Purpose of the Bill

The purpose of the Public Service Amendment Bill 2023 (the Bill) is to amend the Public Service Act 1999 (the Act) to implement elements of the Government’s Australian Public Service (APS) Reform agenda. The Bill proposes to do this by:

• adding a new APS Value of Stewardship, and a requirement for an APS purpose statement
• clarifying the operation of section 19 of the Act by providing that Ministers must not direct Agency Heads on individual employment matters for the APS
• requiring Agency Heads to implement measures to create a work environment that enables decisions to be made by APS employees at the lowest appropriate classification
• empowering the APS Commissioner and the Secretary of the Department of the Prime Minister and Cabinet to require periodic capability reviews of each Department, Services Australia, the Australian Taxation Office and the Australian Public Service Commission
• requiring the Secretaries Board to request and publish regular long-term insights reports
• requiring Agencies to publish their annual APS Employee Census results, along with an action plan that addresses relevant findings. The results will be published in aggregate on each individual Agency, with limited exceptions, including for national security reasons.

In addition, a technical amendment seeks to eliminate unnecessary administration by removing the requirement to seek the APS Commissioner’s consent to delegate powers and functions to Australian Defence Force members.[1]

Background

During the 2022 Federal election campaign, the ALP committed to improving the APS. In a speech in October 2022, the Minister for the Public Service, Senator Katy Gallagher, outlined the new Government’s reform ideas in terms of four priority areas: an APS that embodies integrity in everything it does; an APS that puts people and business at the centre of policy and services; an APS that is a model employer; and an APS that has the capability to do its job well.

Non-legislative initiatives to date

The APS reform agenda is informed by the 40 recommendations of the 2019 report of the Independent review of the APS led by David Thodey. The Thodey review’s recommendation 1 was the appointment of ‘a secretary-level transformation leader’. In June 2022 the Government appointed Dr Gordon de Brouwer as the Secretary for Public Sector Reform. Dr de Brouwer was formerly Secretary of the Department of the Environment and Energy from 2013 to 2017, and was a member of the Thodey review panel. In May 2023, Dr de Brouwer was appointed as Australian Public Service Commissioner.

The October 2022 Budget (Budget paper no. 2, p. 169) allocated $72.9 million over 3 years from 2022–23 (‘offset through savings from within the APS’) to ‘strengthen the capability of the Australian Public Service (APS)’, including:

• $40.8 million for the Department of the Prime Minister and Cabinet (PM&C) and the Australian Public Service Commissioner (APSC) to ‘develop and implement an ambitious reform plan to strengthen the APS’ and
• $25.0 million over two years (from 2023–24) for an APS Capability Reinvestment Fund (the Fund).

The May 2023 Budget (Budget paper no. 2, p. 189) included allocations from the Fund for specific capability projects ($18.5 million in total) over two years from 2023–24, and noted that ‘the balance of the Fund ($6.5 million) will be available for further projects in the 2024–25 Budget process’.

Apart from the above Budget measures, the Bill is the first legislation exclusively intended to progress the APS Reform agenda. Consultations were undertaken prior to tabling of the Bill, including on overarching issues, and specifically on stewardship, the APS purpose statement, and the Bill itself.

Financial implications

The Explanatory Memorandum (EM) observes:

Nil financial implications at this time. Initial funding has been allocated to the Australian Public Service Commission to pilot APS Capability Reviews in 2022-23, 2023-24 and 2024‑25, and to the Department of the Prime Minister and Cabinet to develop and deliver Long‑term Insight Briefings over the same period. How the ongoing resourcing for capability reviews and long-term insight briefings will be met remains subject to a future government decision, informed by evaluations of the pilots of these activities.[2]

Committee consideration

At the time of writing, the Bill had not been referred to, or reported on by, any committees.

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The EM states that the Bill ‘promotes the protection of human rights’.[3]

Key issues and provisions

Section 10 of the Act sets out five APS Values: committed to service; ethical; respectful; accountable; and impartial.

