Thank you for that introduction, Steve.
Its a pleasure to be here today and to have this opportunity to speak directly with senior members of the public service.
As we all know, dialogue between the APS and Ministers is central to improving the workings of government.
Today Id like to outline how I see the public sector contributing to the delivery of better government, and how this fits within the Governments broader policy agenda.
Because better government can mean many things.
And, as we implement measures to achieve better government; as we look for ways to increase government efficiency, improve service delivery, have better frameworks and decrease duplication, its important that we are clear about our objectives.
 
For me, as the Minister for Finance, it quite simply comes down to better services, delivered more efficiently.
But underpinning this seemingly simple statement is a substantial body of work that is being pursued by the Government to improve the services we provide and the manner in which they are delivered.
And this work contributes across the entirety of the Governments agenda.
It contributes to the delivery of our fiscal strategy, how we provide services both directly and with different non-government providers, how we develop policies in the long-term interest of the public, and how we can make taxpayers dollars go further.
 
Better government is more than just a phrase or a tagline.
Not only is it a policy objective in and of itself, but it is key to the effective delivery of all policy objectives across government.
Better government means we work more efficiently and we deliver more effectively.

The importance of a strong and sustainable public sector cannot be overstated in the current international environment.
As sovereign debt concerns linger and leave an adjustment task that will be painful for many countries, particularly in Europe, the capacity of governments to carry out and fulfil their core functions is being called into question.
Financial markets are increasingly acting as the litmus test on governments and whether their ability to govern is up to the task.
For better or worse, the confidence of investment in a countrys finances through sovereign ratings provides a proxy for the credibility of governments.
As Europe has shown, a Government that is not financially sustainable risks its own political legitimacy.
 
Against this backdrop, Australias position is one of strength.
We charted the course through the GFC where we avoided recession through swift action that saw hundreds of thousands of working Australians keep their jobs.
The high demand for Australian government bonds reflects our strong fundamentals, our low public debt and our strict fiscal rules.
Australia remains an attractive destination for investment.
Underpinned by a strict fiscal strategy, this Government is determined to return the budget to surplus in 2012-13, notwithstanding the damage to budget revenues caused by the GFC which has seen a $140 billion in revenue write downs over five years.
Indeed, we are making decisions now that will contribute to the fiscal sustainability of government finances for decades into the future.
Across the public sector, this Government has reshaped the approach to public sector spending through an ongoing commitment to efficiency.
Efficiencies driven by the Government and by managers like yourselves, have seen a $10 billion saving in operating expenses since we came to Government.
That is equivalent to all government spending on pharmaceuticals this year.
And these efficiency savings have been re-directed to meet other government priorities in areas like health and education.
 
The Better Government agenda, and the drive to achieve efficient government, sits firmly within the Governments broader fiscal strategy.
A strong budget underpins all other actions and establishes the capacity of government to deliver services to the community.
And the better government agenda is not only about efficiency, it is also about effectiveness.
How we improve service delivery is equally important.
Because we know that expectations of governments inevitably continue to grow.
We also know that in the decades ahead, the fiscal capacity to respond to these expectations will be under increasing pressure as the ageing population impacts on government revenues.
In response to these forces, agencies need to be innovating and looking at new models of service delivery to ensure that the standards this generation have come to expect are available to all generations that follow.
This requires looking at the frameworks within which government operates, improving the way we interact with the not-for-profit and business communities, and enhancing the governance and the management of risk of program delivery.
And it is an ongoing process.
We can always improve; we can always find new ways to be more efficient; we can always do things better.

Under this Labor Government, significant progress has been made to drive efficiencies in the public sector.
From the outset I want to make clear that an efficient public service is in its own right a policy outcome.
It is government policy, and it is one we strongly support.
And we have runs on the board, with over $10 billion in efficiencies realised since we came to Government.
While it is easy for some to run around saying theyll end the waste, such a slogan doesnt actually measure up to methodical and consistent savings.
An embedded approach to behavioural change is a far superior long-term policy than threatening to abolish a department of state.
 
We all have an obligation to see that taxpayers money is spent efficiently.
Since 2007, this Government has systematically pursued efficiencies in the public sector.
These reforms have been achieved through top down reform, as well as bottom up efficiencies.
Taking different approaches delivers the best outcomes in efficiency; in getting the best outcomes for less.

The primary mechanism for driving efficiencies is the Efficiency Dividend although many in this room may not see it as entirely a bottom up measure.
The Commonwealth operates a devolved financial framework, with agencies and Ministers in control of their own spending, subject to operating within the financial management framework.
This model embodied in the FMA and CAC Acts is a product of its time, when government shifted from centralised control, to principles-based devolution.
The principle of letting managers manage saw the introduction of a framework that saw control pushed from the centre to agencies.
Quite rightly, this approach saw senior managers like yourselves put in charge of budgets, program decisions as well as implementation.
And this approach has served us well.
 
