4 Responses to Discussion Paper

1. Home Builders Melbourne | December 12, 2012 at 7:21 pm | Reply

   Its about time that these documents were simplified for the public as most of us don’t have the time or simply don’t understand the complex language used in the papers. These documents should be summarised into dot points for the general public in simple everyday language.

2. Carol O'Donnell | April 14, 2012 at 2:32 pm | Reply

   Hi

   I have asked for the paper ‘Is Less More? Towards Better Commonwealth Performance’ to be posted to me in hard copy because it is expensive to download and I need it in hard copy to analyse and respond properly. Please send to me at [moderated for privacy].

   I cannot understand the meaning, requirements or effects of many of your key propositions for enhancing transparency and accountability. This is a bad sign for achieving better Commonwealth Performance as a result of introducing them. Many also appear as if they require more, rather than less, regulation.

   Surely you need a project based approach to budgeting to align risk and related expenditures/accountability with the social, environmental and economic goals of the projects which are part of a larger program. See related discussion below based on NSW and Commonwealth experience.

   IS GARY STURGESS SERIOUS ABOUT SERVICES?

   Why do we always come here? I guess I’ll never know.
   It’s like a kind of torture, to have to watch this show. (The Muppets)

   In ‘On the front line’, in the Australian Financial Review (AFR 23.3.12, p.1) Gary Sturgess appears mainly to tackle the relations between the ‘policy class’, to which he states he belongs, and the related Australian social division of paid labour, with a view to finding ways of improving services provided in the public sector to increase their utility and productivity. He is the NSW Premier’s Chair of Public Service Delivery at the Australian and New Zealand School of Government, University of NSW. Formerly he was Cabinet Secretary in NSW government, followed by director of a UK think tank, the Serco Institute. In his AFR article he seems uninterested in history, his own professional organization or in defining many related key terms. Thus he appears unable to see or address the continuing implications of feudal practice in making ‘us’ the ‘stewards of complexity’, instead of more broadly productive servers of customers or others. One sees Caritas views their members as ‘stewards of creation’. What is a steward and what does he do apart from what he has to do in secret congress with his colleagues or his wife?

   Sturgess states ‘democratic societies are founded on the proposition that the sandwich-makers are in control of the toaster makers’. He tries to continue this analogy, based on a story by Douglas Adams about a man who could not build a toaster when also making each component part from raw materials. People normally act in environmental and social contexts driven by their practical history. For example, they join the army because that taxpayer funded work has long been made available to men. The man who tried to make a toaster from scratch seems to be crazy. Why did he do it? Sturgess bases a key historical phenomenon of social organisation and economic development on a random, bizarre event, without any clearly explained goal. Surely only a lawyer could do it?

   Although Sturgess claims to be interested in ‘the radical changes that must be made among policymakers at the top of government to allow managers at the front line to innovate’, the way he treats his subjects, as discussed later, suggests this claim is untrue. Comparative knowledge of both public and private sector service outcomes is necessary to be fairer to managers, workers, consumers and investors in all areas, as well as to provide good services to communities in related environmental, social and financial contexts. Today, as a result of feudal history, the outputs of services remain addressed largely in financial terms, for the benefit of legal and financial service providers, on the pretense they are thus being driven effectively for all in the market. Sturgess appears to have an analysis which is part of the problem rather than part of the solution.

   In the Western mind, the concept of democracy is often equated in practice with groups voting for their leaders, or for their representatives, if one tends towards the anarchist or other libertarian persuasions. These may typically be related to earlier historical eras and to more belligerently interventionist feudal states. In the US, for example, in spite of the comparative OECD statistics, they appear to believe guns mainly protect, rather than kill. Writing in a recent Hiroshima Peace Culture Foundation newsletter, the North American Coordinator of Mayors for Peace pointed out US government also spends nearly as much as the rest of the world’s nations combined on its military. The Pentagon maintains 1000 overseas bases in over 130 countries and the US military dominates the world through operation of 10 unified combatant commands whose areas of operation cover the earth. The US is the only nation that deploys nuclear weapons on foreign soil at NATO bases in five European countries. The military and their arms producers, assisted by many feudal expectations, are key financial interests driving most populations. The US Supreme Court has also declared compulsory health insurance unconstitutional, although it is more expensive, less widely available and inequitably provided, in comparison to services guaranteed by taxes in Australia and many other nations.