Item 2 proposes the addition of ‘stewardship’ as one of the APS Values:

The APS builds its capability and institutional knowledge, and supports the public interest now and into the future, by understanding the long term impacts of what it does.

The Explanatory Memorandum observes:

The proposal responds to the objectives of recommendation 5 of the Thodey review which called for the core principles and APS Values to be strengthened, by reaffirming the important and enduring role that all APS employees play in serving successive Governments, the Parliament and the Australian public… the Stewardship Value… complements the stewardship duties of Secretaries (subsection 57(c)), Secretaries Board (subsection 64(3)(a)); and the Commissioner (subsection 41(2)(g)) …[4]

The proposal for a Stewardship Value has attracted criticism from a group of eminent commentators and former senior public servants, Andrew Podger, Helen Williams and Paddy Gourley. It has been reported that, in a submission to the consultation process, they did not support adding stewardship to the Values.

[A]dding stewardship … would make all staff responsible for a function over which few of them can have any power significantly to affect. … [S]tewardship, however reasonably defined, was overwhelmingly the task of ministers, secretaries, heads of PS Act statutory authorities and senior officials… ‘For example, the injuries to sound administration by Robodebt were the consequence of actions by ministers, departmental secretaries and senior officials and there was precious little junior staff could do to avoid or mitigate the damage.’[5]

Perhaps related to the future-focused aspect of the Stewardship Value, item 10 would insert new section 64A. The Explanatory Memorandum observes:

The purpose of new section 64A is to establish a requirement for Secretaries Board to cause regular, evidence-based and public engagement driven long-term insights reports, developed through a process of public consultation. The Thodey Review calls for the APS to strike a better balance between short-term responsiveness and investing in the deep expertise required to grapple with long-term, strategic policy challenges. The reports will also build the capability of the APS as a whole to consider cross-cutting issues in a linked up way.[6]

Item 10 provides that ‘the Secretaries Board must cause at least one long term insights report to be prepared each financial year’ and they must be made public. Although the specified purpose is to make available ‘information about medium term and long term trends, risks, and opportunities that affect or may affect Australia or Australian society [including] risks and opportunities’, Paddy Gourley observes that long-term insight reports are ‘not defined’, which presumably relates to the format. Gourley also queries why a legal head of power is necessary.[7]

Item 3 requires that the Secretaries Board must cause a written APS Purpose Statement to be prepared, and reviewed at least once every 5 years, thereby implementing the Thodey Review’s recommendation 6 (‘develop and embed an inspiring purpose and vision to unite the APS in serving the nation’). However, the Thodey Review made only a passing reference to section 3 of the Act, which ‘establish[es] an apolitical public service that is efficient and effective in serving the Government, the Parliament and the Australian public’.[8]

The Department of Finance reports that in March 2023 there were 189 Commonwealth entities and companies (not all of which employ staff under the Act) and the most recent data from the APS Employment Database (APSED) reported 161,645 employees in December 2022. Devising an APS Purpose Statement for this range of entities, employees, and functions will be an ambitious task. The risk is that, in devising an umbrella statement with sufficient breadth, it will be too broad to be meaningful. Section 3 of the Act may be too prosaic (and insufficiently poetic) to serve as the Purpose Statement. Secretaries’ progress toward an expression of ‘inspiring purpose and vision’ will no doubt be explored in questions at Senate Estimates hearings.

