Mr ALDRED(11.57) —It is not surprising that the Government is concerned about the structure and operation of Commonwealth administration as it exists today, particularly given the size of the Federal public sector as it now exists. At the time of the last Federal election, total Commonwealth employment was some 433,000 people. Of those, 174,000 were in the Australian Public Service, with another 259,000 employed in the various Commonwealth statutory bodies. Of course, that is a very substantial proportion of our total work force of six million people. If one measures the growth of the Federal public sector under this Labor Government, one finds that since the Government was first elected in March 1983 through until the last election, total Commonwealth employment grew by 31,800 people, or 8 per cent. This contrasts very markedly with the total growth of the Federal public sector of only 2 per cent under the last Liberal Government. So we have 2 per cent over seven or eight years compared with 8 per cent over only four years. It is not surprising that the Labor Government is now very concerned to do what it can to improve the operational efficiency of the Commonwealth public sector.

Of course, the Opposition supports certain aspects of what is being proposed in the Ministers of State Amendment Bill (No. 2) and the Administrative Arrangements Bill. One has to say that, in the notion of departmental rationalisation or the creation of mega-ministries, certain benefits will accrue to the Commonwealth and, thereby, to the taxpayer. There are also a number of considerable dangers in these proposals. The most fundamental danger is how political and, for that matter, proper administrative control will be exercised over the new mega-ministries.

Australia is not the first country to try this approach. We always seem to pick up these sorts of proposals about 10 or 15 years after someone else has tried them and quite often failed in adopting them. The United Kingdom picked up the mega-ministry approach many years ago. It certainly worked effectively in that country in certain regards. But as any episode of Yes, Minister or, more latterly, Yes, Prime Minister clearly indicates, there are significant problems in actually controlling and managing those mega-ministries. Certainly the additional number of Ministers might help to a degree in that management task. Nevertheless, when we substantially increase a single unit of Commonwealth administration at the top level, it becomes a much more difficult exercise to run that organisation.

The other area that I wish to address in the debate today is the matter of fragmentation of the personnel and finance functions of management that is proposed in the set of Bills now before the House. I remind the House that what is proposed in these Bills and in some of the announcements that were made prior to the bringing down of the Bills is that the Commonwealth Public Service Board will be abolished and will be replaced by an Office of Public Service Commissioner. It is expected that that Office of Public Service Commissioner will handle recruitment and certain other general aspects of personnel policy; that the Department of Finance will take over a number of elements of classification and organisation; and, finally, the industrial relations function in relation to personnel management will go to the Department of Industrial Relations.

I must express some disquiet about the fragmentation of these functions. The whole essence of what the Government is supposedly on about in this legislation is adopting what has been called in this debate by a number of speakers preceding me a more strategic approach to the overall structure and running of the Commonwealth Government. But I see the fragmentation of those functions as being something different. There is nothing new about the matter of establishing an Office of Public Service Commissioner. In fact, that is turning the clock back several decades. Before the Second World War we had an Office of Public Service Commissioner with much more limited authority than the Commonwealth Public Service Board has. In that regard I think the proposals are reactionary rather than moving into the future.

Of course, the Opposition fully supports the notion of delegating a number of minor or routine matters in the personnel and financial management area to the various departments. There is much merit in that. If honourable members go to the policy that we put forward to the Australian people prior to the last Federal election, they will see that we too have taken that approach. But to break up and to shatter the macro-functions of personnel and financial management in relation to the Federal public sector has to be something of considerable concern.

If honourable members look carefully at what we put forward to the Australian people prior to the last Federal election, they will see that, although we accepted the notion that the functions of the Commonwealth Public Service Board had become outdated, we thought that those functions should be concentrated in a new department of finance and management. We saw considerable benefit in bringing together a number of aspects of personnel management and financial management in the one department, because they have been separated for a long period. Of course, it leads to a number of structural difficulties in the Commonwealth Public Service in resolving personnel and financial problems when the financial side is in one area and the personnel side is placed in another. We certainly see considerable merit in bringing those together. But we believe that fragmenting the overall personnel and financial functions between three bodies-that is, the Office of Public Service Commissioner, the Department of Finance and the Department of Industrial Relations-will create considerable problems.

