“Designing effective and innovative public policy in a complex environment”
ANU Crawford School
HC Coombs Policy Forum Public Policy Conference
Check against delivery
Thank you for the opportunity to address you today.
I bring the apologies of the Cabinet Secretary, Arthur Sinodinos, who has been called away on Cabinet business.
The theme for this Conference – “Designing effective and innovative public policy in a complex environment” – summarises one of the key challenges governments face today.
That these challenges are faced globally, rather than simply here in Australia, is demonstrated by the distinguished international speakers on the agenda for this Conference.
In public policy as much as in the worlds of politics and business, there is great potential for collaborative innovation with our friends overseas, and on behalf of the Government I welcome all the international speakers to Australia.
I note that at today’s Conference you will hear from some of the leading experts in behavioural insights, in particular from Professor Cass Sunstein.
The behavioural sciences are relative newcomers to public policy but it’s fair to say they have had a significant impact on public policy development in the last decade or so.
Insights from the behavioural sciences have been successfully applied in public policy development internationally and here in Australia, and it is an area we are keen to further explore.
For example, the Australian Taxation Office has been successful in using behavioural insights to improve taxpayers’ experience and compliance. Tailored text messages sent to their phones have helped taxpayers avoid going into debt, and plain English debt letters, using social norms, have led to more people responding and paying on time.
And the NSW Government has successfully utilised behavioural insights to get injured workers back to work quickly and safely.
So I’m pleased to announce that the Government is going to establish a Behavioural Economics Team of the Australian Government, or BETA as it will become known.
BETA will be established as a joint initiative of seven agencies, to be housed within the Department of Prime Minister and Cabinet, and I am delighted that Professor Michael Hiscox of Harvard, has agreed to return home to Australia to initially head up the team.
If I might add a personal insight, as I have found this particular area of research quite fascinating.
Behavioural sciences, particularly as they are applied to economics, can provide fascinating insights into how current policy settings drive or deliver particular responses or results.
However, while these tools help us to understand the world as it is, they do not on their own automatically provide the political or public justification for using these tools to change policy, or seek to alter human behaviour.
The challenge of generating public and stakeholder consent for policy change remains, it cannot be assumed.
Indeed, in some cases generating this consent may even be more critical as proposals arise to use these tools to alter or drive very personal or individual lifestyle choices or preferences, for there is occasionally some resistance to state involvement in such choices.
If I can borrow from your conference theme, in a complex environment, the decision-making model of traditional Cabinet government has proven itself over time to be an adaptable and reliable way of generating sound policy outcomes.
The Prime Minister has made it clear that a traditional Cabinet will be the primary decision-making body of a Government committed to delivering innovative policy to ensure Australia remains a high-wage, generous social welfare net, first world economy.
Regardless of the problem you are seeking to solve, proper policy processes will nearly always deliver sound policy outcomes.
And the key characteristics of proper processes are consultation, communication and research, and planning for effective implementation.
If we look to the international experience, for example, the Cameron Government established the Major Projects Authority to make sure projects are delivered efficiently and effectively.
There’s no single road to this destination, but translating good policy to a good experience on the ground, delivered on time and on budget, and actually achieving policy objectives rather than merely surrogate measures of success, will remain a focus for the Government and the Public Service.
Good governments have clear philosophies and objectives to which they must remain true; and all governments have some stakeholders more sympathetic than others.
It is important that the Cabinet receive regular feedback from the backbench – those most committed to the philosophies and objectives of the government – to ensure that it is well informed on community expectations and issues.
And major reforms require appropriate consultation with stakeholders – those sympathetic to the Government’s objectives and those not-so-sympathetic – the key being to consult widely rather than to elicit applause.
The National Reform Summit of business and community leaders was an example of minds meeting from across the spectrum of interests to consider and discuss the key reforms that will create jobs, drive innovation and stimulate growth.
These discussions occurred in depth and at length among the participants before the Government’s economic team, led by the Prime Minister, met with the members to discuss the reform agenda.
It is an agenda that touches on many strands of business and community life, so it makes sense to review the issues with representatives from across the community and try to find common ground.
