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Finance and Public Administration Legislation Committee
18/11/2013
Estimates
PRIME MINISTER AND CABINET PORTFOLIO
Australian Public Service Commission

Australian Public Service Commission

[22:20]

CHAIR: I welcome Mr Stephen Sedgwick, the Public Service Commissioner, and officers of the Australian Public Service Commission. Officers called upon for the first time to answer a question should state their name and position for the Hansard record and witnesses should speak clearly into the microphone. Mr Sedgwick, do you wish to make an opening statement?

Mr Sedgwick : No, thank you.

Senator SESELJA: Mr Sedgwick, I will just refer you to the number of reports in recent months—particularly here in the ACT—about voluntary redundancies within the Public Service. Are you able to talk us through your understanding of that, in terms of how many agencies and departments have initiated voluntary redundancy programs this year?

Mr Sedgwick : I do not have a comprehensive list. I am quite happy to take that question on notice.

Senator SESELJA: Is it your understanding that it is a widespread practice across agencies in the Public Service?

Mr Sedgwick : There are a number of agencies that need to live within their budget. In order to live within their budget, there are times when they need to reduce staff. If, as has happened, the level of resignations has fallen—it has been falling for the last few years—then agencies will often find themselves in a position where they will offer voluntary redundancies. But I just do not have the number off the top of my head, so I am quite happy to take it on notice.

Senator SESELJA: In taking that on notice, could you also come back with not only a number of agencies but the number of VRs in the last financial year plus this financial year to date?

Mr Sedgwick : We cannot separately identify VRs from other retrenchments; but, subject to that caveat, yes.

Senator SESELJA: So to the extent that you can break it down or provide them.

Mr Sedgwick : To the extent that we can do it, yes.

Senator SESELJA: Are you aware of to what extent the current rounds of redundancies—be they forced or voluntary—are caused by the decisions made by the former government before the election?

Mr Sedgwick : The budgets that agencies are working with are those that were introduced as part of the budget process or as part of the updates of the budget—MYEFO and whatnot. There has not been, to my knowledge, a series of budget initiatives subsequent to the change of government yet. But I am not the finance department, so I cannot say that I am fully authoritative on that matter.

Senator SESELJA: It appears that your understanding is that these cuts are the cuts of the previous government rather than the current government.

Mr Sedgwick : I prefer not to put things in those terms. I would say that agencies are responding to the budget situation in which they find themselves. They are doing the responsible things that they need to do in order to live within the budgets that have been set for them.

Senator SESELJA: Just to clarify then, what you are saying—without necessarily accepting my wording—is that it is as a result of the decisions in the last budget?

Senator LUNDY: I do not think the witness is saying that at all.

Senator SESELJA: I have not actually finished. I do not know that you know what I am actually going to say.

Senator LUNDY: Can I just say that—

CHAIR: Senator Lundy, let Senator Seselja finish.

Senator SESELJA: I do not think you know what I am going to say. Is it as a result of decisions taken in the last budget and the budget update? Those are the words I think you used in one of your earlier answers.

Mr Sedgwick : What I do not know, because I am not the finance department, is whether there have been any other measures subsequent to the change of government—I do not believe that there has been much, but I do not know. It is not my job.

Senator SESELJA: Have agencies been given any allocation, to your knowledge, in relation to the new government's directions and their policy of reducing the size of the Public Service through natural attrition?

Mr Sedgwick : The agencies have not at this stage been given an allocation of the 12,000 reduction in staff numbers that you are talking about. What decisions agencies are making about how to manage their budgets, though, is a matter for them.

Senator SESELJA: But you are not aware of any directions being given in relation to that policy on an agency-by-agency level?

Mr Sedgwick : The government has not made a decision to allocate the 12,000 agency by agency, and I cannot speculate on the decision-making processes of agency heads.

Senator SESELJA: What is your understanding of the efficiency dividends that were announced in the last couple of budgets by the government? Is it your understanding that that has had an impact on staff numbers within the Australian Public Service?

Mr Sedgwick : When the efficiency dividends were announced—and again this is more of a matter to address to the Department of Finance than to us because we do not make the rules about how these efficiency dividends are managed—there were circumstances in which the then government indicated that it was looking for savings in travel or other things. There were also times when the then government was looking to reduce the number of middle managers, for example. There is a mixture, I suspect, of ways that agencies have responded to the efficiency dividends that they faced. The largest proportion of our budget is staff, so you would expect that there would be an impact on staffing numbers. There were times—and again you would need to go to Finance to get the details of this—when the then government was targeting other means.

Senator SESELJA: If we look at that period—where I started in the last financial year up to date—do you have the figures of what the staffing numbers were in the Public Service at the beginning of the last financial year versus what they are at the moment?

