Overview of the Australian Public Service
11.1
The Australian Public Service (APS) is a diverse career-based workforce which Australians rely on every day to deliver essential services. It is responsible for a wide range of functions across the Australian economy, such as policy development, regulation, and the delivery of vital programs and services. Its capacity to efficiently and effectively deliver on these responsibilities relies upon it being staffed by highly skilled and knowledgeable workers.
11.2
As at 30 June 2020, the APS consisted of 150 474 employees across 98 agencies and 14 portfolios, and operated in over 567 locations domestically and internationally. Women currently make up approximately 60 per cent of the APS workforce, and Aboriginal and Torres Strait Islander people make up 3.5 per cent. Furthermore, 17 per cent speak a language other than English and 22 per cent were born overseas.
11.3
It is important to note that these figures do not incorporate the broader workforce used in public service delivery by the Australian Government, such as those individuals engaged as labour contractors and consultants. These arrangements, and their increasing prevalence, are discussed in further detail later in this chapter and in Chapter 12.
11.4
In early February 2020, the Australian Government reduced the number of departments from 18 to 14 with the aim of 'streamlining delivery and fostering greater collaboration on complex policy challenges'. At 30 June 2020, the four largest agencies, as measured by APS workforce, were Services Australia, the Australian Taxation Office (ATO), the Department of Defence, and the Department of Home Affairs. These four agencies represented 56 per cent, or 84 217 employees, of the total APS workforce.
11.5
More than one in four members of the workforce are involved in service delivery, and roles within call and contact centres are the most common type of work. Reflecting the community-facing nature of their roles, the majority of employees working in service delivery and health are located outside of the Australian Capital Territory (ACT).
11.6
Although growing since 2012, the number of employees located in regional areas outside of capital cities has remained relatively stable since 2016 and, as at 30 June 2020, represented 14 per cent of total employees. Between 2003 and 2020, the proportion of employees working in capital cities, apart from Canberra, declined from 55 per cent to 47.5 per cent. Figure 11.1 below outlines employee numbers by location.
Workplace arrangements in the Australian Public Service
Ongoing and non-ongoing employees
11.7
As at 30 June 2020, ongoing employees made up 87.8 per cent, or 132 101 employees, of the total APS workforce. This represented a decline of 117 positions over the prior year and resulted in the lowest proportion of ongoing employees in the APS for the last 20 years.
11.8
Supplementing these permanent employees were 18 373 non-ongoing employees, representing 12.2 per cent of the workforce and an increase of 3 809 positions over the prior financial year. The majority of this increase occurred between 1 January 2020 and 30 June 2020 as a result of the Black Summer bushfire emergency and the commencement of the COVID-19 pandemic. This increase resulted in the number of non-ongoing employees being the highest it has been over the last two decades. This is illustrated in Figure 11.2 below.
11.9
The majority of these non-ongoing employees, 57.8 per cent or 10 618 people, were employed casually, with the balance (42.2 per cent or 7 755 people) employed for a specific term or task. This resulted in the casual workforce forming 7.1 per cent of the APS workforce; an increase of over 6 per cent since 2001.
11.10
During2019–20, the ATO, Services Australia, and the National Disability Insurance Agency (NDIA) had the largest net additions of employees:
The ATO increased its workforce by 2 084 employees, which included 141 ongoing and 1 943 non-ongoing employees.
Services Australia increased its workforce by 1 242, driven by an increase in 1 776 non-ongoing employees.
The NDIA increased its workforce by 906, of which 576 were ongoing employees.
Separation rates
11.11
In evidence to the committee, the Acting Deputy Australian Public Service Commissioner, Mr Patrick Hetherington, highlighted that, in 2020–21, the APS saw the lowest separation rate in five years, and that it currently sits at approximately 6.3 per cent. He further explained that about a third of the separations related to age retirement, with the remaining two thirds being accounted for by people looking for alternative employment and other reasons.
11.12
When questioned about the desirability of staff turnover, the General Manager of People at Services Australia, Mr Michael Nelson, stated that it was 'desirable to have a healthy turnover of staff', and submitted that he thought this figure was about 10 per cent per year. Noting that Services Australia's separation rate was currently only slightly over 7 per cent, he considered that 'quite healthy' in the present environment.