Of course good advice supported by research is essential to successful reform and the Government has a tremendous resource known as the Australian Public Service.
In the modern world all advice is contestible, and Public Servants are a bit like the ringmaster in the chaos of it all.
There have been a few people of late harking back to an imagined golden age of the Australian Public Service, stating by implication – or directly – that the contemporary public service is not fit to advise on, or deliver reform.
My own view, and I know this is the view of Senator Sinodinos, is that today’s APS is ‘fit for purpose’ for a government bent on reform.
And beyond the anecdotal, the evidence for that lies in the big reforms it has – and is – delivering.
Examples include the design, development and conceptualisation of the NDIS – a world class initiative of consumer centred care for people with disability.
And on the delivery side, in relation to the Government’s indigenous procurement policy, there has been a 600% increase in Commonwealth procurement from Indigenous firms in the first four months of this financial year compared to the previous year.
The APS is the primary source of nuanced policy advice and its expertise, augmented by corporate memory, is essential to good public policymaking.
Of course, the most perfectly formed policy in the world, if poorly implemented, will fail to meet its objectives.
More than that, poorly implemented policy can levy considerable cost on the community, even causing death, as we saw in the case of the Home Insulation Program.
Planning for effective implementation, listening to stakeholders and the community and adapting to what you hear, limits the risk that policy will go off the rails.
In the course of shaping and delivering public policy, agencies naturally generate a huge amount of data, not all of which they use effectively or comprehensively.
We see it as an untapped resource, and the Government is committed to maximise the use and reuse of public sector data across the whole economy.
I know this Conference is devoting considerable time to the question of developing innovative public policy.
Innovation extends beyond new policy ideas, it also extends to devising innovative ways to deliver existing policy and to improving administration.
It is part of the promise of the digital era, and the Government has established an executive agency called the Digital Transformation Office to ensure Australians reap that promise by improving the quality of their engagement with Government.
When people can find the information and services they need online, they have a better experience.
Conversely, when they can’t find the information online easily, they waste time and become frustrated.
Getting information out of your government quickly and easily is a basic service in a democracy, but it is also an economic issue.
Of the estimated 811 million transactions with government agencies every year, around 40% are still completed using non-digital channels.
According to a report from Deloitte Access Economics, if over the next 10 years this was reduced to 20%, the change would deliver around $17.9 billion in savings to government and a further $8.7 billion in savings for Australians through time, convenience and out-of-pocket savings.
Regulatory reform, as one of the themes of this Conference, is one of the Government’s priorities.
Too often, governments resort to regulation as our first response.
We’re changing that thinking, so that regulation is not seen as a costless way to address policy issues.
But even where we have good regulation, the way it is administered and applied by regulators can have a major effect on productivity. That is why we have also set out clear expectations for the performance of Commonwealth regulators. They need to minimise their impact on those they regulate while still delivering the vital roles for which they have been created. And they will publicly report their performance every year.
But, our goal is not only to reduce the cost of complying with regulation. We have strengthened our Regulatory Reform Agenda to make sure that, where regulation is necessary, it is designed to support flexibility in our economy and encourage innovation to the greatest extent possible. Our Government will be targeting productivity enhancing regulatory reform priorities. At the same time we will continue to reduce red tape. This helps to keep reducing costs for businesses, community organisations and individuals.
This is essential reform if the Government is to achieve the productivity growth which is necessary to support rising living standards.
The Prime Minister likes to say that there has never been a better time to be an Australian.
I agree, and add there has never been a better time to be engaged in public policy in Australia.
The Government does have an ambitious policy agenda, including the Tax White Paper, the Federation reform process, the upcoming Innovation Statement and the Government response to the Harper Competition review.
We face significant challenges but we have a vast potential in this country that is more than equal to those challenges.
Many of the policy settings we have are right.
But government must be as nimble and responsive to change as the rest of society and the economy.
This government is absolutely committed to orderly and effective processes, to reaching within government to get the best advice from the public service, and reaching beyond, to consult with the community.
That includes the academic community, and I will be most interested in the insights developed during this Conference.
I wish you robust and fruitful discussions, and I am pleased to formally declare the Conference open.