Senator NEWMAN (Social Security) (1:00 PM) —I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard .

Leave granted.

The speeches read as follows—

PUBLIC SERVICE BILL 1997 [No. 2]

The Public Service Bill 1997 provides a legal framework for Australian Public Service employment which achieves an optimum balance between improved accountability and devolved responsibility so as to maximise the efficiency and effectiveness of the Australian Public Service needed for the 21st century.

When the Government came to power in 1996 it realised that many of the inefficiencies of the public service were not the fault of individual public servants but a systemic failure which has its primary, but not sole cause, in the legal framework and the employment arrangements governing the public service.

It was evident that the Government needed to change the legislative framework if high performing organisations were to be achieved.

We acted quickly to develop new legislation in three areas crucial to the competitiveness of the APS: financial management, workplace relations and the Public Service Bill. We have been successful in implementing two of these, but the third, the Public Service Bill was amended by the Senate.

The Government will not be deterred from completing its reform of the APS by the short-sighted obstruction of the Opposition and minor parties. The effect of this obstruction is simply to frustrate the very many people in the public service who are keen to press ahead with a reform agenda in the development of which they have had an important role and which they see clearly is essential for building morale and opportunities for the future.

This is the same as the Bill that was passed by the House of Representatives on 30 October 1997. It had been introduced into the House of Representatives on 26 June 1997 and immediately referred to the Joint Committee of Public Accounts (JCPA) for consideration.

The JCPA handed down its Report on 29 September 1997. In the Report the JCPA supported the need for the 1922 Act to be replaced, and favoured the simplification, modernisation and the more accessible format of the Bill. The Committee made twenty recommendations all of which the Government accepted either in full or in part. The Opposition were, of course, well represented on the JCPA.

The legislation was also referred to the Senate Finance and Public Administration Legislation Committee which reported to the Senate in early October. The Committee largely endorsed many of the JCPA report recommendations, while acknowledging the very brief period in which the Committee had to consider the report.

The Democrats, however, who did not take up representation on the JCPA, submitted a dissenting report recommending that the Bill be withdrawn and rewritten.

The Government accepted all 20 of the JCPA's recommendations. The Government accepted the recommendations, in a spirit of compromise, in the belief that all Parties, Members and Senators shared a common goal for a public service that would deliver the best value from public funds to serve the Government and the community for the 21st century.

Amendments to the Bill, in response to the JCPA recommendations, were made to:

. strengthen the APS Values;

. strengthen the references in the Bill to merit as a fundamental principle of APS employment by including a definition of merit in relation to the engagement and promotion of APS employees; and

. enhancing the level of scrutiny and reporting of agency workplace diversity programs.

The Government amendments were accepted without dissent by the House of Representatives.

The legislation was introduced into the Senate on 11 November where the Opposition and minor parties moved seventy-four amendments to the Bill during some 17 hours of debate on 17, 18 and 19 November 1997.

The Opposition amendments do not recognise the increasing need for APS agencies to be freed from central controls and to adopt employment arrangements which meet their particular needs. This Bill provides that flexibility.

The pressures for public service reforms have not slackened. The Government is determined to bring public service employment arrangements into line with community standards; to enable the public service to meet market competition and to promote a stronger performance culture. We have already introduced administrative reforms that will come into effect on 15 March 1998. Under these reforms:

. Departmental Secretaries will have greater authority and flexibility to effectively manage their staff;

. new Public Service Values and a Code of Conduct for staff will be established through new regulations;

. public accountability will be increased and strengthened; and

. protection for whistleblowers raising allegations of Code of Conduct breaches will be strengthened.

The Government will also press ahead with reforms and improvements to public service workplace relations through the Workplace Relations Act.

This is not to suggest that legislative reform is unnecessary. A new Bill is essential because there are a number of key areas in the current legislation that are not amenable to simplification by administrative action. For example,

- giving employment powers direct to Agency Heads;

- ensuring a secure Parliament-endorsed legislative

- framework for APS values, the new code of conduct

and protection of whistleblowers;

- removing complex appeals arrangements;

- removal of inflexible employment categories;

- removal of compulsory age 65 retirement;

Therefore, it will be impossible to build a fully coherent, reformed, management structure without legislative change.

Cultural change is also necessary. The extent to which the reforms are acknowledged as real changes and embraced by staff and middle management, will be an important determinant of the success of the reform process. The existence of a new Public Service Act will be the major contributor to the perception, among public servants, of real and significant change.

