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Assistant Minister discusses the future of performance pay

MATTHEW ABRAHAM: Gary Johns is the Assistant Minister for Industrial Relations and Minister Assisting the Prime Minister for the public service, so I suppose he's Yes Minister for thousands of public servants. He's held the portfolio responsibility for the public service for about three months, and at lunch time today delivers a keynote address on the service to the Public Service Commission Seminar at the Lakeside Hotel. He's with me now.

Good morning, Minister.

MATTHEW ABRAHAM: Good morning, Matthew.

MATTHEW ABRAHAM: Before we look to some of the specific reforms and views you have on the public service, I suppose you're stroking a supportive audience today. You're saying that we stack up quite well by international comparisons.

GARY JOHNS: I think we do; I don't think there's much doubt about that. We have a very intelligent, well-motivated public service, but that's not the end of the story, is it? There's more to be done.

MATTHEW ABRAHAM: All right. Now, you outline a ... well, it's cut across just about every area that's currently on the agenda in the public service. Let's take a look at performance-based pay. You say that that's going to need, well, it's going to need a review. What's your feeling on it? The unions aren't too happy with, for instance.

GARY JOHNS: No, they're not. Look, it's not a very sensible system if everyone gets performance-based pay. I think that undercuts the merit of a case. But we have to also think what would you put in its place for senior officers? So, whilst the Audit Office for instance says that there are problems in the way we ran the system initially, after its first round - we're going to fix those - but there are still overall questions about whether it's the way to get best performance out of individuals. I'm not convinced one way or the other; there's no problem there. John Coates of course, Senator Coates in his report, doesn't like it at all but wants performance appraisal right through the public service. Now, I think if you separate performance appraisal with pay then you're not left with much. You may as well pay people for what you appraise them for.

MATTHEW ABRAHAM: So what do you do?

GARY JOHNS: Well, right now we're about to, if you like, run model 2, which is a model with some better rules in it and with some blockers in there so not everyone gets performance pay. Now, let's see how that works. If it works well maybe we've found ourselves a good system.

MATTHEW ABRAHAM: We're throwing buckets of money at it in the meantime, aren't we? What's performance-based pay cost?

GARY JOHNS: I'm not sure of the figure, to tell you the truth. It's not so much the amount of money, I think, as the mix of people who get it and who get it on the basis of genuine performance. That's what I'm mostly concerned with.

MATTHEW ABRAHAM: Isn't it going to tend to go to the upper levels, and isn't that part of the fact that it grates with unions?

GARY JOHNS: I think it does, but it was never meant to go anywhere else. You see, it was the unions, amongst others, who came to us and said we think some of those senior level officers are under paid. How can we give them a pay rise? Now, in the mix of debate that went on, people thought that performance-based pay would be a good way to reward them when necessary, when and where necessary. So, you see, that's the solution we found to the pay rise problem.

Now, it wasn't quite as crude as that, but many people suggested we should try this. I don't think the first round was particularly promising because we didn't set decent limits around it. I think second, and I think third rounds are going to be more sensible. Then we evaluate it.

MATTHEW ABRAHAM: All right. You say that, in your speech it is a hint at more temporary employment and job sharing in the public service. Again, how would you envisage that working?

GARY JOHNS: Well, the rules for job sharing, for instance, are sitting in there. They can be done. What we don't have is a culture around the place that suggests that more people ought to give it a try. Now, I don't think any number of rule changes will affect that. That's to do with the relationships between mainly men and women in the household, isn't it, as to who's going to work part time and who's going to look after the children? But it may be so that more and more people in time work part time. But that's something that will require discussion and understanding rather than just us fixing rules. That's the other part of the speech, that any amount of fiddling the rules won't necessarily change the way in which we operate as a public service.

MATTHEW ABRAHAM: You've outlined a timetable to renegotiate the currently APS agreement toward the end of the year. What specifically are you going to look at in that process? Will it be steady as she goes, or are you looking at a major revamp?

GARY JOHNS: Well, by negotiation, that is both sides are going to have agree as to what we do ... the thing I want to stress here is that we now have an overall Act for the public service, we have its regulations, we have, as you just pointed out, the framework agreement. There are awards which govern conditions, there are agency agreements. Now, that's a lot of rules to play with, and I want to see if we can get the balance, the tensions, right, between those four or five levels. And there's this tension between a central, solitary Australian public service versus a decentralised series of agencies. You know, the core values versus the flexibility of letting managers get on and do what they want to do in DEET or DSS or one of the other agencies - Attorney-Generals or whatever.

Now, until we sort that out in our mind, I don't think we can be clear what we want in the new agreement. One of the things I am clear about, though, is that we haven't got enough agency agreements up, and if we don't give that a real good try, agency by agency, then I think we're left a little bit bare when we come up to renegotiate the framework agreement.

MATTHEW ABRAHAM: One issue of a lot of local concern is this question of a separate public service for the ACT, and I assume this will need amendments in your house, or in the big house on the hill, to the Public Service Act. Is the Federal Government keen to keep open permanent mobility between the two services, when we finally get them?

GARY JOHNS: Well, no, we've got some problems with that. I mean, we say to every other State Government and the Northern Territory you can't just walk in and out of the Commonwealth public service. Now, I know that is a significant area of difference between us and the ACT and the trade unions involved. But I don't see why there should be a special relationship between us and the ACT, other than that historically there has been. So I think we might have some phasing in period, but at the end of the day no, I don't think we can have a situation where, for instance, I don't know, three years down the track an ACT government might want to, you know, have 500 ACT public servants leave their public service and then somehow we're left to pick it up. That's not fair.

MATTHEW ABRAHAM: So, yes, you're talking about a window that won't be open for very long - what, 18 months?

GARY JOHNS: Well, that's in the lap of the gods. I mean, that's up to negotiation. I want to keep it nice and loose, inasmuch as, hey, we want to get this thing done, we do want the ACT to have its own public service. We did promise, I think by 1 July - and we're probably going to miss that date - but who cares about the date? Let's get the rules correct and proper and satisfactory all round.

MATTHEW ABRAHAM: It's not happening very quickly, is it, the ACT public service?

GARY JOHNS: Well, as I say, I mean, I'm not going to be pressed by a date of whatever it is. Let's get it right in the first instance. We're not far off, mind you. I mean, there are only two or three points of difference, and in fact there are meetings going along right now, in this week and last week and next week, which should sort it out pretty soon.

MATTHEW ABRAHAM: Okay. Just another couple of other issues. One is, I mean you make an interesting point in your talk today about the appeal process, the system that we have in the public service, the selection process system, and you seem to be unhappy with that. Are you looking at paring that down, making it perhaps more in line with the private sector?

GARY JOHNS: Well, the question I ask is: Sure we want those core principles of fairness and proper and due process, okay? But, I mean, if 20 per cent of the costs incurred in the system are buying you just, sort of, 5 per cent of the final outcome, then maybe it's a bit over the top, maybe we don't have to put in quite as much effort to get more or less the same result. And, I mean, I'm bound to look at those sorts of things. Yes, if we can pare it back without any substantial loss or without any loss of fairness, well, we ought to do it.

MATTHEW ABRAHAM: All right. Gary Johns, thank you for talking to me this morning. Minister Assisting the Prime Minister for the Public Service - as I said, Yes Minister in the public service.