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FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE
24/05/2010
PRIME MINISTER AND CABINET PORTFOLIO
Australian Public Service Commission

CHAIR —Good evening and welcome to Mr Sedgwick, Australian Public Service Commissioner, and officers. Mr Sedgwick, do you have an opening statement?

Mr Sedgwick —Not as such. But I note that in the Blueprint for reform of Australian government administration there was a recommendation that the government has accepted that workplace relations matters in respect of the Australian Public Service transfer to the commission. The government accepted that recommendation but the AAO change has not yet been effected. So, if there are issues around public sector pay and conditions, they would be best directed to DEEWR at this stage.

CHAIR —Thank you very much.

Senator RYAN —Before I get on to the Blueprint I have a couple of questions around staffing levels. In last year’s budget the government predicted that total staffing this year would increase by 2,750. However, the most recent budget indicated an increase of 5,003, an 81 per cent increase over the increase estimated in last year’s budget. Could you enlighten us as to why there had been an increase on the proposed increase in APS staffing levels?

Mr Sedgwick —Having been out of the Public Service until six months ago, it is a bit hard for me to answer that one. I would imagine, until I am corrected by somebody who has the data, the staffing estimates that are put together at the time of the budget are estimates. They are revised through the course of the year as better information comes to hand. Apart from that, I cannot give you a precise answer. I used to be the Secretary of Finance many moons ago, and that was the way that budget estimates were put together: they were no more than a best guess of staffing numbers at the time. Either there was additional policy that was agreed to through the course of the year and funded or—

Senator RYAN —Just growth.

Mr Sedgwick —just growth as the workload changed over time.

Senator RYAN —Or just growth.

Mr Sedgwick —There are some agencies that are subject to funding formulas. As the workload rises, so does their funding.

Senator RYAN —It is just that the 81 per cent increase over that projected increase in 12 months is quite a substantial change.

Mr Sedgwick —Two thousand in 160,000 is not a large number, really.

Senator RYAN —It is an increase that was projected at 2,700, give or take, that is now an increase projected at 5,000. I agree that it is only 2,000 out of 160,000, but it is also 2,000 out of 3,000.

Mr Sedgwick —Sure. But, as I say, these are big numbers and if you have workload formulas that drive funding of Centrelink and various other agencies, for example, those numbers go up and down through the course of the year. If you like, we will take the question on notice and try and get you some data. But, based on past recollections, it may not be easy to get you your answer.

Senator RYAN —Thank you. About that, you compile the State of the service reports, so I assume that you will be compiling the data that may assist in answering these questions, but I appreciate you may not have it at hand. With that change in the projected increase, I am also interested in the change within that increase in the number of people who would be classified as SES. We have an extra 2,000 public servants being employed over a forecast 3,000-person increase, so I would be interested to know, within that forecast increase on an increase, how many of those were to be SES. Senator Ludwig will remember that last estimates we discussed the number of trainees and the dramatic falls that have taken place since the government took office. I would also be interested in the number of this increase that are going to be APS trainees and graduates.

Mr Sedgwick —There has been a long-term decline in the proportion of the Public Service that is trainees and a long-term increase in the proportion of the Public Service that is SES.

Senator RYAN —I do not have the numbers in front of me, but the drop in the number of graduates in your last State of the service report was quite marked.

Mr Sedgwick —In 2009 there were fewer graduates than the year before.

Senator RYAN —And there was a substantial increase in SES.

Mr Sedgwick —There has been a substantial increase in SES over a long period of time. Identifying the sources of growth in the SES is one of the things that we have been funded by the government to look at, and we will be very keen to do that.

Senator RYAN —Do you have data on total expenditure on salaries for the APS, or will you under your new responsibilities when the administrative orders are changed?

Mr Sedgwick —We do not; Finance may.

Senator RYAN —Will you have it under the new arrangements if you take over the employment responsibilities?

Mr Sedgwick —We probably would not. The financial estimates are managed out of the Department of Finance and Deregulation. We may have a better feeling for pay rates across the public service but how they would translate into the actual bill for wages and salaries would not be one of our responsibilities—that would typically be Finance’s.

Senator RYAN —But under your new responsibilities you would not inherit that either?

Mr Sedgwick —No. I may stand to be corrected by one of my colleagues but I would be very surprised.

Senator RYAN —Well, we will be back again in November, as a couple of people have commented, one way or another. I have got some questions about Ahead of the game—commonly known as the Moran review. You were a member of that panel, weren’t you?

Mr Sedgwick —I was indeed.

Senator RYAN —Is it appropriate for me to ask you questions as a member of that panel?

Mr Sedgwick —Sure.

Senator RYAN —There is a broad discussion, I appreciate, throughout the report about efficiency and on page 30 it mentions that there was one small agency that revealed that corporate costs represented:

… approximately $5 million out of an annual appropriation of $15 million …

This was part of the suggestion that there was the opportunity to ‘improve efficiency in small agencies’. I was wondering what agency that was?

Mr Sedgwick —I honestly cannot remember, if indeed I ever knew what that agency was. It should not be too hard to find it, though.

Senator RYAN —I would appreciate that. I can appreciate that there are some small agencies but one in three dollars of an appropriation on effectively payroll, human development, corporate services and other aspects—

Mr Sedgwick —It probably says something about the nature of the business.

Senator RYAN —Also on page 30 there was a comment that ‘63 agencies have fewer than 500 employees’. Did the review identify agencies as appropriate to be dismantled or otherwise merged when it was considering that statement?

