Address by Ian Watt to IPAA 04 October 2012 - The Department of ...

Reflections on my First Year as Secretary of
the Department of the Prime Minister and Cabinet and
Thoughts on the Future
Address by Dr Ian Watt AO
Friday 5 October 2012
Great Hall Parliament House, Canberra
Introduction
Thank you, Carmel, for that introduction.
I would like to acknowledge the traditional owners of the land on which we meet this
afternoon, and their elders, past and present.
I am very pleased to be here today to give this keynote address and I thank IPAA for inviting
me.
I started as the Secretary of the Department of the Prime Minister and Cabinet and head of
the APS on 5 September 2011; now it is a good time to look back on that first year.
Today I want to do three things.
Firstly, I wish to reflect on my first 12 months.
Secondly, I want to look at challenges shaping our future as the APS.
Thirdly, I want to talk about leadership in the APS and some of the ways in which APS
leaders need to work together to develop the next generation of leaders and to strengthen the
APS as a whole.
The First 12 Months: Through the lens of PM&C
As I said in my first speech as Secretary of PM&C on 22 November last year, I believe in the
APS as an institution and I believe it is, and must remain, a strong institution.
Support for the APS is a bipartisan fact of life in Canberra.
For example, in 2001 in his address to IPAA’s Centenary Conference, the then Prime
Minister, the Honourable John Howard, emphasised the value of the Public Service.
He said, and I quote:
“The quality of any government is dependent, in large part, upon the quality of advice
it receives. To believe otherwise – that a responsible and successful government can
be sustained in the long term without the support of a dynamic and dedicated
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bureaucracy defies logic and history.”0F
Mr Howard reiterated his appreciation for the support provided by PM&C and the APS, when
he addressed a function earlier this year celebrating the hundredth anniversary of PM&C.
1
Howard, 19 June 2001, Centenary of the APS Oration, http://pandora.nla.gov.au/pan/10052/20011121-
0000/www.pm.gov.au/news/speeches/2001/speech1163.htm.
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The Prime Minister, the Honourable Julia Gillard, expressed similar appreciation at that
function, and more recently reflected on the role of the public service and the real challenges
it faces at the CPSU National Conference. She stated that what we do really does matter to
Australia and Australians and went on to say, and I quote:
“…And like anything that’s important, the stakes are high, and sometimes the decisions
are hard. That’s true of the decisions we make together, as public servants and ministers,
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true of the advice you give us, true of the work you do to implement our plans.” 1F
a. The Role of PM&C
Any change of Secretary leads to speculation about how the new Secretary sees the role of
his/her organisation, and how that role may change. A new Secretary of PM&C creates more
speculation than most, and that is hardly a surprise.
Some may reflect on my first 12 months and suggest I am turning PM&C back to its more
traditional role as a coordinating agency. That is incorrect. I am not changing PM&C’s basic
role, and it was anyway never ‘just a coordinating agency’. It has always had a much
broader, policy focused role. As one of my predecessors, Sir Geoffrey Yeend (Secretary of
PM&C from 1978 to 1986) said in PM&C’s first Annual Report:
“The basic functions (of PM&C) do not change; nor does the basic character of the
Department, and the intense pressure of working in the forefront of government
activity continues.”
I would be surprised if he or his senior colleagues in PM&C, then working under Prime
Minister Malcolm Fraser, saw PM&C as just a coordinating agency. I would be even more
surprised if the then Prime Minister did.
I would, however, be the first to acknowledge that the role of PM&C has always been greatly
influenced by what the Prime Minister of the day wants and, to a lesser extent, what the
Secretary wants.
So while I am charting a course for PM&C that differs to a degree from our previous course,
I am navigating – like my predecessors – with the views of the Prime Minister clearly in
mind. And the course includes a whole of government coordinating role, but it also includes
a major role in policy development and monitoring implementation.
The change that I am introducing is more about how we go about delivering on the Prime
Minister’s objectives.
