I read lots over the holidays, not all of it relevant to this blog. But here are some thoughts on two pieces that I think readers may find interesting.

The first one I confess was drawn to my attention before Christmas, but I only got to a thorough read just before the big day and then didn’t have time/motivation to write about it. The second one was drawn to my attention probably a year ago, but I am a lazy reader sometimes and it languished in my reading pile for far too long.

Thanks to Mary Clarke for the heads up on the Banks article in The Mandarin, and Ben Furmage, my sincere apologies for taking to so long to be able to have the light bulb discussion.

Banks 2018

In the Mandarin article, Gary Banks makes many clearly useful observations; surely he’s borrowed my songbook. I am in strong agreement with his central thesis, that while evidence – of many sorts and varying reliability – is important, it is not the only consideration. His is a truly practical approach acknowledging that the art of policy making is not a science or simply a process, but a complicated activity that takes into account much more than the evidence, but it should not be a fact or analysis free zone either.

But I was disappointed, but not surprised, by his luke warm treatment of the role of the public sector. I’d like to see a lot more from these folks to address and talk about this issue. My experience suggests that a) many public servants do not understand their responsibilities and b) they weren’t necessarily made aware of them either. As I have noted before, I was regularly told that a brief or policy proposal was being prepared with scant detail on options – sometimes even objectives – because ‘that’s what the Minister wants’. This was a result of a leadership which failed to educate new recruits – and remind longstanding officers – that their roles were considerably broader than reacting to the Minister’s decrees and that they were the keepers of the institutions.

Banks makes this point well.

Among the most important of these are stewardship over institutional and procedural features that transcend the existence and policy orientation of any particular government.(Banks 2018)

Banks notes that three factors are leading to this unhappy state of affairs,

• less secure, more ‘political’ senior appointments,
• a dominant ‘office’ with more political than policy expertise,
• decision-making in a hurry that draws on whatever advice is at hand. (Banks 2018)

Moving away from this situation will not be easy and it is in large part a matter of the lack of awareness – by some in the political class and elsewhere – of what the slow but thorough bureaucracy can offer by way of formulating good, successful policy. The economist in me wants to add that the bureaucratic leaders also need incentives to get them to once again encourage the pursuit of thoughtful, researched, and understood policy – as opposed to the reactive knee jerk policies we are mostly suffering under.

A start would be for some more debate and open dealings from all sides. I can vividly remember being cajoled and pressured, because I was writing about productivity improvements and being told by other, more senior, bureaucrats (in another department) that that word was poison and it was pointless to put it in briefs etc. Try writing about productivity without using the word and you’ll see how naff that idea was. But you know what? Word got out that some mad femme in Treasury was writing about productivity and advisors started calling, wanting to know more. So second guessing and being risk averse is a blueprint for failing to even acknowledge, let alone reach, potential.

The Last Days of Night

This is a truly engaging book on many levels. Firstly it is just a ripping good story well told. It is based on fact, but it has been written with a bit of licence to make the story more compelling and fast paced, but the main facts and events are true. For an economist it holds many treats.

This is the story of how electricity came to the USA. It is essentially the tale of George Westinghouse, Thomas Edison, Nikolai Tesla and a brash young lawyer, Paul Cravath.

Much of the plot line centres around the patent for the light globe, which was dependent on how electricity was delivered – AC or DC. This is a very interesting story, but my particular delights with this book came from other aspects.

Firstly, there were the three very different approaches to ‘invention’ the protagonists took. Westinghouse wanted the best product to be brought to market. Accordingly, he was interested in commercialisation. Edison wanted to test every possible combination of factors to ‘invent’ new or improved products. Tesla just had exceptional ideas and wanted to show they were possible, once that was achieved he lost interest. Three driven men had three very different approaches and motivations.

One of the best economic stories though is how the two businessmen, with just a little help from a lawyer, managed to merge into one large monopoly – this was of course before laws regulating such matters. But is well worth the read for this alone. Perhaps it’s also worth thinking about how one of these men (Thomas Edison) got sidelined and even had his name removed form the company he founded and lead for many years.