Mr Sedgwick : We take a snapshot of APS staffing numbers twice a year. We take a snapshot as at June and we take a snapshot as at December. There was a reduction between June 12 and December 12 of in excess of 1,000, from memory. We have not yet published the data for June 2013—that will be published in a few weeks time.

Senator SESELJA: Have you collated that data?

Mr Sedgwick : Yes.

Senator SESELJA: Do you know what it is?

Mr Sedgwick : Yes.

Senator SESELJA: Are you able to share it with us?

Mr Sedgwick : The data will be published when the data is published, but I can certainly say to you that—

Senator Abetz: It is to be published on 2 December as I understand it. I am not sure what the protocol is regarding whether these figures are held until such time as the official statement.

Mr Sedgwick : What I can tell you is that there has been a further decline.

Senator SESELJA: Minister Abetz, perhaps you could check on that protocol.

Senator Abetz: Yes, I will.

Senator DASTYARI: I want to thank the Australian Public Service Commission for being here this late in the evening. I know that I am standing in the way of people getting home, so I will try to be as brief as possible. I am a bit new, so I am probably going to ask some questions that others probably know the answers to better than myself. What exactly is the role of the Public Service Commission when it comes to terminating department secretaries?

Mr Sedgwick : The commission does not have a role; the commissioner does. There are two ways that a secretary can be terminated. A secretary can be terminated because their department is abolished and the abolition of the department abolishes the office.

Senator DASTYARI: That is effectively a redundancy—they become redundant.

Mr Sedgwick : Yes, depending on whether they are offered another appointment.

Senator DASTYARI: Of course.

Mr Sedgwick : If they are not offered another appointment, then certainly. In the case of a termination of a secretary of an ongoing department—if I could use that expression—the Secretary of the Department of the Prime Minister and Cabinet is required to provide a report in respect of that matter to the Prime Minister. The Prime Minister is the one who makes the recommendation to the Governor-General. In preparing the report the Public Service Commissioner is required to be consulted about the matter, and any disagreement between the Secretary of the Department of the Prime Minister and Cabinet and the commissioner is to be reflected in the report provided to the Prime Minister.

Senator DASTYARI: You obviously have a feel for where I am going with this. On 18 September there were three department heads terminated. Something you said there was quite interesting. The three I am referring to are Dr Don Russell, Andrew Metcalfe and Blair Comley. Blair Comley's department was merged and renamed the Department of Industry, but, as I understand it, the media said that the department did not get abolished but was changed. My understanding is that all three of them were terminated.

Mr Sedgwick : No.

Ms Kelly : If I could clarify that, Mr Comley's appointment was terminated by the abolition of his department under section 56(2) of the act.

Senator DASTYARI: That is not what you told us earlier today.

Ms Kelly : What was said earlier today was that three secretaries were terminated by the Governor-General, and there were three secretaries terminated. There were three secretaries whose appointments were terminated by the abolition of their departments, and there were five secretaries newly appointed.

Senator DASTYARI: No, that is not at all what you said to us earlier today. We discussed the preparation of three letters within the requirements of section 59 of the act. Your advice to us earlier was that there were three secretaries and there were three separate letters produced following section 59—the termination of appointment.

Ms Kelly : I believe that I said that three secretaries were terminated under section 59 and that the requirements of section 59 were complied with.

Senator DASTYARI: But now are you not—

Senator Abetz: I do not have any recollection of letters being mentioned.

Senator DASTYARI: Yes, there was discussion about reports being produced.

Senator Abetz: Letters and reports are different things. What are you referring to? I do not recall terminology of letters—reports, yes. I might be wrong; it has been a long day.

Senator FAULKNER: Just to cut to the chase to help here, is this because departmental names were changed, Commissioner or Ms Kelly?

Ms Kelly : Yes.

Senator FAULKNER: It is a technical point, but did the specific provision of the act apply because the names of agencies changed? Is that right or wrong?

Mr Sedgwick : No, the law will allow an agency's name to be changed, but if the agency is abolished then the office of secretary is terminated.

Senator FAULKNER: So a change of name does not equal an abolition. Is that what you are saying?

Mr Sedgwick : Not normally.

Senator FAULKNER: That is what is not clear to me.

Mr Sedgwick : It is in the circumstances in which the agency is abolished.

Senator FAULKNER: So we are clear, what applied here? I thought Ms Kelly was hinting here that there were three 'abolitions'.

Ms Kelly : That is correct.

Senator FAULKNER: That is not what the commissioner is saying.

Mr Sedgwick : I have not addressed that question.

Senator FAULKNER: This, I think, will save a lot of time. I must have misunderstood what you said, Commissioner.

Mr Sedgwick : There were secretaries whose offices were abolished. The Department of Education, Employment and Workplace Relations was abolished. The Department of Regional Australia, Local Government, Arts and Sport was abolished. Mr Comley's department was abolished. There was a secretary who was terminated in one role and reappointed to another. These are just technicalities under the law. There were two other secretaries who were terminated for other reasons. The three that were being talked about previously were two secretaries who were terminated for other reasons and one who was terminated in order to be reappointed to another department. It is just the technicality of the law. The threes are confusing.