The Commonwealth public sector is without doubt more responsive and flexible than it was 10 years ago.
The programs are more innovative, the approaches more targeted.
This same logic applies to the Efficiency Dividend.
While there are areas where specific policies and actions of government can yield significant reform, as a Government there are also significant efficiencies that can be achieved when we let managers who are closest to the operations seek out those efficiencies.
Decisions over staffing numbers and IT spends are rightly the domain of managers in government agencies.
And that makes sense.
Because you know what you need in terms of resources you and your staff are at the coalface, if you like.
 
So, in setting the whole-of-government Efficiency Dividend the Government is tasking managers to achieve policy outcomes through the most efficient means.
Just as the Government takes tough decisions on what its priorities are through the annual budget process, so too agency heads are required to prioritise spending across their organisations.
One example is the decisions that have been made by the Secretary of my own Department, Mr David Tune, who, in a message to all Finance staff, outlined the approach to be taken in operating within the Efficiency Dividend, and still delivering high quality advice to the Government.
By primarily focusing on non-staffing expenditures, Finance will be targeting reductions in the cost of recruitment, advertising, hospitality, travel and the use of consultants.
These efficiencies will be added to by examining the functions across the Department and looking at the sensible consolidation of functions, and reducing duplication where appropriate.
This is just an example of one Department.
And Im sure similar moves are being made elsewhere.
Essentially, the Efficiency Dividend is the Government tasking Departments to be innovative in delivering high quality services through more streamlined processes.

In addition to the bottom up approach to efficiency, there have been a number of specific areas where a concerted and centralised push has yielded significant returns.
We have achieved significant reforms since coming to Government and will continue to do more over the coming years.
There are areas where Government has identified waste and inefficient practices and has acted to change the practices of the public sector to realise savings.
Underlying several of these measures is recognition that the devolution of some agency functions passed the point of optimal efficiency, and that at a whole-of-government level there was benefit in coordination.
 
Across services that are common to all agencies travel, recruitment advertising or ICT, for example a devolved contracting and purchasing framework meant that agencies were not benefiting from being part of a much greater whole.
ICT is the obvious example.
When each agency is contracting and procuring Microsoft products individually there is an inherent inefficiency, as the Commonwealths purchasing power is diluted.
The Volume Sourcing Arrangement introduced by this Government saw all Commonwealth agencies receive favourable pricing and licensing conditions through whole-of-government contracting.
This Government has also responded to what were seen as differing expectations across government in terms of property use and contracting.
Using a principles-based framework, the Government is moving all agencies towards the same density target over the coming years.
And, of the savings achieved through this process, one third was returned to agency budgets to be re-allocated to higher priorities within agencies whether they be improved IT or additional staff.
 
The introduction of Guidelines on Non-Campaign Recruitment Advertising has also led to significantly reduced expenditure.
Recruitment advertising expenditure has reduced from approximately $44.0 million in 2007-08 to $30.0 million in 200809, $17.0 million in 2009-10, and $14.8million in 201011.
Shifting agencies from half-page colour ads in the weekend papers to standardised advertising has reduced unnecessary spending.
In a competitive job market, the majority of agencies were using bigger and brighter ads to compete with each other and ending this practice has seen recruitment advertising drop by two-thirds since we came to Government.
As Minister, I have built on this work to achieve further reforms to recruitment advertising.
From 1 July this year, recruitment advertising with some limited caveats - will move online, with pages of ads in the weekend newspapers a thing of the past.
This is a common sense reform that will save agencies money, and better respond to the needs of the employees.
These examples are an indication of the broader body of work that is underway across government.
And it is an ongoing process, and one that requires ongoing attention both from public sector managers and government.
It is methodical, and it is getting real results.
 
Throughout this year I expect to be announcing further efficiency reforms that we want to take forward.
It will require new ways of thinking and pushing the boundaries of existing practice to deliver a more efficient government.
I have tasked my Department to actively reach out to the private sector, as well as to draw from international experiences to test what additional ideas there are in this area.
Some of these will have application in Australia, others will not.
But we need to keep an open mind.
Indeed, many of the obvious opportunities to increase efficiencies have already been explored.
Now we need to look more broadly for further potential efficiency reforms.
 
But ultimately that it is only half the equation of delivering better government.
Better Government also means that we need to improve how we deliver programs to ensure that the services we provide the community are top class.
And key elements to this are better service delivery, better engagement, better frameworks and better risk management.

Key to delivering better government is improving the interaction between the public sector and other sectors in the community, and the governance frameworks that ensure risks are well managed and delivery is robust.
Technology and innovation will drive improvements in the areas of health, education and social inclusion.
The National Broadband Network will be the backbone of the digital economy, just as it can be the backbone of improved service delivery.
Harnessing its capacity in delivering services to the community will increase the efficiency of government operations.
But technology alone is not sufficient.
The ability to translate the latest thinking into new policy responses and then into program design and implementation will underpin the improvement in services over the coming decades.
Bridging the gap between policy work and frontline delivery will also be vital.
Often, policy work may not fully grasp the diversity and complexity of real life implementation.
There is a significant body of literature that delves into this gap, and the various means of overcoming it in practice.
Looking at it from another angle, it is argued that what is needed in the policy development stage is the citizens perspective.
Indeed, in terms of service delivery, we need to flip the traditional approach on its head and focus our policy responses on achieving simpler and better targeted frontline service delivery for citizens.
This will likely require new ways of looking at policy development and service delivery, but should provide a more holistic response.
However, new program design also needs to be supported by the right framework; one that provides flexibility to agencies and assurances to government that the innovation is tempered by appropriate risk management.
It also requires working better with other sectors of the economy to achieve public policy outcomes.

