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FINANCE AND PUBLIC ADMINISTRATION REFERENCES COMMITTEE
02/09/2003
Inquiry into members of parliament staff

CHAIR —I welcome Dr Peter Shergold and officers of the Department of the Prime Minister and Cabinet, and Dr Ian Watt and officers of the Department of Finance and Administration. I invite you to make an opening statement to the committee, and then we will proceed to questions. Would you like to lead off, Dr Shergold?

Dr Shergold —I do not want to make an opening statement. There is a joint submission that has been made to you by the Department of the Prime Minister and Cabinet which attaches information provided by the Department of Finance and Administration. I think that submission takes the place of an opening statement.

Dr Watt —I would make the same point. We think we have covered the issues, as a starting point, in that submission, and it certainly takes the place of an opening statement.

CHAIR —Thank you. I will lead off with a couple of questions. Dr Shergold, you gave a speech earlier this year on 13 June, which is not part of your submission but has been well reported. In that speech you supported the system of ministerial advisers and particularly identified that they have a clear and distinct role. Quite a number of the submissions that we have received—and I assume that you or your department have had a look at other submissions—suggest that the role is not that clear and that, indeed, at times there is a degree of confusion about the role of ministerial advisers in the policy process. Would you care to expand upon your belief that it is a clear role and explain what that is, and maybe respond to some of the criticisms or comments of other witnesses to suggest that that is not the case any longer?

Dr Shergold —I am happy to do that. Back in 1972 when Prime Minister Whitlam for the first time introduced significant numbers of partisans to work for ministers, he did it on the basis that it would help to provide government ministers with more control over the policy making and that by having what was a relatively small number of such partisans that would help to ensure that there was competition in policy advice. Prime Minister Hawke back in 1983 coming into the election was persuaded of that. As I remember, the initial proposal was to make it that five per cent of the senior executive service could be appointed on the basis of political partisanship rather than on Public Service merit. As it happens, and I think correctly, the approach that was taken was different: it was to increase the number of advisers who could work for government and indeed for the opposition. It was driven by that same view: that government needed its own advisers—partisan advisers—to play a complementary role to the Public Service.

Having been in the Public Service for some 15 or 16 years now in the Hawke, Keating and Howard governments, I would have to say that my experience is that that has worked remarkably well. It has worked remarkably well in part because ministerial advisers are located with ministers rather than located within the Public Service. It is a relationship which in the vast majority of instances works very effectively to ensure that the government of the day is not dependent on monopoly advice provided by the Public Service.

What I see is a much greater contestability now in the provision of policy advice to the government in which the Public Service necessarily has to be far more innovative, imaginative and creative in the policy advice that it provides which is responsive to the direction set by the elected government of the day. However, it is crucial and vital that the Public Service in providing that robust policy advice does so in a non-partisan way—in other words, that we can continue to serve successive ministers, successive prime ministers and successive governments.

The ministerial adviser, unlike those of us who are a professional administrative class, have fortunes that are directly tied to their minister, prime minister or government. They are partisan and appropriately partisan. They on occasions liaise with party organisations. They bring a different perspective to policy advice than the career public servant. As long as both sides understand that although they serve the same ministers and prime ministers they do so in different ways, that provides a healthy relationship. That was the point I was emphasising in the speech that you referred to.

CHAIR —I might indicate that we have had a request from the media as to whether they could take photographs during the hearing. In the usual manner, we will allow that to occur. Thank you, Dr Shergold. As you know, one of the key issues the inquiry will be focusing on—and it arises out of recommendations of the earlier report into a certain maritime incident—is the possibility of establishing a code of conduct for ministerial advisers. We have received a range of submissions and views on that. In the department's submission you comment on that. At the moment, the Prime Minister's guidelines operate, which you have referred to. On page 3 of your submission you state:

The Prime Minister's Guide on Key Elements of Ministerial Responsibility makes it clear that Ministers are responsible for the conduct of their staff where they act at the Minister's direction and,—

and I want to emphasise these words:

to the extent that they have the Minister's authorisation, take action on his or her behalf.

That seems to be very much the nub of one of the important issues that the committee is looking at, which is where ministerial advisers are acting or not acting with the minister's authorisation. What are the words `to the extent that they have the Minister's authorisation' actually intended to mean? What guidance do they give to the ministerial adviser?

Dr Shergold —You are correct in saying that the Prime Minister's Guide on Key Elements of Ministerial Responsibility does refer to ministers being responsible for the conduct of their staff. We have to remember that what we are talking about here is a relationship often between those staff and the public servants, so of course I am responsible for the conduct of my staff under the values and ethics set out in the Public Service Act 1999 and the guidelines recently issued by the Public Service Commissioner. That being the case, if there is any doubt or question at any stage that a request or a direction given by a ministerial adviser is being given on behalf of the minister, I would intervene to find out if that is the case. It is very rare that that would happen. I can remember a couple of instances where I myself have wanted to confirm with the minister that the request or direction which is being given is on the minister's behalf. But in most day-to-day workings you work on the assumption—and, I think, the correct assumption—that the staffer is representing the views and the authority of the minister.

CHAIR —Did you do that directly with the minister?

Dr Shergold —Of the two occasions that I can think of, on one occasion I did it with the ministerial adviser and on the other occasion I did it with the minister. It was a means for me to clarify the priorities that were being set by the minister.

CHAIR —What do you believe the guidelines mean in a situation where the ministerial adviser acts or gives a direction without the minister's authorisation? What do you believe the guidelines mean in respect of the responsibility that then attaches to the minister for the actions of his staff? Is it still complete?

Dr Shergold —It is clear to me that the minister is responsible for the actions taken by members of his staff on their behalf. If I have any doubt—and in both the instances I talk about it has been where requests have been made which seemed to be at odds with the priorities that had previously been set—I will ensure that the ministerial adviser is acting on behalf of the minister. You have to remember that to get this complementary role to work effectively, to get government to work effectively with a professional public service, requires a relationship of trust. It does impose significant responsibilities on the secretaries of departments to provide leadership to their departments. It is, for example, crucial for my staff to understand, if at any time they have any doubt about the request that is being made to them by a member of the minister's staff, that they would contact me and seek confirmation. That is part of the leadership that I would provide to a department. It is part of the leadership that Dr Watt would provide.

CHAIR —In a situation where information or advice is given to a ministerial adviser with the clear expectation and indication that it should be passed on to the minister, how would you seek to ensure that that occurs? Is there an acceptance that if the advice and information is given it will be passed on? I appreciate that this was very much at the heart of some, or most, of the issues in the CMI report and, bearing that in mind, what steps do you as secretary or your officers take to ensure that that advice and information is passed on?

Dr Shergold —In the normal day-to-day relationship I have with the minister's office and with the minister—or, indeed, the Prime Minister, of course—it is relatively easy for me to know if the advice that is being required has been asked for by the Prime Minister or the minister. In the vast majority of instances where communication takes place between ministerial staff and departmental staff, there is nearly always a follow-up to requests that have been made and discussions that have taken place between the Prime Minister, the minister and the secretary. Usually, directions are set and then in matters of technical detail or in the preparation of legislation often it is followed through in relationships between the minister's office and others within the department. As I say, the key is that if anyone has any doubt at any stage either (1) that what is being requested is not appropriate, whether or not with the minister's authority, or (2) that the staffer is not acting with the minister's authority, then I would intervene, and I would expect my staff to alert me to any concerns that they would have on that issue. I would have to say that it is very rare indeed.

Senator MURRAY —Excuse me, I want to—

CHAIR —I wanted to also ask about the code of conduct, so I am happy if we carry on with this issue at the moment.

Senator MURRAY —Dr Shergold, I just want to pick up on a word you used in your response, just so I understand what the meaning was. You have used the word `request' throughout your responses. Is it always by request, or are there ever orders?

Dr Shergold —It can only be a request. It may be that the minister has asked through a ministerial adviser for a brief to be available at a certain time. I suppose in that way it is in the nature of a direction, but you will do it as is appropriate within the time frame that is available. Whether or not the request comes from the minister or a member of the minister's staff, you would always identify what is appropriate and what the time frame is within which you think that request can be met.

Senator MURRAY —But the minister does not request; the minister issues an instruction and gets a response.

Dr Shergold —I would have to say that in my experience ministers very rarely issue an instruction in that way. They would nearly always say something like: `I have an urgent meeting coming up. Can you get me a brief by four o'clock this afternoon?' I would indicate whether I can, and I would certainly always indicate that I will do all in my power to ensure that that request is met.

Senator BRANDIS —Dr Shergold, I want to explore a little further the concept of a member of a minister's staff acting on behalf of the minister. Your evidence, as I understand it, was that ordinarily it would be assumed that any inquiry, request or direction in the ordinary course of business by a member of the minister's staff is made on behalf of the minister. Is that correct?

Dr Shergold —That is correct.

Senator BRANDIS —I imagine that the concept of delegation must be very widely understood. You do not say, do you, that that is the understanding only in circumstances in which there is specific delegation by a minister? I imagine—but I invite you to comment on this—that there is an expectation among ministerial staff, in particular senior ministerial staff, that they really are almost the alter ego of the minister, so they have a fairly wide-ranging authority to speak and act on the minister's behalf.

Dr Shergold —That is precisely my point. In terms of day-to-day operations, I would work on the basis that the ministerial staffer is working under the authority of the minister, as they would understand that on a day-to-day basis, for example, the assistant secretary they deal with in my department is speaking with my authority and that I am accountable for the actions of that assistant secretary. That is why I am saying there are very rare instances where something is asked that seems to be at odds with a previous priority set by the minister and where you would want to ask the adviser or the minister: `Is it true that you want us to shift priorities in this way?'

Senator BRANDIS —The point I am getting at is that you or officers of the Public Service would not assume ordinarily that every request, direction or action by a member of ministerial staff has been specifically instructed by the minister. One would assume, as long as the action is in the ordinary course of business, that the member of the minister's staff might be acting under a general delegation of authority rather than in response to a specific instruction from the minister.

Dr Shergold —Precisely, just as my staff act under a general delegation of responsibility.

Senator BRANDIS —There would be no difference in the treatment of the response to a request, whether it were known to be made in response to a specific direction or whether it were assumed to be made not in response to a specific direction but under a general delegation of authority.

Dr Shergold —That is absolutely correct.

Senator BRANDIS —Thank you.

Senator CARR —Dr Shergold, could you enlarge on the occasions when you have indicated that you have felt it necessary to raise with a minister whether or not staff were acting consistent with the minister's instructions?

Dr Shergold —Without going into the detail, I can remember two occasions. One was when I was the CEO of ATSIC. A request was made by an adviser in Prime Minister Hawke's office and I wanted to question whether the request was made with the support of the Prime Minister. That was an issue that I took up with both the adviser and the Prime Minister. I think the second one was a more minor occurrence with Minister Nelson's office. It was to do with the priorities of the workloads of the department. I was aware that a request that was being made was going to stop the timeliness of a response that the minister had asked for the previous week. Therefore, I wanted to check with the adviser about what was the relative priority. Those are the two occasions.

Senator CARR —On both occasions, I take it the minister said that the adviser had been providing you with correct information?

Dr Shergold —I do not want to go into the details. Only on one occasion did I speak to the minister, who was actually Prime Minister Hawke. On the second occasion, the matter was simply taken up with the adviser.

Senator CARR —You do not want to enlarge on whether or not the advice tendered to you by the adviser was accurate?

Dr Shergold —Even though these are times past, I believe it is important that there is a relationship of trust between the public servant and the minister or Prime Minister. I think I have said sufficient to give you an understanding of (a) the rarity of the occasions and (b) how I believe it is appropriate for a secretary to respond.

Senator CARR —Thank you, and that is precisely why I am asking the question. In your experience, is it extremely unusual for an adviser not to be acting on the authority of the minister?

Dr Shergold —Yes.

Senator CARR —I was wondering if I could follow through with some matters that were raised in your submission—in particular those matters of your submission that go to the relationship between senior public servants and the government of the day. On page 2 you talk about `frank and honest' advice. `Frank and fearless' is the term that is often used. I presume you mean the same thing—that `frank and honest' is the same as `frank and fearless'.

Dr Shergold —Yes. As you are probably aware given the textural analysis that takes place on my speeches, I am averse to using the term `frank and fearless' because, by becoming a cliche, it has lost power.

Senator CARR —Will you put the concept of `frank and fearless' or `frank and honest' advice in relationship to `responsiveness to government'? Do you see that there are any conflicts between those principles?

Dr Shergold —No. In terms of the values that are set out for the professionalism of the Public Service under the Public Service Act, it is important to provide that frank, honest, robust policy advice which is, at the same time, responsive to the directions that are set by the elected government of the day.

Senator CARR —Yes, and you do not see that there is any conflict between those two principles?

Dr Shergold —No. I believe that it is important to understand what `responsiveness to government' means, and it is in that way that I think the directions that I suppose were set by Prime Minister Whitlam and Prime Minister Hawke seem to me probably correct. My view from my experience in the Public Service is that the role of ministerial advisers is actually a very helpful one to the professionalism of the Public Service—in that the advice that I provide certainly needs to be responsive to the broad directions set by government but it does not need to concern itself with party political considerations, because within the minister's office there are advisers who will have those concerns.

Senator CARR —Yes. You are also noted for use of another term, `bias for action'. Do you maintain use of that term?

Dr Shergold —It is certainly a term to which I am very much committed. I believe that there are two key elements of a professional Public Service—the first is to provide robust policy advice to the government of the day and the second and equally important is that, when the government of the day sets its policy directions and takes its policy decisions, the Public Service should implement those decisions faithfully.

Senator CARR —So you do not see any conflict between the three issues of `frank and fearless' advice, `responsiveness to government' and `bias to action'?