Even more obscure, were the innovative actions of the young lawyer. He looked at the way Edison organised his business and how he had a process for delegating the mundane, dare I say, tedious, tasks to his teams of engineers, but was able to direct and control what was being done. In doing so he ploughed through a mountain of options and found many ‘new’ ideas along the way. Cravath wondered why this could not be replicated in the law? At that time, lawyers did all their own work and operated as a series of individuals in a firm. Cravath, without the knowledge or agreement of his partners, recruited a handful of final year law students as associates to do his legal legwork – digging up files, case and precedents. Sound familiar? That’s how all law firms I know operate now. Partners direct and lead but certainly don’t do their own legwork – that’s what junior staff do! Well done him for adapting a process to improve his own business – and in the end having it adopted by the whole industry. How those in the more junior ranks of the profession see this is another matter[1].

And yes, as that last point illustrates, the characters in the book do not always come out looking good – all of them engage in behaviours which, if not actually illegal, are pretty unethical at times. But this too offers up insights into what motivates people and also how much regulation etc since the 1880s has changed – or attempted to change – behaviours.

 

 

 

 

 

Banks, Gary, 2018, Whatever happened to evidence-based policy making, The Mandarin 30 November 2018.

My apologies but I could not get the hyperlink to work.

Moore, Graham, The last days of night, Random House 2017

[1]See for example, https://www.lawyersweekly.com.au/biglaw/24241-worksafe-making-enquiries-into-kwm-regarding-employee-fatigue

There’s been a bit of a discussion recently about privatisation and if it’s been a good or a bad thing.

Personally, I think it’s a bit of a curate’s egg – good in parts.

Being party to the process of privatisation allows for a point of view perhaps worth exploring.

Having been at the pointy end of some of these privatisations, my conclusion is that their success depends on a) the criteria you use to measure success and b) what the rationale for the privatisation was.

Let me start by going back a ways. One of the things that you notice working in a place like Treasury and Finance is the undeniable tension between being a policy department and the government’s financial manager. Not only does the department have a suite of policy areas specifically under its remit, but it also has an overarching policy responsibility that extends to a whole-of-government view. But more than that, it is the government’s chief financial advisor. A large part of the department’s work is on budgets, making sure that money in and money out are organised and deliver value – both in the spending and in the collection. Sometimes the policy and financial requirements do not align. But what to do when the Treasurer wants to have a particular budget outcome and revenues are going to fall short? If someone suggests a revenue raising option that might jeopardise a future policy reform option which way to jump? I only faced this quandary once, but I’m sure Treasury Secretaries face it often. In the case I recall, our secretary went for the revenue, despite pleas from yours truly and a possie of converts – some very senior – but happily (for me) he was rolled in an interdepartmental committee!

But this highlights an ongoing issue for Treasury – it is a balancing act of good policy and making the books work. And, most importantly, as I have alluded to before, making the politics work. It was this last factor that I suspect got my Secretary to plug for the budget measure over the policy measure.

Privatisations are one area where these tensions are often front and centre.

It’s not a matter of all public enterprises being poorly managed and all private enterprises being good. Often, the government has invested in an enterprise for good reasons and often privatising these comes with a lot of issues – for example, they might be what economists like to call natural monopolies – ie where it is cheaper to have one supplier than multiple suppliers. A natural monopoly has the ability to charge higher prices and/or provide a smaller output than a supplier in a competitive market. If the enterprise is government owned, then the conventional wisdom is the government can control the prices and make them lower than they would have been if the enterprise was in private hands. Regulating a private natural monopoly is fraught, not least because the regulator will never have all the information and will necessarily make a ‘wrong’ price call. The trick is to not make it too wrong. But the other trick is to make sure the regulator has as much access to information as possible, and is not overly hamstrung in doing its job of regulating.

Where am I going with all this?

