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An alternative efficiency dividend: investing in staff

Date: December 04 2012

Andrew Hunter

Citizenship is founded on the idea that members of society pool resources to ensure that civil pillars - such as schools, hospitals and roads - are built, maintained and improved. Services such as social security and healthcare are a doorway to the government for many people. When someone waits in a line at Centrelink for hours or in a phone queue for a similar period, their self-conception as equal and deserving members of the community is diminished. Older citizens who are obliged to access government through the internet often feel similarly disengaged. Too often, Australians who need to access public services feel as though they are characters in a satirical theatre dedicated to the frustrations of modern life.

These frustrations are legacies of the consensually agreed need to reduce the size of the state, and have left governments scrambling to maintain the facade that they can simultaneously maintain the quality of essential services. Policies that aim to achieve this act of political contortion, such as the ''efficiency dividend'', represent neither serious nor creative approaches to improving workplace productivity to make service delivery more efficient. The dividend has not addressed the question of how to achieve savings without reducing the level of service or cutting programs. It is also applied across the board, to efficient and inefficient departments alike.

In an essay this year, prominent political scientist Francis Fukuyama argued that the left needed to ''legitimate anew government as an expression of the public interest''. To do so, he believed the left must ''somehow redesign the public sector, freeing it from existing stakeholders and using new, technology-empowered approaches to delivering services''. But how are progressives in office to seize this opportunity to ''somehow'' redesign the public sector? Modern governments understand the advantages of technology for public services, but reliance on technology alone will not bring the depth of change that's necessary.

Interestingly, Fukuyama noted that many people look to China an example of effective governance. Yet he doubted that model could be applied to a Western context, as he believed it was appropriate to a specific culture. China's public service relies on a tradition of meritocratic recruitment, entrance exams, a heavy emphasis on education and reference to ''technocratic authority''. Deference, of course, comes with a respect for competence and a history of success in delivering outcomes in the service of the public.

There are features of the comparatively small Australian state that Chinese citizens would envy. Our public service is relatively free of corruption. Self-criticism within the Chinese Community Party has recently focussed on the need for ''cleaner'' government. Any lessons we can take from the Chinese model should be accompanied by an understanding that there are aspects we should rightly reject. Other features, however, such as meritocratic recruitment and an emphasis on education, cannot be described as culturally specific.

Are there lessons we can take from our northern neighbours in this Asian century? In Australia, as elsewhere, the government's capacity to deliver effective public services and to develop sound public policy depends largely on the quality of its employees. What can be done to attract the best and the brightest to government, and to further develop the capacities of all public servants? Currently, the Australian Public Service's national graduate program gives graduates the chance to undertake a diploma of government at the beginning of their careers. It also offers an accredited training and development program. One wonders if an undergraduate degree with a diploma of government should be the standard expectation for entry-level public servants, rather the exception.

What else could be offered to attract staff who have studied at the postgraduate level in fields relevant to the agency they want to join? Instead of requiring candidates to undergo entrance exams, as is the case in China and elsewhere in East Asian, incentives could be provided to those who have a postgraduate degree. Could a separate stream that offers a superior entry level, and the opportunity for earlier promotion, be open to staff with these qualifications?

In Japan, prospective civil servants are separated into three streams before the entrance exam, based on their level of education. These streams are known as class 1 (for the brightest candidates with a postgraduate degree), class 2 and class 3 (for high-school graduates). Bureaucrats in class 1 can become a section chief at the age of 26, for example, whereas those of an inferior class who cannot access the same level until they are at least 32. There is an obvious incentive for civil servants to begin their career with a higher level of education. Would similar incentives improve the quality of government staff in Australia?

We also need to ensure that a healthy proportion of high-quality public servants become exceptional managers in the course of their careers. A federal minister recently lamented that the number of managers in Australian workplaces is unmatched by the number of individuals with either leadership skills or an understanding of management practices. This is as true in the bureaucracy as it is in business. A high proportion of federal government managers live in Canberra. As this a country of significant socio-economic disparity, living in the ACT does not offer a window through which they can appreciate the real effects of their work.

Making the public sector's workplaces more attractive to staff will also improve productivity. Can efficiency dividends be found via workplace democracy (a long-forgotten socialist objective), which encourages employee engagement in decision-making, and hence creativity and initiative? Can productivity be lifted by supporting flexible, family-friendly, work-from-home arrangements when appropriate? Can open-plan workplaces (as are used at Microsoft) or ''hot-desking'' techniques improve efficiency? Can restorative-justice programs be used to overcome workplace grievances? A progressive government should be creative in making the public service a model of efficacy based on innovative workplaces, in which productivity rises in line with its employees' wellbeing and professional development.

When government spending is cut, services inevitably diminish, and the people punished are often those at the fringes of society who depend on them. Progressives must break the circle of economic rationality and advocate for quality public services. In this period of stronger engagement with Asia, we should look for successful models in the public services of our region. But the most important sources for reform will be found within our own cultural context.

Andrew Hunter is the chairman of the Australian Fabians.



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