Dr Shergold —No. I think it is important that you understand the relationship. If you did not have frank and fearless advice which is responsive to the government of the day, you could have the ludicrous situation where a public servant would be providing policy advice which was completely at odds with the mandate of the elected government. That is not the purpose of robust policy advice. The purpose of my advice within the broad directions set by government is to come up with imaginative ideas and in an objective way as possible to assess the pros and cons of particular policy approaches.

Senator BRANDIS —On that last point, you are conscious therefore, when you provide policy advice, of the government of the day's—what I think the British call manifesto commitments—election campaign promises, in effect, and you consciously have regard to them in offering the advice to government that you do. How particular a limiting factor are policy and political commitments to the detail of the advice that you give? Is it merely broad outcomes that you have regard to in shaping your advice congruently with the government of the day's announced election commitments, or does it go to the level of means as well as ends?

Dr Shergold —When I say that a public service should be responsive to the government, I am referring to the broad directions set by government. They may be set down in a manifesto or in a mandate, or indeed they may be generally known from the directions set during a term of government. Let me take two concrete instances. For example, when I was the CEO of ATSIC the government of the day had set broad directions about commitment to Aboriginal self-determination. In my view it would have been quite inappropriate to provide policy advice which said, `Oh no, let's go back to an assimilationist policy.' It was clearly not the direction set by the government of the day. In working for Minister Peter Reith—and this is clearly a policy that was set down in a manifesto or the mandate of Prime Minister Howard's government when it came to power—there were clearly directions about industrial relations based at the enterprise level. It would have not been frank, fearless and robust to provide policy advice that said, `Let's go back to a centralised system of wage fixing.' But within those broad directions, believe me, there is an enormous capacity for the Public Service to come up with imaginative options and indeed to put forward to the government what are some of the weaknesses or the challenges that need to be faced in the implementation of policy.

Senator BRANDIS —Senator Carr, I will not trespass any more on your time, but allow me one more question. Dr Shergold, what if you think, though, that a government's declared policy is just wrong? Let us say a party comes into government after many years in opposition and in a moment of robustness during an election campaign it makes a commitment to adopt a particular policy. It is your considered view held in good faith that that is just not going to work and you consider, quite properly, that you are in a good position to make that judgment because the party that has just been elected to government has been in opposition for donkey's years and they just do not know as much about the way this policy is going to work as you do. So you have in good faith a belief that a particular declaration of intent is just not going to work. Do you go to the minister in the new government and say, `With all due respect, Minister, I note what your party said during the election campaign; however, allow me to point out why this is not going to work'? Or do you merely try, accepting the commitment is a given, and devise an implementation strategy?

Dr Shergold —That is why I am trying to define responsiveness in terms of the broad direction set by government. It would certainly be my view that on any specific policy it is important to give robust policy advice on the difficulties of implementing a particular approach.

Senator BRANDIS —So within your definition of robustness, robustness goes so far as to say in a particular case to a minister, `Even though you have announced this policy, let me explain to you why it's not going to work.'

Dr Shergold —Correct, but I have a very strong faith in the Westminster system, in which it is the elected government that sets those broad directions. There is a danger when a professional public servant starts to believe that they have some higher ethical duty to national interest.

Senator BRANDIS —Thank you.

Senator CARR —When did you take over as head of the Prime Minister's department?

Dr Shergold —At the beginning of February this year.

Senator CARR —And up until that time you were with Education?

Dr Shergold —For the previous 12 months.

Senator CARR —But there was no interregnum prior to February?

Dr Shergold —No.

Senator CARR —In view of the concept of bias for action and the questions that go to the role of the Public Service, I have before me a number of newspaper articles from the Sydney Morning Herald which outline what are claimed to be the actions of officers of the Prime Minister's department. They are with regard to what the officials of an ethanol importing company said, labelling PM's officials as `ethanol spies'. These matters went to some events that occurred in September and August of last year, when you were not the head of the department, and indicated that on five occasions there were circumstances where officers of the Department of the Prime Minister and Cabinet sought to gather information concerning the importation of ethanol, which was perceived to be a threat to the commercial operations of a company operating in Australia: the Manildra Group of Companies. Do you recall those articles?

Dr Shergold —Yes, I do.

Senator CARR —Would you regard that as an example of bias for action?

Dr Shergold —As we seem to have returned to a Senate estimates hearing, I will take a Senate estimates approach and say that I am not going to comment on newspaper articles. What I can say categorically, even though I was not the secretary to the department at that time, is that the public servants within my department behaved entirely appropriately in terms of their professional commitments.

Senator CARR —Since you do not want to take an estimates approach, could I ask you a direct question: in undertaking this action, did the officers concerned act, as you say, properly insofar as they were acting on the instruction of the Prime Minister's office?

Dr Shergold —I cannot answer the detail of that. I will take it on notice. I have already indicated to you my absolute understanding that they behaved entirely appropriately. That would seem to me to answer your second question.

Senator CARR —Yes. So, as far as you are concerned, to act on instructions from the Prime Minister's office would be entirely appropriate in these circumstances?

Dr Shergold —Let us go back to the broad position that is being placed. It is entirely appropriate to act on the authority of an adviser in the Prime Minister's office, as long as the request itself is appropriate. Obviously public servants would therefore take account of issues of administrative law, due process et cetera.

Senator CARR —Why would it be necessary for officers to spy on a commercial—

Dr Shergold —Senator, you know, of course, that I am not going to just let that pass. This happens so often. I am not saying that public servants have spied.

Senator BRANDIS —Going back to your last answer, it seems to me that if your evidence to the committee is that Public Service officers behave with entire appropriateness and they would not be doing so were they obeying an improper instruction, then there could not have been an improper instruction?

Dr Shergold —Correct. I do not believe there was spying or acceptance of inappropriate or improper instructions.

CHAIR —Thank you for the leading question, Senator Brandis.

Senator CARR —So, if I use the term `make inquiries' concerning the shipment of ethanol into Australia by the Trafigura group, would that be appropriate?

Dr Shergold —It is entirely appropriate that public servants make inquiries on behalf of ministers or prime ministers. It is one of the key roles that public servants have.

Senator CARR —That is the point I am making: in your view it is appropriate that officers act on advice from the minister's office—in this case, the Prime Minister's office—about the commercial operations of a company importing ethanol?

Dr Shergold —I am answering in a general way. I am not going to get into the position of commenting on newspaper stories that you have in front of you.

Senator CARR —This is not just a question of what newspapers say; I understand the Prime Minister made a comment.

Dr Shergold —Let me cut to the chase on this. I am saying to you very clearly that there is nothing inappropriate in what public servants in my department have done. They acted on appropriate authority, and seeking information is a day-to-day responsibility of public servants.

Senator CARR —I would ask you to take this on notice because I presume you will not be able to tell me now: were those officers responding to a direct request from the Prime Minister or a member of the Prime Minister's staff?

Dr Shergold —I will take that on notice but you will have gathered from the evidence I have provided so far that it is not an important distinction.

Senator CARR —I would like an answer to the question.

Dr Shergold —I will take it on notice.

Senator CARR —Thank you. Could I ask you about another example that—

Dr Shergold —Sorry, an example of what?

Senator CARR —Another example of relationships between public servants and ministerial officers, which is the point of this inquiry. I would suggest to you that it goes to the values of the Public Service and the nature of the role of the Public Service. You have asked us to be clear in the distinction between the role of the public servant and that of the adviser. You have said that it is important to provide robust policy advice which is nonpartisan.

Dr Shergold —Yes.

Senator CARR —You have also said that it is important to be innovative and creative, but nonetheless there is this clear distinction that needs to be maintained at all times of the different roles of the different functionaries within the system of government we currently have. With that in mind I would like to draw your attention to an article that is to be published this Friday in the Griffith Review by Mr Graham Dobell. Are you familiar with Mr Dobell's work as an ABC journalist?

Dr Shergold —Keep talking, Senator, about the article that is to appear.

Senator CARR —Are you familiar with Mr Dobell?

Dr Shergold —No.

Senator CARR —Mr Dobell is widely recognised as a man of some standing with a reputation for fine journalism. In fact, I understand that Mr Downer said words to that effect in an interview with the ABC recently. Mr Dobell has written an article in which he says there has been a situation with regard to foreign affairs officers engaging in what he says is self-censorship.

... self censorship has become an ambassadorial art form; well-understood protocols ensure ministers are not told what they don't want to hear and professional discipline is reinforced by a `culture of compliance'.

Are you familiar with the article?

Dr Shergold —I could not be, Senator—it has not appeared yet.

Senator CARR —I will help you out by seeking leave to table a copy of the article.

CHAIR —As there is no objection, leave is granted. I think it also should be provided to Dr Shergold.

Dr Shergold —I am very happy to deal with what I understand to be the question on the article that is to appear, which is on the nature of self-censorship. Is that correct?

Senator CARR —There are a few other things.

Dr Shergold —The view that self-censorship occurs in the Public Service.

Senator CARR —It goes further than that but let's just start—

Dr Shergold —Let me take that one first and then we will go further.

CHAIR —Excuse me, Dr Shergold; let us just finish the question and then you can comment.

Senator CARR —There are a number of matters that I wish to pursue in this regard, but it strikes me that this is a matter that the foreign minister has made a comment upon, so it is not exactly entirely unfamiliar to the service. Have you been briefed on this issue, Dr Shergold?

Dr Shergold —No. But I would like to talk about your issue of self-censorship when I have an opportunity to.

Senator CARR —You will get the opportunity. I just want to establish whether you have had any discussions about the appearance of this article.

Dr Shergold —But the article has not appeared.

Senator CARR —About the appearance of this article. Let me put it this way: you are about to receive a copy of the article.

Dr Shergold —No, I have not been briefed on the article that you are about to hand me.

Senator CARR —That is the point I wanted to get to.

Senator BRANDIS —Chair, I raise a point of order regarding fairness to the witness, and it is limited to that. I apprehend from the way Senator Carr's questions are going that he is now going to put to Dr Shergold a series of propositions or invite him to comment on observations made by Mr Dobell in an article that Dr Shergold, as we all know, has not had the opportunity to consider. It seems to me a little unfair to go about it in that way, particularly since the article is hardly a state secret. It could presumably have been directed to Dr Shergold's attention in time to give him the opportunity to get across it and consider it.

CHAIR —I do not think there is a point of order, Senator Brandis. I am conscious of the issue you have raised. If Dr Shergold has not seen the full article—and I have not seen it either—then that is a fact. As to whether Doctor Shergold is able to comment on or answer questions asked by Senator Carr regarding comments, observations or arguments that are in the article, I think Dr Shergold will be able to look after himself fairly capably in that regard. We can move on with the questions. From what I understood Senator Carr to have said, this has been drawn to the attention of another minister, namely Minister Downer. Whilst it may not have been published, it appears that it is at least known to ministers and officers of the government and the departments to some extent. Let us move on and see where we get to. Dr Shergold can always—

Senator CARR —Thank you. That is why I was seeking from Dr Shergold advice as to whether he had been briefed on the content of this material.

CHAIR —It would be important though, Senator Carr, to actually get to the question.

Senator CARR —If I could, with the extraordinary assistance that I am receiving here. Dr Shergold, in this article the former departmental DFAT secretaries, Richard Woolcott and Stuart Harris, both point to what they regard as the deterioration in the quality of advice coming from officers to government and, in particular—and this is where you get your chance to comment—they point to a culture of compliance emerging within DFAT.

Senator BRANDIS —Where do they say that? Can you direct us to the passage that you are asking the witness about?

Senator CARR —It is on the first page of the article, on page 67 of the review. I have just quoted from the passage at length.

Senator BRANDIS —You have not told us where it is, Senator Carr.

Senator CARR —I have. It is on the first page, page 67. It says:

Welcome to 21st-century Australian diplomacy, where self-censorship has become an ambassadorial art form; well-understood protocols ensure ministers are not told what they don't want to hear and professional discipline is reinforced by a `culture of compliance'.

Senator BRANDIS —Senator Carr, I do not want to accuse you of being intellectually dishonest, but a couple of questions ago you said that Mr Woolcott and somebody else said that, but in the passage you have just given us that is not attributed to them at all; that is not true.

CHAIR —Senator Brandis, it would assist if we did not engage, and you did not engage, in a debate.

Senator BRANDIS —I do not think it is fair to the witness and to the other senators on the committee—

CHAIR —Senator Brandis, I will make sure that the witness is treated fairly. If the witness has a problem, he can draw it to my attention. I do not need your assistance, with all due respect, to that extent.

Senator CARR —I have quoted one passage on page 67 and, since the senator is so keen for us to get the full detail of this on the record, I refer to the second paragraph on page 70, where reference is made to Stuart Harris, a former head of DFAT from 1984 to 1988. Further down that page there is a passage from another secretary, Woolcott, who was secretary from 1988 to 1992. It says:

Woolcott ... says senior public servants and ambassadors can no longer push arguments to government as they could in the past: `Your Whitlams, Frasers, Hawkes and Keatings didn't object to senior public servants doing this. I feel now a culture of compliance has developed in the public service. It is unfortunate. Prime ministers and ministers say they welcome frank and fearless advice, but they don't always do that if it doesn't accord with what they want to do. I think the bureaucracy now is much more managed out of the Prime Minister's office than it ever used to be. People are a bit more worried about challenging what they perceive to be the established views of the Prime Minister or other ministers on an issue. Someone like Whitlam used to welcome that. Evans used to welcome it. Made them think, made them have another look at some of the policies. I think less of that goes on now.'

Would you care to comment on those views, Dr Shergold?

Dr Shergold —I am happy to comment on their views. Now having seen this article in the Griffith Review, though, I do note in passing that some of the comments you have brought us to bypass others, such as:

The aspirations to be an `elite' service were killed off long before John Howard swept into power ...

So I think we have some selective reading of the quotes.