If government privatises an enterprise because it believes it has no value to add in owning the enterprise, that the need for finances and innovative leadership is beyond the scope of the current structure, or any number of other reasons like this, then it should be open to discussions about how best to manage the transition to ensure that consumers benefit from the privatisation. This will require that appropriate regulation and regulatory models be in place. Importantly, buyers need to understand the restrictions on what they will be able to do and policy makers and regulators need to be aware and forearmed to deal with the ways a regulated entity might seek to circumvent the regulation. The regulation may not be prefect – I can guarantee it won’t be – but so long as in the privatisation process there is enough understanding of the industry and the entity, and a workable outcome should be achievable. I’d point to a small but I believe successful deal done with the Port of Portland in western Victoria.

However, while many privatisations start with an ideal of improving the market and the outcomes for consumers, the promise of high purchase prices sways governments if certain things happen. Others are aimed squarely at getting some revenue – usually as much as possible. The only way I can reconcile the mess that was the privatisation of the Victorian rail freight network was that at the very last moment, the financial advisors whispered to a cash strapped government, that they could secure a much higher price if they went for an integrated service provider – ie providing rails and rolling stock – with a very light handed arbitrate negotiate access regime as the regulatory response. How often did I have to look crest fallen in intergovernmental meetings with that outcome handed to me to defend? An integrated provider with a weak regulatory regime will do what you would expect – gouge the system.

Likewise, it would seem that the lure of high purchase/lease prices encouraged some very questionable inclusions in some transactions – for example, the hampering of the Port of Newcastle to compete in providing a container service, the weak price regulation and some restrictions on a new port in the Port of Melbourne lease, and let’s not forget the Sydney Airport lease which gave the new airport operator first right of refusal to develop a second Sydney Basin airport. You don’t need to be a genius to work out what these little sweeteners did to the purchase price and the subsequent ability of the buyers to make a decent return on the inflated price. And of course, who pays for this inflated return? Consumers do of course.

These privatisations will almost certainly result in consumers being worse off, and quite possibly a poorer economy as prices rise to meet the required rate of return to justify the high price paid for the enterprise and so on. A short cash sugar hit and then it all goes pear-shaped, but by that time the government has moved on and regulators and others are left to try to salvage something from the single-minded pursuit of high prices.

Part of this must also be attributed to the mixed requirements of bureaucrats where the charge of raising the revenue comes hard up against a policy oversight role for the long term interests of the community. Those charged with the privatisation process know that their aim is to maximise the sale price. Others in the same department, or indeed in related departments, may try hard to lobby for a regulatory regime, for example, which will result in a lower purchase price because the prices the new owner will be able to charge (and hence their return on the investment) will be moderated by the regulation. Into this stride the financial advisers, employed by the government to bring a good dose of commercial expertise to the process. But while I don’t know, I’d take a bet that their remuneration is not a flat fee, but is tied to a percentage of the sale price. What does this do to their advice? Well arguably it skews it because the financial advisors have an incentive to push for as many concessions as possible to get the highest purchase price. They aren’t responsible for the longer-term ramifications.

So to me, it’s no surprise that lots of privatisations can be judged a failure – especially from a consumer perspective, but also from an economy wide perspective when restrictions on competition and regulatory failure are factored in.

But let’s not get too carried away either by the view to the rear through our rose tinted glasses. Often letting the status quo continue would have lead to other not desirable outcomes. Allowing a group of talented and well meaning (maybe) engineers run a company with no strong strategic or economic oversight (at an entity like the SECV) may well have lead to a different outcome, but I am not convinced it would have been better. The discipline of the market can be a powerful tool for innovation, understanding and progress. And if I am to believe Thom Hogg, the SECV had grown somewhat too big for it’s boots and imposed the odd tariff increase – of major proportions, without so much as a note to the government about its intentions.

So the answer to the question – are privatisations good or bad? – is, like lots of other interesting and worthwhile questions, it depends. We shouldn’t expect simple answers to complex scenarios, but what we should expect is a frank and honest discussion, unfettered by rosy views of the past or in thrall of the ‘miracle of the market’. And yes, of course be aware of the incentives of the players in the process.