As I have said before, PM&C does need to set priorities, to be selective in what it is involved
in and what it is not involved in; it needs to be involved in a collegiate and collaborative
fashion; and it does not need to lead on every major issue that faces government.
2 Gillard, 28 August 2012, “A life in the Public Service” Address to the CPSU National Conference 2012,
http://www.pm.gov.au/press-office/life-public-service-address-cpsu-national-conference-2012.
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Indeed, we are sometimes at our best when we use our leadership ability and behaviours to
help support other departments and agencies in achieving outcomes across government. We
are at our best when we are considerate and respectful in our dealings across government, and
collegiate and collaborative in our daily business.
As I have previously said, PM&C will support the work of others, will offer a second opinion
where it considers it appropriate, and – if we do disagree – we will disagree firmly but
respectfully.
That is how I see PM&C working.
b. Learning from Annual Reports
Annual Reports are a key part of the APS ‘shop-front’ and we can learn a lot from them.
And, as I said at IPAA’s recent Annual Reports Awards night, I am a supporter of IPAA’s
role in promoting the importance of Annual Reports. Annual Reports are, and will continue
to be, key chronicles of the important work done in public administration. They also provide
a consistent and reliable narrative on the development of the APS, and how the priorities of
government are addressed.
Finally, they are an important way in which we, the APS, are accountable, through Ministers,
to Parliament and to the public.
In promoting high quality Annual Reports, IPAA helps lift the supposed ‘veil’ around the
APS and its activities.
When you take our Annual Reports, and the wide and diverse range of existing publications
about the APS – everything from the regular journal of IPAA and various academic pieces, to
Senate Estimates reports – I doubt that the activities of the APS are shrouded in mystery.
And I equally doubt that we need insider exposés to tell us how the APS works. There is
already plenty of public material available for those who choose to seek it.
Our Annual Reports catalogue change, so I thought it might be interesting to compare the
PM&C 2000-01 Report, the year I left PM&C, with the 2011-12 Report, about to be released.
At the IPAA awards night I spoke about the advantage of brevity in Annual Reports and of
my commitment to a ‘shorter’ Report. I have adhered to that. Discounting the accountability
reporting and financial statements, PM&C’s 2011-12 Report is 91 pages, down from 168 in
2010-11, and even marginally less than the 100 in 2000-01.
I would never have thought I would release something shorter than Max More-Wilton, for
Max was a man of admirable brevity, but I have!
There are, obviously, differences in priorities between the reports.
For example, in 2000-01, PM&C’s priorities included the Centenary of Federation; the
introduction of the A New Tax System; the implementation of the 2000 Defence White
Paper; the negotiation of bilateral social security arrangements with New Zealand; and
supporting a smooth transition to independence and long-term stability in East Timor.
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The priorities ten years later reflect a greater international focus, new technologies and a
different social inclusion agenda. For example, the Australia in the Asian Century White
Paper; Australia’s role in supporting security transition in Afghanistan; the National
Broadband Network; health reform, including mental health reform; the National Disability
Insurance Scheme; environmental regulation reform; and preparing for G20 2014.
The priorities differ, but both equally reflect those of the Prime Minister of the day.
The reports also show that PM&C has grown over the decade, as the responsibility and the
role of the Prime Minister has grown, as the complexity of government has grown, and as
centralised implementation and implementation monitoring has become more important to
governments.
But one thing that hasn't changed is the leadership PM&C has shown in appointing women to
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senior positions. In 2000-01, 40 per cent of PM&C SES were women, it is now 43 per cent2F .
I am proud of the strong female presence in senior PM&C ranks, including that four of my
seven direct reports are women. I also report to three women – the Prime Minister, my EA
Beryl Knox and my wife Lorraine.
I am a member of the Male Champions of Change and Chair of the APS Diversity Council,
roles I take very seriously.
And I do so because I am committed to a public service that employs and promotes the best,
and believe that the APS should be able to reflect the diversity of our community. (More on
that later.)
