Policy 101: Blind siding rarely the way to bring the troops with you

Independent Senator Nick Xenophon in Crikey today:

The budget in May was a stinker. As one senator reportedly told The Australian Financial Review this week, the budget was “in more shit than a Werribee duck”, referencing the coastal town south of Melbourne that hosts a sewage treatment plant. I have big policy problems with the budget, such as the Medicare co-payment and the cuts to auto sector workers, pensioners, social security, higher education, health, schools, foreign aid and renewable energy funding. But I’ve been gobsmacked at the blind-siding of the whole country by this government. When did the government tell the states they were stripping a lazy $80 billion out of their future health and education budgets? When did the government tell the auto sector it would drain a further $600 million out of industry assistance (that makes $1.1 billion cut in total) that could have gone to restructuring ahead of the exit of the car makers? When did the government tell the universities it was going to cut 20% from federal funding for undergraduate courses and deregulate the sector? When did the government tell self-funded retirees it was taking away their modest seniors’ supplement?

Never, that’s when. Until budget night, that was. The subtext is all about mistrust of the electorate. I’m tipping Budget 2.0, sometime soon. And the government won’t get that through unless it restores trust with the voters.

You could add plenty to the Senator's list of Budget blind siders that add to the trust deficit including the announcement of the plan to restructure the access to information system by abolishing the Office of Australian Information Commissioner, all the time pronouncing a commitment to transparency and accountability and claiming the resulting changes will "improve administrative efficiencies and reduce the burden on FOI applicants."

Federal Budget: OAIC down about $150k

Could have been worse I guess.

As reading a Portfolio Budget Statement has never been my forte, I can only tell you after a little help that buried away in the statement for the Office of the Australian Information Commissioner [PDF 176KB] is an allocation of $10.604 million for 2013-14 compared to $10.764 million for the current year. Staff levels in the 80-85 range. Key performance indicators for timeliness remain unambitious, to use a term I've thrown around before, but you can only do what you can do. Adequate resourcing might make a difference.

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Program 1.1 key performance indicators •      Australian Government agencies comply with the requirements of the Information Publication Scheme and disclosure logs. •      Principles on open public sector information are promoted and understood across government. •      OAIC merits review and complaint handling processes meet timeliness and quality benchmarks. •      Information and education products on privacy, FOI and information policy meet stakeholder needs. •      The Information Advisory Committee and Privacy Advisory Committee are supported in their role of providing advice to the OAIC.
	2012–13		2014–15	2015–16	2016–17
	Revised	2013–14	Forward	Forward	Forward
Key performance indicators	budget	Budget	year 1	year 2	year 3
Percentage of privacy complaints finalised within 12 months	80%	80%	80%	80%	80%
Percentage of FOI complaints finalised within 12 months	80%	80%	80%	80%	80%
Time taken from commencement to finalisation of audits/performance assessments	6 months	6 months	6 months	6 months	6 months
Percentage of Information Commissioner reviews completed in 12 months	80%	80%	80%	80%	80%

Transparency in use of taxpayers' money still way short of what we should expect

Readers with a long memory might recall references here to Operation Sunlight an initiative of the Rudd government following years when points were raised by one time Democrats Senator Andrew Murray about the need to improve the openness and transparency of public sector budgetary and financial management. 

And the International Budgetary Partnership in 2010 that didn't even bother to rate our efforts at budget transparency.

Ross Gittins highlighted shortcomings in budget transparency a year ago.

 

So interesting to see the submission from Australian Information Commissioner John McMillan on the Commonwealth Financial Accountability Review (the Review) discussion paper Is Less More? Towards Better Commonwealth Performance particularly concerning  ‘Enhancing transparency and accountability' and ‘Improving performance'. 

All directed to making Australian Government financial information more available and more useful to the public. 

There are a number of important suggestions in the submission. One that commands attention is that the Review consider developing a list of financial information that should be published by agencies under the FOI Information Publishing Scheme. I'd go further and legislate for publication of many of these expenditures:

• Educational expenses and study leave paid to staff
• Expenditure on executive coaching, leadership training and media training
• Paid parental leave
• Employee expenses as a proportion of the agency budget
• Expenditure on hospitality and entertainment
• The value of consultancies awarded by the agency
• Discretionary grants made by the agency
• Expenditure on legal services
• Expenditure on corporate cars
• Expenditure on taxis
• Expenditure on advertising
• Expenditure on media monitoring
• Expenditure on media subscriptions
• Expenditure on staff travel
• Measures taken to absorb the efficiency dividend
• Staff numbers employed in ongoing, non-ongoing and contract positions, and at SES level
• Expenditure on entitlements of current and former parliamentarians.