The last release of the HILDA data (Household, Income and Labour Dynamics in Australia Survey) covers the years 2001 to 2016. It offers lots of interesting insights into the working of Australian households at a micro level. It is a rich resource for researchers, policy makers and those with an interest in how households work.

With each new release of data, the Melbourne Institute provides a commentary and analysis of various aspects of the data. This year, among other things, they have chosen to look at the division of labour in households – that’s econspeak for who does what around the house.

The analysis is interesting and discusses both attitudes to work – paid and unpaid – as well as the actual amount of time men and women spend on unpaid, household work. The analysis is confined to working age heterosexual couples, and when child care is in question, the group is further limited to those with children under 15.

It is an interesting read and I recommend it to you.

But my issue is a bit subtle. Over recent years, the young women in my life have alerted me to an aspect of household relationships which had previously passed me by. They call it the mental load.

For those not aware of this, it describes the myriad small responsibilities and decisions that I’d characterise as management. Things like keeping track of whether things are done – like the laundry, shopping etc, who will be home each night, where everyone needs to be on the weekends and how that will be accommodated, organising the holidays, keeping the social calendar, arranging the birthdays, thinking of others in a more general way. The list goes on. Nearly all of this is invisible. And because it is, it passes people by – I know – I was one of them and I was doing the lifting. But it is a load. It takes energy and time. The responsible person tends not to daydream or read on the way home on PT, no they’re busy planning, checking and making sure stuff happens. [1]

So I wondered, does the HILDA survey ask people about this aspect of household labour? It was a difficult question to answer; not least because the survey is so detailed there are oodles of questions to look through. But I don’t think they do.

I asked them if this was true and if so, had they considered adding this to their survey. I have been waiting for a reply before writing this – but to date – nearly six weeks later – silence. Maybe they think I am mad, or a rabid loony, or maybe they’re just seriously busy considering this question.

But my own research – not at all reliable – from friends and acquaintances, suggests that the person in a household who does this, mostly knows about it and that person is most definitely – on nearly all aspects of the task – the woman. Do people not talk about this? Well some do. One friend told me she’d gone away for nearly a month and left her partner in charge of the household, including the care of their young child. She told me the discussion they had when she got home was very revealing. Her husband now understood the term ‘mental load’. It’s now a few months since that happened – maybe I should go back and check in to see if things have changed?

Am I being picky? Or is this a missing aspect of household labour that should be measured? On the basis that what gets measured gets managed, I’d say yes.

[1] Google ‘mental load’ and you will be inundated with a host of references – from the loony to the academic. It’s worth having a small dip in this sea.

In The Age of 8 October, Ross Gittens writes that the long run has come home to roost for financial institutions. He also tells us that economists like to use models of the market that don’t necessarily do a very good job of reflecting reality – not perfect competition. (For the non-economists among my readers perfect competition is a highly stylised abstract notion that, in broad terms, there are lots of buyers and lots of sellers and they all have perfect knowledge.) I can’t argue with either of these propositions.The first proposition tells me that the regulation of the financial services sector will get an overhaul. The second tells me that maybe policy makers might want to look a bit more closely at the distance between the perfectly competitive market and some markets – like financial services.

Gittens then goes on to approvingly quote Rod Sims, chair of the ACCC, exhorting consumers to take our (banking) business elsewhere if we’re not satisfied. Hmmmm. I find it hard to believe that Rod Sims has not been paying attention. Just where are the disgruntled banking customers meant to go? Personally, over the years, I’ve been a “full” customer of three of the big four and none of my experiences have been particularly brilliant. But for a variety of reasons I still bank with one of them – but I keep it to a minimum. For special products I go sometimes to smaller players, much to the frustration of my financial planners (who clearly have a preference for fewer rather than more accounts).