   Neither does mark to market accounting appear to have been an accurate or prudent US business evaluation move. The story of the failure of Enron by McLean and Elkind (2004) showed mark to market accounting wildly inflated apparent company and project values, greatly underestimated all related scheme costs and could reverse the intended effects of fully funded insurance practice which is ideally to stabilize and protect funds, including for future generations, rather than to increase international underwriting cycles and related business volatility. After the 2008 crash, such problems are now starting all over again in the US, where many appear to be acting constitutionally but irrationally and so also appear to need help.

   From scientific and democratic perspectives, the concept of aggregative democracy (voting) may be compared with deliberative democracy, which is more rationally inclusive. Deliberative democracy assumes the combination of belief and the desire to make rational decisions should drive development directions, not just money and numbers. Deliberative democracy is vital to protect the interests of future generations from destruction at the hands of currently driving, sectional, financial interests. For example, the US Supreme Court recently sanctioned unlimited corporate contributions to political campaigns. Since World War II the US has increasingly also become the international heart for many feudal orders where violence and poverty have been driven by feudal patronage politics and related voting expectations.

   In ‘The Bottom Billion’, for example, Collier discusses the group of African and Central Asian nations that ‘even in the golden decade between the end of the Cold War and 9/11 saw incomes decline 5% ‘(2008, p. 1). Collier shows that international development problems are often related to politicians and their associates being in positions to siphon off funds from aid or other foreign and domestic contracts, to meet the top personal, election, job and other family or tribally based patronage and voting requirements, in regional arenas where many boundaries may also be hotly disputed with an increasingly sophisticated range of arms or lawyers. In these nations the effects of voting have often been to increase violence before and after elections within many communities whose members may feel bound to support their immediately dominant fellows and their causes, or suffer the effects. He estimates 40% of Africa’s military spending is financed by foreign aid but claims that far from favouring big military budgets, finance ministers want evidence to defend their spending priorities against demands from powerful military lobbies. Manage openly.

   The distinction between aggregative and deliberative democracy ideally provides the capacity for all belief, including all religious and individual belief, to openly drive broadly scientific and democratic approaches to evidence and to related planning and development funds, in international and regional contexts. This is ideally supported through more open media access and reporting. The rights and duties of individuals in regard to self-determination may also be better judged and recorded in processes where persons are more accurately contextualised in social and environmental arenas broader than the ruling court and the related adversarial, medical or other professional gazes.

   From this perspective, regional service provision is ideally openly designed in the key stakeholder interest, but managed flexibly to meet changing realities on the ground. Key stakeholders are those for whose benefit the project was established, including those who funded it. Related service providers are stakeholders. Decisions designed to achieve broadly stated regional objectives also need to be clearly and openly justified and debated in popular media. In democracies, people need easy access to information to know, understand and participate freely or cheaply in the collective cultural, business and political processes. They appear likely to do this best in independent media driven by collective democratic interests as well as commercial ones. Given his NSW background, one assumes Sturgess knows this. Why mention sandwich makers and toaster makers?

   When he uses the term ‘us’ and others discussed later, one wonders who Sturgess means and what they do or are supposed to do in practice. He claims the strengths of democratic societies, where sandwich makers control toaster makers, are obvious, but I have no idea what he thinks they are, or if he seeks to speak as a member of either group or others. He states the system ‘creates a fault-line between the amateurs and the professionals that contributes to the dysfunctionality of modern government’. In the example he gives, of the Defence Minister and his conflicts with military chiefs, all appear employees with jobs subject to contract requirements and with related interests. One assumes these interests also relate to the aim of providing Australians with better security, whether this is defined from typically feudal perspectives, or from more broadly and openly communicative ones which are also more open to broader debate to find ways forward.