Senator BRANDIS —Surely not.

Dr Shergold —But I will deal with the issue. I remember, when I was an economic historian, reading a very good book on hooliganism over the last century. What became clear was that each generation believes the behaviour of the present young generation is much worse than it was in the past. I would have to say that there is a tendency, perhaps even amongst ex-secretaries like Stuart Harris and Richard Woolcott, to believe that things are not as good in terms of the frankness and fearlessness of policy advice as they used to be in the old days. The one advantage I suppose I have over them is that I am in the service now. On the basis of that and of experience with three governments, I can say that I see no change whatever.

The notions that ministers do not wish to hear policy advice or that public servants are cowed into not providing robust policy advice are, as I said on a radio station recently, balderdash and poppycock. It is complete and utter nonsense. I have never worked to a Prime Minister or a minister who did not want to receive robust policy advice. It may be that, at the end, that policy advice was rejected, but they wanted to hear it. There is no evidence whatever that I can see that barriers are being put up to stop ministers or their advisers receiving strong advice from public servants. I see no evidence whatever that public servants are intimidated. I can understand the view that the removal of permanent tenure for secretaries by Prime Minister Keating in, I think, 1994 may have made the Public Service more cowed, but I see no evidence whatever of that being the case. I know of none of my secretarial colleagues who, in providing policy advice, are in any way intimidated by the fact that they no longer have permanency of tenure.

Senator CARR —That is pleasing to hear. The article goes on to describe how the various diplomatic cables have now changed in their formatting and that the opportunities for more junior officers to have access to those cables have now been restricted, and that is put down in part to the need to prevent officials from talking out of turn, be it to the media or to the opposition. What do you say to those types of suggestions? Has there been a change in the way that material is now being presented to government, to remove any critical comments about government's actions?

Dr Shergold —I can do no better than to quote from page 72 of the Griffith Review, which you have kindly provided me with. Unfortunately I lose a line with it being a photocopy—but I will start. It states:

The man at the centre of DFAT, the secretary, Ashton Calvert, argues there was never a public service golden age—

something I entirely agree with—

`The implication seems to be that there was some previous period when public servants were free to decide ...

Unfortunately I then lose a line of text.

Senator BRANDIS —I think Senator Carr has the original there. To be helpful, he might pass it to you.

Dr Shergold —It would be helpful if I could read it out, because I think it is very important to quote from the present secretary; it seems to me that in this article he completely dismisses the propositions that have been put forward.

Senator CARR —So, in response to Mr Dobell's central allegation, in your judgment there has been no change to the formatting of material in diplomatic cables that go to government?

Dr Shergold —Doctor Calvert agrees that there has been cultural change, but he sees it more as a response to `staff cuts, technological change and the complexity of issues modern government confronts'. He says that Foreign Affairs must be more of a team player in a whole-of-government process and, to quote, `We most certainly are much better integrated and better embedded in the broader public service than before.' I must say that I could not have said it better myself.

Senator CARR —So, in your judgment, the claims made about the failure to provide critical advice to government are untrue.

Dr Shergold —I do not think I could have been clearer in what I have said. Yes, definitely untrue.

CHAIR —At least we have established that Graeme Dobell's article is very fair and reasonable in presenting views on the issue.

Senator CARR —Dr Shergold, I go to points that you have raised about the need for critical advice to government. I return to the period when you were the secretary of the education department. You took particular interest in the Crossroads consultation process, did you not?

Dr Shergold —I certainly did.

Senator CARR —People worked through to you on Crossroads matters?

Dr Shergold —They did.

Senator CARR —I have here a letter from the current secretary, Jeff Harmer. He refers to a number of reports which had material removed from them that was perceived to be critical of government in regard to the HECS policy changes introduced in 1996. The letter says that, in November 2002 or thereabouts, the department took the decision to remove material regarding HECS that has recently become the subject of media reporting. Were you the officer responsible for removing that material?

Dr Shergold —I am so glad you have asked that, Senator. No, of course I was not the officer responsible for the removal of material from those reports. Indeed, I believe the report in question was one that I had never seen. As I indicated to you, I think at the last Senate estimates hearing that we had together, I certainly had taken a decision that research undertaken internally would then become part of the internal policy advice which contributed to the government's decision on higher education reform. I think that was nine months ago.

Senator CARR —That is right. In this context, I am referring to five separate reports. There is a national report.

Dr Shergold —The national report was not one that I had asked to be changed.

Senator CARR —Mr Burmester was in charge of that particular one?

Dr Shergold —I do not know; all I can tell you is that I did not.

Senator CARR —But Mr Burmester was the manager of the higher education group at the time. That is true, isn't it?

Dr Shergold —He would have been the head of the higher education division at the time.

Senator CARR —Did Mr Tom Karmel report to him or to you?

Dr Shergold —No. I do not believe that Tom Karmel would have reported to Mr Burmester. My understanding of the reporting arrangements at the time—I am happy to have this checked by Dr Harmer—is that Tom Karmel reported to Wendy Jarvie, the deputy who had responsibility for research and evaluation.

Senator CARR —But not to you?

Dr Shergold —No, Tom Karmel did not report to me. Obviously, through my deputy, he would have reported to me. I thought you were asking about the direct reporting relationship.

Senator CARR —Yes. That is right. As you said, officers were acting on your behalf.

Dr Shergold —This Tom Karmel is the officer that I think you suggested may have been removed from his position.

Senator CARR —No, I said that there was a reorganisation of the research unit.

Dr Shergold —Yes.

Senator CARR —Mr Karmel was the head of the research unit in an acting capacity. I said that the jobs were advertised and that he did not secure that job.

Dr Shergold —Yes. I would like to correct that. You say these things, they get in the media, they are accepted as fact, and they are utterly wrong.

Senator BRANDIS —That is why he does it.

Dr Shergold —Let me put on the record that the selection process was a normal public service selection process—that is to say that I was not on the selection panel, but a representative of the Public Service Commission was. Mr Karmel applied for that job. He got that job, Senator. He won the position. Unfortunately, he was offered a better job at the same time and, in spite of my entreaties to stay with the department, he decided to take the other job. We now have it in the public arena and in newspaper stories that an officer was removed from that position, whereas in fact it is precisely the opposite: the officer in question won the promotion and decided not to take it.

Senator BRANDIS —Let us hope, Dr Shergold, that the media pays as much attention to your specific and emphatic refutation as it does to Senator Carr's false allegation.

CHAIR —Senator Brandis, I would request, for the orderly conduct of this committee, that senators do not interject, start asking questions or making comments.

Senator BRANDIS —With respect—

CHAIR —No. Just listen to me, Senator Brandis. If you wish to follow a particular line of questioning at a particular point of time and that involves interrupting the senator who is asking the questions, you can draw it to my attention and I will certainty facilitate that opportunity.

Senator BRANDIS —On a point of order, Mr Chairman.

CHAIR —What point of order?

Senator BRANDIS —The point of order is this: the approach that Senator Carr has been adopting with this witness, as must have been evident to you, with respect, has been to put to the witness a series of false propositions and then in subsequent questions to characterise the witness's earlier evidence in a way which, frankly, is quite dishonest. You, with respect, as chairman, ought to exercise some control over that abuse of the questioning process.

CHAIR —Senator Brandis, I do not believe there has been any abuse of the questioning process. There is no point of order. I call Senator Carr. As I have said, Dr Shergold, I would have thought, is handling himself well enough as an experienced public servant to answer the questions. If he finds himself in a position where he needs to draw matters to my attention, he can.

Senator CARR —Dr Shergold, could you please provide me with the date on which Mr Tom Karmel was advised that he had been appointed to that position as the head of the new research group within DEST.

Dr Shergold —I can do that. I can also provide a letter, which I think you have received from Tom Karmel, making it clear that he was not removed from the position.

Senator CARR —No, I did not receive a letter from Mr Karmel making it clear. I did receive a letter from him, indicating that he applied for the position and that another officer, Miss Borthwick—if I recall rightly—secured that position. That is neither here nor there. You are the one that has actually raised this matter; I have not. I really do not think this is—

Dr Shergold —No, it is importantly here or there. Miss Borthwick got the job when the person who had been recommended to the Public Service Commissioner—Mr Karmel—said he did not wish to take the job because he had had a better offer. It is precisely here or there.

Senator BRANDIS —That is set out in the letter, is it?

Dr Shergold —I believe there is a letter, and certainly I have the Public Service Commissioner's report.

Senator CARR —You said you were going to provide it.

Dr Shergold —I have the Public Service Commissioner's report, which I can provide.

Senator CARR —Would you provide the letter? You were saying that you wanted to table Mr Karmel's letter.

Dr Shergold —No. I said I will find out if there is one that is available to be tabled.

Senator CARR —I thought you said before that you had a letter that you would provide.

Dr Shergold —I said that I think there will be one that is available, and I will certainly table the Public Service Commissioner's report on the outcome of the selection process.

Senator CARR —Thank you. I have some correspondence from Mr Karmel, and my recollection of the nature of that correspondence is not as you have indicated. But, as I say, you are the one that has raised this matter. I would be interested to know on what date you reclassified the following reports: HECS and educational opportunities by P. Aungles et al; HECS: The impact of changes by Maureen McLachlan and Tom Karmel; and University participation of persons from non-English speaking background: Impact of migration patterns 1991-2002 by R. Fleming and T. Karmel. These are various reports referred to in Senate estimates question 14904—you will need to check this, I have no doubt—where it was said that the two reports were to be provided to me but the remaining reports are in the nature of internal policy advice. I would like to know the date on which those remaining reports were reclassified from being forthcoming for publication.

Dr Shergold —I cannot give a precise date. I think that that question you are referring to is the answer that I gave you nine months ago.

Senator CARR —It was on 5 June 2003.

Dr Shergold —Chair, if I could have 30 seconds, I think I can answer this question, if you really want to go into this detail.

CHAIR —If you can check with one of your officers, that is fine.

Dr Shergold —I have a briefcase. I gave an answer at Senate estimates on Thursday, 21 November 2002. I was asked by Senator Carr about these reports. There is the report by McLachlan and Karmel. This is in November 2002. I responded:

That is in the nature of policy advice that is being provided to the minister now in terms of the higher education review.

The Hansard then reads:

Senator CARR—I see. So was the report commissioned by the department or was it an internal working document?

Dr Shergold—It is internal. It is done by members of the department.

So back in November 2002 I had indicated to you quite clearly in Senate estimates that the reports that had been done by DEST staff were internal working documents which were now contributing to the higher education review.

Senator CARR —Thank you, Dr Shergold. So sometime between April 2002, when the reports were prepared as the underpinnings for the national report and were delivered presumably to you or to Wendy Jarvie, their status was changed from being forthcoming for publication, as listed in that report, to being advice to the minister.

Dr Shergold —Correct.

Senator CARR —Can you tell me the date on which—

Dr Shergold —No, of course I cannot. I could not possibly tell you date on which that happened. But what happened in that period was that the government made a decision to have a major inquiry into higher education. Therefore, it was my clear decision—and, I believe, entirely appropriate—that the internal policy advice provided within the department, not by outside consultants, would feed into the policy development on behalf of government. That is what happened in that period. From April 2002 a major review was established on higher education, as you are aware. Therefore, the material being prepared within the department became part of the internal policy advice that went to the minister. There is nothing unusual in that.

Senator CARR —So you personally made that decision?

Dr Shergold —Yes.

Senator CARR —You say this was advice that went to the minister.

Dr Shergold —It became part of the variety of policy advice that was going to the minister. You would remember the extensive consultation process that took place and the number of focus groups that were held. There was a series of discussions. The minister had his own advisory group. I established a team, which included Mr Aungles, to work on policy advice going to the minister. It became part of that mass of policy advice on which the minister and then the government took their decisions.

Senator CARR —Can you give me the date on which that advice went to the minister?

Dr Shergold —No. I would not know. I am not sure that those reports ever went to the minister. They may have, but I simply could not tell you that. I do know that they became part of the policy advice to the minister, which was developed in an iterative way. That is how policy is developed.

Senator CARR —These reports were not made available to the Senate because it was said that this was advice to the minister.

Dr Shergold —Correct—because it was done by people within the department.

Senator CARR —You have referred to correspondence from Mr Karmel. Presumably, you are aware of the public comment that Mr Karmel has made, that he is the author of these reports, he always believed that these reports were for publication, and that that is why they were listed in the first draft of the national report as being forthcoming. I am interested to know on what date they were transferred from being `forthcoming for publication' and the date on which they actually went to the minister. This might seem like a pedantic point, but the question of whether or not they are advice to the minister determines whether or not they are available for publication. The fact that their status changed from being research reports for publication to advice to the minister is critical in whether or not these reports were in fact published. Would you agree?

Dr Shergold —No.

Senator CARR —Why not?

Dr Shergold —Because when the government decided to have a major policy review of higher education, I decided, in quite a standard Public Service way, that the advice that had been prepared—and which was continuing to be prepared—by officers within the department would be in the nature of confidential policy advice going to the minister. That is entirely appropriate in terms of the practice in the Public Service for the last 100 years.

Senator CARR —I appreciate the point you make, but, on the other hand, if reports are prepared which contain matters that are critical of government policy and the status of those reports is then changed—that is, they were prepared on the basis that they were going to be published and were changed to advice to the minister—have you not effectively suppressed those reports?

Dr Shergold —No.

Senator CARR —Why not?

Dr Shergold —If policy advice prepared for a minister is not made available to the opposition or to the media, that is not suppression; it is normal. That is what public servants do.

Senator CARR —The difference in this case—and this is why it is important—is that the authors of the reports had prepared them with a view to publication. They have stated on the public record that they were prepared as part of a national report. I have access to the documents which indicate that they were forthcoming for publication. You subsequently changed their status to make them advice to the minister.