Senator DASTYARI: Yes, this is. We will have a closer look at it later. This is actually slightly different from what was said earlier, but I think it is not a material point, because the question is whether they were terminated under section 56 or section 59. At the end of the day, let us just put that aside. They were terminated. Commissioner, the Public Service Commission does not have a role, but you have a role, as a commissioner, when it comes to termination.

Mr Sedgwick : Yes.

Senator DASTYARI: Correct me if I am wrong about this: the Governor-General gets a report from the Prime Minister.

Mr Sedgwick : It is a recommendation from the Prime Minister.

Senator DASTYARI: Sorry, a recommendation from the Prime Minister. I assume that is in a formal written document. But that is a matter for the Prime Minister; that is obviously not a matter for you. The Prime Minister has received a report about the proposed termination from the secretary of the Prime Minister's department, who is Dr Watt. In the preparation of that report, does there have to be consultation with you in your role as the commissioner?

Mr Sedgwick : Yes.

Senator DASTYARI: That is correct. In your opinion, in the instances relating to 18 September—I imagine it happened a couple of days earlier than that, but that is when they were publicly announced—were those requirements meant?

Mr Sedgwick : Yes.

Senator DASTYARI: Do you know when the part of that requirement that relates to you was met?

Mr Sedgwick : I would have to go back and search my memory for precise dates, if that is what you mean.

Senator DASTYARI: I assume it would have been at some point between the seventh and the 18th.

Mr Sedgwick : Yes, but if you want a precise date, I am going to have to go back and reconstruct my memory.

Senator DASTYARI: Is that possible? Could we possibly ask for that to be taken on notice.

CHAIR: You can ask for something to be taken on notice.

Senator FAULKNER: There is no record that you can refer to in this, though, is there, Commissioner? Or is there? When you talk about reconstructing your memory, have you got the benefit of something tangible with which to do that, or not?

Mr Sedgwick : There is no record that I hold, and the formal record is not the only part of the consultation.

Senator FAULKNER: But there would be a series of events, I suppose.

Mr Sedgwick : There would be conversations.

Senator FAULKNER: Yes, I am sure. There might be a record of some of those; some there might not be record of.

Mr Sedgwick : You can presume that there would be very few records.

Senator FAULKNER: I appreciate that. That is why I am asking you. Hence you are carefully saying you will have to dredge your memory. Good luck!

Senator DASTYARI: In regard to the report that was produced by the secretary of the Prime Minister's department, obviously there was consultation with you, as is required under the act. That has been your advice, and that is very similar to what Ms Kelly was saying earlier. She was of the opinion that the legal requirements have been met. Obviously you will get back to us about exact dates, but is that a formal meeting that gets held, or is it a conversation, or is it a written document? All I am interested in—and I am not asking for details; I am just asking for process—is the process for the termination of a departmental secretary. What is the process for consultation?

Mr Sedgwick : The process of consultation with me was a process that played out over several days as various issues were being addressed. There were a number of conversations that I was involved in with Dr Watt. A consultation is a consultation. It was a series of conversations.

CHAIR: Senator Dastyari, before you continue, Senator Faulkner has indicated he has a few minutes of questions for the Public Service Commissioner, and I would like to move to the Inspector General of Intelligence and Security at a quarter to.

Senator DASTYARI: If you do not mind, I probably have a few minutes more than that, if that is okay. I will try to be as brief as I can.

CHAIR: I am mindful that there are people who have been waiting all day for the Office of the Inspector-General of Intelligence and Security. We have kept the department here and it is only fair that they are given an appropriate opportunity. We do need to move there.

Senator DASTYARI: I will try to be as brief as I can.

CHAIR: Senator Faulkner may concede his time to you, you never know.

Senator FAULKNER: I would like a very brief time with the Commissioner, if I could. I will be brief.

CHAIR: Handle it between yourselves.

Senator DASTYARI: There was obviously consultation, but was the nature of that consultation only relating to those that were terminated, or were there other people being discussed in those consultations that did not end up being terminated?

Mr Sedgwick : The act also requires that there be consultation in respect of appointments. As I said, these consultations occurred over several days. We were in discussion about proposed appointments because there was a report in respect of those as well.

Senator DASTYARI: The act is clear that, if the secretary of the Prime Minister's department and the commissioner disagree in relation to a proposed termination, the substance of the disagreement has to be explained. Have you actually seen the final report that was given to the Prime Minister?

Mr Sedgwick : Yes.

Senator DASTYARI: Did it outline the disagreements?

Mr Sedgwick : You are assuming there were disagreements.

