Because even though the Budget focus of my role may be more newsworthy, the governance and public sector elements of my portfolio are as significant, and often more enduring.
Because we know that good governance is vital to meeting the growing community expectations on the public sector.
And how we meet these expectations will underpin the communitys confidence in the Australian Public Service.
Important to this is recognising the context for the public sector, determining the type of public sector we want and equipping it to meet the challenges of the coming decades.
This has a number of different aspects to it, but today I want to discuss two that I see as fundamental to the shape of the public sector.
The first is the fiscal context. At its most basic, the public sector involves the utilisation of taxpayer dollars to deliver goods and services to the Australian community.
Fundamental to this equation is that every dollar is allocated efficiently and effectively in meeting the objectives set by the Government.
This requires constant attention, not just to the task, but to different ways of identifying efficiencies.
The second aspect I want to discuss today is the importance of public sector frameworks being up to the task.
Our world is changing a rapid rate, and the public sector has to change too. It needs to have the tools to enable it to respond flexibly over coming generations. The public sector is a reflection of the broader community, its expectations, its values and its priorities.
The APS is shaped by these broader community trends the needs of the community today are different to what they were 20 years ago, just as the needs of our childrens generation will be different to our own.
That is why the public sector needs to be forward looking. It needs to be preparing for what is coming, and not be bound by what has happened.
Looking ahead, I see three challenges that will shape our country for the coming decades.
The first transformation is the ramifications of the shift in economic power from West to East. This provides Australia with unique opportunities given our geography.
The second is responding to climate change and ensuring environmental sustainability both at home and across the globe. There is an imperative for governments to act on the science, and take advantage of the economic opportunities from moving to a low pollution economy.
The third is the challenge of demography. We are ageing as a population, and this will shape the needs of our community as well as the expectations on governments and their budgets.
The dynamic of a increased health and ageing related spending and declining labour force participation is the defining fiscal challenge of this and the next generation.
This challenge is often exacerbated by the fact that the community's expectations of government inevitably grow over time.
Balancing budgets in these circumstances is crucial, but it certainly isnt easy.
In particular the intersection of demographics and the continual improvement of technology will drive increasing pressures on governments, the public service and the services you all provide.
This dynamic is clearest in health care where the improvements in pharmaceuticals and treatments compound the existing fiscal pressure that comes with an ageing population.
This is unavoidable. But this is to be expected.
We live in a country where the ideal of universal access to essential services is embedded in our understanding of government. The pressure of increasing demands means that we need the most efficient public sector possible.
Because the answer to this challenge needs to be better and more creative responses from government and the public sector, not indiscriminate cuts to the most needy in our community.
I see an efficient government as an important end in itself.
As I mentioned earlier, public spending is the utilisation of taxpayer dollars to deliver goods and services to the Australian community. This trusteeship role underpins all government activity.
While discussions of efficiencies often get lost in the specific they need to be framed in the broader fiscal context.
Governments are increasingly being judged on their capacities to manage budgets and contain public sector expenditures. Whether this is large social welfare programs or running departments of state, the performance of government is seen through the prism of spending efficiency.
Governments are increasingly being asked by the community to carry out improved services with fewer resources. This responds to the priorities of governments and the expectations of the community with funding being re-allocated to other important reforms.
The focus on efficiencies, prioritisation and the reallocation of funding to higher priorities is germane to all governments. But how governments respond to this dynamic differs markedly, and ultimately is a reflection of the values and principles that shape their approach to governing.
We are a Labor Government, and our priorities reflect that. We approach the task in accordance with Labor values.
Our Government has taken the explicit decision to target savings, to not target job cuts and to maintain front line services.
The juxtaposition could not be clearer with the recently elected LNP government in Queensland. Having committed to no job cuts prior to the election, this pledge was broken within months of the election.
Our party places a high value on work, on the importance of job security and understand that these are not issues that you flippantly dismiss.
We also respect the role of front line staff in the public sector and know that a cut to these services sacking the fire fighters and nurses that selflessly put others before themselves undermines key elements of our society.
They undermine confidence in the public sector not through any failings of those employed, but through the decisions of governments.
Our governments approach has been targeted, and is shaped by a genuine appreciation of the public sector, and the important role it plays now and into the future.
We have to be smart and do all we can to protect the central asset of the APS the skills and dedication of Australias world-leading public servants. Importantly, we have to also ensure we continue to grow corporate knowledge and core workforce skills through support for graduate recruitment schemes.
Our approach is based on the understanding that the public sector is about people. And that the output of the public sector can be retained, while at the same time identifying savings in unnecessary spending.
Within these policy parameters, the public sector has responded, and found innovative and new ways to reduce spending.
Since weve come to government, weve found more than $13 billion in public sector efficiencies. We have focused these savings on non-staffing areas such as reducing spending on travel and advertising.
Through smart approaches to travel we are already saving $240 million.
Better management of Commonwealth ICT has saved more than $2 billion.
More effective management of Commonwealth Property has saved $1.2 billion.
We have also dramatically reduced campaign advertising which was over $250 million in 2007 in the last year of the Howard Government.
These examples demonstrate the approach we have taken to seeking further efficiencies. Because efficiencies are not just about reducing funding, it is doing more with less.
Better purchasing arrangements for IT, and using the governments purchasing power effectively to get a better deal these are amongst the examples of how we have approached the task of identifying efficiencies.
Considered changes that are about unlocking resources for our community priorities in areas like health, paid parental leave, aged care reform and mental health.
And it is an ongoing task.
Today I am announcing a new targeted savings program that will see $550 million returned to the budget over the forward estimates.