Dr Shergold —I subsequently changed the status because, by the time they were ready, the government had decided it was going to undertake a major review of higher education and, therefore, the documents that had been prepared internally became part of that larger amount of policy advice that was provided to the minister.

Senator BRANDIS —So they were, in effect, superseded by events?

Dr Shergold —They were superseded by events and, of course, a number of the issues raised in that internal policy advice were further developed and expanded during the next six to eight months.

Senator BRANDIS —So in their pre-existing form they were also obsolete?

Dr Shergold —They made a contribution to the decision that the government took. These reports are essentially about the issues of fees and HECS. Those, of course, were precisely the issues that the government addressed earlier this year when they produced their policy on higher education.

Senator CARR —Dr Shergold, on what date did the government announce that it was going to have a crossroads review?

Dr Shergold —I am sorry, I am not in that department now. I would guess it was in March or April of last year, but you would have to talk to Dr Harmer to get the documents to confirm that.

Senator CARR —Was it not the case that these reports had been concluded by the time the announcement was made?

Dr Shergold —I am not sure. I do not think they were concluded, but I do not think that is material to the question you are asking me. Even if they had been concluded, they were reports done not by an outside consultant but by public servants within the department. As the secretary of the department, I decided that that material, along with other material and other policy advice that was subsequently developed, would be internal. It was in the nature of advice going to the minister. That is quite normal.

Senator CARR —How did these reports change from the time when they were completed—April 2002—to the time when they were published as a result of questions we pursued through the Senate in July 2003? What was the nature of the changes in the four underpinning documents?

Dr Shergold —I have no idea, because that was not something that I was involved in. I imagine it took place after I left the department. You will have to ask Dr Harmer and Mr Burmester.

Senator CARR —I will.

Dr Shergold —I have made it clear that I did not make any changes to reports that were then made public.

Senator BRANDIS —Surely, Dr Shergold, the question is not really how the documents changed but how the relevance or the utility of the documents changed in view of the announced review?

Dr Shergold —I will take the most obvious example. To the extent that these issues related to HECS—such as how to set HECS levels and what was the threshold at which HECS should start to be paid—that was fundamental to the questions that were asked of academics, such as Bruce Chapman at the ANU, and through the focus groups. In fact, they were further developed within the department in the next eight or nine months.

Senator CARR —That is right. These reports raised issues. There is a legitimate argument as to whether or not there is other research. But the nature of this type of research is such that there are going to be differences of opinion. These reports were groundbreaking in the sense that they challenged the conventional wisdom. At what point was Dr Karmel told that his reports were going to be advice to the minister?

Dr Shergold —I cannot give a date on that. Almost certainly, by the middle of 2002 it would have been clear that we had a major process in train for the development of a higher education policy package for the minister's consideration. It would have been clear because one of the two authors that you refer to, Mr Aungles, was part of the team that was brought together to develop options for higher education reform.

Senator CARR —I asked a specific question.

Dr Shergold —I cannot give you a specific date.

Senator CARR —Would you take that on notice?

Dr Shergold —I will take it on notice, but I very much doubt that there will be anything in the files of the department. I am happy to take it on notice.

Senator CARR —We will come to the question of record keeping in a minute. I have asked at what point were the authors of these reports told that their research was not going to be published. The subsequent reason for not publishing the report was that it was methodologically flawed. At what point were the officers concerned advised of that reason for non-publication?

Dr Shergold —Again, here things are getting remarkably confused. I think you will be aware that I have never argued that the reports were methodologically flawed. I understand that Mr Burmester took the decision on the documents that were to be published.

Senator CARR —So that was Mr Burmester's judgment?

Dr Shergold —In terms of the reasons for what was subsequently published or not published by the department, the decision rested with Mr Burmester—as I understand it from what Dr Harmer tells me. But really these are questions that would be much better dealt with in Senate estimates with the department in question.

Senator CARR —I appreciate that point and, as I have indicated to you and I am sure you were not surprised to hear, I have an interest in pursuing it in that quarter. I am raising this in this context. You have indicated to us that robust policy advice must be presented to governments. This is a clear case where you have a major public inquiry under way which is going to reshape the higher education system, and you have some breakthrough research—publicly funded research. Is this not the sort of information that should have been made public, since that was the purpose for which the reports were originally commissioned?

Dr Shergold —Absolutely not. With respect, I think that shows a fundamental misunderstanding of the Westminster system. What we are arguing about here is not the robustness of the policy advice that went to the minister; we are arguing about whether that robust policy advice that went to the minister should also be made available to you. Robust policy advice depends for its nature on the fact that it is given in confidence to the minister.

Senator CARR —These are reports that were commissioned for publication. Presumably you were worried about me getting them, but whether or not the public gets them is the point of this. Why shouldn't these reports be made available?

Senator BRANDIS —This is total distortion, Mr Chairman. You should exercise a bit of discipline over this. It is unfair and insulting.

Dr Shergold —Why should the policy advice developed within a department not be made available to the opposition or to the press? Because the Westminster tradition depends on frank and fearless advice being provided in confidence by public servants to ministers.

Senator BRANDIS —Do not expect Senator Carr to understand the Westminster system. They do not have it in North Korea!

CHAIR —Senator Brandis, if you do not have a question, do not interject. If you do have a question, do us the courtesy of letting us know. I make the point that Senator Carr's question did go to the issue of publication, which does not mean that just the opposition and the press get to see the report; it means everybody has access to the reports, including the public and the parliament.

Senator CARR —What is the role of evidence based policy-making in this context?

Dr Shergold —Evidence based policy making is crucial. That is why public servants have a key role in dealing with large amounts of information that may be publicly available, that may come out through consultations, and transforming that information into knowledge which is then made available and put at the disposal of the government of the day.

Senator CARR —So the minister presumably would be very interested in advice such as this, which would challenge some of the assumptions made about changing the payments or the level of the moneys that have been paid by students for the higher education scheme?

Dr Shergold —Absolutely he would. Among the range of issues that were being addressed is how HECS should be implemented. Should it be extended to other students? What would be the threshold level at which HECS cut in? So evidence based advice is crucial. The reports that you are talking about that were prepared internally were one source of that advice.

Senator CARR —I ask you again: on what date was that advice tendered to the minister? Were these reports ever given to the minister?

Dr Shergold —I have already indicated that I do not know if those reports where ever given to the minister. What I can say categorically is that the issues that would have been raised in those reports would have been part of the policy advice which went to the minister.

CHAIR —Thank you. I have allowed this series of questions and answers to go on because, whilst it clearly does relate back to some issues that have been raised in other proceedings—the estimates proceedings particularly—in my view it has been still within the terms of reference because it goes to issues of the relationship between the Public Service and the ministerial advisers of the minister's office. After a short suspension, I would like to return to some other issues.

Proceedings suspended from 10.35 a.m. to 10.50 a.m.

CHAIR —We will recommence the hearing with Senator Carr, who has a few more questions.

Senator CARR —Dr Shergold, we were talking about the evidence based research and whether or not advice is robust. In the case to which I referred there are these four underpinning reports for the national report by the Department of Education, Science and Training when you were secretary. You have indicated that you were the one who took the decision to change the status of the advice to the minister. Was there any discussion with any members of the minister's staff about that decision?

Dr Shergold —I presume there must have been, but it would not have been in terms of the decision to make them public. I think it would have always been assumed that, when you have a major policy exercise being developed over a nine-month period, the internal policy work that is being done will become part of the material that is available to the minister.

Senator CARR —Do you recall who you discussed this with?

Dr Shergold —No, I have indicated that I do not even remember if I did; I am presuming that I would have had such discussions.

Senator CARR —So you would not have spoken to Mr Hampton about this?

Dr Shergold —I think that is probably unlikely because, except for a couple of periods when he stood in, he was the media adviser and not the senior adviser. It would have been the senior adviser that I would have spoken to on a matter of policy.

Senator CARR —Not the higher education adviser?

Dr Shergold —I would almost certainly initially have talked to the senior adviser.

Senator CARR —Mr Hampton did stand in for the senior adviser on occasions.

Dr Shergold —Yes, I think that when the senior adviser was on holiday on occasion he stood in that position.

Senator CARR —Was it the case that Mr Hampton in fact stood in during the period when these decisions were being made about the status of these reports?

Dr Shergold —You would have to ask the department. I am not sure if they would even have the dates during which he stood in. You are basing your questions on the supposition that I sat down and we had a discussion about whether these reports would be made public or not. My recollection is that that is not the case. In terms of talking to the minister and his office about how we would develop policy options for consideration, I would have made it clear what was available publicly, what was available internally, what sort of consultation process was required and which people either the department or the minister needed to speak to. Development of public policy is very much an iterative process.

Senator CARR —Indeed. Of course during this period, the EIP branch, which produced these reports, published a number of reports on matters related to the Crossroads process.

Dr Shergold —These are reports by outside consultants?

Senator CARR —No, these were reports also undertaken by internal consultants.

Dr Shergold —Okay.

Senator CARR —Was the EIP report Socioeconomic background and higher education participation: an analysis of school students aspirations and expectations by R. James an internal one?

Dr Shergold —I do not believe it was, but I will take that on notice.

Senator CARR —What about the report Mobility: Why do university students move? by R. Blakers et al?

Dr Shergold —I will have to confirm it, but I think that both of those reports were undertaken by outside consultants.

Senator CARR —The point I am getting at is whether they are outside or inside. Reports were commissioned by EIP, some were commissioned by outside consultants and some of them were prepared by internal consultants.

Dr Shergold —No, it is not an internal consultant.

Senator CARR —Sorry, internal officers.

Dr Shergold —Yes, staff members.

Senator CARR —Officers. Are you saying that all reports prepared by officers of the department were categorised as advice to the minister during this period?

Dr Shergold —No. I am saying that the decision that I made was that those reports which were relevant to the policy development under discussion would have been characterised in that way. It is possible—I cannot remember—that if there was a report produced by that area on early childhood education, for example, that that may have been published. But if it was on higher education reform, no, it would have been taken within the ambit of the policy advice going to the minister.

Senator CARR —I ask you this: why were there some reports published and others not?

Dr Shergold —The predominant reason for that would be those that were undertaken by outside consultants as opposed to those that were developed in the department.

Senator CARR —So there were no outside consultants' reports that were deemed to be advice to the minister?

Dr Shergold —You would have to ask that question of Dr Harmer.

Senator CARR —You do not have the files.

Dr Shergold —I am sorry, I have not come here for a Senate estimates inquiry into DEST.

Senator CARR —I am not asking you Senate estimates questions—

CHAIR —Excuse me, it is not a Senate estimates inquiry, Dr Shergold, and I do not think you should make that sort of a comment. But I am going to ask you, Senator Carr, to quickly wrap this up, because I think there are some other issues that other senators want to get to.

Senator CARR —I appreciate that. When you talk about robust advice and providing frank and fearless advice, Dr Shergold, is it not the case that the reports that were categorised as advice to ministers had one characteristic in common—that is, they had information contained within them that somebody thought was difficult for the government and they had criticisms of the government's policy changes in 1996? Is that true?

Dr Shergold —I cannot remember the detail. They would have certainly been in the nature of robust advice. They would have raised concerns about HECS and fees and changes to those, but those were precisely then the issues that were taken up in the development of the government's higher education reform proposal.

Senator BRANDIS —And address.

Dr Shergold —And address; precisely. If you look at the government policy as announced, you will see that there are significant elements of that that raise the HECS threshold for example, that provide an increased range of scholarships and that significantly increase the number of students that can gain access to a loan scheme and the purposes for which they can get access to that scheme, and there are initiatives in terms of Indigenous students—all of those would have been in part a response to the internal policy advice that was being developed.

Senator CARR —So when we talk here about a culture of compliance, are you suggesting—

Dr Shergold —Sorry, where is `here'?

Senator CARR —I raised it here today in the first series of questions I asked you regarding the comments made by former heads or secretaries of the Department of Foreign Affairs and Trade that there was a culture of compliance. I put it to you, Dr Shergold, that you do not necessarily need strong ministerial intervention if senior public servants are prepared to intervene in the policy formulation process to ensure that matters that are not comfortable for government do not actually go through the processes of being put before the minister. How do you respond to that proposition?

Dr Shergold —I respond to it in two ways. If it is a general proposition, of course I agree with it. If the inference is that I actually engaged in such practice, I reject it utterly. This is complete nonsense—nonsense that is bordering on fabrication. Let me make it absolutely clear: there is no evidence whatsoever in anything that you have suggested that Minister Brendan Nelson was not getting robust policy advice from the department in the development of higher education reform. All that is being argued about here is what of that advice should have been made public.

Senator BRANDIS —I suppose, Dr Shergold, your problem is that if the advice was not critical enough it would be regarded as part of the culture of compliance and if it was sufficiently critical as not to be part of the culture of compliance it would be regarded as representing a devastating criticism of the government's policies, whereas, in fact, any policy advice which is robust is going to involve an element of critique. Would you agree with that?

Dr Shergold —That is correct, Senator. My final proposition, and let me make it absolutely clear, is that I do not believe that in senior levels of the Public Service there is a culture of compliance. I have not known any minister of any political persuasion, from Robert Tickner on one side of the political spectrum to Peter Reith on the other, who has sought to doctor the advice that goes to them or prevent advice going to them. Ministers are sensible and rational. They want strong policy advice; they want to test their ideas. They may not accept that advice but as long as they know that the advice remains confidential and takes place within their own room then they will welcome it.

Senator CARR —The problem is, Dr Shergold—

CHAIR —This is your final question for the moment, Senator Carr. We are running out of time.

Senator CARR —I have a letter here from the secretary of the department which says that this material, which of course underpinned the national report, and the national report itself were not provided to the minister's office until well after these decisions had been made. I put it to you, Dr Shergold, that officers of the department who work directly to you—Mr Burmester could not have acted without your authority—took the decision to have these matters suppressed.