In fact, we see those problems arising in two particular areas. First, it is fundamental to the operation of management in the Federal Public Service that we cannot separate a number of the functions that are currently being broken up. For instance, there is an intrinsic link between the classification and organisation function and the industrial relations function. Much of what is determined and laid down in the classification and organisation area is a direct result of negotiations that may take place in the industrial relations area. It is quite artificial to think that these two functions can be separated. By fragmenting the functions in this way we run the risk of developing over a period differing standards and approaches about things within the various departments of Commonwealth administration. At the micro level there can be much benefit in that in some of the bonus schemes that have been tried out in various departments, such as the Department of Transport and Communications. When we develop quite differing standards at the general level over a period we may well find that there is a breakdown of the whole concept of a unified career service. That will make the task of moving people between departments extremely difficult and it will add substantially to the problems of management in the Federal Public Service. It breaks down further the whole strategic approach. It is not, in fact, a strategic approach; it is a spaghetti approach because we are breaking up all these functions between a number of different organisations.

The other area I have to express concern about is the placing of industrial relations functions in relation to Commonwealth administration in the Department of Industrial Relations itself. That Department has a very long history of close association with the union movement, including the Australian Council of Trade Unions (ACTU), and has generally been notorious, over a period of several years, for going soft in discussions and negotiations with the union movement. I have no doubt that it has been one of the long held objectives by the ACTU to break down the vigour and force with which the management side of the argument is put on industrial relations matters as they affect Commonwealth administration. In fact, by placing the management of the industrial relations function in the Department of Industrial Relations one is setting up almost an incestuous arrangement between people who, to my mind and to the minds of many other people, are far too close to the union movement.

To take up the option that was proposed in the policy put forward by the Opposition in the last Federal election, which was to re-establish the Public Service Arbitrator in that particular role and allow the proposed department of management and finance to take the management side of the argument in industrial relations matters, would be a far more effective way of looking after the interests of the Commonwealth and the taxpayer in industrial relations matters. Setting up this strange, incestuous relationship where the Department of Industrial Relations, with its close links with the union movement, will also be putting the management side of the argument in industrial relations matters as they affect the Federal Public Service and statutory authorities, is quite dangerous. I think the interests of the Commonwealth and the taxpayer will suffer accordingly.

Although we see merit in a number of things that the Government is proposing in the Administrative Arrangements Bill, we have to express grave disquiet about a number of those proposals. Firstly, the workability and practicability of actually setting up these mega-ministries, though desirable in some respects, will add to the problems of political and administrative control over these major departments. In relation to the fragmentation of personnel and financial management functions we should be very concerned that if those arrangements are spread between the new office of the Public Service Commissioner, the Department of Industrial Relations and the Department of Finance it will break down the cohesion of those functions. Where as a major personnel problem within the confines of the Public Service Board previously may have been resolved by one set of decision makers or, under the Opposition's proposal of a new department of management and finance, resolved by the decision makers in that department, the personnel involved will now have to stumble through three Commonwealth organisations, that is, the new office of the Public Service Commissioner, the Department of Finance and the Department of Industrial Relations, to try to fix up the one matter of general personnel policy. I think that will lead to a lot of confusion and a waste of time and it will not help the overall functioning of the Service at all. In fact, it departs from the strategic approach the Government is supposedly taking in this area.

I reiterate, finally, that there is special concern about putting the representation of the Commonwealth's point of view on industrial relations with the Department of Industrial Relations. I think that is an incestuous arrangement and it will operate to the detriment of the taxpayer and to the detriment of the interests of the Commonwealth.