Labour contractors and external workers
11.13
Neither the Australian Public Service Commission (APSC), nor the Department of Finance, was able to confirm how many people engaged through labour hire or other external contracting arrangements are working within the Australian Public Service. This data is not collected, and neither agency provided an explanation for why this is the case. This is discussed further in Chapter 12.
11.14
As shown in Figure 11.3, below, the utilisation of labour contractors and consultants has increased markedly in recent years. Across a sample of 24 agencies, spending on contractors has more than doubled over the period between 2012–13 and 2016–17. Furthermore, information sourced from AusTender indicated that the total value of consultant contracts across the APS increased from $386 million to $545 million during the same four year period.
11.15
In responding to questions about this increase, the Deputy Secretary of Budget and Financial Reporting, Department of Finance, Mr Matt Yannopoulos, stated that government services, generally, have expanded considerably over the recent period, and that the utilisation of labour hire has supported this. He also submitted that the economy and the expectations of Australians, in terms of government service delivery and the utilisation of digital technologies, has evolved considerably in recent years.
11.16
Mr Hetherington noted that departmental secretaries are empowered to make decisions about the workforce they require to achieve the outcomes they are responsible for. He also stated that the APSC believes there will be an ongoing need for contracted support to, amongst other things, handle surge requirements, and submitted that this was 'entirely appropriate'.
11.17
The Community and Public Sector Union (CPSU) submitted conservative estimates that there are about 30 000 people employed across the government in 'insecure arrangements', although it noted that data on the utilisation of these arrangements are hard to obtain.
11.18
The Independent Review of the Australian Public Service (the APS Review) also highlighted that information on the use of external workers was hard to source and often inadequate, or not gathered at all. Specifically, in its final report it said:
Data on this topic, as is the case with many APS-wide workforce matters, are not gathered or analysed centrally and are often inadequate. For example, the number of contractors and consultants working for the APS is not counted and data on expenditure are inconsistently collected across the service.
11.19
The final report of the APS Review also noted that:
These increases have occurred against the backdrop of a significant increase in the size of programs administered by the APS but almost no increase in departmental budgets. The review has heard, and data suggest, that contractors and consultants are being used to meet the increased burden of program delivery — work traditionally done by APS employees — as well as policy design and implementation.
11.20
In contrast, representatives from the APSC and the Department of Finance submitted that the general purpose of utilising labour hire is to accommodate surge requirements, non‑ongoing activities, and to obtain specific skillsets. Specifically, witnesses from these agencies stated:
… I think the general approach to use of labour hire is to supplement a workforce for surge or terminating activities, where it's not going to be an ongoing program of government.
The other area is where we need a particular skill set for a short period of time and where we know that we don't have an enduring basis upon which to bring them in on an ongoing basis.
11.21
The claim that labour hire is predominantly used for temporary, non-ongoing and surge work was repeatedly contradicted by APS workers in evidence provided by the CPSU. An ATO employee said; 'in my previous team, out of 14 workers, only two were employees [of the ATO]. The rest were labour hire. Most had been there 5+ years'. Another ATO employee said: 'our department has had the same labour hire staff for more than 9 years'.
11.22
The evidence provided by ATO employees was echoed in other agencies. An employee of Services Australia told the CPSU: 'Labour hire is very regularly used for ongoing positions. My labour hire teammates do the same job as I do. All have been hired for 5+ years in the same role'. An employee of the Department of Veterans' Affairs added that between a third and half of their agency is staffed by labour hire, in roles that are not specialised, and involve everyday ongoing processing work.
Outsourcing
11.23
In addition to the increased utilisation of labour hire and contractors, the CPSU noted that there has been a rapid escalation in the use of outsourced providers to undertake telephony work in Commonwealth agencies. This is particularly prevalent in agencies including Services Australia, the ATO, Department of Health and Department of Home Affairs.
11.24
Prior to the COVID-19 pandemic, Services Australia had already entered into significant contracts to outsource call centre work, including with Stellar Asia Pacific ($135 million), Concentrix Services ($132 million), Datacom Connect ($120 million) and Serco Citizen Services ($36 million).
11.25
Similarly, the ATO has substantially increased its spending on outsourced services in recent years, with its annual spend increasing from $75.45 million in 2012–13 to $216.31 million in 2016–17, according to the ATO's submission to the Joint Committee of Public Accounts and Audit.