Dr Shergold —I am sorry; what are you actually putting to me—that the policy advice that went to the minister was being suppressed by me? Is that what you are putting to me?

Senator CARR —I am putting to you that this research material that you reclassified, which happened to be critical of the government—

Dr Shergold —As the internal policy advice.

Senator CARR —You reclassified that advice and you then indicated it may not have actually gone to the minister.

Dr Shergold —I am saying that the report may not necessarily have gone to the minister. I can give you a categorical assertion that the issues raised in those reports were discussed week in, week out with the minister in the development of the policy proposals that he brought forward.

Senator CARR —And at that point did the minister say to you, `I don't want these documents to see the light of day'?

Dr Shergold —No.

Senator MURRAY —Dr Watt, this committee, in its guise as the legislation committee, last year reviewed the gold pass bill. In the process of that review, we had Western Australian tribunal members appear as witnesses. In their evidence they discussed the technique they had used for evaluating remuneration and conditions, called a work value method. I assume you are familiar with that because it has a very common basis. As the Democrat's shadow minister of state that caused me to prick up my ears. I wrote to the minister using some excellent material that the library provided for me and asked the minister if the department conducted or would conduct a work value assessment of electorate officers. That was on 14 March 2003. I did so having a general concern that the turnover in electorate offices was higher than one would expect, certainly higher than I had experienced in my business life, and that the wages and conditions were not as good as they might be to keep the sort of staff that have to do the sort of work that is done.

I asked the library to do some cross-jurisdictional comparisons, as far as they could, to assist me—I know it is a crude comparison—in comparing the states and territories with the federal jurisdiction. For instance, you could draw a conclusion, although it is difficult to do so, that, in three of the states, overall electorate officers were better paid in terms of their wages and conditions than were federal electorate officers. And, not being a biased person, I do not think that they do the same quality and depth of work as they do in the federal offices, of course.

Dr Watt, is there a higher turnover of electorate staff, or higher than you would expect, relative to, say, the Public Service generally or, from your experience in the private sector, could that be addressed, assessed or researched in some way? Is it the intention of the department over a period of time, as a natural human resource management tool, away from the pressures of negotiating certified agreements, to have a work value kind of approach, particularly for electorate staff, but I would expand that to suggest all MOP staff?

Dr Watt —I will pick up on a couple of those issues and then pass over to Ms Mason or Ms Clarke. It is very hard to identify whether turnover is higher than expected. Electorate staff turnover could well be benchmarked against APS turnover but, for example, whether it would be higher than APS turnover is a moot point. Certainly the Department of Finance and Administration in the last two or three years has gone through some dramatic levels of turnover. I think I can match our turnover, unfortunately, against almost anyone's. On the issue of pay levels between state and federal public servants, anecdotally we find that state public servants are, on the whole, slightly better paid, certainly at senior levels, than federal public servants. I will pass across to my colleagues.

Senator MURRAY —Just before you do, in relation to the other part of my question, a part of professional evaluation in human resources is the use of techniques—benchmarking and so on—which are widely used. Because work value theory and practice is now better developed, is it something that you as a department in a general approach might be considering adding to your tool kit, as it were?

Dr Watt —We have used it internally on one or two occasions over the last 12 months within the department per se. It is a tool kit we do use. I am not familiar with where our thinking is in relation to electorate staff or MOP staff.

Ms Clarke —When the minister wrote back, he noted that a study had been undertaken a few years before the Miller report which looked at a number of aspects of electorate officer work, including issues to do with staff retention and initiatives that could be taken to best address that. They were discussed with staff in the context of, I think, the 1999-2000 certified agreement. Many of those were rejected by staff and what staff ended up agreeing with was to have overlapping salary bands; that was their way of addressing some of the concerns they had. What was being said was that there had been a study undertaken and what had come out of it was in the certified agreement. I will now turn—

Senator MURRAY —Ms Clarke, before you turn to the next issue, just holding to that point, my difficulty with the minister's response relates to staff attitudes. They are very important in this. Members and senators, in discussions I have had with them, are concerned that three issues are picked up: turnover; attracting quality staff, because of the wages and conditions; and, even when you have them, keeping them. Staff may have one view but senators and members have a different need.

Ms Mason —We note that turnover figures for MOP staff is one of the issues the committee has put to us, and we are working to extract something useful on that over the next short period of time. The turnover figures for MOP staff are likely to be artificially inflated because, for instance, if a staffer were to finish with one employer one day, take a short break and then commence with another employer, as is reasonably common, that would show as turnover, when in fact, in practice, it is virtually a continuation of MOP(S) employment or similar to that. As far as attracting quality staff, I think that the certified agreement that was certified by the Industrial Relations Commission on 20 August goes some way to improving the terms and conditions of employment for MOP staffers and, hopefully, will assist in attracting and retaining high-quality staff.

Ms Clarke —In research that the library did we had a very close look at it. I think you highlighted that it was very difficult to compare like with like in both the state and the federal MOPS sectors. I have not got the research with me, but I looked at New South Wales, for instance. They appeared to have a higher rate of pay, but they did not pay any overtime. They paid an allowance for overtime and that was that. You did not have the option to have overtime, so you were not getting paid for every hour worked. So there were differences in the way things were organised that made those comparisons very difficult to make. In one case, in Tasmania, there was no data available because it was all done on AWAs. It was very hard to compare like with like but, as Ms Mason says, the 19 per cent over three years has certainly addressed some of the wage concerns that staff had.

Senator MURRAY —Ms Clarke, as you know, senators and members come from diverse backgrounds—thankfully—and some have well-developed human resources skills and management skills and others do not; they have different skills and attributes. I have noted, again from discussion with various senators and members, that some senators and members' offices have an exceptionally high turnover and others do not. If you did a comparison between those senators' and members' electorate offices with the lowest staff turnover and those with the highest, I suspect you might find that the highest turnover was three or four times as high as the lowest. That would seem to me to go to perhaps not the character but to the human resources management ability of those senators and members.

I would be glad if you could correct me if I am wrong, but I have never seen in my seven years in this place any program which offers to senators or members or their offices advice or ways of better management when there is such a high turnover—which can be easily identified, I would assume, from your statistics. I do not suggest that they should be outed in a public manner, but it does generate a high cost. If you lose people, you have got to replace them, and it is a cost to the Commonwealth and a cost to the member or senator. I wonder what you have to say about your cross-comparisons within senators' and members' offices of turnover ratios, and what mechanisms you employ as a department to try and reduce that.

Ms Clarke —I would like to talk in relation to staff, because that is our area of expertise and interest. There is at the moment a training needs analysis under way and staff are being contacted with a view to having a Web based questionnaire that asks them what sorts of training requirements they have. The consultants we have employed will also be going out to senators and members asking them what sort of training they would like or they think their staff require. That is happening now and over the next few months, so we will be expecting issues such as that to be raised in that context. If people feel the need for some HR training, we will be able to identify that in the process and subsequently develop or get someone to develop some training modules to provide it, if that is what staff are interested in.

Senator MURRAY —But what I am identifying for you is a problem which a senator or member might not be aware of. Because they operate on almost a cellular basis, they might not realise that their high turnover is unusual relative to other members and senators and they might not realise that it is a consequence of their own managerial ability. I say to you that that is an inefficiency that we have got, and I would expect your department to pick up and provide personal advice to the member or senator concerned. I do not think it is a matter for the parliament as a whole or for publication, but it is a matter of getting that more professional input in situations where the member or senator may not have that particular aspect to their background.

Ms Mason —Senator, if I could comment: it is difficult to draw inferences about differences in turnover rates between offices. Turnover may occur for a range of reasons. Coming back to what I think is your underlying point—that is, support, training and assistance provided to our various clients in management practices—I understand that our account management area has provided some sessions for senators and members on performance management issues in which they have sought to provide information about good practice and good process. In addition to that we do have the account management unit staff help desk. There were approximately 20,000 calls to the help desk during 2002-03, of which around 60 per cent related to employment matters. So there is fairly significant use of that opportunity to seek assistance, guidance and support in staffing related matters.

Senator MURRAY —By staff or by members and senators?

Ms Mason —It is a mixture. We do service inquiries from staff members but also from the employing senators and members.

Senator MURRAY —I do not want you to do an analysis of the whole 20,000 calls, but perhaps you could take a snapshot of a week's calls and see what percentage are from senators and members as opposed to staff.

Ms Mason —That is something we could take a look at.

Senator MURRAY —I do not have any more questions on this particular area but I do have some on other areas, which I can return to later.

Senator WATSON —In relation to the issue pursued by my colleague Senator Murray, I think you need to take great care in taking a global position for each office. For example, looking at my own office it would be much more useful if there were an evaluation on a classification type basis. I find that the most junior position is one where you generally have the highest turnover, where you deliberately encourage young, bright people to come in, use it as a learning experience and then step up within 18 months to two years time. Whereas you tend to keep the more senior positions for a much longer period of time—maybe 10 or 15 years if you are lucky enough to stay there that long. I think you have to be very careful about taking global positions and comparing office by office. As Senator Murray acknowledged, different senators have different approaches to their staff in terms of encouraging young people to get a start in life, say, just after university.

Dr Watt —I think Ms Mason made the point that it is very hard to draw inferences from office by office data, because of a variety of things. It will affect turnover, classifications; that is one point you have made. Taking a very small sample is another particular circumstance. You can understand why turnover would be higher in some regions than others and so forth. It is a vexed statistical question.

Senator MOORE —I think I should start by putting on record how much I loathe the term `robust' in discussions about communication. The term has now taken over the debate. I will say that straight up. I have much the same questions for Dr Shergold and Dr Watt in their positions as department heads in terms of the actual operation of the complementary relationship to which Dr Shergold referred between ministerial staff and people who work in the department who are full-time professional public servants. I am interested in the information that is provided to the public servants as to how they respond to questions or requests or communication from people who work in ministerial offices and whether in fact there are clear protocols in place in your two departments. I know you can only speak about your own departments in this way. Is there a clear protocol as to who can take these calls and how they are responded to? Dr Watt, how does that work for the Public Service members of your department?

Dr Watt —If you are asking me whether we have a written protocol on these issues, the answer is: no, we do not. The officers—predominantly the SES—would deal with the ministers' advisers. In many cases contact would be initiated by a minister's adviser on an issue. Certainly that is as common as it is for an office to initiate it. The SES themselves, in dealing with those contacts, draw on a great deal of experience. I do not think my SES would be in any doubt that they are made very aware that if they have any reservations about the nature of contact—they may on the odd occasion—they are to escalate that issue very quickly through their senior managers and ultimately to me. But the overwhelming bulk of that day-to-day contact—because it is day to day on many issues—goes forward quite happily, quite harmoniously and quite productively without anything needing to get to my desk.

Senator MOORE —We would expect that.

Dr Watt —I would hope so. Otherwise the relationship could not work.

Senator MOORE —The ongoing expectation is that, in the majority of cases, things work fine.

Dr Watt —I think it is more than the majority. It really is the vast majority—99.997 per cent.

CHAIR —Could I clarify: you are talking about ministerial advisers. There are, of course, the DLOs. Are you including them as part of your response in terms of the interaction between the Public Service and the minister's office? I understood that one of the primary purposes of the DLO—departmental liaison officer—is just that.

Dr Watt —Certainly some interaction with the minister's office is via a DLO, but I think it is fair to say—and I am casting my mind back across a number of different minister's offices—that again, the vast majority of it is directly between the adviser and the Public Service officer involved in the issue—not via a DLO.

Senator MOORE —But the expectation is that that communication is with senior public servants as opposed to people in the lower ranks.

Dr Watt —By and large it would be with senior Public Servants. The vast majority in my department would be with the SES. There would be some with section heads—that is the EL2 people, and they are team leaders. There would occasionally be interaction lower down. This is often a source of great encouragement for the junior officer who gets the call from the minister from time to time—as I have seen occur in previous departments—or from a senior adviser, saying `Tell me a bit more about this piece of work you have done', but most of it is at senior levels, because these are the people who deal with the minister and his office on a day-to-day basis.

Senator MOORE —Dr Shergold, you have been filled in on the question. In terms of the way it operates in your department, is it similar?

Dr Shergold —Yes, it is. There is no written protocol. However, in my first weeks in the department I had two all-staff meetings where I addressed the relationship between public servants and ministerial advisers, and I made it clear that if there is ever a cause for concern they should contact me. That speech was then put up on our intranet, so it is available for staff.

Senator MOORE —So it is almost a de facto protocol.

Dr Shergold —It certainly gets my staff to understand my expectations of them and of the relationship they have with the Prime Minister's office. In terms of the DLOs, Ms Belcher gives them a briefing before they take up their position.

Senator MOORE —My understanding is that the DLOs have quite a clear expectation of their role and with whom they speak, and that is in writing. Is that right, Ms Belcher?

Ms Belcher —No, Senator. There is no written instruction to them on who they might deal with in the department and the minister's office. They would be able to speak to anyone in the department, as necessary. What they do have is a very clear understanding of their role as public servants and not as political advisers.

Senator MOORE —So that is clarified and it is in your paper, in that they are not political advisers. What I am trying to get my head around is how something can be clear, beyond question, if it is verbal. One of the processes for assessing someone's performance is actually making sure that they are fully clear on what the expectations are and how they then operate. I am interested that neither department—in particular the DLOs—seems to have a clear written protocol for the communication processes.

Dr Watt —I am not sure that that is quite correct. Just as Ms Belcher briefs the PM&C DLOs who go to the Prime Minister's office, so our head of Corporate briefs our own DLOs. When they go up, they sometimes come and talk to me about their role before they go, and I encourage that. We also have performance agreements between the DLOs and head of Corporate, which would take into account these sorts of matters.