How does the APS rate?
There are around 167,000 APS employees. We are located in every state and territory and in
many locations around the world. This makes us one of the largest and most complex
organisations in Australia, if not the largest and most complex.
We employ people with a mind-boggling range of skills and qualifications. We are highly
skilled, and we recruit well educated people. Thanks partly to the rapid expansion of
Graduate Recruitment Programs, we have over 48,000 people with graduate or equivalent
qualifications or better – nearly 30 per cent of our workforce. And of those, nearly 5 per cent
have Doctorates and nearly 16 per cent have Masters qualifications.
Finally, we do everything from serve on the counter at Centrelink to undertake macroeconomic
forecasting; from carrying out world class defence scientific research to running a
world class and low cost pharmaceutical benefits scheme; from delivering multimillion dollar
aid projects in far flung corners of the world to accurately and precisely writing up the
minutes of Cabinet meetings.
How do we rate as a public service? In my view, pretty well.
3 Internal PM&C data.
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The 2009 report by KPMG, Benchmarking Australian Government Administration, which
compared the APS with eight other high-performing national public services, found that the
APS was among the best performers in its perception as an independent and values-based
public service, and in its responsiveness to change.
I have a more intuitive test, and that comes from Chairing the OECD Working Group of
Senior Budget Officials over the period 2005 to 2009. During that time I saw how highly
influential Australia was in those meetings, and how seriously our views were taken by other,
often larger, OECD nations. That to me was a sign of our reputation as having high quality
officials and a high quality public service.
But, no matter what we do now, no matter how highly we now rate amongst the developed
world, and whether we are ready or not, there are plenty of challenges coming our way that
we will have to rise to meet.
Looking to the Future: the Challenges
The APS will, from time to time, face challenges in remaining the policy advisers,
developers, implementers and delivers of choice for the Australian Government. There is,
after all, competition in all these fields, and that is a healthy spur for all of us.
Why do I consider it important that we retain that role? Simply because we have something
unique to offer in it, including:
• the capacity to stand aside from vested interests and to properly support governments
focusing on governing in the national interest;
• experience in what works in the Commonwealth Government and what doesn’t; and
• being accountable to current and future governments for our actions.
Are we well placed to meet the coming challenges and to remain in that role?
Reasonably so, but we can do better and we will need to.
My predecessor, Terry Moran, was correct when he said that “the APS is not broken. It is not
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a renovator’s opportunity”.3F
However, the APS – like all organisations – needs regular review and reassessment, and
incremental change and improvement to keep it in top condition, and among the very best
public services in the world.
Past change tended to be somewhat episodic, the result of occasional reviews such as: the
1976 Coombs Royal Commission; the 1983 Reid Review; or more recently, the Review of
Australian Government Administration which lead to the 2010 Blueprint for Reform.
4 Moran, 15 July 2009, Address to IPAA, http://www.dpmc.gov.au/media/speech_2009_07_15.cfm.
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However, the challenges are getting tougher, and they won’t wait for a once-a-decade-or-so
review. They include:
• the rise of Asia in economic, strategic and political terms;
• demographic change, particularly Australia’s ageing population;
• a tighter long-term fiscal environment;
• environmental sustainability, including resource security and managing our natural
and built environments;
• new technologies that emerge with almost impossible speed; and
• refining and simplifying our Federal system.
We also face increasing demands as a result of new technology, the 24 hour media cycle and
the instantaneous transmission of information globally. It means we are never ‘off’.
And all these challenges are only amplified by increasing citizen expectations.
The Blueprint started a formal shift towards greater emphasis on building in continuous
improvement into our organisations – and a lot has also been done in that respect by
individual agencies – but we need to do more to cement that approach into our DNA and
right across the APS.
a. Improving leadership and capability
With challenges like those mentioned in mind, my priority is to ensure the APS is skilled to
meet them, and to ensure it remains the Government’s first choice for policy advice,
implementation and program and service delivery.
