of federal, state and local government boards, advisory boards, committees and sub-committees. Each jurisdiction categorises them differently according to sector, portfolio, purpose and their level of 'power or influence' (my words) amongst other things. Most are paid, some quite well. In the case of Federal Government boards, the remuneration tribunal determination for part-time officeholders clearly outline the fees you will receive and provides a handy reference list.  

Most government boards and committees have appointments processes which require them to advertise (you see many of the listings on Women on Boards - link) and to recruit based on skills and experience. Those which are legislated often have a long list of skills required in schedules attached to the legislation. WOB has suggested that these lists could be reviewed for currency in terms of skillsets.

The quality of the recruitment process for government boards depends very much on who is conducting it (in-house departmental staff, search firm, board nominations committee etc) and how much they know about the activity. Some departments do it very well and have a strong understanding of the need for diversity of skill sets, gender and so forth. Others are more hit and miss.

Where the system tends to break down is after a group of potential candidates are recommended to a Minister for consideration for appointment. At worst, this can result in lengthy delays, inaction / stalling or overt interference leading to the appointment of the mates Minister Gallagher refers to. 

I suspect it is the latter end of the process which Minister Gallagher is trying to stamp out or reform. Which means the challenge will be in persuading other Ministerial colleagues not to meddle in the process and, possibly, to even remove Ministers from any involvement in the process of government board recriutment. In doing this, the Government would then be able to say its recruitment process is entirely skills and merit based and about what you know, not who you know.

Which also means that government will need to accept the possibility that on occasions, the majority of board members on a government body may all vote for, or be members of, a certain political party. If the process in selection did not involve any Ministerial interference then this should not be cause for alarm. 

In her remarks on the subject, Minister Gallagher made mention of two bodies when she said: “We know that half of the Productivity Commission’s board members have a political connection to the Coalition and the administrative appeals tribunal was stacked with appointments with clear Liberal party links." 

While the AAT could be justifiably accused of Liberal appointments, the real question is do they have the appropriate skills and experience to conduct independent merits review of administrative decisions made under Commonwealth laws? 

Does true independence mean you do not vote at elections so as not to display any bias in the political process. How far do you have to take independence or should we trust the generally very high standard of our legal profession, who make up many of the appointments on the AAT, to make wise and prudent judgments free from bias?

In the case of the Producivity Commission, I reviewed the bios of the 12 commissioners from a pure laymans perspective and to see if I could find overt links to any political party. In the case of Professor Alex Robson, there was a clear connection to the Liberal Party. He was Chief Economist for Malcolm Turnbull when he was PM and also served as Australian Ambassador to the OECD.

However, when you look at his credentials for serving on the Productivity Commission they would appear to fit the skills and experience one might think are required, in that he came to the position of Chief Economist via Deloitte Access Economics, Griffith Univeristy, ANU and the Commonwealth Treasury in Canberra and his teaching and research is in the areas of advanced microeconomics, game theory, public economics and public choice, law and economics, and macroeconomics.

Other commissioners are similarly highly credentialled in that they have had signficant careers in both the public and private sectors as lawyers, academics and economists and have a deep understanding of, and interest in public policy. I could not find any polticial connections, which is not to say they do not exist.

Which begs the question, is the Government keen to get rid of the economic thinking that dominates the Productivity Commission or does it think that the people who serve on it lack merit and integrity as the Minister inferred when she said; "recommendations would help put merit and integrity at the centre of the public sector appointment process." If its the former, then this may require a review of the skills and experience sought when the government goes looking for new commmissioners, rather than assuming the ones who are there are appointed on some criteria other than merit

Which brings me back to the premise of my article, which is that the review of the public appointments process is a good opporutnity to overhaul a number of processes that can lead to sub-optimal outcomes on federal government boards and committees.

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