Senator MOORE —Is there a clause in the performance agreement about the interaction between their ministerial position and their home department?

Dr Watt —I could not comment on the specific nature of those performance agreements, but I think there is a fair amount of material in there which spells out our expectations in terms of their communication with their home department.

Senator MOORE —Are they in general terms? I understand you cannot give us clear detail of the individual performance agreements, but what kinds of issues are covered in that process?

Dr Watt —Again, I am not able to comment on specific performance agreements—

Senator MOORE —As we agree.

Dr Watt —but I can take it on notice and look at it for you. I am not privy to the individual performance agreements of all my officers.

Senator MOORE —No, but my question is: regarding the core issues that would be covered in a performance agreement for someone who is taking on such a sensitive and highly advantageous role for their career, what kinds of communication protocols would you be looking at in that performance agreement?

Dr Watt —Again, I can get some information for you before we finish this morning, if that would help.

Senator MOORE —Okay. Ms Belcher, would they be similar kinds of core issues that you would be talking about with your people?

Ms Belcher —Yes, it is a general discussion of expectations. We have a fairly informal system whereby we seek feedback from the office in which the DLO works and also from people within the department about the success of their relationship.

Senator MOORE —Dr Shergold, earlier you said that the environment of trust is so important in discussions with your staff members, so they can turn to you if there is a concern. Dr Shergold and Dr Watt, if a complaint or a concern is raised by particularly a junior member of your department about some interaction they have had with someone from a minister's office, what is the expectation of the process to follow that through?

Dr Shergold —In terms of my department now and, indeed, the departments I previously headed, the expectation is that, if there is a concern about a direction they have been given or something they have been asked to do—

Senator MOORE —Or any interaction.

Dr Shergold —Yes, anything like that. In the first instance, they would talk to their immediate supervisor and, if there is a concern, then it would come to me. In both of the instances that I raised that I can remember, the issues came to me when a more junior SES officer felt that there was a need for me to clarify with the office what the situation was.

Senator MOORE —They were the two instances to which you referred earlier?

Dr Shergold —Yes.

Senator MOORE —I did not pick that up earlier. I thought they were your own personal experiences, but they actually came from your department.

Dr Shergold —They were both issues in which a senior executive had been asked to do something and where there were concerns about how that related to existing priorities. They came to me to talk about it and then I talked to the office.

Senator MOORE —Dr Watt, is that similar in your agency?

Dr Watt —Should such matters occur they would be, as I said earlier, raised initially through a superior officer and, if necessary, with me. I would then clarify them as necessary with one of the minister's senior advisers, the chief of staff or the minister.

Senator MOORE —In your own experience have you had any similar situations to those referred to by Dr Shergold?

Dr Watt —No, not specifically.

Senator MOORE —In terms of the other way around, if there were an issue in any minister's office about one of your staff members, what would be the expected protocol in that case?

Dr Shergold —The expected protocol in that situation almost certainly would be that either the senior adviser or the minister—usually the senior adviser—would raise any issues of concern with me.

Senator MOORE —And that would be with them raising it directly with you about anyone in your agency?

Dr Shergold —Yes, but again it happens very rarely. If you had a situation where an adviser felt that they had asked for something to be done by a senior executive and it had not been done in a timely fashion, the expectation would be that, if they were unable to resolve it with the officer in question, they would do it through me.

Senator MOORE —And is it similar in your case, Dr Watt?

Dr Watt —The expectation would be similar.

Senator MOORE —We will go on to the issues of record keeping later, so I will not go there now. I have a general kind of question. Have you seen all the submissions that we have received?

Dr Watt —Yes.

Senator MOORE —A common theme in some of the submissions is the public perception that there is a lack of clarity about the interaction of the ministerial staffers and the Public Service and the whole difficulty in being able to trace through levels of accountability. That has come out in a number of the submissions. I would like to hear from both of you, Dr Shergold—and I know you touched on this in your earlier evidence, but I would just like you to flesh that out a bit—and Dr Watt, from your perspective. Could I have your comments on the fact that a number of people have taken an interest in providing submissions to this inquiry. It is not something you just do, saying, `I'm a bit bored today; I think I'll write a submission.' These people have a genuine interest. Why do you think there is this uncertainty or feeling of lack of clarity in the community?

Dr Shergold —In large measure because the complementary but different roles of advisers and public servants are not understood and, in part, because there has been, I think, a quiet revolution in the nature of our representative democracy. Ministerial advisers have been focused upon, but I think it is much more wide ranging. That quiet revolution is that the world in which public servants now work is far more contestable in terms of the policy advice that is provided and the government services that are delivered. And it is not just because there are ministerial advisers; indeed, in my view, the big shift has been in the growth in importance of university researchers and think tanks and the professionalisation of advocacy organisations—not just business and unions but also community organisations. The result of that, I think, is that a minister today has a much wider range of policy advice going to her or him than a minister did, say, a generation ago, or even 15 years ago. I do not believe that the public at large, or even some of those who have made the very good submissions that you have received, fully comprehend the changing nature of how public policy is now made. It is, in my view, a much more demanding and challenging role for public servants than in the old days.

Dr Watt —It is very hard for me to comment on why the community has perceptions, because I am only one member of the community. But I do think that people do, as Dr Shergold says, miss not only the contestability of advice but also the openness of advice that is now available to governments. Ministers not only lock into advice processes from the APS—I have never yet found a minister who was not very interested in advice that his department could give him or her—but also focus on advice that is available from other sources. I think ministers are very omnivorous in the information and advice they collect, and I think people miss how open the advice process is now. I think that may be why they think that somehow something is ill at ease.

CHAIR —Dr Shergold and Dr Watt, you use the term `advice'—and I think you used the word `information' as well, Dr Watt—and that is understandable, but I put to you that the major concern is that what might be information or factual material that should be presented to or get to the minister does not, or there is a claim that it does not. That is pretty much what has been behind a lot of the concern of the public, particularly about some of the major issues that have arisen that we know about—for example, the certain maritime incident and the intelligence issue, which is the subject of another inquiry. So, whilst we can have a debate about the processes involving policy advice, there is also this other area of material that is either requested or should be passed on, because it is relevant to circumstances, somehow does not get to the minister and then consequences follow. To me, that is what a lot of the concern out there in the community seems to be.

I would like you to answer Senator Moore's question in the context of that type of information rather than policy advice, which may be rejected or accepted but, if factual information that should be passed on and should be made known to the minister is not made known, that is a different issue altogether because it is not something that a minister can necessarily reject. If the government is proceeding on a certain course believing something to be the case and it is not the case, how do we deal with that?

Dr Shergold —We deal with it in part by having a professional public service. I suppose in a sense we are making the distinction here between policy advice that may go to a minister or Prime Minister for agreement and, as is often provided, information for noting—that is to say, information that a minister or Prime Minister needs to be aware of and which will feed into actions they might take or policies they might develop but is not specific policy advice.

CHAIR —Or relating to statements that they have made publicly or in the parliament. Let's get to the nub of the issue: I am talking about where there is information that contradicts, if you like, what has already been put into the public arena or into the parliamentary arena.

Dr Shergold —I think, if you were looking at the areas which would be absolute priorities for a department, one would be where a statement had been made in parliament which the public servant believed to be wrong in any way. It would be instantly reported to the minister or Prime Minister because we are aware of how important that is in terms of misleading parliament. That is why you will find in any department that there are people who very carefully watch parliament, particularly question time, and check the text afterwards to make sure that nothing has been said that could be factually incorrect in any way. That is a very high priority for the Public Service, and any Prime Minister or minister would want to know instantly if there is any cause for concern in that regard.

CHAIR —Could I just interrupt again? We are not here to go over the certain maritime incident inquiry again, but that is clearly a background to—

Senator BRANDIS —Then put it to rest.

CHAIR —It is a background to this inquiry, Senator Brandis, and, as you well know, it was one of the recommendations. We are still to hear the response of the government to the recommendations of that inquiry and it was almost 12 months ago. I can distinctly recall the Prime Minister—and I saw it on TV—when he was commenting about the statements that children had been thrown overboard, saying, `If those allegations are correct,' or words to that effect. So there was a qualification in the Prime Minister's comments at the time on the basis that this was what he had been informed but he needed to be in full possession of the facts. I took particular note of it, thinking, `Let's see what develops.' Of course, we then got into the position where that was never corrected. So there was an awareness, at least with the Prime Minister at the time, that those allegations needed to be verified. I make that point to draw attention to the fact that there was a breakdown somewhere along the line, clearly, in the process of the advice and of the information to correct the record getting through to the minister and the Prime Minister.

Dr Shergold —Our obligation, as set out in the values of the Public Service, is to provide advice which is timely and accurate, among other characteristics. The difficulty is that there is sometimes a tension between those two objectives. That is why I think it is important that, when advice comes forward which has not yet been substantiated, it clearly identifies that fact. So we need to distinguish between information which has been shown to be correct and information which may be emerging but is not yet substantiated. One of the trickiest elements, I think, in terms of public service is getting the right balance between timeliness and accuracy.

Senator MURRAY —A point of clarification: does that timeliness and accuracy change according to the political cycle—for instance, in an election period as compared to another period? Is there a heightened level of awareness of the need in those circumstances?

Dr Shergold —I am not sure if it is the election cycle or when actions are under way—as was the case in that instance. I was not directly involved in the certain maritime incident, so it is difficult for me to comment except from the outside. However, for example, in terms of the conduct of the war with Iraq, there is a constant pressure because you are dealing with a real-time situation where government has to take decisions in an ongoing way. It is vital to be sure that the information that goes to government to take those decisions is as accurate as possible and clearly distinguishes, for example, what is proven as against what might be intelligence or analysis. In those sorts of situations where a government is faced with making very fast decisions, the Public Service has a key role to play in being timely but clearly distinguishing the nature of the information going to government upon which decisions are taken.

Senator MOORE —I will follow on in terms of clarifying the situation for the training that you give your staff, particularly your senior staff who are the ones most regularly expected to deal with ministers and ministers' offices. You enunciated your views in terms of the focus of the public sector and how it has changed, the contestability of advice and all those things. Is that focus clear in the process of training staff members so that they know the view of the public sector in which they are operating and what your expectations are as department heads? Is there a clear expectation, in the absence of any written protocol, that any contact from a ministerial adviser is in fact for, by and of the minister as opposed to for, by or of me who happens to be an adviser? They are two questions but, in the interests of time, we could knock them over together.

Dr Shergold —I think that it is broadly understood. For example, the Australian Public Service Commission has taken a lead role across the Public Service in ensuring that the issues of values and ethical standards are known across the Public Service. They certainly provide training which deals with the issue of public service in an environment of competition and contestability. I think that most agencies, certainly the ones in which I have served, do address those issues—for example, in terms of induction training that is provided to the graduates who come in. Many agencies now—including my own—make sure that, as part of the training that is provided to graduates during the course of their first year, they get to understand the role of parliament, they go along to parliamentary committees, they get to understand the role of a minister's office or the Prime Minister's office, and they get to meet with the Prime Minister's office or the minister's office to understand those roles. So I think there is a high degree of understanding of that changed environment. My hypothesis—and it is no more than that—is that I do not believe that changed environment is as well understood outside the Public Service.

Senator MOORE —Could you address that second point concerning the expectation that the staff in your department have when they are contacted by someone from the minister's office—whether that person is speaking for the minister as opposed to themselves.

Dr Shergold —Yes, I think that is well understood in that it is indicated to staff that, if they ever have doubts in that regard, to contact their supervisor or indeed to contact me.

Senator MOORE —So it is understanding by exception?

Dr Shergold —That is correct. You work on the assumption that those in the minister's office are acting with the authority of the minister.

Dr Watt —Just to take the latter point first, the expectation in my department is that any contact between an adviser and a staffer is on behalf of the minister. That expectation is very high. If they thought anything but that, I would expect my staff to escalate the issue very quickly to senior officer level. In relation to the first point, the vast bulk of contact between ministers' offices and Finance staffers is at the SES level or at the level of very experienced team leaders. There are people often with 10, 15, 20, 30 or even more years experience in the Public Service. They know their way around. They have a very good sense of the appropriateness of those contacts.

Through various induction programs—we have the regular new starters program, for example, and we have the induction program for graduates, which started last year—we do try to instil in some of our newer team members the same sorts of values and ethical expectations that we have of our senior officers. My sense is that my officers are pretty well equipped to deal with those sorts of issues.

Senator CARR —Dr Watts and Dr Shergold, if the assumption is that ministerial advisers are acting on the authority of the minister, is it the assumption also that advice to the ministerial adviser is also advice to the minister?

Dr Shergold —Yes, it is. Advice that you give to the ministerial adviser is certainly always advice to the minister. The reason I have any hesitation is that so much of the contact on a day-to-day basis is part of an iterative process. For example, the sort of contact that takes place if there has been a decision to develop a piece of legislation or a regulation is clearly something that is decided between a minister and the secretary. But a lot of the detail of that will take place between the ministerial adviser and the department. You cannot tell at what stage that ongoing discussion gets elevated again to the attention of the minister, but you work on the basis that the advice that you are giving to the adviser is advice to the minister.

Senator CARR —So there is no distinction between formal and informal advice in that regard?

Dr Shergold —There is a distinction between written and oral advice and different forms of written advice, whether it is in a paper brief or, increasingly, in an email interchange. In terms of record keeping, no, I do not believe that to be the case. Whether the communication takes place by paper brief, by email or by phone call, there is an obligation where necessary to keep the record of how policy has developed.

Senator CARR —Are emails part of the official channel of communications?

Dr Shergold —Not all emails. Most departments, with the support of the National Archives, have now developed systems to ensure that emails—that record of interchange—that are part of communication with the minister's office on the development of policy are kept—they are part of the records—just like written briefs were kept in the past.