In order to do so, we need to better develop our future leaders, and strengthen our
capabilities. We need to become an organisation of higher quality leaders and managers.
Further, this is an area where the lead has to be taken by APS leaders.
We are working on our capacity and capability. We have commenced the Agency Capability
Review Program, which was recommended in the Blueprint.
Capability Reviews are independent, high level, forward looking reviews of the strategy,
leadership and delivery capability of an agency.
We have completed or almost completed eight reviews so far. The review teams work
constructively with the agency’s leadership to assist them better understand the organisation’s
relative strengths and weaknesses, strengthen their continuous improvement agenda and,
overtime improve the organisation’s effectiveness.
The reviews do not seek to prescribe a specific way forward for the agency. They are
valuable because all parties understand that there is always room for improvement; and
because the reviewers bring fresh insights and perspectives to bear.
We have also established the Strategic Centre for Leadership, Learning and Development,
which provides service-wide talent management and learning and development programs.
The Centre has helped us reinvent our leadership development model and revise our approach
to leadership, putting greater emphasis on experiential learning. We are also focusing more
on talent management, trialling new approaches that stretch our high performers and require
them to make a journey of reflection and learning.
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But there is more we need to do to develop our leadership capacity.
We need to continue to attract very good people, be they new entrants, graduates or lateral
transfees from business, academia, the community sector and other governments. To do that
we need to highlight the intrinsic value and diversity of our work, and to maintain and build
our reputation for professionalism. And we need to nurture and grow the skills and
experience of people within the APS.
Ideally, our future leaders will have diverse experience in policy development,
implementation and service delivery and have worked in several different agencies. Many
will also have wide experience outside the APS. To help provide them with these
experiences, we need to encourage and facilitate employee mobility across the APS, between
the Commonwealth and States, and with the non-government sectors, through greater use of
secondments and exchanges.
We also need to provide opportunities to strengthen individual leadership and management
capabilities. After all, everyone in the APS is and should be a leader.
What do I mean by that? We rightly expect that, amongst other things, our most senior
leaders will define and communicate the strategic priorities, vision and culture of our
organisations and manage processes that deal with the most complex issues that we face.
Yet everybody has important leadership roles to perform, each in our own context, and we
can all model leadership behaviours. Each of us, for example, can think creatively about
what we do and seek out and embrace more effective ways of working; build productive
relationships within the workplace and with all with whom we deal; call and deal effectively
with inappropriate behaviour whenever we observe it; deal carefully with ethical dilemmas,
such as making judgements between “equally right” competing claims for support; and live
the APS values.
These are all examples of elements of leadership which need to be nurtured and honed at all
levels of the APS.
Accordingly, we need to provide development opportunities across more than just the Senior
Executive level. Indeed, having concentrated last year on the SES we are now moving to
rework our approach to developing the core skills, including management skills, of the
broader APS.
And we need to recognise that learning and development is not restricted to formal training
programs, as important as they can be in an individual’s development. We need to provide a
range of development experiences including on-the-job training, mentoring and coaching.
And doing this is neither complex nor time consuming. It can take simple forms, such as
taking junior officers along to key meetings; explaining to our staff not just what the decision
is, but why it was made, so they gain from our experience; and making time to provide
regular, honest and constructive performance feedback – something we should all be doing
anyway.
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We also need to allow public servants to develop judgement through real world experience
and accept that sometimes mistakes will be made. And we need to be generous in dealing
with honest mistakes. After all, we have all made them, and mistakes often provide the most
valuable learning.
Finally, I do believe that the development of much of the future leadership cadre of the APS
has to be done primarily by the current leadership. This is not something the government of
the day can do, nor should we expect it to. It is primarily our responsibility and we are the
best placed group to do it. And that is something that I believe governments have always
appreciated and left to the senior APS. The APS Commissioner and Secretaries’ Board have
the necessary work in hand.
b. The APS in the Asian Century
The other aspect of capability development I want to discuss is building the capacity of the
APS to meet the challenges and opportunities of the Asian Century.