Mr Sedgwick —No, that was not a function of the review. If that is an issue that needs to be pursued it would be one that would be pursued within the portfolio and by the finance minister. It was not a primary issue for the panel.

Senator RYAN —The report also recommends the abolition of the efficiency dividend, I understand?

Mr Sedgwick —No, I do not think it was actually that brave. It does recommend that there be an examination to see whether there are alternatives to the efficiency dividend. My memory of it was that there was a process that was suggested. On page 68 it says:

As part of the review Finance, PM &C and Treasury would consider options, including:

  • Retaining an efficiency dividend in a form similar to the current model …

Or removing the dividend entirely and rely on a discretionary saving process, or introducing other mechanisms. So it did not actually make a finding on the subject; it just identified it as an issue.

Senator RYAN —Did it identify or consider alternatives in developing the Blueprint?

Mr Sedgwick —No, not really. As you might imagine, this is an instrument that has been in place for many years and it is not a simple thing to redesign an alternative way of encouraging agencies to improve their efficiency. We left that for the agencies that were responsible—that is, Finance, PM&C and Treasury.

Senator RYAN —When the review was set up who nominated the members of the panel?

Mr Sedgwick —I am sorry, I was not there at the time. I was not in government at the time so I cannot answer that for you.

Senator RYAN —I should highlight, Chair, that I will probably be addressing some of these questions to the Department of the Prime Minister and Cabinet tomorrow as well because there is a crossover between the two agencies on this.

Senator Ludwig —Tomorrow is probably the most appropriate time to ask that question.

Mr Sedgwick —Anything that relates to the setting up of the panel I cannot help you with, I’m afraid.

Senator RYAN —The review proposes the citizen survey as a way to measure feedback. Have any steps already been taken? I know that some elements of this report are already under implementation, have any steps been undertaken to implement this particular recommendation so far? Or again, is that being overseen by someone else?

Mr Sedgwick —We have responsibility for the citizen survey. The first stage of this process is to establish what exists. So we are about to do two things. One is to survey agencies to establish what procedures they have in train at the moment to survey the perceptions of citizens of the service that they receive, and we are in the process of recruiting the team to take that work forward. So the first stage of this will be to do a feasibility study. The first component of which will be to establish what exists. Then we will work through whether we can build a new survey based on what already happens or whether we have to develop something that is freestanding and new. There is experience we can draw from in other countries.

Senator RYAN —I understand Canada is an example that was probably considered by the review?

Mr Sedgwick —Yes. Canada and New Zealand.

Senator RYAN —Have you come to a determination as to how regular it will be?

Mr Sedgwick —No, not precisely. It is unlikely to be every year but it would follow a regular pattern—every couple of years. Those matters are for decision by the government when we do the feasibility study and establish what the costs are of doing this.

Senator RYAN —So you do not have a budget yet?

Mr Sedgwick —We have a budget to do the feasibility study.

Senator RYAN —But not to start conducting surveys?

Mr Sedgwick —No, we will come back to the government when we have established what is a sensible way to take it forward.

Senator RYAN —Do you envisage that, after you come back with the feasibility study, there will be decisions made by the government on the framework but then the survey will be regularly performed pursuant to that framework, rather than some of these decisions being made on a, for example, biennial basis by the government of the day?

Mr Sedgwick —No, the intention would be that, in this feasibility stage, we would establish a pilot instrument and maybe test it to see how it would go, so that we can establish what would be—at least at its heart—a regularly repeated survey, so that you can map trends over time. There may be little questions that vary from year to year or every couple of years so that you can focus on particular issues, but you would want to have a degree of continuity over time, because it is trends that matter as much as anything else in these surveys.

Senator RYAN —So, with respect to the pilot instrument you mentioned, is that going to be developed and overseen by you as the Public Service Commissioner or by the Department of the Prime Minister and Cabinet or is it entirely within your bailiwick?

Mr Sedgwick —We have responsibility to do that. But, as you can imagine, we will be consulting widely with agencies, including those that are in the business of delivering services to clients, to learn from their expertise.

Senator RYAN —But it is your decision?

Mr Sedgwick —We will put a recommendation to government.

Senator RYAN —I appreciate that. Is that about the conduct of the pilot study as well?

Mr Sedgwick —Yes.

Senator RYAN —So you will be putting a recommendation to government about the pilot study; you will not be undertaking that yourself as part of the feasibility study?

Mr Sedgwick —We will consult the minister on that before we take that step.

Senator RYAN —But it will be part of the feasibility study?

Mr Sedgwick —The pilot will be part of the feasibility study.

Senator RYAN —Do you have a view on—or does the report come to a conclusion which I have missed—about the findings of both the pilot instrument and the survey on an ongoing basis as to whether they would all be made public or be tabled in parliament or be made confidential and maintained for use only inside the APS?

Mr Sedgwick —I think the expectation is that the survey results would be published. In what detail will depend on in effect how large the survey sample is. So they are matters that will be established through the course of the feasibility study.

Senator RYAN —With respect to the new employment responsibilities you are going to have, how many staff do you expect to be transferred from the Department of Education, Employment and Workplace Relations?

Mr Sedgwick —We are still settling the fine details but, in round numbers, 25.

Senator RYAN —And they will all be under the Public Service Commissioner’s employ after that?

Mr Sedgwick —At that stage, yes.