I'd add also all payments made and costs incurred by minsters and ministerial staff.

As the Commmisioner concludes

Some of the items in that list may go beyond the scope of this Review. Some other items are currently published by at least some agencies, for example, in annual reports. However, it would enhance public accessibility and accountability of government spending if a common practice was adopted in all agencies. The IPS provides an excellent framework for developing that common practice; and the Review is well-placed to facilitate or support this development. 

Efficiency dividend blunderbuss to hit accountability agencies

Wikimedia Commons MZOPW

The across the board extra 2.5% efficiency dividend for 2012-13 (on top of the existing 1.5%, an increase this year from 1.25%, planned to be "temporary" and in place for two years) announced as part of yesterday's budget cuts won't apply to a number of "smaller agencies" including courts and tribunals such as the Administrative Appeals Tribunal. But other agencies that play an important transparency and accountabilty role- notably Office of Australian Information Commissioner, Ombudsman and Auditor General-didn't make the exception list. The savings won't be achieved by cutting back on the tea and bikkies, now long gone, and seem certain to impact negatively on capacity. The Government turned down last year a parliamentary committee recommendation made two years previously that would exempt the first $50 million of appropriations thus shielding small agencies such as these from automatic cuts. And gave the Opposition stick in April for proposing a 2% efficiency dividend.

Australia missing from survey of budget transparency

I had not heard of the International Budget Partnership until I came across references online to the Open Budget Survey 2010. IBP works with civil society and other groups "to make budget systems more transparent and accountable to the public." They believe that "the public has a right to comprehensive, timely, and useful information on how the government manages public funds." Their experience shows "that when ordinary people have information, skills, and opportunities to participate, broader public engagement in government budget processes can promote substantive improvements in governance and poverty.

So to the Report on the 2010 survey of 94 countries, 74 of which fail to meet basic standards of transparency and accountability in their national budgets: not a word about us. While developing countries are the main focus, and South Africa received the highest score, developed countries we would compare with such as New Zealand (2nd), United Kingdom (3rd), France (4th), Norway (5th) Sweden (6th), the United States (7th), Germany(12th) all feature in the top two categories.

There is no link to any Australian group, think tank or academic centre that looks at these issues. Surely not a true indication of interest and expertise? A volunteer before 2012? (In NZ it's Transparency International.)

I'm sure we would come out of such an assessment fairly well, but it's a reminder that the Federal Government's budget initiative Operation Sunlight may still have a way to go and that some who look closely at these things find major flaws in transparency claims for example concerning the Defence budget.

Those in Canberra who manage Australia's aid should find plenty of material of interest in the report and its recommendations.Countries in our region that receive significant Australian aid and are in the third of five categories (Some information but fail to meet the basic standard) include Papua New Guinea, Philippines, Indonesia and Thailand. Malaysia, Pakistan, Timor-Leste and Afghanistan ( a significant improver since 2008) are in category four, Minimal. Cambodia, Vietnam, China are in Scant. Fiji (not on our books these days) is in the small No information group.

Here is just one aspect of transparency covered in the Report:

In 68 of the 94 countries surveyed, legislatures do not organize any public hearings at which the public is given an opportunity to testify on the budgets of individual ministries.(Come to think of it, neither do we.) Further, in 35 countries included in the Survey, all legislative budget discussions involving the executive are closed meetings; the public is excluded altogether from observing these meetings, even if they are committee hearings, and no public record of the meetings is provided. In 36 countries, only a few such discussions are open to the public.

Some dark corners for Operation Sunlight.

Ross Gittins

Operation Sunlight-the Federal Government's "reform agenda to improve the openness and transparency of public sector budgetary and financial management" has been mentioned here a couple of times, including this good self report card from Minister Tanner and an earlier comment that there hasn't been much reporting on or analysis of the Government's claims. So interested in this in the column by Ross Gittins  in the Sydney Morning Herald today on the annual report on the  Defence budget by the acknowledged expert Dr Mark Thomson of the Australian Strategic Policy Institute.