We also need to recognise that government is not always best placed to be the provider of certain services, and that government may not hold all policy answers.
This is not a criticism.
Indeed, far from it.
This recognises that government programs should be delivered to achieve our policy outcomes in the most effective and efficient manner.
In community services, it is entirely appropriate to look to service provision in areas where not-for-profit groups have specific skills and expertise.
Because this capacity is unlikely to be found in the public sector, and in many areas it would not be appropriate as it would be unnecessary duplication of services that already exist.
So, embedded in this approach is the need to improve engagement between government and non-government sectors.
 
I recognise that more engagement may seem commonsense, but it is something that is sometimes overlooked as an area that can improve service delivery.
Evidence of these benefits can be seen in the work that Minister Butler is doing on the not-for-profit sector reforms, encapsulating various streams of work from across the Government to improve the delivery of services in this field.
This is not only applicable to the social sector it is also imperative to embed deeper engagement with the business community.
In my portfolio we are facilitating this in the deregulation area through the Business Advisory Forum, announced by the Prime Minister, Minister Bradbury and myself earlier this month.
Seeking the views of senior business figures to feed into policy development specifically around deregulation and competition will provide vital input to government policy.
Over time, improving our engagement with non-government sectors will help shape future policy reforms.
But for this to occur successfully, we need to put in place the right frameworks to manage this change.
 
As the expectations of government change, so too must the frameworks of the public sector change.
We need to provide the flexibility and capability to meet the changing demands on government.
Much of the thinking behind the current financial framework is nearly 20 years old.
And, while the current framework has met the needs of government to date, it is insufficient to meet future needs.
That is why today I am formally releasing the Commonwealth Financial Accountability Review Discussion Paper that has been prepared by my Department to kick-start the process of reforming the current financial framework.
While not pre-empting decisions of Government, the paper examines current arrangements, and poses a number of questions to generate debate.
Indeed, I would encourage all of you present today to be engaged with this process.
Id also ask that you encourage any stakeholders that interact with government to similarly get involved.
This process will be inclusive, and assist government in getting the right financial framework for the next twenty years and beyond.
The discussion paper will be available on the Department of Finance website.
Vital to the approaches Ive outlined today is appropriate risk management practices because new approaches will inevitably present new risks.
This is unavoidable but it is manageable.
For governments, and for the public sector, risk-free is a term that sounds appealing, but is ultimately impossible to achieve.
The transactions of government, the interface with other sectors, the interaction with citizens, presents far too many moving parts for it to all be free of risk.
Furthermore, attempting to eliminate risk can actually have the perverse impact of stifling the very innovation that will improve service delivery and the intended outcomes for all Australians.
That is why a renewed focus on risk, balanced with the need to innovate, is an important area of decision making and one which the Government looks to the public sector to advise us on.
Getting this balance right is important and can mean the difference for how successfully a policy is implemented and delivered.
We have already made some progress in this area through the introduction of a number of tools to assist agencies.
The Risk Potential Assessment Tool, which aids in determining and communicating the risk of a proposal to Cabinet, not only informs the decision making process but also indicates whether additional assurance processes should be applied.
The Government has extended the application of the Gateway assurance methodology to apply to programs, given the complexity and implementation challenges that can accompany program delivery, particularly cross-portfolio programs.
Last year, we also announced reforms to strengthen the role of internal audit within agencies, to ensure that internal policy discussions aware of and able to manage risks.
However, these important measures cannot displace the need to continually build the capability of managers across the public sector to better manage risks in program design and implementation.
 
This Government has made significant progress on delivering better government and I believe there is still more that can be done.
Better government is about continued improvement.
The way government works has changed.
The expectations of governments have changed, the complexity has increased, and the scrutiny heightened.
As we all know, a significant amount of work goes into bringing a policy concept to fruition.
And as part of this, we need to look for ways to deliver these policies effectively and efficiently.
We are now using non-government entities and the not-for-profit sector in service delivery.
We are increasingly moving service delivery online.
We are working smarter and delivering more.
Now, there are those who will simplistically quip that waste is everywhere in the public sector.
And this perception certainly isnt helped when rare instances of bad behaviour and mismanagement of taxpayers money occur and are aired in the public domain.
But as I said earlier, we all have an obligation to see that taxpayers money is spent efficiently and, while there is always more to be done, I think it is fair to say that this Government is undertaking serious work on this front.
Better government is more than just an efficiency dividend, its more than a catch-phrase.
Its not just about saving money. Its about saving time.
Its about cutting unnecessary processes.
Its about delivering better, and deepening our engagement.
Its an overarching approach to delivering good public policy that we both politicians and public servants should follow and aim for.
 
Thank you.