These will be felt across all aspects of society and by all of our institutions, not just across
our economy. They will require all of us to develop and nurture new capabilities.
This applies to the APS as a whole – not just those public servants from DFAT, Defence or
AusAID who specifically operate in Asia or work on specific Asian-related issues. Australia
increasingly needs an APS that has a better understanding of Asia, and of its potential role in
Australia’s future, and that has the capabilities to develop better integrated and informed
policy and programs as a result.
Building a genuinely Asia-literate, Asia capable APS requires a focus on broad Asia relevant
skills across the service (from graduates to senior executives); a better understanding of what
is happening in Asia and why; and an appreciation of its influence on all portfolios activities,
even those once considered to be solely domestic.
For example, APS officers will need greater cross-cultural awareness and an appreciation of
how Australia’s domestic policy objectives intersect with our international ones, and how
domestic policy will be shaped by global and regional factors.
Again, more specialised policy officers and APS leaders will require a sophisticated
understanding of the regional and global political, economic and other institutional structures
and relationships; some may need an Asian language proficiency; and all of us will need a
better understanding of how to interact with the differing cultures across Asia.
The Australia in the Asian Century White Paper will be released shortly. There will be
opportunities to discuss how we need to shape the APS to better respond to the pathways
proposed in the White Paper after that release. But let me emphasise the need is for the APS
to change.
c. One APS
The challenges we face reaffirms for me the importance of operating as one APS.
I have spoken about my belief in one APS regularly over the last year.
Why is the idea important and why should we operate that way?
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The answer is simple. Because it:
• helps us to reshape ourselves when new challenges require new or different responses;
• breaks down barriers that otherwise grow and limit our ability to collaborate
effectively;
• is efficient and helps us to pool our expertise and experience; and
• focuses us on delivering for government as a whole, not just individual
Departments/Ministers.
Finally, and perhaps more importantly, one APS is a way of organising ourselves to respond
to the expectation of government and citizens alike that we will deal with issues holistically
and in a joined up way. To do otherwise is likely to provide no more than partial success.
Do I believe we are working as one APS? Not completely yet, but we have got a lot better
over the last few decades.
Working as one APS means we are mindful of our common purpose. It does not mean we
always agree on everything, or that we hold the same views, or do everything together, but
rather that we collaborate generously and constantly. It does mean that we should develop
both the breadth and depth of our skills base as a public service, beyond our own agencies.
One APS is an important ideal. But its application in practice will only ever be as strong and
as effective as the willingness of the APS leadership to embrace it.
d. APS Stewardship
I spoke earlier about leadership. But more than leadership, we also need stewardship. And,
over the years, I don’t think we have paid enough attention to being stewards of our
respective organisations.
What do I mean by that? I mean that we are responsible not only for the current health of our
organisations, but that we take responsibility for their future health as well.
In this sense stewardship is about capability – building organisations that are currently fit for
purpose, but also evolving to meet emerging needs, and capable always of responding to a
Government in a manner that suits the government’s own agenda and style.
This includes the capability to be forward looking and able to help creatively define, refine
and deliver the Government’s agenda.
And, since we can never perfectly anticipate the future, we need to be stewards of resilient
organisations that can adapt quickly to deal with whatever the future might bring.
The stewardship role of departmental secretaries and the Secretaries’ Board will soon be
legislated. The Public Service Amendment Bill, currently before the Parliament, defines the
role of Secretaries as including a longer term stewardship role both within their Department
and more broadly across the APS.
But I consider the role as stewards of the APS is not just one for departmental Secretaries, or
even just the senior leaders – all APS employees should consider themselves stewards of their
part of the APS.