   The economist Amartya Sen (1999) described ‘human security’ as ‘the keyword to comprehensively seizing all the menaces that threaten the survival, daily life, and dignity of human beings, and strengthening the efforts to confront these threats’. He argued that support for the poor, freedom of speech and transparent management is necessary for effective operation of markets and equality. One must be clear what is meant by ‘amateur’ and ‘professional’ to balance and address the information, human capital, intellectual property and other rights, duties and requirements of particular customers, employers, employees, subcontractors, investors or the related communities who ideally benefit from regional production. All productivity appears naturally undermined by continuing feudal practice that is secret and approached from adversarial rather than more independently and broadly informed and questioning perspectives, which may or may not be considered expert, as a result of some general or particular knowledge and experience.
   Policy is an official statement of organizational expectation intent or direction, which may or may not be directly or primarily based on law. In democratic societies all organizations and individuals are expected to operate within the law, which is thus the strongest form of social policy, in that it ideally represents the minimum standard of community expectations, and accordingly there is ideally some punishment for ignoring it. On the other hand, law and its practice have been comparatively narrowly and feudally constructed and based on many earlier prescriptions, rather than to achieve clear social aims, supported by clear definitions and budgets ideally designed to achieve aims as outcomes. Rule bound legal procedure and adversarial methods related to evidence are pre-scientific. Many problems for delivering high quality services in cost-effective ways spring from this. In general, balancing demands in democratic societies for the good of current and future generations often requires more open, broadly comparable information and action, not secret, blinkered, specialised prescription and action in law.

   Sturgess ignores government and law as historical products of earlier eras based on feudal beliefs which have been increasingly extended to rule over later concepts of scientific and democratic practice and all related service delivery. He also ignores the national competition policy first addressed in Hilmer’s report to Australian Heads of Government, which was accepted by them before being given to lawyers to implement. The amendments to the Trade Practices Act appeared, as usual, not to change its course. Hilmer defined competition as, ‘striving or potential striving of two or more persons or organizations against one another for the same or related objects’ (1993, p.2). For perhaps the first time, competition was thus clearly defined authoritatively in terms beyond the traditionally feudal financial models, in which all in the market are expected to be driven only by money and where the satisfaction of all attached family and other wants are either taken for granted or invite wars for compensation in court.

   The quality of services delivered in the government funded and private sectors must also be able to be judged comparatively, if policy makers and managers at the front line are to help customers better and more productively, as Sturgess claims to seek. The Committee on Economics, Finance and Public Administration inquiry into current and future directions of Australia’s service industries (2006) defined services as the parts of the economy not agriculture, forestry and fishing; mining or manufacturing. Sturgess states Australians have no capacity to judge the productivity of the public service sector that delivers health, education, justice and welfare services, in spite of its accounting for 15 to 20 percent of gross domestic product, roughly equal to the combined contributions of mining and manufacturing. Related problems face customers and others in the private sector as they usually have no idea how any service quality or cost may be comparatively known or affected by the traditionally expected use of the competitive bid or stock price in the absence of other organisational, social or environmental information or measures.

   Measures of productivity are based on identification of the supposed inputs and outputs of market processes, numerically expressed in trading environments in which all are ideally assumed to perform goal oriented actions purely driven by price. Such goals are normally expected also to be approached secretly in bidding wars. This has a tendency to drive many unknown costs further down many opaque contracting chains in all work related directions. The result, as in 2008, may be almost total financial ignorance, followed by financial crash which surprises experts and shows they were wrong in many estimates. Whether Marrickville Council could save millions of dollars and pass on the savings to ratepayers if garbage collection were outsourced, as claimed in the Inner West Courier (29.3.12, p.3) depends on how well services are managed, not the management sector. Sturgess appears to want services designed to serve consumers but ignores the fact that the driving legal, commercial and bureaucratic practices observed by his ‘policy class’, are often feudally dysfunctional from later scientific and democratic perspectives. The latter demand open judgment not more closed practice judged largely in secret by ‘peers’ conceived as superior and trusted knights around an ideally expanding numbers of tables.

   Yet Sturgess appears never to have met an Australian front-line public service manager he did not like and equates their typical behaviour with that of the small business man like his father. He claims there ‘is little of the archetypal public servant about them’ and appears happy to agree that their world is ‘dirty’ for the ‘obvious’ reason that each ‘must accommodate the frailty of human existence hour by hour’. I think how people have historically made or make their living often explains their public behaviour best, without the need for pejorative judgments like those. This is important for understanding any of the effects of what may be feudally dominant and related balkanized state and market operations on the type and quality of any services provided. Sturgess overlooks the feudal nature and effects of legal and bureaucratic practices in extracting value for those acting in ruling monopoly occupations, such as legal and allied areas. Their interests are often fixed in closed shops which may easily travel in the name of service for many poor reasons which need to be grasped. From service perspectives, law drives crazy practice.