Senator RYAN —If I could turn now, in the comments that have been made public, to some of the more controversial aspects of the review with respect to the SES and the review of the ‘size, capability and work level standards for each level of the SES’. What are the reasons for concern about the current structure and distribution of the SES? I understand the report referred to the number of deputy secretaries being considered to be excessive.

Mr Sedgwick —No, the report made a similar observation to the one that you made earlier on, that over a period of time there has been a steady increase in the average classification level in the Public Service, if you like, and that, at a time when over the last 15 years the Public Service at large grew by about 15 per cent, the size of the SES grew by 50 per cent plus in each band. That has just raised the question as to what has been driving that. Is it a function of the growing complexity of the work and the nature of the representational duties that are now performed by senior officers or is it other things like classification creep, which is a less than rigorous application of the work level standards? We do not know the answer to that. The report recommended that there be a review to establish the reasons for the size of the growth and the classification standards of the SES so that we can get some data around the problem and get a better understanding of what is driving what.

Senator RYAN —I am jumping around a bit because I have some issues to chase tomorrow and I want to try to get this done by the dinner break. If I could turn now to the comment about staff training and research—and feel free to say this is not appropriate for you to comment on—the report states:

PM&C would work with agencies to develop stronger links with the Australia and New Zealand School of Government, National Security College and think tanks such as the Lowy and Grattan Institutes.

It leapt out at me that the one institution that was not mentioned was ASPI, the Australian Strategic Policy Institute, which is effectively a think tank funded by government. It seemed to mention all the think-tanks other than the one that the government set up precisely for this purpose to be an independent source of advice on defence and security matters.

Mr Sedgwick —I suspect that is just one of those things that has happened in putting the report together. I do not think there was anything particularly sinister in that, and that particular institute does have its own constituency.

Senator RYAN —It does, and the omission of the ASPI was notable partly because of the reason you mentioned. There is also a particular focus on ANU in this. I appreciate it does mention the Australia and New Zealand School of Government scattered around multiple campuses, but it puts a great deal of focus on a significant growth in the role of ANU and the Crawford school, which raised concerns with a few that this particular document was rather Canberra-centric. By creating a sole training source of advice where you have ANU, which is already reasonably dominant and has particular funding arrangements that reflect that, and it being obviously the largest and oldest university in this city, doesn’t that pose a risk of being too reliant upon one institution and maybe lose the benefits of competing opinions and interests, particularly those from outside the ACT?

Mr Sedgwick —I don’t see it that way. Given the decisions that have been taken to strengthen the policy think tanks that are available at the ANU I understand that you might think that, but I do not think that is one of the animating principles of the document. It actually places quite an emphasis on the Public Service developing networks and relationships with a broad range of thinkers and experts. It puts as strong an emphasis on those academic networks, whether they are in Canberra or anywhere else, as it does on the ANU. There are some particular funding relationships with the ANU. The notion that public servants should reach out and that they should have good inroads with policy researchers in any institution almost in any place in the world is one of the principles that underpin some of the things around strategic policy thinking in the document. I would not overemphasise the significance of the ANU as an issue there.

The second is that there is to be a strategic centre for leadership, learning and development established within the commission, and one of its jobs will be to forge a strong strategic relationship between learning and development options that are accredited or in some sense endorsed by that centre and the strategic learning and development priorities of the APS. It will have a remit to broker or accredit or in any other way provide quality assurance about providers, wherever they may be found. These are ways to deal with the issues that you have in mind that aren’t quite so bad.

CHAIR —We will now stand adjourned until 7.45 p.m.

Proceedings suspended from 6.32 pm to 7.45 pm

CHAIR —Welcome back. We will resume with the Australian Public Service Commission. Senator Ryan.

Senator RYAN —I have some queries with respect to the Moran review. The review recommends some significant responsibilities for the new Secretaries Board. I am wondering about the governance and accountability requirements for this board. Who does the Secretaries Board report to and through whom?

Mr Sedgwick —The Secretaries Board does not have a formal reporting line, in the sense that it is a representation of all of the portfolios. However, it does have a range of accountabilities for elements of the governance of the APS. If you accept that we have an institution that is united by a set of values that we have accepted for ourselves, there is a responsibility to try and manage the APS workforce as an entity, to nurture talent and to try and provide opportunities to develop individuals, and to work through some of the policy issues that have been identified in the report. To the extent that it is reporting, it is reporting to the government and the head of the government is the Prime Minister, and the Prime Minister is advised by the secretary of PM&C. To the extent that there is a formal reporting line, it would be of that kind but it is not formally constituted in that way.

Senator RYAN —You can probably see a directional heading. I know that there is a lot of high-level language in the Moran review. But, as has happened in certain state governments, a group of secretaries has quite substantial implementation responsibilities, particularly coordination responsibilities. The lack of a specific governance and accountability mechanism is of some concern to me and to some people who have approached me. I could envisage a situation where the Secretaries Board might be undertaking work, but each minister may not necessarily be aware of it. It is its own body. Isn’t that a flaw in the system? The most senior APS officials in the country form this group that has responsibilities for strategic policy capability establishment, talent management and putting a human capital framework in place. But, as you said, there is no formal, specific accountability mechanism to the parliament.

Mr Sedgwick —I see it slightly differently, I think, for a couple of reasons. One is that one of the objectives of the Secretaries Board is to achieve stronger coordination of issues that have a whole of government focus. In a sense, the Secretaries Board is a formalisation of what portfolio secretaries have been capable of doing for quite some time, but in the circumstances we are in now there is a much stronger expectation that the secretaries will collaborate in pursuit of issues that require cross-portfolio collaboration. They tend to be issues of policy or the delivery of service. It is not a rogue body; it cannot go and do its own thing.

