Australian Economy

Canberra desperately needs a chief operating officer to effectively reform government

There has been some modest progress around improving service delivery and building digital and data capability, but three years after the landmark report the federal public service still looks and feels very similar to the one that Thodey and his high-powered review team concluded had lost its way.

Bureaucracies are fundamentally driven by structures and organisational design and other than a call for a more unified public service, David Thodey’s report was surprisingly silent on the machinery of government changes needed to reset for modern public administration.

If the APS was starting anew, no one would suggest the current behemoth of super departments, the alphabet soup of regulators, nor the gaggle of single-program agencies and entities all battling for budget and policy pre-eminence and relevance.

We need a fit-for-purpose government

There is no perfect organisational approach, but there are some obvious design principles that should inform what a contemporary, fit-for-purpose government looks like.

The first is embedding at cabinet-level someone whose only job is to ensure the effective and efficient delivery of government. The public sector represents around 30 per cent of the economy, yet there is no senior minister who has the mandate to drive the bigger reforms needed.

Government is inexorably being redesigned around a handful of data-centric platforms that underpin the key functions of government such as revenue collection, payments, regulatory compliance and permissions.

This implies a whole-of-government architecture operating a suite of joined-up services and policy-centric applications, with the citizen firmly at the centre.

That is a long way from the current silo-by-design, traditional Westminster-style portfolios largely focused on government itself.

While co-operation among the mandarins in Canberra has improved, the large delivery agencies (Service Australia, the Australian Tax Office, Home Affairs and Defence) still rule the roost, with policy increasingly being outsourced to either ministerial offices, consultants or external reviewers.

In Australia, NSW is easily the furthest down the track of trying to change government for the modern era. The politician almost single-handedly pursing this transformation is Victor Dominello, the Minister for Customer Service and Digital Government.

Dominello argues that government is central to the national productivity challenge that is needed to drive wages and profits up.

“This will require deep reforms to the status quo,” Dominello says. “You can’t be productive with paper, so digital is the answer.

“When it comes to productivity and digital, all government agencies should be making this a priority. However, generally the primary responsibility sits somewhere in treasury, dispersed among a number of other ministers, each having elements of oversight.”

Governance as a solar system

He argues a major change in governance is required.

“In government structures the two top dogs are the prime minister followed by the treasurer – a two-sun solar system focused on policy and money,” says Dominello. “You have large planets like Jupiter (health), Saturn (education) or Neptune (police) orbiting around, but the centre is policy and money.

“The corporate world realises that this model doesn’t work. They have a chief executive officer, a chief financial officer and a chief operating officer guiding the ship.

“If the COO wasn’t there, there wouldn’t be a focus on the customer experience, and without customers or happy customers the business would quickly be out of business.”

In NSW, Dominello is effectively the state COO, part of a powerful cabinet-level committee that both checks that initiatives are designed around citizens and not government, and tracks the delivery of the government’s priorities.

NSW Minister for Customer Service and Digital Government Victor Dominello. Rhett Wyman

The role was born out of his decade-long experience wrangling with the bureaucratic beast that is government.

“I have the scars to prove it,” says Dominello, a reference to just how challenging government reform is.

“Imagine if after the federal election a new ministry was created that had similar responsibilities to that of a COO,” Dominello muses.

“It couldn’t be a token or junior ministry. For the productivity reform required to keep us competitive, we need a minister who has significant heft, equivalent to that of treasurer.

“Only then will we see a shift from our status quo. Only then will we see government agencies put people at the centre of the solar system and not the other way around.”

Stopping the distractions

The idea recognises that without a fundamental shift in how the machinery of government is designed, the day-to-day demands of modern politics will mean governments are continuously distracted from their key design and delivery role.

In practice this would relieve the prime minister’s department of the unforgiving role of overseeing execution, enabling it to focus on policy and the management of cabinet.

Scott Morrison promised a focus on delivery, with ministers meant to report against a set of key performance requirements. These were never made public and a series of ministerial reshuffles and real-world emergencies saw energy and focus drift away. A mid-level policy and delivery unit embedded in the prime minister’s department struggled to move the dial.

Key transformational reforms such as digital identity and the overhaul of the MyGov portal remain undelivered. After five years of development, data-sharing between agencies was finally legislated, but with proposals to include the private sector deferred.

The COO role is not for a minister seeking fame and publicity, with most of the work laborious, detailed and incremental.

Significantly one of the federal changes that came out of COVID-19 was the establishment of the COO committee, made up of the chief operating officers from all the major departments and agencies. It was a key player in the early co-ordination of COVID-19 policies and, with ministerial leadership, could be the foundation for a real focus on citizens and how government delivers for them.

There are large swathes of social policy programs, such as disability, aged care, mental health and family violence that are begging to be designed around citizens rather than a cacophony of different schemes, subsidies and supports.

The same is equally true for emergency response and safety interventions such as in the digital space.

Citizens are demanding a joined-up response that recognises their personal circumstances and a customised effort, rather than simply a bigger but disparate effort from multiple agencies operating specific programs.

This simply won’t happen under the current traditional Westminster organisational approach, which is built for government rather than citizens.

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