Consistent with our approach over the last five years, these savings will focus on non-staff costs. These savings will not be found through targeting jobs.
The Government has set a new expectation for federal departments and agencies to meet reductions in a range of non-staffing areas including air travel, non-campaign recruitment advertising, printing costs, and the engagement of contractors and consultants.
The Government will save at least $30 million each year through across-the-board reductions in domestic and international air travel spending.
We are putting a restriction on business class travel for some short-haul flights across Australia, and moving towards a greater reliance on semi-flexible fares instead of more expensive fully flexible fares.
We are also asking public servants to make greater use of telepresence and teleconference facilities. Already, the National Telepresence System has yielded $37 million in savings in travel and related expenses.
While we know it is important that public servants can travel to engage with Australians across the nation, we do need to take an approach to travel that more closely reflects the fiscal imperatives facing Australia, and embraces the technology now available.
The Government has saved around $30 million per annum on recruitment advertising since coming to Government.
While we have reduced the size and colour of advertisements and consolidated purchasing, the evidence before us is that Australians are increasingly looking for jobs online rather than papers.
For this reason, I have revised the recruitment advertising guidelines to make online only the default position for recruitment advertising unless special conditions apply. This will save over $2 million each year.
Similarly, we recognise that Australians are increasingly accessing government information online. Yet in 2010-11, agencies and departments spent about $125 million on printing and publications such as reports and working papers.
While some departments are already choosing to publish online, we need to take this further.
As a first step the Government will reduce this spending by about five per cent, saving nearly $6 million each year. The next step will be to work with the Parliament and others to investigate legislative and other requirements for printing and publication.
Wherever possible we will be replacing these requirements with obligations to publish online.
The Government will also save over $60 million each year through reducing the public services reliance on external consultants and contractors.
These saving reflect a focus on reducing external measures that could be undertaken by the APS already. We are backing our strengths and taking advantage of the breadth of skills we already have in our public service.
By targeting specific functions and avoiding staff cuts, we believe this package of measures will characterise the next phase in driving efficiencies.
We do not see this approach impacting the capacity of agencies.
However, balancing the demands of efficiency and while at the same time meeting community expectations requires good government and good management.
It requires judgement to reallocate resources to meet the emerging priorities effectively.
But meeting the challenges that I have outlined will require more than just an efficient government we also need to work better.
Efficiency will only get us so far. We need to also be looking to the future demands on the public sector and structures that will be needed to meet ever rising demands.
In responding to the challenges over the decades ahead, we will need an APS that is efficient, innovative and flexible. But it also needs to have strong risk management practices and effective service delivery.
The brevity of these key principles belies the scope of the work involved in building the public sector so that it is able to respond to the challenges before us.
Indeed, these characteristics are not always mutually exclusive, and are sometimes conflicting. Finding the balance that best meets our needs will require strong governance, and good judgement.
We see the public sector as an invaluable resource, one that is to be strengthened and encouraged.
We want to foster innovation so that the public sector is leading the policy debate, not trailing it.
We also want to see flexibility to be able to respond in a timely way, to be able to develop and implement policies in an ever changing environment.
However innovation and flexibility need to be appropriately buttressed by a balanced approach to risk management, where risks are properly identified, priced and managed.
It also requires effective service delivery because the role of the public service extends to the front line, to the actual provision of services that Australians need.
While our current frameworks have served us well, we need to make sure that the architecture we are putting in place will serve us well over the years to come.
That is why we have commenced the Commonwealth Financial Accountability Review to go back to the first principles.
This process is focused on the financial and accountability frameworks which, along with culture and leadership, are the key determinants of public sector performance.
Earlier this year I released a discussion paper to elicit the views of stakeholders and interested parties on the future of the public sector.
This paper sought comments on a number of questions around the financial, legal and governance aspects of the public sector. It canvassed the means to improve performance. It addressed different and better approaches to risk management. Opportunities to reduce compliance and simplify reporting obligations are also discussed.
Over 70 organisations and individuals responded to the discussion paper with an over arching consensus that change was due. This level of response is promising, and it is encouraging.
The next phase of this project is distilling the ideas and topics in the discussion paper into firmer propositions for consultation. Reflecting the input received through discussions held so far, the next step will see our thinking focused on prioritising the reforms needed.
In the near future, I will be releasing the next iteration of this work, and I would encourage everyone here to participate in that process.
While Dr Helgeby from my Department will be providing further detail on this work later today, I would offer these thoughts on the direction I see public sector reform.
I see the need for a public sector:
- That is flexible, yet follows robust and rigorous policy development processes
- That is joined up, with services shaped by the needs of the community, not the structures of the bureaucracy
- That is focused on continual and measurable performance
- That is efficient and has the capacity to re-allocate resources as needed to respond to issues as they occur
- That continually builds its capacity and proficiency
- That has compliance that is fit to purpose, and moves away from one size fits all approach; and
- A public sector that is innovative, and is continually looking at ways of improving the way we work.
I see the public sector as continually changing whether it is finding new efficiencies or reforming how we operate it is never stationary.
And while the idea that things can stand still may have some appeal - it is not consistent with community expectations on the public sector.
Because the community is constantly changing, the APS needs to be similarly dynamic.
This will require flexibility and innovation. That is why I see continual reform is a mark of a strong public sector.
Indeed, confidence in the public sector comes from the APS responding to the needs of the day. And central to this is good governance.
It is building up the public sectors capacity. It is ensuring it is efficient and effective. And it is putting in place the right frameworks to respond to the big policy challenges that face this country for this decade and the next.
