Thursday, March 12, 2009

Belshaw’s World: Australia’s creaking administrative systems

Note to readers: This post appeared as a column in the Armidale Express on Wednesday 11 February 2009. I am repeating the columns here with a week's lag because the Express columns are not on line.
It is early Monday morning. As I write, the death toll in the Victorian bush fire disaster nears one hundred. In the midst of the sadness, it makes me proud to be an Australian when I look at the huge efforts of all those involved in fighting such a calamity.

I have been arguing for some time that our current system of public administration does not always work very well. Tell me something I don’t know, some readers might say!

This has become an issue because Mr Rudd wants certain spend to happen quickly. Systemic rigidities make this difficult to achieve.

To the outsider, Australia’s government system appears large and complex. And indeed it is. Yet when you drill down, you find that the number of people involved in any particular area – both advisers and doers – can be quite small. Further, these people operate in a complicated environment where much of their time has to be spent on process matters dictated by an often rigid and over-controlled system.

The problems begin with the expenditure controls that have been in place for many years.

In social housing for example, an area that Mr Rudd has targeted for expansion, declining real funding forced housing agencies in all jurisdictions to try to do more with less.

Faced with the combination of growing needs and limited resources, housing agencies first cut back on maintenance to maintain the supply of new social housing. The led to a maintenance backlog. This is not unique to social housing – look at UNE and its colleges as a local example.

The next step was to prioritise allocations to those with greatest needs.

Who could argue with this? Yet it had some very unfortunate side effects. It reduced the diversity of people in social housing, concentrating people with complex needs in housing estates. It increased costs and reduced rental income.

As the problems became clear, housing agencies throughout Australia looked to ways of leveraging what they had. Some jurisdictions were better at this than others, but the pattern was the same. Available policy and development resources were focused on the task at hand.

Now tell agencies that they can spend and must do it quickly. Neither the plans nor the people are immediately available to do this.

Problems continue.

The Commonwealth wants the states to spend, but also wants to control. Again, who could argue? After all, it’s tax payer money. We want a national approach. So Canberra defines national rules and priorities expressed in terms of key performance indicators.

The difficulty is that conditions vary greatly across Australia. A one size fits all approach often does not work.

As an example, Canberra policy towards our Indigenous peoples is heavily driven by Northern Territory problems. This does not necessarily meet the needs of Aboriginal people living in NSW where conditions are very different.

Once the Commonwealth has defined its approach, individual arrangements have to be negotiated with the states. This takes place through the COAG (Council of Australian Governments) structure and is usually a two stage process.

An umbrella agreement or agreements must be negotiated. These take the form of legal agreements setting out what must be achieved by when.

Each state or territory has to work out what the sometimes very prescriptive Commonwealth approach means for them.

Once agreements are signed, implementation plans must be agreed. These translate the agreement(s) into specific action plans linked to the defined national performance indicators. Problems can emerge where indicators set by the Commonwealth and negotiated under pressure do not fit. How do we make this work?

Given the importance of the agreements, the various central coordinating agencies necessarily become heavily involved. Political judgments have to be made. Is the state prepared to accept an imperfect agreement? What is the cost of walking away?

If you look at the whole process, we start with agencies not geared to spend. Add to this the Commonwealth’s desire for uniformity and control expressed through the COAG process. Now you can see the difficulties involved in doing something quickly.

Would things be better if we abolished that states? Not necessarily, but that’s another story.

No comments: