New phase of reform for Australian Public Service underway, says minister

By on 06/11/2023 | Updated on 06/11/2023
Katy Gallagher flanked by Dr Gordon de Brouwer Australian Public Service Commissioner and Dr Janine O’Flynn, Director Crawford School of Public Policy.
Katy Gallagher flanked by Dr Gordon de Brouwer, Australian Public Service commissioner, and Dr Janine O’Flynn, director of the Crawford School of Public Policy. Photo: Commonwealth of Australia

An initial 12-month phase focusing on the design of the Australian Public Service (APS) reform agenda is complete and a second rebuilding phase is set to begin that aims to restore capacity and capability in the service

Australian Public Service (APS) reform is now entering its second phase, according to senator Katy Gallagher, the minister for public service.

In her annual statement on APS reform at the Australian National University Crawford School of Public Policy on 1 November, Gallagher said that phase two would involve “embedding [reforms] across the APS”.

Gallagher acknowledged the APS has come under “heavy scrutiny” over the past 15 months due to the Robodebt Royal Commission report, code of conduct inquiries, audit reports, ombudsmans’ inquiries, the PwC scandal and focus on contracting across the APS.

Gallagher said that “the first priority area” at the centre of the APS reform agenda was to develop a service “that embodies integrity in everything it does”.

As a result, many reform measures are devoted to improving the behaviours and processes of those at the senior levels of the APS, with measures intended to drive better performance and establish responsibility for failures.

She explained that this stage would build on the existing reforms to the appointments process and performance management of senior public servants with a requirement for the secretary of the Office of the Prime Minister and Cabinet (PM&C) and the APS commissioner to conduct merit-based appointments processes for secretary roles.

This would “build rigor into the advice provided to the prime minister on candidates,” she said, adding that a new performance framework and improved method of handling sustained underperformance of secretaries, including appropriate consequences, would also be put in place.

Read more: Australian Public Service chief promises ‘unwavering focus on integrity and capability’ in Robodebt aftermath

Gallagher said there would also be improvements to how agency head appointments, performance and suspension are conducted including “merit-based appointment processes and creating a power to suspend agency heads” without pay and applying breaches of the code of conduct.

There are also new motion and inquiry powers for the APS commissioner to initiate reviews and investigations into code of conduct breaches by current and former agency heads, including secretaries and other APS employees.

Another priority area is to improve and invest in the APS. According to Gallagher, in the past 12 months since the removal of the Average Staffing Level (ASL) cap that prevented agencies from hiring staff, over 3,000 labour hire and external jobs have been converted into permanent positions. Furthermore, at the Senior Executive Service (SES) band level two, a gender parity milestone was reached with 50.1% female staff achieved.

In addition, she said that the first round of centralised bargaining with public sector unions on pay and conditions since 1995 had commenced. “When the offer is accepted we will reduce pay fragmentation across the APS from an average of 25% to 13%,” she explained.

Gallagher (left) also announced a new ‘SES 100’ initiative to increase Aboriginal and Torres Strait Island representation at SES level to 100 by 2024-25, up from the current number of 54. This is part of wider plans to increase the representation of First Nations employees in the APS to 5%, up from 3.5%. She acknowledged that at June 2023, the number had only increased by 49 employees compared to the previous year, when the target is to bring in an additional 2,500 First Nations employees overall.

Plans to reduce the reliance on outside contractors are being accelerated. Gallagher said that the Department of Finance audit on the public sector workforce showed that A$20.8bn (US$13.5bn) was spent on external labour “equivalent to a shadow workforce of more than 50,000 people” despite the ASL cap.

“At the same time external labour costs were clearly ballooning,” Gallagher said, adding that “the average agency spent approximately one in every A$4 (US$2.60) on external labour”.

She explained that the government had already converted 3,300 roles saving A$811m (US$527.3m) over the budget forward estimates. It is making further commitments to reduce reliance on consultants in in-house capabilities including through the Australian Government Consulting pilot programme and the new Australian Centre for Evaluation.

Read more: ‘We want to make evaluation a fundamental part of what government does’: the inside story of setting up the Australian Centre for Evaluation

On 23 October, the government released the APS Strategic Commissioning Framework that sets the policy direction for the APS to reduce the reliance on contractors and prioritise direct employment to strengthen capability. Agency heads will be held accountable for rebalancing their workforce.

“Core functions such as drafting cabinet submissions, drafting regulation, leading policy development or occupying a role on an agency’s executive must never be outsourced,” Gallagher said.

She added that the framework “outlines the limited circumstances” in which external workforce is appropriate and ensures the APS maximises the benefits of those arrangements and must “enhance the work and knowledge of the APS”.

Agency heads must set targets by June 2024 to reduce their agency’s reliance on outside contractors and outline what capabilities will be brought back in-house, how many roles will be affected and the anticipated reduction in expenditure. Targets will be reported in each Agencies’ Corporate Plan from 2024-25 with updates in their Annual Reports.

Meanwhile, the latest funding has been released for the APS Capability Re-Investment Fund, which started up last year and involves agencies putting forward proposals for sector-wide capability improvements into a competitive process. Ten projects were supported this year. Next year, agencies are to bid for a share of the A$6.5m (US$4.2m) capability investment funding.

Priority areas include “enhancing data analytic and policy integration skills, adapting to a green economy, workforce, building understanding of AI application in the public service, building capability for working in Asia and Pacific and supporting cultural and psychological safety in the workplace,” Gallagher said.

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About Tim Fish

Tim Fish is a government and defence journalist with experience in politics and global travel. With a MA degree in War Studies and work as reporter on public service publications, Tim has expertise and has written extensively on government and international security.

One Comment

  1. Renu Kumari says:

    Your comprehensive update on the second phase of the Australian Public Service (APS) reform is commendable. The emphasis on integrity, merit-based appointments, and improved performance frameworks reflects a commitment to a robust and responsible APS.

    The initiatives to convert external roles into permanent positions, achieve gender parity, and increase Indigenous representation through the ‘SES 100’ initiative demonstrate a dedication to diversity and inclusivity.

    The acceleration of plans to reduce reliance on external contractors, as outlined in the APS Strategic Commissioning Framework, is a crucial step toward optimizing resources and ensuring that core functions remain in-house.

    I appreciate the transparency in addressing challenges faced by the APS over the past 15 months, including the Robodebt Royal Commission report and code of conduct inquiries. Your focus on driving better performance and accountability at senior levels is vital for rebuilding public trust.

    The commitment to capability investment projects, especially in data analytics, policy integration, and AI application, showcases a forward-looking approach to equip the APS for the evolving landscape.

    Looking forward to witnessing the positive impact of these reforms on the APS and its ability to serve the Australian public effectively.

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