When Lindsay Tanner was shadow finance minister before the 2007 election, he invited various worthies (including yours truly) to offer suggestions on ways the budget papers could be made more transparent and informative. These suggestions were developed into the Operation Sunlight policy Labor took to the election and has implemented now it is in government. But Thomson complains of newly darkened corners in the defence budget. He says the government ceased disclosing funding deferrals in its first budget. And this year, ''in a marked departure from previous years, the budget papers do not list the projects planned for approval in the coming 12 months''. I confess I had hoped for better from that nice Mr Rudd.

The paper version of the column has Thomson pointing to the only available list of projects that may be funded in the next two to three years, and  criticism by Gittins of selective and unexplained shifts by the Government from accrual ("French") to cash ("English") accounting in different areas when it suits, hardly designed to encourage full understanding of the figures, even by people like him.

FOI: Cat on ladder with a key

It will take a long time for the Opposition to live down its record on the transparency front while in government, but it doesn't mean criticisms aren't worth noting. And some metaphors aren't bad either. Here's the Liberal Member for Paterson, and Shadow Minister for Defence Science and Personnel Bob Baldwin in the House yesterday during debate on Appropriations Bills:

"It is now beyond any doubt that this Labor government has no ability to deliver on any of its intentions, promises or policies. For example, the intent of Operation Sunlight was to increase transparency of budgetary estimates and improve the readability of budget papers, yet this latest appropriation bill still smacks of Labor’s light touch in regard to transparency. An increase in transparency could be described in layman’s terms as being like installing a large glass window in a brick wall, thereby allowing the outside world to peer through and see what is on the other side. However, transparency according to the gospel of Prime Minister Rudd and his Labor disciples would be more akin to installing a small cat flap in the highest corner of the wall which can only be as accessed with a ladder and opened with a key. Now, the only key that regularly opens this cat flap is wielded by the freedom of information laws, and even then the Rudd Labor government does its level best to hinder those attempting to gain access to what should be classified as public information. That is hardly what I would describe as transparency in government."

The contentious issue is how big that glass window really needs to be. Baldwin went on to point out that the Bill included an additional $690 million worth of extra funding for the Department of Defence but no actual breakdown.

"In fact, this bill states that there is $528 million earmarked for ‘the protection and advancement of Australia’s national interests through the provision of military capability and the promotion of security and stability’. A further $108 million is to be used for ‘the advancement of Australia’s strategic interests through the conduct of military operations and other tasks directed by government’. It is plain to see that the level and amount of information substantiating the appropriation of over half a billion dollars of taxpayers’ money is, I am afraid to say, more than just a little light-on; it is downright shameful and a deliberate act of obfuscation."

Back in May last year I wondered if anyone with the skills and experience in such things had done an assessment of the Government's delivery of the promise of Operation Sunlight. Didn't see or hear a word, so still wondering?

Thanks to Open Australia for the Hansard link

Defence shelters detail

The resignation of Defence Minister Joel Fitzgibbon for failure to fully adhere to the Ministerial Code of Conduct serves to highlight the importance of those interminable Estimates hearings. As The Age points out the end came-following months of scrutiny and adjustments to his declaration of interests- because of inaccuracies revealed in questioning Defence officials yesterday about "undertakings that the minister made publicly in March about his role in the lobbying activities of his brother. Mark Fitzgibbon is the managing director of NIB Health Fund who, in partnership with US company Humana, last year sought to do business with the Defence Force." The episode should prompt some questioning as well about the adequacy of the lobbyist registration scheme.

Fitzgibbons' involvement in matters of business interest to his brother aren't the only details hard to get out of the Defence system, despite all the talk about transparency, and other initiatives such as Operation Sunlight and its promise of meaningful budget papers.

Mark Thompson of the Australian Strategic Policy Institute is recognised as one of the few who know what's really happening with defence spending, running at $72,990,375.34 per day. In his latest commentary, "The Cost of Defence" Thompson laments that "the most comprehensive White Paper of the modern era’ has been followed by the least comprehensive Defence budget papers of the past decade."His conclusion about transparency and accountability:

"As the first budget after a new Defence White Paper, there is a glaring absence of substantive information on funding, investment and reform. The best that can be said is that the budget is consistent with a White Paper that’s silent on when anything will occur or what things will cost. All we are offered is a vision of what the defence force will look like in 2030. We don’t know when new capability will arrive. We don’t know when old capability will be fixed. We have minimal information on how $20 billion of savings will be accomplished, and not much more on how the money will be spent. We don’t know how much capital investment has been delayed, or when it has been delayed to. And from a funding model extending twenty-one years into the future, we are only given a glimpse of the next four years. But relax; we are going to have twelve submarines sometime after 2030.

