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When governments stop listening to advice


There is always a period in the life of any government when it stops listening to advice, a wise old bureaucrat commented recently. But, he said, he had never known a government to stop listening so early in the political season.

It fits in with a Peter Costello remark in the recent biography of Howard by two academics, Wayne Errington and Peter Van Onselen. In Costello’s version, 2004 saw the Treasurer’s office prepare a smorgasbord of about 20 costed policy ideas that might be put up for the election campaign. Some were about tax. There was an education initiative. A health one. A childcare one. The idea was that Howard, and his tacticians would pick two or three of the best according to their view of the best electoral bang for the buck. But John Howard took everything, and more. As Costello put it, "He ordered everything on the menu: entrée, main, dessert, the vegetarian option". Ate the toothpicks too, one might add.

In a later section of the book Costello complains of such binge spending, saying that, as Treasurer, "I have to foot the bill and that worries me. And then I start thinking about not just footing the bill today but, if we keep building in all of these things, footing the bill in five, 10 and 15 years, and, you know, I do worry about the sustainability of these things."

The quotes are noteworthy not for some mere partisan point. It’s a major problem of government these days. The remarks were made more than a year ago, even if they were published only in recent weeks. Since then, John Howard (without any form of apparent resistance from his Treasurer) has committed the Government to many billions more in long term public expenditure, and has given every indication that the pace will increase enormously as the country moves closer to election.

More ominously, the expenditure plans are going through no normal process of government. Notoriously, because Ken Henry, Secretary of the Treasury complained of it, there was no input from Treasury (or Finance, or Environment) in John Howard’s $10 billion water plan. The 'plan' — and just what it involves other than spraying $10 billion about is still quite unclear months after the announcement — was concocted, over four days, by a group of ministers, minders and a few people from the Department of Prime Minister and Cabinet.

Likewise with the invasion of the Northern Territory in the name of saving Aborigines from child abuse, and from themselves. This was a policy, again without a plan to accompany it (and with no idea of cost), concocted by a emotional but incoherent minister and the Prime minister over a few days. Not tested against departmental expertises, nor even in proper Cabinet debate, nor weighed, measured and integrated into any sort of whole of government financial, economic or even political plan. More than a month in, not even the players, or for that matter the minister, really know what is meant to happen to reverse what has gone before.

When governments stop listening to adviceBetter managed has been the Commonwealth takeover — through use of the corporations power of the constitution — of industrial relations power, but that too presents problems, not least from the opportunities perceived by politicians, on both sides, for unlimited Commonwealth power in virtually any field. Legal constraint, as well as old-fashioned notions of an ideal federalism, was once an argument almost as important as financial constraint and economic sense in determining good policy.

The Tasmanian hospital takeover was politics at its most crude. The Prime Minister judged, on the run, that it might win him a few votes. There have been discussions before of a Commonwealth takeover of public hospitals — even some ministerial advocates, including Health Minister, Tony Abbott, and some respectable analyses (such as the one by Andrew Podger) of what might be done and how.

Until recently, however, Howard was publicly opposed, and with reason. Nothing he has now announced fits into any earlier ideas of what might be done, or to what strategy or purpose. The individual takeover target in question, in Burnie, must send shudders through both the health and treasury bureaucracy in Canberra, given that propping up the hospital is a defeat for any sort of rational planning, allocation of resources, or pressure on the states for sensible planning.

The Prime Minister’s rationale for intervention, indeed, sends a powerful signal to the states that they should not plan sensibly, that they should pay obeisance to all manner of local vested interests, and that the sensible allocation of scarce resources is the least important consideration of all. The problem was aggravated by the enthusiastic invitation from Tony Abbott to any other rent-seeking hospital to get in line. The immediate impulse of some other pressed MPs, almost encouraged by the Minister for Education, Julie Bishop, was to suggest that parents frustrated by school closures or rationalisations should seek direct funding from Canberra.