The current Public Service Act is over 75 years old and has been amended 100 times. It is complex, prescriptive and out of date. The new Bill removes that prescription, is easy to understand and is only 40 pages long.

Although there will be some fundamental employment relationships that we cannot change without the new Public Service Bill, the Government will continue, in the meantime, to use the Workplace Relations Act to make a significant impact on the performance of the APS.

As the Minister Assisting the Prime Minister for the Public Service has stated on a number of occasions, Australia needs a public service that can:

. position Australia in a global environment to ensure that we are future focused and seeking out the changes that will guarantee our national future;

. benchmark itself against all sectors to determine what it does best, what it can improve, and what is more effectively delivered by the market;

. provide frank and fearless—and innovative—advice to government; and

. access the best service delivery skills, quality and cost, wherever they might reside.

Along with reforming workplace relations generally, and the waterfront in particular, achieving a more relevant, efficient and innovative, world class Australian Public Service is a key objective of the Government. The Government is determined to build on the strengths of—and make even more effective—one of the key institutions supporting Australia's democratic system.

The Public Service Bill is therefore an essential part of our reform agenda.

I turn now to the terms of the Bill itself.

The Public Service Bill is a very exciting piece of legislation, aiming to put in place a framework for a high performance public service.

Alan Kohler, writing in The Age, commented last year that the Bill is:

' . . . the most uncompromising deregulation of the Public Service anywhere in the world. The bill lays down standards for ethical behaviour and impartiality, establishes the first code of conduct for public servants, sets up a process for accountability and scrutiny, and then lets departmental heads run things as if they were corporate chief executives.'

'[It] is one of the great pieces of Government employee legislation—simple, clear and powerful'. (The Melbourne Age , 11 July 1997)

It not only removes prescription and central control, but enhances the accountability framework which the Parliament and the community expect of the public service. It will enable the public service to meet market competition, to benchmark itself more effectively against other sectors and to promote a stronger performance culture.

The Bill is all about making the Public Service more efficient and effective and delivering better service to both the Government and to the public. It gives a message about the expectations of citizens in a democratic system of governance appropriate for the twenty-first century.

What holds the APS together, what creates a unified Service, is the shared values and ethos of public service. And these are reinforced in the Bill, by setting out for the first time, the APS Values and a Code of Conduct for all public servants. This legislative framework of values, conduct and scrutiny provide, for the first time, a coherent statement of the public interest.

The community also expects that its public service will be subject to the same workplace arrangements as apply to the rest of the workforce. The Public Service Bill seeks to achieve this by giving Agency Heads the same rights, duties and powers as an ordinary employer, thus allowing employment arrangements that will meet the particular needs of each individual workplace. Accordingly, the Bill devolves employment powers from the central agencies to Agency Heads. It does not prescribe process but instead ensures that Agency Heads are held accountable for their actions.

I believe that the Bill will be welcomed by those innovative and creative public servants who are actively seeking a higher standard of performance and who are frustrated by the constraints.

For example, the 1995 Australian Workplace Industrial Relations Survey indicated that employees in the Public Service felt disempowered by the highly protected and regulated environment. While formal consultative processes were twice as likely to be in place than in the private sector, public servants did not feel able to make decisions for themselves at the workplace level.

They did not have a high level of workplace autonomy—the Survey showed that more than twice as many private sector employees recorded high levels of workplace autonomy.

Under the Public Service Act of 1922 public servants have been working under a piece of legislation more than seventy five years old. It is outdated, overly prescriptive and unnecessarily centralist. Workplace flexibility and accountability is limited. Personnel decisions are slow, paper-driven and labour-intensive.

The Government is reintroducing this Bill unchanged, not because we want an election over it, but because we believe this Bill as it stands provides the type of Public Service that the Government and the Australian Community have a right to expect.

I commend the Bill to the Senate.

PUBLIC EMPLOYMENT (CONSEQUENTIAL AND TRANSITIONAL) AMENDMENT BILL 1997 [No. 2]

The Public Employment (Consequential and Transitional) Amendment Bill 1997 deals with the consequential and transitional matters arising from the proposed repeal of the Public Service Act 1922 and its replacement by the legislation set out in the Public Service Bill 1997.

This is the same Bill that was passed by the House of Representatives on

30 October 1997. In November 1997 the Opposition parties in the Senate passed amendments to this Bill and the Public Service Bill 1997. The Government rejects outright those amendments and is reintroducing this Bill to progress the reforms which will allow for a dynamic and flexible public service.