Each of the members of the Secretaries Board reports to a minister and, in the context of whole-of-government issues, there are the standard questions around the authority of cabinet, the responsibilities of ministers and all of that stuff. None of that has changed. I cannot see that there is anything different about this set of relationships compared to portfolio secretaries in terms of the accountability of each member of that group to their minister and to the government.

You were talking about some of the capability issues—the development of talent and all of those things. One of the interesting components of the blueprint is that it has mandated a role for the commission to encourage better workforce planning across the Public Service and to put systems in place to encourage, or certainly provide a vehicle for, the Secretaries Board to deal with workforce planning issues at the level of the APS, but in circumstances in which the commissioner also has obligations and opportunities to report publicly.

So I think there is actually a component of reporting and monitoring about the management of the service which is stronger in this set of arrangements than was the case in the past, including because it articulates a responsibility for secretaries to manage the whole of the APS, which in the past was a little bit less clear.

Senator RYAN —I take what you say. The role of this body seems to be elevated out of this report. This body is taking on a more significant role in the management of the APS. What is the formal role that you have, if any, in the Secretaries Board?

Mr Sedgwick —I am a member of the Secretaries Board along with the portfolio secretaries, but I am independent and have obligations to report—for example, in the State of the service report.

Senator RYAN —Let us say there was a coordination issue across government. It might be in relation to, for example, a home insulation scheme. The discussions at the Secretaries Board of those activities—if it had been in place over the last 12 months—would be particularly relevant to the parliament. I am not sure where or how I could investigate the activities, discussions, working papers, agenda—all relevant issues—that may relate to that with the Secretaries Board, or which minister I would quiz or how I would examine it at, for example, estimates hearings with the lack of a formal reporting line.

Mr Sedgwick —In that sense, the formal coordination relationships of the Secretaries Board are similar to but stronger than those that exist under the portfolio secretaries arrangements. If you wish to pursue that, maybe you should take that up with PM&C. Because each member of that board is responsible to a minister and there are coordinating arrangements within government, the responsibilities of the Secretaries Board will be discharged through those arrangements. So it would not have a direct relationship with the parliament other than the ones that we currently have.

Senator RYAN —No, but, as I said to you earlier—and you conceded, Mr Sedgwick—the role of the Secretaries Board has been heightened or elevated as a result of this, which provokes many to think that maybe, if it is taking on a formal role in that sense, the lack of such an arrangement may be a significant flaw. But I will take that up with Prime Minister and Cabinet.

Mr Sedgwick —I see the arrangements a little differently, in the sense that the formation of the Secretaries Board does two things—one is that it firmly places on the record that we are a single Australian Public Service and that we, the leadership group of the Public Service, have obligations to try and manage its talent pool well. That it is basically putting an obligation on all of us to cooperate in managing the careers of individuals who need to have diverse experiences in order to be able to move through the ranks. I see it in terms of reminding secretaries and placing the onus on secretaries to collaborate more in the interests of the Public Service and not just in the interests of their own institution.

Senator RYAN —I suppose my interest here is in having, whatever the structure and relationships that you are trying to improve within the APS, a clear mechanism of accountability towards the parliament.

Mr Sedgwick —I think those relationships remain through ministers as they always have been and our accountability is to ministers.

Senator RYAN —Finally, I turn to the issue of the Australian National Institute for Public Policy and, again, it may not be appropriate to ask you these questions. One of the elements in the report says that it should conduct research relevant to public policy priorities of the government. I was wondering if discussion had been undertaken on how the government would inform the institute of its public policy priorities.

Mr Sedgwick —I am sorry, we do not have policy responsibility in that area. I think it is in the Industry portfolio.

Senator RYAN —Even under the aegis of this particular review?

Mr Sedgwick —Yes.

Senator XENOPHON —I am going to the issue of whistleblower protection and the role that the APS has in dealing with issues with respect to whistleblowers. I know the government is planning to have a new regime for whistleblowers but at the moment what happens if a public servant comes to you and says that they are being victimised or prejudiced in some way by coming forward or giving information about a problem within the Public Service? What protection and what role does the APS have in respect to that?

Mr Sedgwick —I am a newbie at this business so I will stand to be corrected by my colleagues if necessary. My understanding of it is that if a member of the Australian Public Service raises a complaint about an alleged breach of the Code of Conduct by another member of the Public Service the individual would be expected to raise that matter first with their own agency so that it can be investigated under the arrangements of that agency. If they bring it to us and it fits the guidelines as being a case that we can look at then we would look at it to see whether there is an issue that can be pursued. If there is we would examine it; if there is not we would not examine it.

Senator XENOPHON —For instance, in relation to the Inspector-General of Taxation’s review of the Change Program at the ATO, I have had it put to me by some people who worked in the tax office that if word gets out that they have cooperated with such an inquiry, notwithstanding that they may be given protection pursuant to the Inspector-General’s act, it would be prejudicial to them and that there is a genuine concern that if they spoke out and cooperated with this inquiry it would be a black mark against their career. I am just reflecting what has been put to me; I am not saying that this is what would happen. How do you deal with the culture, perception or fear amongst some public servants that even if they participate in a properly constituted inquiry it will be used against them directly or indirectly in their careers within the Public Service?