11.26
The lack of service-wide data for external workers and their increased utilisation to perform roles traditionally done by APS employees is further discussed in Chapter 12.
APS Workforce Strategy 2025
11.27
In 2021, the Australian Government released its workforce strategy titled Delivering for Tomorrow: APS Workforce Strategy 2025 (Workforce Strategy). The Workforce Strategy submitted that flexibility in workforce composition remained an important feature to ensure agency heads can access the right personnel required to drive delivery. It argued that external workers can provide 'significant benefits to agencies to help them achieve their outcomes', and that they provide specialist skillsets which can supplement the APS workforce during peak periods.
11.28
Noting that the use of labour hire, contractors, and consultants brings risks that must be managed, the Workforce Strategy advocated for agencies which rely on 'mixed workforce arrangements' to take an integrated approach to their workforce planning, especially when key deliverables are reliant on non‑APS workforces.
Diversity and inclusion
11.29
Over the last decade there has been an overall trend towards increased diversity within the APS, with higher proportions of Aboriginal and Torres Strait Islander people, women, and people with disability. As at 30 June 2020, women represented 60 per cent of the APS; Aboriginal and Torres Strait Islander people represented 3.5 per cent; employees with disability represented 4 per cent; and employees from non-English speaking backgrounds represented 14.3 per cent. Figure 11.4, below, presents the trend information since 2011.
11.30
The 2019–20 State of the Service Report (the Service Report) highlighted that the Secretaries Board, the APS’s principal service-wide governance body, is leading the APS at a whole-of-service level to address diversity and inclusion. Specifically, it noted that the APS:
launched the Commonwealth Aboriginal and Torres Strait Islander Workforce Strategy 2020–24 in July 2020;
is refreshing the APS Gender Equality Strategy;
is recruiting and retaining more people with disability through the APS Disability Employment Strategy 2020–25; and
is supporting mature aged workers who choose to remain in the APS and those who would like to join it.
11.31
The Service Report also highlighted that:
Research shows that business outcomes improve when there is greater gender balance in leadership. In the private sector, organisations with more women in senior leadership positions achieve better performance, productivity and profitability.
These successes are attributed to open, collegiate management approaches more often observed in women, including the ability to build consensus and inclusiveness by encouraging all voices at the table to be heard
These attributes apply to the public sector. APS departments with higher rates of women at the SES level are reported to emphasise communication and networking skills, collaboration, collegiality and a focus on relationships.
11.32
As cited in the Service Report, the Organisation for Economic Cooperation and Development's (OECD) Government at a Glance publication noted that Australia performed above the OECD average in terms of gender equality in the public sector. As stated previously, 60 per cent of APS roles are now held by women, and women account for almost 3 in every 5 new employees in ongoing roles.
11.33
Women are highly represented in health (80 per cent), service delivery (72.8 per cent), and human resource (71.5 per cent) roles. Further, women are well represented across all classification levels, including the Senior Executive Service (SES). Figure 11.5 summarises this below.
11.34
Currently women represent less than 50 per cent of the SES; however, this is changing. As shown in Figure 11.6, below, the proportion of women in leadership roles has continued to advance since the turn of the century. Significantly, in 2019–20, approximately 60 per cent of all SES promotions went to women.
Gender pay gap
11.35
Although women are considered to be at pay parity for most APS classification levels, there remains a gender pay gap of 7.3 per cent, in favour of men, across the APS. The gender pay gap is detailed in Figure 11.7 below.
11.36
During 2019, the average base salary in the APS was $91 016 for women and $98 149 for men. This represented a pay gap half that of the national average (13.9 per cent); however it was higher than the pay gap of the lowest sector categorisation, Public Administration and Safety, which was at 6 per cent.
11.37
The Assistant Commissioner for Workplace Relations at the APSC, Mr Marco Spaccavento, highlighted that the gap is narrowing and that it has 'basically declined every year that we've [the APSC] been measuring it'. Mr Spaccavento did, however, confirm that casual employees were not included in these figures, and that it would be difficult to ascertain the impact their inclusion would have.