Choosing between the majors is really like choosing the lesser of two (or four) evils. Some of the smaller institutions are better at some things than others. Some actually pay discernible interest, have really nailed online banking, give quick and reasonable responses to queries, and some even waive those annoying fees. But they may not offer the full suite of financial products. So the big four are often the recipients of the business of reluctant customers. Couple that with that the absolute nightmare of changing financial institutions if you have a raft of connected activities, like credit cards, which are part of a regular payment process for example, direct deposits like your salary or other money that comes in regularly, setting up all those direct debits (again), it’s a daunting task, and let’s not even venture into home loans or business credit.

My banking needs are modest. But others may need more complex bundles of products, or want simplicity in their financials (or happier financial planners), or may be hesitant to move business to non-deposit-taking institutions. So they stick to the big four which bring with them the ‘benefits’ of such status bestowed on them by government.

For these reasons, many bank customers are pretty rusted on. And it’s not just in this market that this is the norm. If my favourite cafe’s standards fall, my ultimate response would be to find a new favourite. It’s not hard to do. Or if push really came to shove I could possibly switch and not have a coffee at all, or make my own. I don’t really have to engage with this market at all. These markets respond to the “Sims” approach of consumer power. Not surprisingly, they are relatively lightly regulated. Banks, the telcos, utilities etc on the other hand present a whole different dynamic. Sure they are regulated, but here’s the thing, do the regulators and policy makers really understand the markets these firms operate in? Rod Sims’ comment has me wondering.

Ron Ben David, Chair of the Essential Services Commission (Vic), has posited some interesting ideas about these markets – how refreshing to see this coming from a regulator. https://www.esc.vic.gov.au/media-centre/competition-neo-paternalism-and-nonsumer-uprising.

His starting point is to identify markets where we do not really have a choice of whether to participate or not. I imagine it’s possible to live without access to utilities, banking, telecommunications etc, but most of us wouldn’t even consider it. So we are not going to abandon these markets in a hurry. For quite some time, Ron and I used to trade stories about how and why we hadn’t engaged in the retail electricity market too. We did both eventually enter that realm, but it took a lot of goading from each of us! Switching is not an easy task, even though there are now more tools for customers to use they are still only a vague approximation of what the various plans will offer. Our issue was to ask is it worth the effort?

But this is the most we can reasonably do. As I noted above, this is a really fraught option in some markets like banking, but considerably easier in others such as mobile phones. Although even there with number portability, the ability of the average consumer to thoughtfully compare company offerings is probably pretty limited. Ron’s discussion in his paper is about how behaviour in these markets, by both suppliers and customers, is not efficient (in economic terms) current approaches to regulation of these markets need to readdressed. But some of them, like banking, have the double whammy of essential and with very high transactions costs in switching providers.

Add to this the thought that these types of markets are currently operating so as to ensure pretty inefficient outcomes by effectively taxing consumers who don’t shop around and you can see there is a regulatory question to be attended to. The exhortation of simply shop around ignores the inefficiency inherent in the current market operations and passes some reasonably substantial search and transactions costs onto consumers. This won’t solve the issue.

The challenge to regulators then is to work out how to deal with this – or is it enough to hope that the technological solutions that Ron posits as a thought experiment, will actually materialise?

Financial services looks like being the ripe for a regulatory overhaul. Maybe we can expect policy makers to take into consideration this time the truly non-competitive aspects of this market. Next in line I ‘d like to think might be energy – yes the eternal optimist. Getting these markets right would enable us to take up Peter Costello’s challenge (The Age 12 October 2018 – Costello lashes Lib leaders) and give the Treasurer something to talk about if the International Monetary Fund should ever ask us again to share a successful case of reform.

Post script

I wrote this before the announcement on Friday 26 October that the COAG energy ministers apparently agreed for there to reference/comparison rate and/or default offer for electricity. http://www.coagenergycouncil.gov.au/sites/prod.energycouncil/files/publications/documents/20th%20COAG%20Energy%20Council%20Communique.pdf Details of this are sketchy to say the least. But a) it’s arguably something that falls into the realm – albeit loosely – of energy policy and therefore should be treated with a hint of suspicion that it will last until next week, and b) this doesn’t really tackle the underlying issue of a differently functioning market than the text books would have us consider. I wonder how the AER (Australian Energy Regulator) or whoever will set these prices, will calculate them. And what will this regulation do to the efficiency of the markets, consumer welfare ( another economic construct – sorry – the individual benefits derived from consumption of goods and services), and possibly the entrenchment of the dominance of the big players?

