Australian Politics and Policy - Senior, 2019a

Australian Politics and Policy
Dimensions
of change
under NPM
Explicit
standards and
measures of
performance
Greater
emphasis on
output
controls
Under older forms of
bureaucracy
Qualitative, implicit
standards and norms
basedontrustina
professional public
service
Public organisations
controlled by top-down
‘ordersoftheday’,as
determined by senior
management; emphasis
on procedures
Under NPM
Tangible and reportable performance
measures and indicators on the range, level
and content of services to be provided; goals,
targets and indicators of success, preferably
expressed in quantitative terms; greater
transparency in resource allocation;
adoption of activity- or formula-based
funding and subsequently accruals
accounting
Public organisations controlled through
resources and rewards allocated according to
pre-set output measures; emphasis on results
Source: adapted from Hood 1995, Hood 1991 and Pollitt 1995.
The legacy of NPM
In the 1980s and 1990s, the adoption of NPM policies by both Labor and
Liberal–National Coalition governments led to widespread privatisation of government
assets and services and commercialisation of many of those remaining in
public hands (for instance, some services introduced user charging). 31
As Figure 2 suggests, the impact on employee numbers during NPM’s heyday
wasmoreintheorderofaredistributionfromtheCommonwealthtostateand
local governments, with only a minor downsizing in total numbers in the 1990s,
from 1.73 to 1.45 million, and then an increase to just under 2 million currently. 32
Commonwealth employees declined from 23 to 12 per cent of the total public
sector workforce between 1990 and 2017, while the proportion of state government
employees rose from 67 to 78 per cent.
30 ‘An efficient body of permanent officers … possessing sufficient independence, character, ability
and experience to be able to advise, assist, and to some extent influence those who are from
time to time set over them’ (from the Northcote-Trevelyan Report, quoted in Caiden 1967, 383).
31 Aulich and O’Flynn 2007; O’Faircheallaigh, Wanna and Weller 1999, 66. See Hughes 2003 for an
extended discussion of the rationale for and against the establishment of public enterprises as a
particular segment of the public sector.
32 It is similarly unclear whether outsourcing had a significant effect on public sector expenditure
and employment in other countries (e.g. Alonso, Clifton and Díaz-Fuentes 2015, 656).
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