Update: This 30 page report released on Wednesday by Defence Secretary Warner adds to the picture. I'll be interested in Thompson's analysis.

Government grants set for a little more rigour from July

New rules are scheduled for Commonwealth grants from 1 July 2009, including-this is new?- an obligation on ministers and officials to record why a particular grant is an efficient and effective use of public money. Would be interesting to know the level of compliance with the other new requirement since 1 January to publish details of grants on each agency website- but no-one asked in Estimates last week. And to see what is released as a result of a request for -wait for it- the Grant report on grants.The following from Senate Estimates (Finance and Public Administration 27/5/2009) at 91-93 examination of the Department of Finance and Deregulation

Senator COONAN—Can someone at the table please give me an overview of the new Commonwealth grants framework that will replace the current discretionary grants framework?

Ms Campbell—The Department of Finance and Deregulation is working with a number of agencies across the Commonwealth to finalise and implement a comprehensive policy framework for grants from 1 July 2009. The framework will require that ministers and officials record the basis on which they are satisfied that approving particular grants is an efficient and effective use of public money. From 1 January 2009, agencies have been required to publish on their website, within seven working days after a funding agreement has been signed by both parties, the details of the grant. Also, ministers that are members of the House of
Representatives are to advise the minister for finance when they have approved individual grants to organisations within their own electorate. The new guidelines are going to be underpinned by changes to the Financial Management and Accountability Regulations. They will be amended by 1 July 2009 to ensure, particularly, that the basis of grant approval needs to be recorded.

Senator COONAN—Who has been consulted in relation to the guidelines? Has a draft been released?

Mr Suur—There has been a working group that involves various departments and agencies working on the draft guidelines now for some months. A second iteration of the guidelines went out this week for agency comment, and we hope to have that comment by the end of this week.

Senator COONAN—As I understand it from the answers that have been given, ministers will still be able to approve individual grants to organisations in their own electorates. Is that right?

Ms Campbell—That is correct. Those ministers will be required to notify the minister for finance.

Mr Suur—In fact, that arrangement has been in place since December 2007. It was an early decision of this government.

Ms Campbell—It gets published on the website...As Mr Suur said, some of these measures have been in place since 2007.

Senator COONAN—Which ones?

Ms Campbell—The minister of finance being notified of ministers approving grants. Initially there were requirements for seeking agreement, I think.

Mr Suur—Yes.

Ms Campbell—That has probably been overtaken by this additional transparency, where it is on the website as well as the minister being notified.

Senator COONAN—So there was initially a requirement that there would need to be agreement before the grant was made; is that right? Is that what you just said?

Ms Campbell—At first when the government was looking at the changes that it wanted to make to the grants framework to ensure a level of transparency and accountability I think there was a requirement that a committee consider such a grant. Since that time, there has been a review of the grants framework. There was a strategic review conducted about the best way to ensure the efficient effects were given ethical use of Commonwealth resources in a way that instilled the transparency and accountability that was required.

Senator COONAN—Who undertook the strategic review?

Ms Campbell—The review was undertaken by Mr Peter Grant.... He was assisted by an academic to have a look at the grants programs that have been put in place.

Senator COONAN—Has Mr Grant prepared a report?

Ms Campbell—Yes, he did.

Senator COONAN—Can we have a look at the report?

Ms Campbell—The report was generally advice to government, but—

Dr Watt—We will see what we can do. It is not a public report; we will see what we can do. We can perhaps give you some of it, which might help.

Senator COONAN—This is very interesting. Who was on the committee?

Ms Campbell—I am not aware of that. We will have to take that on notice and get back to you.

Dr Watt—We will take that on notice.

Senator COONAN—Was the committee made up of finance or other people? Who?

Dr Watt—It was a ministerial committee. There are a few things we need to clarify and we will before we go down that road.

Senator COONAN—You could appreciate that it sounds very like there was initially a requirement that grants were made in consultation with the minister for finance or that there had to be approval as opposed to simply notifying the minister of grants. That is what I want to know: was there ever an initial arrangement that was resiled from as a result of this review?