   For example, in mid 2010 newspapers carried notices seeking expressions of interest (EOI) in the NSW government sale of the waste management business WSN, prepared by UBS Investment Bank, acting for government. UBS stated on no account should anyone:

   ‘express interest directly or indirectly approach WSN or the Government, their officers, officials, employees, customers or suppliers in relation to any matter relating to this Invitation, the EOI stage or Process, without the prior written approval of UBS………….On no account should Recipients of this Invitation directly or indirectly approach elected members of the Government or officers of the Government with a view to obtaining information in respect of any part of their response to the Invitation……… Any such approach or attempted approach……may lead to their exclusion from the Process ( p. 14).

   This is an ignorantly expensive approach to doing business. One ideally expects the NSW government would support its legislated aims. In the case of WSN sites, under any management, the most relevant aims seem to appear in the Environmental Planning and Assessment Act (1979); the Waste Avoidance and Resources Recovery Act (2001) and the Protection of the Environment Operations Act (1997). The sale of WSN and any related documentary request for expressions of interest in its purchase are ideally designed efficiently to serve these aims which are social and environmental. UBS, treasury, etc. hold better practice back by reverting to ignorantly determined price.

   As managing director of Baulderstone, Rick Turchini also pointed out huge wastage occurs when government calls for competitive tenders for major projects. This requires a great amount of work to be done and much related free information provision for every bid, including for those which fail. Turchini argued more open management alliances are a better way forward and teams from the public and private sectors should openly work together with shared objectives towards common goals to reduce conflict and allow more appropriate risk sharing (AFR 24.9.07, p. 71). In contrast with trades in construction or in the case of many other contractors, the lawyer, architect or medical specialist are highly privileged in not being subjected to quote or to the expectation of providing any information to anyone, unless for a considerable fee. Academic labour markets are also high protected by government regulation and increasingly specialised public subsidies. Many of these are dysfunctional and need to be broken by more open use of plain English communication for students and others who can access computers, newspapers, TV, etc.

   Sturgess claims government policy makers are too removed from the service delivery action to be able to understand it or help it. He certainly cannot logically address the effective delivery of government services to the consumer, without also considering the private sector service in a comparable light. ‘Compare the pair’, is ideally not just an advertisement to compare the investment outcomes of non-profit industry superannuation services with those of traditional fund managers or trustees. The social and environmental goals and related practical outcomes of investment should also be made increasingly clear to all to improve service quality and save money. Sturgess claims to seek a reform agenda requiring government ‘to reorganise itself around the life events of service users because that would require the policy class to look at government in a radically different way’. He should tell us how he thinks that could be done in relation to the new National Disability Insurance Scheme and the National Training Entitlement. Who will hold the budgets for services for any intended client of either scheme, and how the schemes will generate any particular services are not yet clear. There also appears to be little information about National Training Entitlement Certificate III and its curriculum.

   In my view, the Productivity Commission report on the Vocational Education and Training Workforce (2010) suggested Certificate IV reduces the number of competent trainers, assessors and students by the need for them to acquire opaque, theoretical and narrowly delivered subject content. The quality of education must be partly in the eye of the beholders who consume it and who fund it depending on their personal capacities and needs. Education openness may therefore logically be seen as a necessary but insufficient test of education quality. The more one knows about the content beforehand, the more one may judge if it is worth consuming further. Certification of student competency to practice safely and effectively is a separate matter, which may be managed by the most relevant institutions according to various specifications relevant to key stakeholder needs (those for whom the service was designed and those who fund it), and to related broadly protective community requirements.

   The most useful direction Sturgess offers appears in the statement of Alfred Sloan, the long-time chief executive of General Motors, who apparently wrote in the 1950s:

   From decentralization we get responsibility, development of personnel, decisions close to the facts, flexibility – in short, all of the qualities necessary for an organization to adapt to new conditions. From co-ordination we get efficiencies and economies. It must be apparent that coordinated decentralisation is not an easy concept to apply.

   The coordinated decentralisation Sloan identifies as necessary for better production and related service could often be gained today by more open, computer, TV, newspaper, radio or other communication. Whether the social and environmental standards required and perhaps delivered in government services are considered better or worse than for services delivered in the private sector is ideally an empirical question in particular environments. From this perspective the media should have a major role as a fourth estate, not as electoral candidate, service or product pushers driven by advertising funds.

