Of all the policy presentations at The Industry Papers forum last week, the one that touched a raw nerve was about the Australian Public Service, with a call to bring the regulations governing senior bureaucrats more in line with the private sector.
The senior leadership of our public service are held to lower standards of accountability than leaders in the private sector, and it is costing Australian taxpayers billions of dollars each year.
In a piece headlined ‘The high price of bureaucratic power,’ ANU mathematician Dr Priya Dev argues that Commonwealth entities and the senior bureaucracy are essentially self-regulated, without the rigour of a mechanism equivalent to the Corporations Act.
“Commonwealth departments possess an Australian Business Number (ABN), appearing like a tax-paying organisation on paper, but they are not bound by the Corporations Act,” Dr Dev wrote in The Industry Papers.
“Instead, they are governed by the Public Governance, Performance and Accountability Act (PGPA Act), which claims to ensure that Commonwealth departments deploy our capital efficiently, economically, effectively and ethically.
“However, the PGPA Act explicitly lacks civil or criminal penalties for entities or their senior officers in cases of wrong-doing or breaches.
“This stark lack of meaningful consequences for rule-breakers is unlike most other legislative instruments. For example, the Corporations Act imposes fines, disqualification, and imprisonment for breaches.
“While the PGPA Act aims to prevent wrongdoing, it fails as a legislative instrument because it cannot hold government departments or senior bureaucrats liable for reckless behaviour that causes financial or social harm.
“Without civil or criminal penalties, it is unviable for citizens to take legal action against Commonwealth entities for breaches of the PGPA Act, and thus its role appears to be one of optics over outcomes.”
Dr Dev is a university academic, but has a portfolio career specialising in applying mathematics to model complex systems, with her research instrumental in consulting roles with ASX-listed companies, as well as advising SMEs and startups.
The PGPA was the Commonwealth’s attempt at creating a Corporations Act for Commonwealth entities and senior bureaucrats, “but it falls way short of being useful because there are no civil or criminal penalties baked into it.”
The result, Dr Dev says, is a misalignment of incentives for these government entities and senior public service leaders.
One example of the impact of this misalignment has been on display through the failures of the Robodebt program, revelations of the Robodebt royal commission and then the investigation and response of the Australia Public Service Commission’s investigation of the program.
“Commonwealth entities owe a duty of care to the institution and that means protecting its image, over and above the people they serve,” Dr Dev told The Industry Papers launch forum at Old Parliament House last week.
“Sadly, protecting the image of the institution can conflict with what is best for the country, its citizens and businesses. And that’s how we get a Robodebt.
“In the Robodebt class action, the Commonwealth claimed that it had no duty of care toward the welfare recipients it was supposed to care for.
“That’s why Robodebt will repeat itself in different forms, it’s also why we get billion-dollar tech wrecks and why they will repeat time and time again.”
Channelling the legendary investor Charlie Munger, Dr Dev says that we can change incentives, we can change the outcome.
And one way to change the incentives would be by strengthening the PGPA Act and bring it closer to the Corporations Act by creating enforceable consequences for breaches.
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