The COVID-19 pandemic and the Australian Public Service
11.38
The COVID-19 pandemic presented major challenges for the APS, requiring it to scale up almost overnight to cater to the surging demand for key services and payments, and to deliver new government initiatives. For example:
between March 2020 and early May 2020, the ATO approved the early release of over $10 billion in superannuation to 1.3 million applicants;
by the middle of July 2020, 960 000 organisations, and 3.5 million individuals, had received JobKeeper payments worth more than $30.6 billion;
over a 55 day period, Services Australia processed 1.3 million JobSeeker claims—a volume equivalent to a normal two and a half year period—while also responding to 3.7 million phone calls, 1.9 million service centre walk‑ins, and 250 000 social media interactions;
ATO responded to increased call volumes of 106 per cent in April 2020 compared to the prior corresponding period;
the Department of Industry, Science, Energy and Resources handled a 116 per cent increase in the number of business contacts and a 150 per cent increase in variations to business grants between March and June 2020;
the myGov website handled 2.6 million logins on 25 March 2020, representing a 44 per cent increase on the previous record of 1.8 million daily logins;
the ABS increased its statistical releases by more than 51 per cent in May and June compared to the average of the previous 13 months; and
the Department of Health's AskMBS function saw the number of inquiries in mid-March 2020 double compared to pre-pandemic levels, and the social media team saw an increase of over 3 000 per cent on business-as-usual activity between 20 January and 29 May 2020.
11.39
The APS Commissioner, Mr Peter Woolcott AO, stated that:
Critical to our success in managing an effective response was our workforce and willingness to work as one APS. We moved skills and expertise to critical areas of need, broke down traditional silos and adapted quickly to shifting priorities.
11.40
Responding to these challenges, Mr Hetherington noted that since December 2019, the APS workforce increased by approximately 6.5 per cent, or over 9 000 people. He stated that, of these additional employees, about 4 000 were engaged as ongoing employees and 5 000 as non‑ongoing employees to handle 'surge requirements'. Mr Yannopoulos also highlighted that staff across the APS had been mobilised to support those agencies which experienced sharp increases in demand for their services, such as Services Australia and the ATO.
11.41
Mr Hetherington contrasted the experience of many private sector employees with their counterparts in the public sector:
I'm not aware of any cases of public servants being stood down akin to the way it may have happened in private industry. What I would say, though, is that the Public Service throughout the crisis has continued to operate [and] has continued to deliver on its business outcomes …
11.42
In their evidence to the committee, the ATO noted that since the onset of the pandemic in early 2020, the organisation has provided paid leave for employees unable to work due to COVID—especially when they are unwell—but also if they are required to isolate and quarantine as a precaution. Furthermore, the Deputy Commissioner for People within the ATO, Mr Bradley Chapman, submitted that the ATO continues to support staff to attend their vaccination appointments by providing access to paid leave.
11.43
When questioned about whether non-ongoing staff are also provided these benefits, Mr Chapman said that casual employees are able to access vaccination services during paid time; however, he couldn't confirm arrangements with external workers, such as labour hire workers and contractors, stating that 'I believe we are encouraging all of our providers to do the same'.
11.44
The Managing Director of Hays, Mr Nick Deligiannis, confirmed that the labour hire staff his firm has placed with the APS do not receive paid leave for isolation and quarantine. Expanding on this point, he stated that:
… regardless of the reason for not being able to be at work, the nature of the temporary arrangement that we have with our employees is that they're paid an hourly rate which has a casual loading attached to it, so it's a higher hourly rate. That offsets the fact that they don't have benefits that would be attached to a more permanent arrangement, like sick leave, annual leave et cetera. The offset, as I said, is the higher hourly rate based on the casual loading that's applied to their rate.
11.45
Mr Hetherington submitted that job security in the public sector continues to be high and that public service employment has been very stable through the COVID-19 pandemic. Referencing the annual public service survey, he noted that approximately 95 per cent of employees say they are satisfied with the stability and security of their job; 75 per cent believe they are fairly remunerated; and nearly 90 per cent agree they are satisfied with non-monetary conditions. Importantly, however, these figures do not include the broader non-APS workforce, such as those engaged through labour hire firms and as consultants.
11.46
The National Secretary of the Community and Public Sector Union (CPSU), Ms Melissa Donnelly, stated that the pandemic has highlighted the extent of insecure work across Australia and the damage it causes, and submitted that the Australian Government should be leading the solution to support more secure jobs. Noting that 'the work of the APS is being increasingly casualised, outsourced, and privatised', she concluded that 'clearly … that is not what is happening at the moment'.