Senator CARR —So the report in the Griffith Review this week that says that emails are not regarded as part of the normal process is inaccurate, is it?

Dr Shergold —That is inaccurate if that is what this article says.

CHAIR —Just to follow that up, Dr Shergold, you are on the record as advocating that one of the lessons to be learned out of the certain maritime incident issue was the need to maintain appropriate records. What follow-up have you undertaken or has been undertaken through the service and, by implication, with the advisers to ensure that those records are kept or improved?

Dr Shergold —Most departments—with varying approaches, because they are developing their own IT systems—are now keenly aware of the need to keep records of electronic communication, as opposed to paper communication, in a way that meets, for example, the archiving standards. That is vital because so much of the iterative development of legislation or policy now takes place through email communication. Obviously email is used for many other purposes, so you do not collect all email communication. But, where it is clearly involved in policy or implementation issues with the minister's office, most if not all departments are now working on ways to ensure that that electronic communication is retained.

CHAIR —Did you take any specific steps to draw awareness to that, given your own comments, which I think were reported in the Canberra Times in April this year, that this is an important requirement?

Dr Shergold —In both my previous departments—that is, DEWR and DEST—I initiated new IT programs and protocols to ensure that email communications were being appropriately kept and managed as records.

CHAIR —Senator Webber has been waiting patiently. We are running substantially over time but hopefully we can complete the department shortly. If we cannot, we may have to make arrangements to come back at a later stage but hopefully we can avoid that.

Senator MOORE —Dr Shergold, could the committee have a copy of the minute you posted to your department that outlined your expectations for these communications?

Dr Shergold —Yes, I can make that available.

Senator MOORE —That would be great. Thank you very much.

Senator WEBBER —Dr Shergold, I was intrigued by one of your statements earlier this morning. I am trying to recall it—it has already been a very long morning, particularly for someone who caught the midnight horror to get here. I think I am right in recollecting that this morning you made some comments about moving away from the statement of frank and fearless advice. Is that correct?

Dr Shergold —Yes. The point I was making is that I believe in frank and fearless advice, but the difficulty is that that term trips off the tongue too glibly now; it has lost its power by becoming a cliche. That is why I would use, for example, the term `frank and honest'—or `robust'—policy advice—

Senator WEBBER —You have upset Senator Moore.

Dr Shergold —so that the message remains heard.

Senator WEBBER —Surely all advice would be honest; that is a natural assumption and we would not have to say that. I would have thought that frank and fearless more clearly characterises—

Dr Shergold —I believe advice should be frank, fearless and honest. I prefer to use the term `robust' simply because it captures attention more than the term `frank and fearless' which, as I say, has lost its power through becoming a cliche. That is why I do not use the term. I believe in the sentiments that underpin it.

Senator MURRAY —To the parliamentarian, the term `robust' means that people are being rude to each other.

Senator WEBBER —That is why Senator Moore actively dislikes the term `robust'.

Dr Shergold —I would not use it in that sense.

Senator WEBBER —As someone who, a long time ago, was employed under the MOP(S) Act—and I have also been a state ministerial staffer—I think it is a term that still has a lot of currency. I find it interesting that you see that. I would have thought that using the term `fearless' would counteract any perception that advice or interactions were compliant, which is the point that Senator Carr was drawing out. But if we are going to move away from that term—

Dr Shergold —It is a personal view. I am simply moving away from that descriptor, not from the value. The value is enormously important. I believe in advice that is fearless and responsive to government.

Senator CARR —And that is why it has a bias to action?

Dr Shergold —The bias to action predominantly refers to the commitment to implement government policy. As I say, there are two things: the preparation of policy advice, on the basis of which government takes decisions; and, of equal importance, the public service has a role in implementing those decisions once they are taken.

Senator WEBBER —I accept what you are saying. Maybe I am being very semantic, but I see `fearless' as having a very strong definition and a different meaning from `robust' or `honest'—that is, you can give honest advice but be scared; you can be robust but it is not necessarily that. We have a very different definition of `robust', as Senator Murray has said, in our realm of perhaps accepting advice rather than offering it.

Dr Shergold —One of the terms that I like that the Public Service Commission uses, in respect of the qualities required of senior executives, is `the need to be courageous'. That is a term that I remember we discussed at some length. I think it is correct. There are times as a public servant when you need to show courage.

Senator MURRAY —Dr Shergold, I think I have heard you twice this morning use the term `Westminster'. I personally prefer the term `Washminster', which, as I discovered in somebody's writings, first appeared in the early eighties. I prefer it because it emphasises the separation of powers, which is one of the crucial elements of the American system. In Washington they have recognised that people who work for the executive, as opposed to people in the government, should be accountable to Congress, and they do appear before committees, where they have executive authority. In England, as I understand it, advisers to the government—indeed Mr Campbell has just done that very thing—are designated as to who is classified with executive authority and therefore is accountable to the parliament.

In both cases, as I understand it, they may of course claim executive privilege, as indeed do public sector employees such as yourself, where it is policy advice or where it is confidential to matters between you and the minister or the Prime Minister. There is no objection from the professional public service to being accountable to parliament: they come before us and they operate in a way which is well understood within our system. Is there any in-principle objection therefore to someone who acts with executive authority on behalf of a minister doing the same thing?

Dr Shergold —Public servants are not accountable to parliament. We are accountable through our ministers to parliament, and that is an important distinction which I think goes to the heart of the Westminster system.

Senator MURRAY —It is not a distinction I accept, by the way.

Dr Shergold —I understand.

Senator MURRAY —I just want you to know that I do not accept that.

Dr Shergold —The general proposition is that public servants are responsible through their ministers to parliament, and of course we are subject to the investigation and evaluation of the Australian auditor and so on. Some of those who appear before you may believe that we have become a `Washminster' system. I do not, because the essential element, as I understand it, of a `Washminster' system is that large amounts of the senior executive of the public service are partisan and are changed when governments change. That is the heart of what happens in the Washington system.

Senator MURRAY —Can I clarify for you my use of the term. My use of the term refers to the way in which the parliament is set up. `Washminster' is most commonly used with respect to the way in which the Senate and the House of Representatives interact and the way in which the separation of powers is reinforced in the notion of the Senate versus the government.

Dr Shergold —I was coming to that. It is because, I believe, the great bulk of senior executives in the American federal service are politically partisan and, indeed, are appointed by the President that they are subject to so much scrutiny. We do not have that situation. Our senior executives are non-partisan. Initially, in 1983, the incoming Hawke government contemplated moving to something similar, where five per cent of the senior executive were going to be partisan appointments, not appointments made on merit.

Senator MURRAY —You said that earlier.

Dr Shergold —They decided not to take that approach but rather to have ministerial advisers located in ministers' offices. My personal view is that that is preferable because it helps to distinguish the two roles. If I have a problem with what is happening in Westminster at the moment it is that the distinction between the political appointees and the civil servants is not clear. That is to say that the political appointee in the Blair government is classed as a temporary civil servant and works alongside the permanent civil servants. The distinction in their roles, I believe, becomes blurred. I think it is much clearer in this country, where the advisers sit with ministers and are geographically separate from the public servants. Also, their conditions of appointment are seen as quite different. For what it is worth, my personal view is that over the last 20 years we have got it pretty right.

Senator MURRAY —May I say—and I do not say this in any confrontational way—that one of the reasons I disagree with your view that you are accountable to the parliament through the minister is that, if the Senate so wishes, both in terms of its powers and its standing orders, it can order you to appear before this parliament and it can order you to answer questions. Of course, you can always take a right of silence, but it can make you appear. The parliament has accepted that it will not, or should not, deal with people who fall under the MOP(S) Act on that basis, although I presume it might be able to.

I want to come back to the belief that those who operate with any executive or administrative authority—in the full meaning of that term—should therefore be accountable to parliament. We have to discuss how we will frame and devise that and put in the proper protections so that people are not wrongly brought before parliament. It seems to me that the Americans and the British have tried to deal with that issue—namely, the accountability of someone who acts with executive authority even though they are an adviser—and it is the problem that we have been addressing here this morning, just from different directions. And it is not one we can walk away from. I do not think it is particular to the CMI issue, the Education issue or anything else. I think it is a general problem we face. With that summary, my question to you is: are you, in principle, supportive of the view that anyone who acts in an executive or administrative capacity should be accountable for their actions and, in doing so, under the powers and standing orders of the Senate, to the Senate?

Dr Shergold —In principle, I believe that all those in the positions to which you refer should be accountable. I believe that public servants are accountable through our minister and that advisers are accountable through their minister. The question—and it is for the government to decide—is whether the government want to move beyond that. There are levels of accountability at the moment. As I understand it, the purpose of this committee is for you to consider whether they are appropriate. But, at the end of the day, it is a matter for government decision.

Senator MURRAY —There are two separate routes, as I understand it so far. If I can have the latitude to make the remark in this early stage, it seems to me that there are two areas that the committee is moving towards so far. One is either a sort of code of conduct approach, which is another form of internal regulation, management and structuring of people's relationships to improve it. The other approach, which we have not yet developed, is whether attached to that or in addition to that there should be enhanced accountability to the parliament itself of MOP staff who act in executive authority, which is not the situation at present.

Dr Shergold —Senator, as I repeat, that is a matter for the government to decide. I have given you my personal views on Westminster and Washington and the difference between them, but I do not want to provide my personal views as an indication of the way that government ought to decide. All I would emphasise is that, through the Public Service Act, through the guidelines provided by the Public Service Commissioner, through parliamentary committees and through the Prime Minister's key guidelines, there are processes and structures of accountability already in place.

Senator MURRAY —Dr Watt, do you have anything to add to the discussion and discourse we have had?

Dr Watt —I do not think so.

Senator WATSON —Dr Shergold, what more can be done to make more transparent the different roles of advisers versus senior public servants?

Dr Shergold —I think, in part, there is a responsibility on the Public Service itself to be very clear in its documentation about what the contrasting roles are. I must say that the Public Service Commissioner's guidelines, which were issued last week, are an important step forward in distinguishing the complementary roles that are played.

Senator WATSON —Do they go far enough?

Dr Shergold —My view is that the guidelines do go far enough. It is important to understand that we are not talking about rules or prescription here; they are guidelines for the heads of agencies and public servants to take into account in terms of their dealing with ministers' offices. We have to remember that, after 77 years, parliament took a very important decision in 1999 by giving us a quite different type of Public Service Act. We moved from a highly prescriptive, rules driven Public Service Act to a values based Public Service Act. I think that has to be the basis on which the ethos, traditions and standards of the Public Service are preserved and that has to be the basis on which we distinguish the roles of the ministerial adviser and the public servant.

Senator WATSON —That values approach is relatively new and needs some embellishment or filling out, and that is why I asked you the question.

Dr Shergold —That is why, as I say, the guidelines and the guides to best practice that are put out by the Public Service Commissioner play a valuable role.

Senator WATSON —Do you think the Senate estimates calling of senior public servants before it is leading us more and more towards the Washington system as opposed to the Westminster system and are parliamentarians tending to get their responsibilities in terms of questioning somewhat blurred?

Dr Shergold —I think the fundamentals of the Senate estimates process are right. The committees provide a very important mechanism for parliament to scrutinise the actions of public servants. If I have a problem it is that too often the questions move away from issues of estimates, budgets, administration and decision making into the making of public policy. I do not believe that is healthy, because the system does depend upon the fact that public servants are able to provide advice to the elected government of the day in confidence.

CHAIR —The estimates committees do not just primarily deal with budget estimates. They also involve examination of annual reports, which often contain a lot of policy information. I have a couple of further questions. Dr Watt, what sort of training programs does the department offer or make available for ministerial advisers? Do they avail themselves of those programs or the programs that are generally available for MOPS employees?

Dr Watt —I think Ms Mason or Ms Clarke are well equipped to answer that.

Ms Clarke —We provide a range of training that both electorate and personal staff can avail themselves of, and they frequently do. For instance, we have an induction session for new starters, and some old hands occasionally turn up to that. That is targeted at electorate staff, and we offer sessions up here for both personal and electorate staff.

CHAIR —When you say personal, are you including ministerial advisers?

Ms Clarke —Yes.

CHAIR —That is what I really want to focus on, given that they have a different role, as we know, to electorate staff.

Ms Clarke —MOPS staff at the level of adviser and below have a range of professional development training offered to them through the certified agreement. Specific training programs that have been sponsored by the Special Minister of State are offered. There are also ad hoc professional development programs and computer systems training. Funds are provided to political party secretariats and Independent members to conduct training for their staff as well. There is quite a range that we do offer. As I mentioned to Senator Murray earlier, there is a training needs analysis currently under way, where we are seeking to identify new aspects of training that are required. We have previously had a training needs analysis to identify the kind of training that was being sought, and that was offered. That included communication, writing and all those sorts of things. We are looking to revamp that and see what is on offer now.

CHAIR —Is there anything that is specifically directed at the ministerial advisers and people in similar positions, given that they are going to have a much greater interaction with public servants and with the Senior Executive Service of the APS than other MOPS employees?

Ms Clarke —I am not sure whether I can answer the question you are asking. Certainly with our induction program—which was offered more generically—we had the Public Service Commission come in and give a segment, up here in Parliament House, on dealing with public servants, our code of conduct and how that applies, and how we support ministers. That information was given out and is available on the web site of the induction package.

CHAIR —Let me go to the issue which has occupied a lot of the submissions which have been made to the committee, a potential code of conduct for MOPS employees or some MOPS employees, such as non-electorate staff. I note, Dr Shergold, that in the submission from the Department of the Prime Minister and Cabinet you state that the decision to introduce such a code would be:

...essentially one for those who employ the staff ... An alternative would be to apply a code only to non-electorate staff.