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How do you know whether you are a good steward? No doubt there are a lot of refined
metrics we could discuss – but I ask myself a simple question: will I leave the organisation in
better shape than I found it?
e. Encouraging diversity
As Secretary of PM&C, I want to ensure that PM&C is the best that it can be. This means
having the best people working for PM&C, including people who are representative of the
broader community. I feel the same way about the APS.
I talked earlier about gender diversity in PM&C and how I am proud of it. PM&C has a long
history of encouraging women to compete for jobs and, because they are often the best
candidates, they get appointed. The APS has also come a fair way in improving general
equality – we now have four female Secretaries out of a total of 20; 29 per cent of our Band
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3s are female; and 38 per cent of our SES4F . But we can all do better, and some departments
and agencies must do better.
We also have to do better in other areas of diversity. In the PM&C 2000-01 Annual Report
there was no mention of how many Indigenous Australians or staff with disability were
employed.
We now employ six Indigenous staff and 15 staff with disability. A good start, but not the
finish for PM&C or the APS.
I am confident that the APS can and will do more to employ a more diverse group of
employees.
And I am confident because I consider that the APS has been better than most in building a
diverse workforce, and has given opportunity where others have not. The APS does not have
a tradition of elitism or of senior staff coming from privileged backgrounds (as some of civil
services do). Rather we supported socio-economic diversity in our recruits, well before most
white collar organisations.
In the 1950s, 60s and 70s the APS was welcoming to blue collar or working class kids who
often found the professions, parts of the financial sector and some of the other traditional
pathways to success in Australia much more difficult.
This was shown by Ian Castles in his 1987 article highlighting the working class backgrounds
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of former Treasury Secretaries5F . And our senior leaders still often come from relatively
humble backgrounds.
Take Peter Shergold, a former Secretary of PM&C, the son of a London bus driver. Former
Secretary of Treasury, Ken Henry, the son of a timber worker.
5
APSC, Stat of the Service Report 2010-11,
http://www.apsc.gov.au/__data/assets/pdf_file/0015/3336/completereport.pdf.
6
Castles, I, 1987, ‘Facts and Fancies of Bureaucracy’ in Canberra Bulletin of Public Administration, No. 53,
December 1987.
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And amongst the current crop, the current Secretary of Treasury, Martin Parkinson, the first
person in his family to finish secondary school, the Public Service Commissioner, Steve
Sedgwick, the son of a carpenter, and the Secretary of the Department of Human Services,
Kathryn Campbell, the daughter of a factory foreman.
And I am confident that we will have more future female leaders, future Indigenous leaders
and future leaders with disability because the way we have delivered opportunity for lower
socio-economic groups in the past.
To help achieve this, I am working with my colleagues on the Diversity Council to provide
strategic leadership on diversity issues across the APS, with a particular focus on Indigenous
Australians and people with disability. We want to make diversity issues more visible and to
provide best practice solutions for the APS.
You will hear and see more of our work in coming months.
And you will see a lot more of the results of Secretaries’ Board working together to ensure
that the APS becomes an even stronger institution than it already is.
5. Conclusion
Finally, let me end where I began. It is a privilege to be the Secretary of PM&C and the head
of the APS. There is no doubt my first year has been both demanding and challenging, but it
has also been enjoyable. I hope it stays that way.
The APS is a strong institution but can’t stand still.
Looking back at the two PM&C Annual Reports, who could have predicted ten years ago the
range of issues we face now. I don’t believe I could have.
I can only wonder what the PM&C Annual report of 2021-22 will look like, and be thankful
that it is unlikely to be me who is signing it off! I do, however, hope that it is brief.
Whatever it may contain, I have no doubt that if we focus on growing a responsive,
collaborative APS with strong leadership, then in years to come we will continue to meet
challenges with enthusiasm and care for the future.
In a world of continuous improvement, the APS leadership itself needs to play a major role in
the development of the APS. That is a task that I believe the current APS leadership team is
up for, and I will be working as part of that team to do just that.
Thank you, and I am very happy to take your questions.
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