Senator Abetz: That is presuming that there were disagreements, so let us do it step by step.

Senator DASTYARI: Okay. Were there any disagreements in the report?

Mr Sedgwick : The report was from the secretary of Prime Minister and Cabinet and the law was complied with.

Senator DASTYARI: I am not disputing that the law was not complied with. My question is: in your role as the Public Service Commissioner did you support the decision to remove three department heads or to terminate them? It is a pretty easy question to answer.

Mr Sedgwick : That is not my role.

Senator DASTYARI: But it is your role.

Mr Sedgwick : No, no. The act requires that there is a report to the Prime Minister in respect of the termination.

Senator DASTYARI: The act requires that there be consultation and then, if there be disagreement in the proposed course of action, that that be recorded in the report. The act, as I read it, implies that as part of that consultation. If your requirement is not to have an opinion then what is the point of having an act that requires you to be consulted?

Mr Sedgwick : There was nothing in the report that I took exception to.

Senator DASTYARI: Sure, but you would not take exception if the report and the substance of the report outlined different views.

Mr Sedgwick : Senator, I know we are short of time. There was nothing in the report that I took exception to. I am not prepared to discuss the report. It was not my report; it was the secretary of Prime Minister and Cabinet's report. It was a report provided to the Prime Minister. I am not prepared to discuss what was in the report. But I will give you an assurance that the law was complied with.

Senator DASTYARI: No-one is disputing that the law was complied with. Did you or did you not support in the consultation process—because obviously when you are consulted you are asked for your opinion—the termination of three department heads? Come on, this is ridiculous.

CHAIR: I remind you again that at a quarter to we will be moving on.

Mr Sedgwick : It is very difficult to explain this, but the report is in respect of the matter. One of the important things in a report of this kind is to ensure procedural fairness. Issues of that kind were important.

Senator DASTYARI: Chair, are you saying that we have to go?

CHAIR: Let me make the position as clear as I can. We have had a very indulgent day at the request of Senator Faulkner and Senator Wong to extend examination of other departments. The consequence of that is that we have to show the courtesy to other senators and to the departments that we have kept here until 11 o'clock. It is only fair and reasonable. I am not trying to cut you off. I am happy for you to have your investigation, but unfortunately we have to do what I think is a very fair and reasonable thing to do.

Senator FAULKNER: I have suggested to Senator Dastyari that he flag this issue as one of importance to him with the Commissioner and that he comes back to the additional estimates round in February. Mr Sedgwick is well and truly apprised of the fact of Senator Dastyari's interest.

CHAIR: Good advice.

Senator FAULKNER: I am not interested in the politics of this, Commissioner. I did want to ask a couple of questions. I suspect you may have to take them on notice because of time. I want to ask about the public service implications of the gazettal of the appointment of Mr Bracks on 18 July. You would be aware of section 38 of the Public Service Act, which says an agency head cannot terminate the employment of an SES employee unless the commissioner—in this case you—has issued a certificate under section 38 of the act stating that the termination has satisfied the requirements of the commissioner's direction and is in the public interest. You would be aware, of course, of those provisions. Can I just confirm that you did issue such a certificate?

Mr Sedgwick : Not in that case. I would need to take on notice and therefore get back to you regarding the circumstances.

Senator FAULKNER: I am surprised to hear that, but we do not have time tonight for me to explore it. I am not particularly interested in the politics of this.

Mr Sedgwick : Senator, I do not have the detail in my head. We will get back to you.

Senator FAULKNER: Fair enough, Commissioner. We do not have time, and I do not want to address the politics. I am interested in the costs involved here, I am interested in public interest and I am interested, obviously, as to why a certificate was not issued. Could I also flag with you that at a future date, at the next round of estimates, I will come back and ask you questions about that. I am assuming this was section 22(2)(b) of the Public Service Act. Mr Bracks in this case would have been in a non-ongoing temporary full-time SES band 2 position. I am not sure of that. I would like to confirm that. What of those issues you can take on notice and provide to me before the next estimates round I would appreciate. I might follow through later on. I want to keep with the spirit of what the chair has asked.

Senator LUNDY: I have some questions I will place on notice.

CHAIR: Thank you.

Senator SMITH: Commissioner, you referred earlier to a report of statistics that are to be released on 2 December. What is the name of that report?

Mr Sedgwick : It is the state of the service report. There is a statistical bulletin associated with that and it will be released on the same day.

Senator SMITH: I appreciate that you might not be able to divulge the exact details of the figure in that report, but can you provide us with a ballpark figure or estimate.

Mr Sedgwick : It did decline by several hundred.

Senator Abetz: I think you will find in that report that the number of redundancies will be potentially in the hundreds, if not thousands. But wait till 2 December and you will find the figure.

CHAIR: I thank the officers of the Australian Public Service Commission and request the presence of the Office of the Inspector-General of Intelligence and Security.