Mr Sedgwick —The act is clear: to harass somebody or victimise them in those circumstances can well be found to be a breach of the Code of Conduct. There are mechanisms available, which the law provides, for individuals to pursue allegations of breaches and I would encourage them to use them.

Senator XENOPHON —But if it is more subtle than that—they are overlooked for a promotion, they get transferred to another department, they get shifted sideways to an area which was not their area of expertise—how do you deal with that? What safeguards are there? I know it is a difficult issue and can be quite nuanced but how do you deal with that in the context of public servants who genuinely want to do the right thing if they perceive that there is a problem within a department but by being outspoken in anyway they can be prejudiced?

Mr Sedgwick —I think we can only operate there at two levels. One is to ensure, both by word and by deed, that we promote the values that the APS is meant to represent. Behaviour by which an individual is victimised in circumstances in which they have genuinely raised issues of whistleblowing is not acceptable behaviour. We simply have to make that known widely and as loudly as we can. In terms of the kind of case that you are dealing with—and neither of us knows the truth, so let us accept that we are dealing with a hypothetical here, in a sense—for anyone to act in those circumstances requires a certain evidentiary base.

Senator XENOPHON —Do you mean if someone comes forward to the Inspector-General of Taxation’s inquiry or in relation to any action against them?

Mr Sedgwick —No, I am sorry, I do not want to make any observation about a specific inquiry. I just do not know enough about that inquiry, so let us not particularise it. If an individual wishes to raise an allegation then they are perfectly able to do so. If they wish to receive advice about whether there may be an issue which they need to bring to somebody’s attention, my colleagues have just reminded me that the government funds a service called the Ethics Advisory Service, where individuals can speak confidentially and receive advice about what their options might be in those circumstances. The point I was trying to make to you, though, is that an individual who believes that they have been victimised can raise the issue. What you can do about that depends upon the strength of the evidence.

Senator XENOPHON —How many complaints would you have each year in relation to concerns of victimisation if people have spoken out? You may wish to take this on notice.

Mr Sedgwick —I am sure a colleague can help me with that.

Ms Fisher —We do not get very many whistleblowing reports each year. The scheme is a two-tier scheme and the expectation is that the reports will be lodged in the employee’s own agency in the first instance, and they come to us as a second-tier report, unless there is some particular circumstances which mean that the agency head would not be able to inquire into that whistleblowing report themselves. In the financial year to date, a total of 21 conduct related complaints were made to the Public Service Commissioner. Four of these were out of scope. In six cases the person making the allegation was advised to lodge them with the agency in which the misconduct occurred. Four inquiries have been completed and two further inquiries are under way. Over the same period, five whistleblowing reports were made to the Merit Protection Commissioner. Of these cases, one was out of scope and inquiries were completed into two cases, and we have one on hand.

Senator XENOPHON —Further to that, the minister announced on 17 March that there will be an overhaul of whistleblower protection laws—is that right, Minister?

Senator Ludwig —That is right. In July 2008, the Attorney-General requested, on behalf of the then Cabinet Secretary, that the House of Representatives committee inquire into and report. That report was duly provided and since that time the government has responded to that report, and we have outlined the proposed public interest disclosure legislation.

Senator XENOPHON —Minister, in relation to what is being proposed, what is the time frame for the legislation being introduced, further to the announcement that you made earlier this year?

Senator Ludwig —Legislation to implement the government’s response will be developed this year. It will then be a matter of how we progress it through parliament, but I am not in control of the numbers in parliament, as you would rightly know.

Senator XENOPHON —Or wrongly! Is it likely to come up in the last two sitting weeks of June or after 1 July?

Senator Ludwig —I cannot be any more specific about that. We are obviously providing the response. We are looking at providing legislation to implement the government’s response this year. I think that is as much as I can add at this point.

Senator XENOPHON —Can I ask the APSC, in the context of what the government has proposed, and obviously you are familiar with the government’s public disclosure—

Ms Fisher —Of the report, yes.

Senator XENOPHON —Yes. What effect will that have on the way that you deal with these sorts of complaints—in other words, complaints of victimisation? Do you expect that there will be an expanded scope for the APS to be involved in these sorts of matters? In other words, if the whistleblower protection or the public disclosure protection is broader, do you expect that there will be a bigger role for the APSC in terms of dealing with these issues?

Senator Ludwig —It is probably a policy question that you are now traversing, which more likely should be directed to me.

Senator XENOPHON —Is it, though? If the law is changed, if there are broader considerations that can be looked at—

Senator Ludwig —Then we are going into a hypothetical, but what we have is a response to the House of Representatives committee report. The government has outlined its intentions to legislate in this area and we have outlined broadly the scheme which we intend to operate under. The next step, of course, is to have the legislation—hopefully, with all good intentions, this year. We can then seek to introduce it into parliament. That would be the course that you would expect to take, and that may deal with some of the issues that you have raised.

Senator XENOPHON —But if the legislation is broader there could be more work for the APSC to do.

Senator Ludwig —The question is ‘if’, you see. What I have outlined—

Senator XENOPHON —What—is it going to be worse than the current regime?

Senator Ludwig —No, certainly not. What I have outlined, if you give me an opportunity to actually go to some of it, will provide a comprehensive framework for complaints about a wide range of wrongdoing in the Commonwealth public sector. You would usually expect the agency to deal with it in the first instance and, if required, there would be a reference to an external agency. So a lot of this will turn on the number of complaints that will be made, how many will be dealt with once you have a proper framework in place by the agencies themselves and how many will be referred. All of that will depend on the number of people who complain, so it would be complaints driven in that sense. I would not want to speculate on what the complaints are likely to be. That is why we are putting in place a comprehensive framework—to ensure the issues that you have canvassed in part are properly addressed.