Ms Campbell—We will take that on notice, Senator.

Senator COONAN—You do not actually know that, is that right?

Ms Campbell—I think the initial arrangements that were put in place were pending the outcomes of the review. Once the review was finalised we had to look at the workability of this, at the actual administration of how government would continue to operate in a functional manner when there were a number of grants programs. We did not want to delay getting this funding to the people who would be given the grants.

Senator COONAN—It would be too difficult to. It would have to get a tick-off from the minister.

Dr Watt—It does complicate decision making.

Ms Campbell—The review found that this enhanced level of transparency, where it goes on the website within seven days and the minister was notified, would provide that level of accountability.

Senate questions for Operation Sunlight and budget transparency

Senate Estimates (Finance and Public Administration 27/5/2009 at 88-89) examination of the Department of Finance and Deregulation last week saw questions asked about Operation Sunlight. Nothing new, or startling but here is an edited version.

Senator CAMERON—.. Operation Sunlight was an overhaul of budget transparency. Could you advise me as to how that has operated in the current budget and any issues that have arisen.

Ms Campbell—Operation Sunlight was in play for the last budget as well as this one. In this budget we introduced a significant improvement in the publication of program information in the portfolio budget statements...That was done working closely with all agencies. All agencies have included details of their programs, including financial details and performance information about their programs, in those documents. That has been the most significant change in this budget. I will just go to find a number of the elements that have already been introduced. That one was the most significant in recent times.

Senator CAMERON—Are these the implementation of former Senator Murray’s recommendations as well?

Ms Campbell—Yes. Minister Tanner, when he was in opposition, published a document called Operation Sunlight and then refined it. Once the government was elected, he implemented that operation. He also asked the then Senator Murray to review Operation Sunlight and to make recommendations to further improve the program or to make changes that may have become necessary since Minister Tanner first put the document out. The then Senator Murray’s report was released with the government response in December of last year, and we have been continuing to implement Operation Sunlight, including some additional measures that were
introduced following the then Senator Murray’s review. One of the other significant changes in this budget was the introduction of new outcome statements for a number of agencies. Minister Tanner, in Operation Sunlight, had referred to the fact that some outcome statements were vague and not descriptive and did not really capture, in a definitive manner, what agencies
were expected to deliver. There has been a review of a great deal—in fact the majority—of the outcome statements over the last 12 months, and these have been published in the portfolio budget statements this year. Those that have not been reviewed are generally for organisations undergoing major changes. There are only a handful of those and they will be reviewed over the next few months in time for the next budget.

Ms Campbell—It is an ongoing process but the outcome statements and the program information were both very significant parts of Operation Sunlight. There are a few outstanding items that we will still be working on over the next six to 12 months but the next phase, which will be very important, will be agencies reporting against how their programs have performed. This will occur in next year’s annual report cycle.

Senator CAMERON—One of the changes, as I understand it, is outcome level trend reporting. Have we moved to that yet?

Ms Campbell—No, we have not moved to that yet. We are settling the outcome statements in and asking agencies to look at how they might be able to capture information on the performance of the outcome level. We are very much focusing at the moment on the program level information so that agencies can capture that program information and look at the trends in program information.

Senator CAMERON—When we move to trend reporting, because it is always good to get things in context, how far back would you go?

Ms Campbell—We have not envisaged going backwards at this stage, because it is very difficult to capture information backwards, but we are focusing on moving forward. We are focusing on that at the program level. Next year, in the annual report cycle, those agencies who have detailed the program information in this portfolio budget statement will report against it. Then as time goes by we will be able to capture that information and that trend information.

Ms Campbell—.. in last year’s budget we did introduce just the one set of financial statements in budget paper No. 1, where previously there had been three sets of financial statements. That was introduced last year and streamlined the document somewhat. The bulk of it has been in the yellow documents for each of the portfolios, where they have been able to articulate each of their programs and the expectations of those programs.

Senator CAMERON—Has this focused the minds of the department and the minister to deal with this in a very concise way to get the information out?

Ms Campbell—Operation Sunlight has focused not only the Department of Finance but every department, because it has allowed them to think about what they are delivering and to articulate clearly, and to also capture the program information and to display that for senators and the audience of these documents.