   From democratic perspectives, people like Sturgess – lawyers with financial interests and their colleagues – are often helping to wipe out many vulnerable species and increase inequality internationally because of a refusal to recognise and define many feudally related paradigms and market operations, which may or may not also be called corrupt. For example, in Dead Aid (2010) Dambisa Moyo, clearly a protégé of the international ‘policy class’, recklessly talks up some obviously high risk African markets yet again. Another black woman talked up some similarly risky markets on a recent ‘Inside Business’ program on ABC TV. Are they intending to buy the stock? They should have instead championed more openly and fairly managed land and water policy, planning and related management directions as regional foundations for carbon pollution reduction and many other development directions which are more sustainable from social and environmental as well as financial perspectives. The feudal success game of avoiding the obvious so as to try to please superiors and perhaps be rewarded deserves to be rationally and clearly broken, especially by black women. Why else would one bother to appoint?

   Following Bell and Drucker, Florida (2003) pointed out knowledge production is different to other forms as its value to the community multiplies and increases through creation, spread and use, rather than the product being used up or production destroying the ‘global commons’ for private gain, as in traditional approaches to agriculture, mining or manufacturing. He claimed because a good idea produces more value for the community the more it is used and built upon, it also produces increasing returns on production rather than the diminishing returns traditional economists think normal. He claimed traditional societies overprotect intellectual property and reduce opportunities for creativity, conceptualized as useful combination of new forms out of existing knowledge.

   From this perspective the broader the availability of information, the broader the dissemination of knowledge and all related productive and creative strategies. However, persistent feudally dysfunctional social drivers include a lot of outdated, narrow and incomprehensible law without clear aims or plain English definitions. Confusions between earlier feudal or tribal duties to brethren and newer scientific and democratic duties to broader regional communities are embedded in many related secret practices.

   As shown by the history of Australian health care, workers compensation insurance, and non-profit industry superannuation, risk management structures and practices operate better when driven to achieve social and environmental goals of the key stakeholders, rather than profits for insurance companies and their stockholders. Funds are ideally owned, underwritten, managed and invested openly and competitively in the interests of the key stakeholders. Lawyers, insurance companies and related stakeholders may resist this direction and their traditional perceptions of risk lead to higher costs and to collapses that top executives may walk away from rich, while the majority get caught. Those who can pay their big bills slowly may unfairly wipe out many others further down the chains.

   From this perspective an independent media is a jewel in the policy class because of its potential in openly connecting and clarifying interests rather than being engaged in the feudal business of splitting and dividing interests in many secret and collegiate operations. Productivity should be investigated in this light. The policy class, as Sturgess knows, has discussed many of the above issues since the Whitlam government in the 1970s. I still have on my desk the chunk of the Berlin Wall the Editor in Chief of the AFR gave me at dinner in 1990. Life may or may not go on, but elephants, unlike markets, never forget. As an independent intellectual Sturgess should reveal law, not ignore it yet follow it.

   References:

   McLean, B. and Elkind, P. (2004) The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron. New York. Penguin.

   Collier, P. (2008) The Bottom Billion: Why the Poorest Countries are Failing and What Can be Done about It. Oxford University Press.

   Sen, A. (1999) Beyond the Crisis: Development Strategies in Asia. Singapore. Institute of South East Asian Studies.

   Moyo, D. (2010) Dead Aid: Why Aid is Not Working and How There is Another Way for Africa. London. Penguin.

   Report by the Independent Committee of Inquiry (Hilmer Report) (1993) National Competition Policy. Canberra. Australian Government Publishing Service.

   Florida, R. (2003) The Rise of the Creative Class. North Melbourne. Pluto Press.

   • cfar | April 16, 2012 at 10:20 am |

     Thanks for your input, Carol. We have sent you a hard copy of the disucssion paper.

     In terms of enhancing transparency and accountability, the goal is to simplify the information provided to Parliament and the public to make it more user friendly. There is currently a lot of information produced by government for external accountability purposes. However, the discussion paper notes that even with all of this information “it is not clear that accountability and transparency have improved”. Perhaps if information is easier to understand, it could be more useful.

     In relation to delivery of government programs and services, the discussion paper looks at how to improve performance measurement, such as through better KPIs or program evaluation. Doing this could provide policy-makers with better information to help them make more informed decisions and improve service delivery.

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