John Howard, defending his decision, said quite rightly that voters are more interested in outcomes than constitutional theories about responsibility for delivering them. Commonwealth Governments of all complexions have bristled for years about how they pay most of the public hospital bill while having little say in hospital management, while states try desperately to shift further costs on to the Medicare system. Blame shifting is as much a problem as cost shifting. In education the Commonwealth is also intervening, and making national and local commitments without providing any sort of central rationale, rhyme or reason.

People want good hospitals and good schools. What 'good' amounts to is never entirely clear, though anything smacking of declining quality, reduced investment, complaining and demoralised workforces, and popular perceptions of falling 'standards' is clearly 'bad'. With all the blame shifting, Howard is quite right to say that the Commonwealth has some reason to get involved, or at least, some reason to demand better accountability for the massive Commonwealth investment. An angry Commonwealth may even cut to the chase and focus on outcomes.

But ad hoc responses to the perceived services crises, the more ad hoc for being in an election context, are not a substitute for a plan for a new 21st century federalism, the stretching of old federalism processes, and the selective, almost random, abandonment of negotiation, cooperation and the Council of Australian Governments processes. Even less so is it a reason for throwing out whole-of-government processes within the Commonwealth itself.

A good deal of the time, indeed, no one is arguing about real things. They are arguing about perceptions — not least the perception of being seen to do something. One does not actually have to do anything to create this perception; all one has to do is announce that one has a plan to do something, couple with some number drawn from a hat of millions, or billions, intended to be spent. The politics — including the anger of the states and other players — actually serves a short term purpose of reminding everyone that the Government is now doing something. This is not process taking over outcomes. It is where plans, visions, frameworks, strategies and razzamatazz substitute for action.

A more effective Opposition might be making more effective politics about this, but this is not the bureaucracy’s chief concern. Bad habits of governments, of any persuasion, tend to persist into succeeding administrations. Good habits are harder to sustain.

Over the last 30 years, ministerial government has considerably improved, and Australia has been better governed and more economically sound as a result. Ministers developed expenditure review committees. With or without economic rationalism, debates about sound policy became more economic and more rational. The processes of decision making were improved, and systems of taking in advice (including bureaucratic advice), and assessing all decisions against the general, as well as the specific, objectives of government. The amalgamation of departments, and the financial management reforms, fitted in as well.

Howardism, at first, worked off such processes, indeed made the doing so a centrepoint of its claim to being better economic managers. But much of this is now out the window, and the administration now has created in the resulting shambles something in the nature of the 'black hole' that was so politically useful to Howard in 1996.



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Existing comments

Thanks Jack for an insightful and objective take on the current political situation. As a teacher I am subject to the decisions made by the government in regard to education and I must admit to being confused and angry at some of the directions it is suggested we should head.

Stephen Locke | 09 August 2007  

Once an important element in the government's social and educational policies was positive discrimination for disadvantaged members of our society. Today it seems this government aims to give positive advantage to those living in marginal electorates. It is to be hoped that Howard does not get away with such blatant misuse of public money.

David Dyer | 11 August 2007  

1. the centralism implicit in Mr Howard's commandeering of so many functions previously administered by the States stands in contrast to his avowed defence of "State's rights" when, as Opposition Leader in the 1980's, he exhorted his Senators to stymie similar moves by Mr Hawke's government.
2. Noting that the Commonwealth has the taxing powers, to the extent that democracy makes for responsible decision-making, perhaps it should also have the responsibility for expenditure.
3. The takeover of the Murray-Darling system is all about making cooling water available for our nuclear-powered future; likewise, the takeover of Aboriginal lands is all about prospecting for minerals and making deposits available for exploitation.
4. Federal interventions in what were traditionally seen as areas of States' responsibility follow from the High Court's rejection of States' case against Federal workplace laws by invoking corporations powers. By so doing, the High Court was essentially defining Australia to be a unitary State run for the benefit of corporations, not a federation of States, and most certainly not as a nation of citizens in whom sovereignity is vested. To the extent that Australia's citizens derive benefit from their citizenship, they do so at the pleasure of those corporations.
To this extent, Mr Howard's centralist tendencies are symptomatic of a deeper malaise at the heart of the Australian nation.

David Arthur | 18 August 2007  

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