In my first blog I noted in passing that the bureaucracy had sometimes been left at the post when it comes to policy development and often offered little more than what the Minister asked for or some divination of what that might be.

In part I think this is a reflection of the growing distance between a lot of Ministers and their departments. Some of this is fed by the ever growing size and influence of the advisors, sometimes it is fed by a paranoia about the ‘loyalty’ of the public service and sometimes it is fed, let’s be honest, by past experience of poor advice.

But departments can work to address these instances of being by-passed. Reading the Grattan Institute’s report “Who’s in the room” (September 2018) made me think about how this might be done and, possibly even more importantly, why it needs to happen. The bureaucracy must work on having its voice heard.

So why is it important? Among other things, the bureaucracy has seen a lot of it before. It has immense experience in what works, what doesn’t work, how to frame a policy, who to engage with and, here’s the Grattan moment – offering a wide view of the policy[1]. All Cabinet templates for policy proposals (should) include a section on who are the stakeholders, what do they think and how will they be affected. This is to take the discussion beyond the vested interests, who may not see beyond their own interests, and even if they do, will have every incentive to colour the wider world view to favour their interests.

The Grattan report also gave me pause when it noted how important access to decision makers is and how the quality of that access, or the influence that arises, is informed by personal links and credibility. One thing that always struck me as a middling bureaucrat with very limited access to Ministers, was the importance of building, developing and maintaining a good relationship with ministerial advisors. This is something that is within all bureaucrats’ reach. You need to create a reason for respect for your ideas and input. You need to build a relationship based on timely, sound and fair advice. You need to be proactive but not pesky. You need to have authority for your views; the backing of senior department or central agency figures can help. But most of all, you need to always maintain a respectful and professional persona yourself. Make your work irresistible. Provide helpful comments, remembering that the backgrounds of advisers are many and varied. Often they have little or no knowledge of an area you are seriously familiar with. Be prepared to be a teacher and a guide. Be prepared too that for all their issues and weirdness – yes advisors I am talking about you – they are nearly all really smart people. They will learn fast. And they can be your strong allies too. The key word is influence. It is the bureaucrats’ strong point – you and your agency have greater access to the ministers than just about anyone else. Make sure you use every opportunity.

I recall at the end of one major piece of work, the team had a celebration function which the relevant minister attended. I was on secondment and so were several others on the team. Two of us were talking to the minister who asked – well what’s next. Without any collaboration or hesitation, we both said X. He looked astonished and said well I was thinking Y. We said yes there are issues there too, but X is much more pervasive, impacts many times more people and has much wider implications. I don’t think anyone had told him that before. Maybe because he wasn’t our Minister, maybe we are just both bolshie folk, but it doesn’t generally hurt to offer suggestions like this.

The next big policy move wasn’t X, or Y. But it sowed the seed – maybe. The policy train had just slowed but not stopped but we were able to have our desired destination heard.

[1] This is not to say that just because ‘this is the way we do it and always have’ is an option it should not be regularly reexamined and new ideas given air. No point in repeating the mistakes of the past – but good to know what they were.

Does it make sense?

Those involved in developing public policy for government face restrictions in how they can talk about their work. Those who’ve retired have far fewer restrictions.

This is a view from the bleachers – with distance. Because I am not a consultant, academic or journalist with no career to beware of, my point of view may be a bit different. The content of this blog is my own opinion and meant to provide more nuance to discussions, add a different, and hopefully insightful, perspective .

Topics I write about will be a bit random as will the timing of new posts. Most posts will relate pretty directly to public policy questions that are topical. They might be reaction to the news, comments on an underlying issue, or just my views about issues raised in articles, podcasts or books I am engaged with.