Senator XENOPHON —Can I just ask the APSC, finally, in terms of other jurisdictions with respect to the protection of whistleblowers. You may wish to take this on notice. Has an analysis been done of what other countries do, what other whistleblower protection legislation does, whether it is at the state or federal level overseas, in the context of giving protection to whistleblowers who have been victimised? In other words, are there stronger sanctions or penalties or other mechanisms that would discourage prejudicial behaviour against those who have spoken out?

Mr Sedgwick —I do not know the answer to that question.

Senator XENOPHON —I am happy for you to take on notice whether you have looked at that.

Ms Fisher —Has an analysis been done in respect of the new proposals?

Senator XENOPHON —And also in other jurisdictions—whether it is United States, at a state or federal level, or Europe, for instance, or other Commonwealth countries—whether there has been a more comprehensive approach towards whistleblower protection in terms of stronger sanctions.

Senator Ludwig —It may be that the APSC is not the appropriate agency to answer the question. You might want to consider whether you ask PM&C, the Ombudsman or IGIS these questions.

Mr Sedgwick —The policy responsibility in this matter rests with PM&C. That is why we are being a little cautious about what we can and cannot say. It is not our role.

Senator XENOPHON —Okay. Thank you.

Senator MOORE —Mr Sedgwick, the CPSU does a regular review of women in the Public Service, and it is survey based. One of the issues that came out in the recent one was the general ignorance, even within the public sector, of superannuation issues. There was concern about people’s protection into the future.

The other one was a new one that had not been picked up before which was a deep concern about people being contacted out of hours, particularly with access to technology and things like Blackberrys. The women who were surveyed made the point that they were being contacted more and more out of hours. Over 34 per cent said they were getting contacted at nights, on weekends and when they were on holidays. On those two points with what the Public Service Commission is doing in developing best practice and talking with various people across the service, is there anything that you are doing to look at those for women? I am sure that whilst my information comes from the women’s survey it would not be peculiar to women in either of those cases.

Mr Sedgwick —In terms of the superannuation issues this is going to sound like a litany. At the moment we do not have responsibilities in those areas, so we have not actually turned our mind to do that.

Senator MOORE —It came as a huge shock to me, in an industry which has had protected superannuation for a long time, that women when asked said that they were confused and also fearful of their future. Whilst I know that the Public Service Commission does not handle superannuation for public servants I thought that as a wider issue you may be aware of that and look at processes in the area. I take the point that it is not your primary responsibility but best practice in the Public Service is. The second point that I am particularly interested in is certainly one that has not been identified too clearly in the past and a large number of women have made that point about the Public Service practice.

Mr Sedgwick —That is interesting. Being one who has recently come back to the Public Service and in the course of doing so been introduced to the Blackberry I can well understand why you might have a love/hate relationship with this particular piece of machinery. I can go back more years than I care to remember when we were just starting to get—in those days—desktop computers that you could place in your home and link in to work. At the time I was secretary of Finance and there were various levels of the organisation who were quite keen to have these installed at home so that they could dial in. My answer was, ‘Why would you be so mad? For God’s sake when you go home I want you to go home and turn off.’ It was actually the women who said, ‘Do us a favour. If we’ve got dual responsibilities and we know that there is work that we need to do, if we know we can go home, do what we have to do, and then come back later and use the technology to time shift and meet both of the obligations that we believe we have then you are actually helping us.’ I kind of agreed and that is kind of what we did until it was 12.30 on one morning and we were having an email exchange which I ended with, ‘For God’s sake go to bed, I’ll see you in the morning.’ I suspect this has been with us for a long time. The particular technology platform seems to vary over time. We all have a task to do to manage these things and to manage them well. To the extent that I can give people advice on how to deal with those things I am quite happy to do it but, not having managed to get that work-life balance right myself, I am not sure that I am really a good example to hold out to others. I think it requires discipline on all parties to manage that technology in ways that makes it effective.

Senator MOORE —Is it an issue that has been raised with the Public Service Commission?

Mr Sedgwick —It has not in my tenure there. As I say, it is one we all struggle with. I would not be surprised if it turns up every now and again.

Ms McGregor —The particular issue that you raised about Blackberrys and all the rest of it has not been one that we have surveyed or has been raised specifically. I was just looking as you were speaking about the work-life balance questions in the State of the service

Senator MOORE —That is right, there is a link.

Ms McGregor —Yes. In the previous year 2007-08, 66 per cent of those surveyed said that the workplace culture supports people to achieve a good work-life balance but it actually improved to 71 per cent last year. That is not a dramatic trend but it is improving or moving in the right direction. Similarly, when we measure engagement factors that was improved this year on last year. It is one to watch though, as you quite rightly point out.

Senator MOORE —And when it goes beyond a voluntary nature, when people do not have private time at all and when they are being contacted from work. I was interested to see whether it has been raised and I have read about the work-life balance. It is not specifically there but there is a crossover.

Ms McGregor —No, it is not specifically there.

Senator MOORE —Thank you, Chair.

Senator CAMERON —Mr Sedgwick, I understand the Public Service Commission has a goal to ensure that the APS provides the service the country needs.

Mr Sedgwick —That is not a bad approximation, yes.