I would be interested in hearing you comment further. I appreciate that there might be some policy considerations here, but we have had a range of proposals put to us. There are models which exist in other countries and, indeed, in Queensland. I will give you the opportunity to comment if you would like to—and I would appreciate it—on the views that have been put forward, in the context of how such a code might impact upon the relationship between ministerial advisers, ministerial staffers and the departments.

Dr Shergold —As the submission points out, it is for the government to decide if there should be a code of conduct for ministerial staff. I am happy to make three points. The first is that there is guidance on conduct. That guidance sits within the Prime Minister's guide on key elements of ministerial responsibilities. The second is that all ministerial staff, as with their ministers, are obliged to follow the law. A ministerial staffer cannot decide to take actions that the minister herself or himself cannot take. I suppose the third comment I would make is that if you had a code of conduct introduced for ministerial staff, it would then beg the question of whether a code should also exist for the staff of other office holders—perhaps even the electorate staff of senators and members. So the issue is, if you were to go down this track, how far you would move.

CHAIR —I appreciate that. I suppose I am trying to ascertain whether or not you have any comments to make about that issue. Let me put this to you: it is clear, for instance, that the electorate staff of both opposition members and government members—particularly backbenchers—would not be, as part of their duties, involved in—

Senator CARR —Exercising executive authority.

CHAIR —They would not be involved in policy interchanges with senior levels of the Public Service, certainly not from the opposition's perspective. So there are functions that are undertaken by the ministerial advisers and ministerial staff that are clearly different from—

Dr Shergold —Can I make this issue clear. Senator Murray said something and then I heard what Senator Carr said. We do need to make it clear that ministerial staff cannot exercise executive authority. They can influence executive authority but they do not exercise it themselves.

Senator CARR —So you have never known a circumstance, Dr Shergold, in your 18 years of public service, where a ministerial adviser has sought to exercise executive authority?

Dr Shergold —I do not know about seeking. All I know is that they cannot exercise ministerial authority.

Senator CARR —So with regard to the matters that were raised in the children overboard affair, there was never a circumstance where advisers were seeking to exercise ministerial authority, in your experience?

Dr Shergold —As I say, I cannot comment on what ministerial advisers may seek or not seek to do. What I am stating categorically is that they cannot exercise that executive authority.

Senator CARR —And they never have in your experience?

Dr Shergold —It is not possible. This is why the Guide on Key Elements of Ministerial Responsibility is important. It says:

Ultimately, however, ministers cannot delegate to members of their personal staff their constitutional, legal or accountability responsibilities.

Senator CARR —Absolutely. We understand the legal situation. The question is: have you ever come across a circumstance where a ministerial adviser has sought to direct a public servant?

Dr Shergold —That could start a very long discussion here.

Senator CARR —I would like a simple answer.

Dr Shergold —I can do that; I can give a simple answer. You will often have a ministerial staffer say to a public servant, `The minister would like to have a brief prepared for the meeting that he is having tomorrow.' That is quite normal. That, in a sense, you may define as a direction. What I am saying is that that is not exercising executive authority. The person—the staffer—is requesting that on behalf of the minister. That is the nature of the great bulk of relationships between public servants and ministers' offices.

Senator MURRAY —So if the Senate standing orders were changed, and they simply said that any adviser to the government who acted in an executive capacity, in any case, would be accountable to the parliament, you would not object—because, as far as you are concerned, it does not happen?

Dr Watt —Having it in the standing orders allows it to happen.

CHAIR —Dr Shergold, I think that question was directed to you.

Dr Shergold —The position is quite clear. I think the issue that you are addressing is whether the existing prime ministerial guidelines, which are quite clear on this matter, are sufficient. The fact is that those ministerial staffers are accountable through their ministers, and it is the ministers who wield the executive authority. They are the ones with the constitutional and legal authority.

Senator MURRAY —The difficulty is that I do not believe you, and it is not in the sense of—

Dr Shergold —That is certainly robust!

Senator MURRAY —It is not in the sense of calling you untruthful, but it is in the sense that, in my experience of ministerial advisers, they carry the authority of the minister and exercise that authority.

CHAIR —They try.

Senator MURRAY —They do. You must recognise that shadows like me, who deal with a vast variety of ministerial advisers, are fully aware of the power of their utterances and the ability of an agreement with them to translate into an outcome. I think that is entirely proper. I do not disagree with it. What I am saying to you is that if on the non-government benches you experience the actuality of executive authority in those persons, then the framework within which that happens is less important to us than the reality. We are trying to address that situation, in those narrow circumstances, as to when those people should be accountable to us as opposed to being accountable to the minister only.

Dr Shergold —I hate to disappoint you, but I am not sure that I do entirely disagree with you. I think we may be talking past each other a little, because I am saying who wields the executive authority, and I think you are suggesting to me that, on certain occasions, political advisers, by their behaviour, act as if they wield executive authority. In terms of the role of the Public Service and its relationship with ministers and ministers' officers, I assume that, on day-to-day matters, those who are the ministerial advisers act with the authority of their minister. But in terms of actually using executive authority, it is the minister who is responsible.

CHAIR —Could I just go back to the comment in the department's submission, Dr Shergold, where it says, `An alternative would be to apply a code only to non-electorate staff.' Obviously there is a reason why that comment was made. I would like to know why that is stated there.

Ms Belcher —We saw a distinction between staff who work for office holders, be they ministers or shadow ministers, and those who work just within an electorate office on the business of assisting the senator or member in that electorate capacity. When I say that we saw a distinction, I am not saying that it is a distinction that would necessarily have to be drawn, but it is one that could be drawn.

CHAIR —I thought that was the case, but I wanted to have that clarified. A question to both of you: have the departments prepared responses to the recommendations of the report of the Select Committee on A Certain Maritime Incident, and have they been given to the ministers?

Dr Shergold —We are in the course of developing responses.

CHAIR —It has been almost 11 months. How long do you think it will be before the responses are completed and then given to the minister?

Dr Shergold —As always in these situations, Senator, you will understand that that is a matter for the government to decide.

CHAIR —I am asking about the department's work in preparing—

Dr Shergold —The departmental approach across government is under way. Some of the issues are very broad and go across the range of Public Service agencies—for example, the issue that you raised of records management and record keeping.

CHAIR —There are 13 recommendations, from memory. I am particularly interested in recommendation 11—which, no doubt, we will shortly come to with the Public Service Commission—which is about convening a working group for senior officials of the Department of the Prime Minister and Cabinet and senior parliamentary officers of both houses of parliament to develop a code of conduct for ministerial advisers, and so on. Can I take it that, given the response to the recommendation has not been finalised and presented as yet, that has not been acted upon?

Dr Shergold —Correct.

CHAIR —Thank you.

Dr Watt —Senator Moore left me with a question about performance agreements with our DLOs. The relevant officer is here, if Senator Moore would like the information.

Senator MOORE —That would be lovely, thank you.

Dr Shergold —Earlier, in an interchange with Senator Carr, I was asked about documents that could be tabled. These are the documents that clearly indicate that Dr Tom Karmel was not removed from his position. I will table for you an exchange of letters between the Public Service Commissioner and me. Those letters of July last year make it clear. A letter from me says:

... the Selection Advisory Committee assessed Dr Thomas Karmel as the most suitable candidate—

in other words, he was selected for the position—

However, since finalising interviews, Dr Karmel has accepted an offer of employment as the new Managing Director of the National Centre for Vocational Education Research and has confirmed that he no longer wishes to be considered for the Chief Research Officer position in DEST.

I have the return letter from Mr Podger, the Public Service Commissioner, which says:

Having considered the information provided against requirements for selection at this level and the certification of the process by my representative—

that is, the Public Service Commissioner's representative—

on the selection advisory committee, I am satisfied that the selection exercise meets all requirements of the Act, Regulations, and the Commissioner's Directions.

Finally, I will table an email from Tom Karmel to the Sydney Morning Herald, which says:

I would appreciate it if you could clarify the circumstances in which I left DEST—

I put in parentheses that the Sydney Morning Herald did not do so—

I left DEST to take up the position of managing director, National Centre for Vocational Education Research. Prior to taking up that position I had been acting group manager of the Research, Analysis and Evaluation Group. I left DEST to pursue a different career path, not because of any lack of opportunities at DEST.

I will table those documents in the hope that there will be a clarifying statement at some stage in the Senate.

Senator CARR —Was Dr Karmel ever advised that he had actually been appointed to the position?

Dr Shergold —Yes, I had a discussion with Dr Karmel.

Senator CARR —But did that occur after he had withdrawn from the position or before?

Dr Shergold —I certainly had a discussion with Dr Karmel about whether he should take the position that I had offered him in the department or whether he should take the other position as head of the NCVER.

Senator CARR —Was he ever advised that he had been successful in his application?

Dr Shergold —Yes, he would have been because I discussed with him which of the positions he should take.

Senator CARR —Was that after he had advised you he wanted to take the NCVER job?

Dr Shergold —He came to me to seek my advice on the dilemma he had, where he had been offered two jobs. I think it is pretty categorical, if I may say so. He is not someone who was removed from his position or failed to gain a promotion.

CHAIR —Thank you. Welcome, Mr Suur.

Mr Suur —Senator Moore, as I understand it there were two questions that you were pursuing. The first was: what do we do as a department to brief our departmental liaison officers about their role before they take up their appointment with our ministers. We have two ministers and a parliamentary secretary and a total of four departmental liaison officers in those offices. The second was: what do we do in relation to the performance agreements to make clear their role to communicate and facilitate relationships between the department and the ministers' offices. Have I got those two questions right?

Senator MOORE —They were the particular questions. I was interested in performance agreements with other members of the department as well on that particular issue. But if I can get the information from you for the DLOs it will be a very good start.

Mr Suur —Thank you. Let me read you some examples of things that are in the performance agreement for our current DLOs: to ensure that there is effective communication between the offices of the ministers and the parliamentary secretary; to manage the relationship between the respective ministers, the department and the advisers to the minister; to ensure the department is kept abreast of issues raised by the minister and his advisers to ensure the department can take necessary action; to provide frank and factual feedback to the department on the service provided to the minister; to provide constructive suggestions to the department on ways to improve the service to the minister; to demonstrate judgment in balancing competing demands on the department while helping to ensure the minister's priorities and timelines are met; and to facilitate regular discussion between the departmental liaison officers in all ministers' offices and the parliamentary secretary's office and seek a constructive exchange of ideas.

There is a lot of stuff in there that goes to their facilitation role—from keeping communication channels open to ensuring that departmental officers and the department understand what the requirements of the minister's office are and that the department is in a position to respond to those requirements.

Senator MOORE —Thank you. I want to ask some more questions on this general issue of Dr Shergold and Dr Watt. One of the core aspects that you have spoken about is the accountability of your staff members. You have both said they—through different ways but nonetheless through ways that are clearly understood by your staff members—understand their accountability to their department, to the minister and also in their processes. Do they have confidence that there is that same degree of accountability on people who work in the minister's office if there is a difference between the Public Service and the minister's office?

A public servant knows that if they do something wrong there will be a process that comes out of that. That is very clear in their understanding with your training in the way the act works and the penalties involved. Do your public servants who are involved in this process so intimately have confidence that if the fault is not in the Public Service but in the minister's office some process will be followed?

Dr Shergold —It is a difficult question to answer because I do not know in a real sense without doing a staff survey what my staff's view on this is and therefore what I say is necessarily my personal reflection. It is certainly well understood that I am accountable for the department and what the chain of accountability and responsibility is and what processes exist under the Public Service Act. I believe that certainly at senior levels they would have a pretty clear understanding of the role of the minister's office and they would certainly be aware that the ministerial adviser is responsible not to me as the public servant but to the minister. It is the minister that is the head of their chain of accountability. That certainly would be understood.

Dr Watt —That would be the case in the Department of Finance and Administration. Again, this is a personal view; you cannot give it any other way.

Senator MOORE —Absolutely.

Dr Watt —I do not have the basis for it but my sense is my staff understand my accountabilities very well and I think they understand ministerial staff accountabilities very well. I think also that my staff would appreciate that if there was a breakdown in the relationship it would be pursued by both the minister's chief of staff and by me and in our respective ways.

Senator MOORE —Would you both agree that that would be an absolutely basic element to the complementary relationship that you have both said you think is in place?

Dr Shergold —Yes. It is essential for complementarity and it is essential for the continued maintenance of a relationship of trust between the Public Service and the minister's office.

Dr Watt —And you cannot operate without that.

Senator MOORE —Absolutely.

Senator WATSON —Dr Shergold, as one who has watched the performance of departmental secretaries before parliamentary committees for over two decades now, I must say that I have not only enjoyed your interchange this morning but I also believe that your views will ultimately find their way into student reference books and Public Service training manuals.

CHAIR —Is there a question here, Senator?

Senator WATSON —Thank you for today's contribution.

Dr Shergold —Thank you very much.

CHAIR —I will finish with one further question. Can you give us an indication as to when the responses to the recommendations of the certain maritime incident committee report will be finalised within the departments to then go to the relevant ministers?

Dr Shergold —I cannot.

Dr Watt —We are not directly involved, only tangentially.

CHAIR —Thank you, it has been a very robust hearing this morning. I thank Dr Shergold, Dr Watt and other officers of the two departments for appearing. There are a couple of technical issues that require some statistics—

Dr Shergold —We are working on a response to those, Chair.

Dr Watt —As we are too.

CHAIR —I might just indicate that it may well be necessary for us to request you to come back at the conclusion of the hearing or at another time, depending upon issues that may be raised in the rest of the hearing.

Dr Shergold —I understand.

Dr Watt —Mr Chair, do you have a sense of when that might be?

CHAIR —I think we can let you know later today or tomorrow morning. We are on a tight time frame so we will certainly cooperate with you in that regard. I thank the officers for their time.

[12.38 p.m.]