They will not be generally heavily researched and annotated, but where I have a particular interest there might be more of this.

I have more than 40 years of public service experience to draw from both in the commonwealth and state public services. I have a strong background in regulation, competition and microeconomic issues more generally. Sector-wise, much of my thinking over the past 25 years has been in infrastructure and transport, but I have dabbled in social policy issues too – such as education, health and even gambling policy a long time ago.

Are we now finding more politicians who don’t want to know what they don’t know? Are they being pandered to by a bureaucracy that’s not going to offer them new ideas, different ways of achieving their aims, or just plain tough advice that the options their ministers are pushing will not work or, more likely, have considerable collateral costs?

Sometimes it seems that way.

Good policy takes time, research, evidence is always a plus even though it may be hard to find, consideration of options, understanding how it will play out, who it will affect and judgements about the relative costs and benefits. This doesn’t always happen. Sometimes there’s a good reason for it and policy has to be ‘made on the run’. But these occasions should be the exception rather than the rule. [1]

Seasoned policy makers know that a large part of their time should be taken up with scanning the horizon, checking what is possibly coming, looking for better ways to do things, keeping up with policy developments in other jurisdictions and engaging early in the policy development process.

Many years ago, Prof Harper told a group of Victorian policy officers a story about the policy train. He said it didn’t run to any knowable timetable, often failed to stop at the station and then when it did, the stop was likely to be short and without much warning. So policy makers had to be ready, with the policies pretty much developed so they could jump on that train and drive good policy outcomes. All very true. And maybe with the way the bureaucracy is run these days, blue sky thinking and wondering what if are seen as luxuries that don’t fit with the day to day realities. If so, then we are all the poorer for it.

When government, through their ministers, asks for a policy to be developed to facilitate outcome Y, what should the policy developers do? In the absence of prior research and consultation, and sometimes simply plain lack of knowledge or understanding how to make sound policy, to develop options, many departments simply seek to provide their minister with exactly what they believe the minister wants.

Ministers sometimes have ideas about how to achieve their desired outcomes. The bureaucracy should test that approach, but also to offer other approaches and options, noting costs and benefits and the distribution of those, along the way. Policy in the broadest terms is rightly the domain of our elected representatives. But filling in the details, providing options for implementation, giving advice on costs – budgetary and more broadly – as well as ways to offset some losses for particular groups if necessary, are all the sort of thing departments can be responsible for providing options for governments to consider. Naturally, those options need to be assessed by the government who are the ultimate decision makers.

But more often than I like to recall, especially in the last 10 years or so, departments have failed to go beyond providing their minister with exactly what the minister asked for, no commentary on how well this would work, what the evidence is, or what alternatives and their implications might not be. Other times, departments might offer a similarly narrow response on the basis that they can intuit what the minister/government wants or will accept. Both these approaches are bound to lead to some poor, or at least poorly considered, policy.

So what can be done?

Well policy officers some of this is in your control. Push back against the short, narrow response. While keeping in mind the overall tenor and direction of a government, be prepared to question the prevailing ‘wisdom’ about what governments will and won’t contemplate. Offer your ministers options, be clear about cost and benefits and who wears them. Bring to their attention, especially important in an election year, what the big or emerging issues are and how government might frame their responses to them. Be smart about how options and arguments are presented. There’s no point in framing these things in a way that will unnecessarily alarm the reader – make the options play to the policy’s strengths. Engage, influence and provide solid and complete advice. Look for evidence. And don’t forget to build in evaluation to your policy. That’s an excellent source of data for the future too. More about that in another blog.

 

[1] Recent work undertaken by the newDemocracy Foundation presents some interesting case studies on some of the policy decisions of government, both federal and state, and concludes that things could certainly be done better. https://www.dev.newdemocracy.com.au/wp-content/uploads/2018/10/Evidence-Based-Policy-Research-Project-Media-Statement.pdf (Accessed 6 October 2018).