Section 19 of the Act provides that an Agency Head is not subject to directions by Ministers in relation to individual APS staffing decisions, including in relation to SES employees. Item 6 would delete from section 19 ‘an Agency Head is not subject to direction by any Minister’ and substitute ‘a Minister must not direct an Agency Head’. The Explanatory Memorandum observes that ‘the purpose of this amendment is to reaffirm the apolitical role of the APS by making it explicit that Ministers cannot direct Agency Heads on employment matters’.[9]

Paddy Gourley describes the measures in items 7, 8 and 12 as ‘unobjectionable’, but queries why legal heads of power are necessary.[10]

New section 19A created by item 7 would require Agency Heads to implement measures to create a work environment that enables decisions to be made by APS employees at lowest appropriate classification, a response to recommendation 32 of the Thodey Review.[11] Recommendation 32 also proposed a review of ‘SES and non-SES classification levels and structures (including Work Level Standards) against best practice and future needs’.[12] The APS Hierarchy and Classification Review released in August 2022 proposed ‘a shift to a flatter structure … reducing layers and removing excessive reporting layers is a critical success factor in enabling accountability and decision-making to be pushed down to lower levels’ (p. 14). However, a former Public Service Commissioner, Andrew Podger, suggested that ‘you can have a lot of levels in a classification structure, but in fact, empower people down the line’, and it appears this is the approach taken in item 7.

Item 8 comprises new sections 44A and 44B. As outlined in the Explanatory Memorandum:

Proposed section 44A introduces a requirement for regular, independent and transparent capability reviews. The proposal responds to recommendation 2a of the Thodey Review which called for regular, future-focused capability reviews to build organisational capacity and accountability, by establishing the power for the Commissioner to cause a capability review (proposed subsection 44A(1)). Capability reviews will be independent, forward-looking and assess an agency's ability to meet future objectives and challenges, establishing a requirement [new section 44B] for Agencies to prepare and publish action plans responding to findings.[13]

Capability reviews are not new to the APS, with the APSC website reporting that at least 20 have been conducted since 2011.

The APS Employee Census has been conducted since 2012. The APSC collects comprehensive employment data on an annual basis, but this is not the Census. As noted by the APSC in 2019, the Census is an annual employee perception survey. The most recent results are for 2022, and the 2023 survey closed in early June. Publication of Census results is currently optional. The purpose of the new section 78B created by item 12 is to:

establish a requirement for agencies to publish aggregate APS Employee Census results, along with the preparation and publication of an action plan responding to those results. This proposal responds to recommendation 2b of the Thodey review, by fostering a culture of transparency and accountability for continuous improvement within Agencies. It will also seek to improve the APS’s position as a model employer that listens to and addresses the thoughts, concerns, and ideas of its employees.[14]

Concluding comments

The Government’s APS Reform Agenda emphasises integrity, an issue that has come into sharper focus in the past 12 months through the Robodebt Royal Commission (the report of which will be published on 7 July 2023), ongoing revelations about the role and conduct of consultancies, the Auditor-General’s report on grants made through the Community Health and Hospitals Program, and the imminent establishment of the National Anti-Corruption Commission.

The Bill does not address integrity issues, comprising instead provisions that have been described as ‘unobjectionable’, including measures for which legislation may not be necessary for their implementation, such as capability reviews.

Paddy Gourley further observes that:

the fundamental disappointment of these proposals is that they ignore the big things that need to be done. For example:

• improve the central management of the APS as a whole by bolstering the power of the Public Service Commission, restricting the role of the Secretaries Board and providing a mechanism for better coordination between the central agencies
• make the Public Service Commissioner the primary adviser on the appointment and tenure of departmental heads
• abolish fixed-period appointments for departmental heads and put them in a position where they are more likely to believe they can provide full and frank advice without the risk of being sacked
• make it legislatively clear that the merit appointment provisions of the Public Service Act should not be avoided by placing consultants and contractors in APS positions
• give legislative effect to the oft-proclaimed desire for greater diversity and inclusiveness in public service employment
• require the publication of surveys on issues — such as agencies’ adherence to service standards — in which citizens have a genuine interest
• legislate procedures for appointments to statutory offices that would minimise the risk of public confidence being undermined by political association
• tighten the regulation of community development grants so they serve the public interest rather than the interests of those in marginal or government-held electorates
• legislate rules to avoid conflicts of interest in the post-separation employment of public officials
• legislate a code of conduct for ministerial staff.[15]