Senator CAMERON —And one of these issues is this work-life balance issue that has been raised. You conduct a State of the service report—is that the one that was just alluded to?

Mr Sedgwick —Yes, that is right.

Senator CAMERON —Has there been any issue of people finding pressure from cost constraints in the Public Service or a problem with people feeling that that work-life balance is out of whack?

Mr Sedgwick —We are just trying to find it.

Ms McGregor —I thought we were home free. I just closed the book. We measure issues of job satisfaction and motivation, and one of those subsets is the work-life balance that I was alluding to before. We do have an expert here. The issue of motivation and discretionary effort is a key engagement factor and improved to 80-something per cent in 2008-09—an improvement from the previous year. Similarly, job satisfaction was up. Loyalty and commitment to the agency, which is a key engagement factor, was high again and loyalty and commitment to the APS was rising. On those sorts of indicators it is an improving situation.

Senator CAMERON —But 20 per cent obviously do not feel that the work-life balance is there.

Ms McGregor —That was the engagement factor. The work-life balance that I indicated before was lower. It was some 71 per cent, as I recall.

Senator CAMERON —So there are still a fair few who would say that work-life balance is an issue. Do you have figures for Public Service resignations and retirements—global figures?

Ms Pietrucha —Yes, we do.

Senator CAMERON —Can you tell me what they are?

Ms Pietrucha —In our yearly statistical bulletin we record separations each year for ongoing staff in the Public Service. In the year ending 30 June 2009, there were around 10,460 persons separating from the Public Service.

Senator CAMERON —So 10,460 separations were from—

Ms Pietrucha —As at 30 June 2009, over that 12-month period.

Senator CAMERON —Were many of these people replaced during that period?

Ms Pietrucha —That is our separations data; that is not engagements data. Engagements is a different figure.

Senator CAMERON —What is the engagement figure?

Ms McGregor —It is 12,963 for the same period.

Senator JACINTA COLLINS —Are we talking about EFTs here?

Ms Pietrucha —No. This is the actual head-count data that we record through the APS employment database.

Senator CAMERON —If a freeze came on Public Service recruitment, through resignations and retirements would you expect roughly 10½ thousand jobs to disappear?

Ms Pietrucha —It would depend on how the freeze was applied, whether it was applied unilaterally.

Mr Sedgwick —And then if there are any exclusions from the application of the freeze. It depends on how the policy is designed as to whether the figure is 10,000 or some other number.

Senator CAMERON —If that become a reality, would you expect that to put further pressure on work-life balance, on skill acquirements and on maintenance of skills within the service?

Mr Sedgwick —I think there are a number of components of that. The other side, I guess, is the workload and whether there is an adjustment of functions that the Public Service has to perform. We were talking earlier about circumstances in which the workload automatically adjusts. The level of unemployment, for example, will raise and lower the number of people in Centrelink. So it is that relationship between workload and numbers that will make the difference there. In terms of skill levels, one consequence of a freeze is that you may lose the opportunity to recruit graduates that year. That may be a cohort that is difficult to replace in subsequent years, which is an issue, I think, that needs to be carefully managed.

Senator CAMERON —Isn’t there some reporting around the place that during the global financial crisis one of the key benefits that arose within the Australian economy was that unions, employers and employees worked together to maintain the skill base and that that meant we could move quickly forward when the recovery came? If we cut 10,500 jobs out of the Public Service, how quickly could you adjust?

Mr Sedgwick —It is true that one of the—‘unusual’ is the wrong word—pleasing features of the way that the country has coped through the global financial crisis is that there has been a much bigger effect on hours worked rather than the number of people who were employed. The headcount response, if you like, was quite different this time around, so more people remained attached to the labour market and more people remained attached to their employer, which was quite useful in terms of being able to benefit from investment in training, skill and all of those things. In circumstances in which the Commonwealth had a freeze on recruitment to the Public Service, as I said to you, the issue is the match of the labour force with the nature and the volume of the work that is required. They are issues that you work through in the circumstances of the time.

Senator CAMERON —I suppose the effects would be different in different areas. Let us say the retirement of one key person takes place and you cannot replace that person—how do you deal with that?

Mr Sedgwick —There is a degree of arbitrariness, in a sense, as to whether you get the right relationship between the staff that remain and the work that needs to be done in those circumstances.

Senator CAMERON —So an arbitrary cut from resignations and retirements would mean that it would be more difficult for the Public Service to be flexible and respond to consumer demand.

Mr Sedgwick —In circumstances in which agencies may wish to plan their workforce and to try and get a blend of skills, they would have less flexibility to pursue their objectives. Presumably in those circumstances they would be trying to find ways of dealing with the issues that are sensible.

Senator CAMERON —What has been the experience in the past when arbitrary cuts have taken place, do you know, in terms of the skill base, being able to fill key positions, and service to the public?

Mr Sedgwick —I do not have data at my fingertips that could address that issue.

Senator CAMERON —Are you aware of any analysis that may have been done internally on that?

Mr Sedgwick —No, not myself.

Senator CAMERON —So if the opposition position takes place, where 10,500 jobs disappear in the Public Service each year for two years, you will have major problems you will have to address, won’t you?

Mr Sedgwick —Again, as I was saying to you, there is this balance between the nature and the scale of activity and the volume and the nature of the workforce that is there at the time. There would be some issues that agencies would need to manage, certainly.

Senator CAMERON —Could you be confident that with nearly 21,000 jobs disappearing in two years you could ensure the APS provides the service that the country needs?