Both this Bill and the Public Service Bill underwent extensive scrutiny by the Joint Committee of Public Accounts. I am pleased that the Committee supported the need for the present Act to be replaced and favoured the simplification, modernisation and more accessible format of the new Bill.

The Government adopted, in whole or in part, the twenty recommendations made by the Joint Committee of Public Accounts. The Government also gave close consideration to the substantive comments contained in the report but which were not expressed formally as recommendations.

Despite the Government accepting the recommendations of the Committee, the Opposition and minor parties in the Senate went on to amend the Bill. The amendments did not recognise the increasing need for APS agencies to be freed from central controls and adopt employment arrangements which meet their particular needs while retaining the best characteristics of the APS: integrity; professionalism and accountability. This Bill, together with the Public Service Bill 1997, provides that flexibility.

I turn now to the terms of the Bill itself.

The Bill sets out certain transitional provisions that are necessary with the introduction of the Public Service Bill. There is a need for provision of transitional arrangements from the old to the new employment framework and a need to validate actions and decisions taken under the old legislation where that action has not been completed.

There is also a need to make consequential amendments to the extensive range of legislation which incorporates references to the Public Service Act 1922.

The transitional provisions fall into three broad areas.

First, it is necessary to set in place conversion arrangements for those who work in the APS. With the removal of the concept of office for APS staff and the creation of a single employment category, officers and employees covered by the existing Act are converted to employees in their corresponding agencies with their corresponding classifications. Fixed-term Secretaries to Departments under the old Act will become Secretaries of their corresponding Departments under the new Act. Similarly, the person holding office as the Public Service Commissioner under the existing Act will become the Public Service Commissioner under the new Act, as if she had been appointed under the new Act.

Second, as the Public Service Bill 1997 is primarily principles-based, there are some conditions covered by the Public Service Act 1922 that require transitional arrangements because they will no longer be regulated in the same way.

The most important of these are the arrangements governing the rights of return of staff who have left the APS to take up non-APS public employment under the complex, legislative provisions of the old Act. These staff will be able to return to the APS under the transitional arrangements and, in future, APS employees will be able to move in and out of APS employment, where it is in the interest of the APS, under a simpler model of unpaid leave.

Third, there is a need to provide for the continuation of processes already set in train. Action may have commenced under the Public Service Act 1922 or the Merit Protection (Australian Government Employees) Act 1984 that will not be completed by the time the new Public Service Act is proclaimed.

I refer to matters such as appointments, promotions, suspensions, transfers and advancements, as well as to appeals, grievances and other reviews of employment decisions. To enable action to be completed, regulations will be made to ensure the continuation of those processes after the new Act is proclaimed.

The validation of actions and decisions taken under the former legislation will be largely dealt with in regulations.

With respect to the consequential amendments, the Acts specified in Schedule 1 to this Bill will be amended or repealed as set out in that Schedule. The amendments can be divided into the following categories:

. changes in the current provisions relating to staffing to reflect the new employment framework;

. removal of obsolete references to the Public Service Board;

. consequential amendments to the superannuation legislation, but without any changes in the operation of the schemes;

. changes to the role of the Remuneration Tribunal in relation to the remuneration and allowances for Secretaries;

. removal of cross-references to reciprocal mobility which will now be dealt with by directions by the Public Service Commissioner;

. removal of references to the old mobility arrangements set out in Part IV of the Public Service Act 1922;

. standard translations for common terms in the old Act; and

. other miscellaneous amendments to ensure appropriate links to the new APS employment framework.

The Bill also deals with the consequences of devolving the arrangements for setting the salaries of the Senior Executive Service (SES). The link of the remuneration of Members of Parliament with the SES Band 2 minimum salary will be replaced by a link to the classification structure created by the Remuneration Tribunal for certain statutory offices. It is not intended to increase the level of remuneration.

Subject to any special requirements in relation to particular consequential amendments, this Bill will commence on the same day as the Public Service Act 1997.

The proposed amendments have no financial impact.

Collectively the arrangements proposed in this Bill will provide the necessary certainty and continuity of administrative and management arrangements for the Australian Public Service. They will enable an orderly devolution of employment powers in the APS and a transition to a less regulated workplace.

I commend the Bill to the Senate.

Ordered that further consideration of the second reading of these bills be adjourned until the first day of the winter sittings, in accordance with standing order 111.

Sitting suspended from 1.00 p.m. to 2.00 p.m.