Mr Sedgwick —Luckily, I am not the head of an agency that needs to make those calls. In the circumstances that we are talking about, we would be encouraging organisations to try and plan and manage their workforce as well to adjust to the circumstances in which they found themselves. But we are not the employer, so we do not make the decisions for them.

Senator JACINTA COLLINS —If you are talking about providing guidance on planning and managing a workforce, can you give us any insight into how one might manage a distinction between front-line and non-front-line staff in this context?

Mr Sedgwick —I would imagine that those with the relevant portfolio responsibility would be doing some policy development work to articulate what those different categories might amount to.

Senator JACINTA COLLINS —Are there any precedents that you know of?

Mr Sedgwick —I do know there are some state jurisdictions that insist that they can draw a distinction of that kind. There have been times in Commonwealth history, from my memory—and I am dredging my memory now—where, in circumstances in which there have been constraints on the growth of the Public Service, the government has attempted to protect the front-line. Definitions were put in place at the time that attempted to give expression to their policy intent.

Senator JACINTA COLLINS —What have we learnt in retrospect once those policies have been analysed?

Mr Sedgwick —Luckily that is not my responsibility to do—

Senator JACINTA COLLINS —But you are aware of cases in the past where this has occurred, but you are not aware of any analysis of the impact of those policies that has been undertaken after the event?

Mr Sedgwick —No, I am not aware of that kind of work—and my memory now is going back many years, so it could well be faulty.

Senator CAMERON —How many graduates does the Public Service employ each year?

Mr Sedgwick —In round numbers it is about 1,000, from memory, which is roughly what it was the year before.

Senator RYAN —It has been falling over the last two years.

Senator JACINTA COLLINS —You are saying it has been maintained?

Mr Sedgwick —It has fallen over a couple of years. The 2010 intake was roughly in the order of 1,000—which side of 1,000 I just cannot remember.

Senator CAMERON —Could you expand on the implications of not taking more graduates on if there was a freeze on employment?

Mr Sedgwick —One of our issues as a public service is that none of us are getting any younger and some of us are getting to the point where we may want to go and do other things. I think something like 70 per cent of the SES will reach retirement age in the next 10 years and 45 per cent of the executive level group similarly will reach retirement age, though that does not necessarily mean that they will retire but it certainly means that they have an option. So generational change in the Public Service is an issue for us, that in a workforce planning sense we would want to try and manage. If we lost access to a cohort of graduates in policy areas, for example, then over time we would need to try and replenish the pool when the freeze was removed to attract into the service what would then be mature age people to try and fill gaps in our demographic profile. That is not always an easy thing to do, but I think that would be the response that we would be forced to make.

Senator CAMERON —So the Public Service has no levers to use, and governments have no levers either, to stop people retiring or resigning?

Mr Sedgwick —No, thankfully.

Senator CAMERON —So, if there is a huge increase in the number of people who retire and there is a freeze, and you have a standard ‘no replacement’, there are no controls over how many people you may have to deal with, is there?

Mr Sedgwick —No, in the sense that it is individuals who make the decision as to whether or not they leave, but ultimately it is up to the government as to how they would respond in those circumstances.

Senator CAMERON —What would be the options for operational issues in the Public Service if the response is just to let the retirements and the resignations continue?

Mr Sedgwick —Agencies would have to work that through for themselves. Again, it depends on the relationship between the volume of work and the nature of work that needs to be done and the nature and volume of the labour force they have to do the work. Individual agencies would need to put in place the strategies that best meet their circumstances in that world.

Senator CAMERON —Including less service to the public?

Mr Sedgwick —That may depend a little bit on the options that are available to a government to deliver service. In circumstances in which you cannot use your own staff, you may resort to other mechanisms in order to achieve the same outcome.

Senator CAMERON —So you could have a theoretical Public Service freeze but use more contractors?

Mr Sedgwick —Each agency would need to manage within its budget to achieve the outcomes that are required to be set. You could not preordain from the beginning which of the options would be either selected or consistent with the policy framework within which they were operating.

Senator RYAN —I just want to clarify a couple of issues given some of the previous questions. My numbers, based on State of the service reports, tell me that between 2007 and 2009 there was, in terms of graduate positions in the APS, a fall from 1,256 to 1,114. Is that correct?

Ms Pietrucha —I just have to verify that for you, but I think it is correct.

Senator RYAN —Which represents a drop of 142 positions and a decline of 11 per cent. At the same time there was an increase in total SES positions from 2,535 to 2,845. Is that correct?

Mr Sedgwick —I will accept your numbers because you are reading them off the report.

Senator RYAN —That represents an increase of 12.2 per cent. And there were 310 SES positions added, while there were 142 graduate positions lost in the two years since the government came to office.

Mr Sedgwick —This is the issue we were talking about before the break—that there has been, over a long period of time, 15 years or more, this progressive upscaling, if you like—

Senator RYAN —I appreciate that. Given some of the previous questions that were talking about how graduates needed to come in, I just wanted to put those figures on the record and have them confirmed—that that there has already been a 12 per cent decline in the number of graduates since the government came to office. Senator Ludwig and I discussed this last time at some length.

Senator Ludwig —I do recall that discussion.

Mr Sedgwick —But I do not have the numbers in front of me, so I cannot—

Senator RYAN —Feel free to correct them on notice if you wish.

CHAIR —There are no further questions. I thank Mr Sedgwick and the officers for appearing before us this afternoon and look forward to seeing them at the next round of estimates.

[8.34 pm]