Secretary, Dr Peter Shergold |
Page Index
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Changing of the guard
After almost seven years as Secretary of the Department of
the Prime Minister and Cabinet, Mr Max Moore-Wilton AC
resigned on 20 December 2002 to take up the position as
Chief Executive Officer and Executive Chairman of the Sydney
Airports Corporation. I took up the position of Secretary to
the Department of the Prime Minister and Cabinet in February
2003.
Max is a larger-than-life figure who led the department with
great authority. Fearless, demanding and intellectually rigorous,
he provided strong support to the Prime Minister and to Cabinet.
His shoes are not easily filled. Thankfully he left behind a
highly professional, committed and creative department. Its
people are second to none and I feel lucky indeed to have such
a fine team to work with.
The year in review
The tragedies sparked by events overseas have had a profound
effect on the Australian community. Inevitably those issues
presented a recurring theme for the work of this department
during the past year.
As I emphasised in an address to staff early in my term as
Secretary, the threat of global terrorism has transformed our
lives. Terrorism has altered Australia’s place in the
world in a profound manner. It has long-term consequences for
the nation - and for its public servants. Many of Australia’s
greatest strategic and political challenges are emerging in
areas of domestic security, border protection and counter-terrorism.
Those issues, typically ‘non-routine’, will test
bureaucratic structures. Ensuring effective coordination of
intelligence, analysis and strategic policy responses will test
public administration. Certainly we will need to build up and
restructure resources within the department.
International events
The period from July 2002 to June 2003 was one of considerable
significance for Australia’s role in world affairs. A
number of international events had a profound and lasting impact
on Australia and Australians - in particular, the October
2002 terrorist attack in Bali and the government’s decision
in March 2003 to commit Australian forces to the international
coalition to enforce Iraq’s compliance with its United
Nations Security Council obligations. The Prime Minister’s
intensive programme of overseas travel during this period reflected
the higher tempo of global security challenges.
In addition to coordinating the Australian Government’s
response to the Bali bombings, the department made a strong
contribution to building Australia’s capacity to cooperate
with countries in our region on counter-terrorism. In the second
half of 2002, the focus of the international community shifted
to Iraq’s continued refusal to comply with its obligations
under successive United Nations Security Council resolutions.
The department assisted the Prime Minister in the important
role he played by lobbying key members of the council in support
of United Nations Security Council resolution 1441. During the
critical phase of Australian Defence Force action between March
and May 2003, the department chaired the Iraq Coordination Group,
established to ensure cross-portfolio coordination and to support
the Secretaries’ Committee on National Security and the
National Security Committee of Cabinet.
The department continued to support the Prime Minister’s
leadership roles as both Chairman in Office of the Commonwealth
and Chairman of the Commonwealth leaders’ troika on Zimbabwe.
With the Pacific region a major focus of government foreign
policy activity, the department was heavily engaged in governmental
responses to regional challenges, notably in shaping a revised
policy approach to the Solomon Islands. It is clear that many
Pacific Island countries look to Australia for support in providing
assistance in ensuring law and order, improving governance and
restoring civil society. The theme of ‘Helpem Fren’
is likely to be a continuing motif of the year ahead.
As part of the government’s substantial trade agenda
over the past year, the department assisted the Prime Minister’s
efforts to secure the United States’ agreement to commence
negotiations for a bilateral Free Trade Agreement. It also supported
his leading role in securing a contract to supply China’s
Guangdong province with $25 billion worth of liquefied natural
gas over 25 years - Australia’s largest single export
deal.
Domestic security and border protection
The Bali bombings brought home forcefully the importance of
a coordinated approach to counter-terrorism. The department
led the Review of Commonwealth Counter-Terrorism Arrangements,
commissioned by the Prime Minister. As a result of the review,
further measures were introduced to enhance our counter-terrorism
capability, with the department taking the lead role in policy
coordination. On 24 October 2002, the Prime Minister, Premiers
and Chief Ministers signed an Inter-Governmental Agreement,
which provided for improved national coordination through the
National Counter-Terrorism Committee. Those arrangements are
reflected in the new National Counter-Terrorism Plan, launched
by the Prime Minister on 11 June 2003.
In the current security environment, the government identified
an urgent need to inform the public not only about the counter-terrorism
measures being taken to protect our way of life, but also how
all Australians can contribute to national security. The department
led a taskforce to develop the national security campaign, launched
in December 2002, along with the National Security Hotline.
As a result members of the public can call 24 hours a day, seven
days a week, to report any concerns about suspicious activity.
It is clear that defence, security and intelligence issues
can no longer be seen as adjuncts to international policy. The
threat of terrorism places new demands on the structures and
culture of public administration. I therefore established a
new National Security Division on 1 July 2003 to ensure
national security is provided in a whole-of-government manner.
Through its chairmanship of the National Counter-Terrorism
Committee, the department will also ensure that the Australian,
state and territory governments work closely together on national
security issues. At the December 2002 meeting of the Council
of Australian Governments (COAG), leaders renewed their commitment
to a strong, nationally coordinated approach to counter-terrorism.
A further significant outcome from the COAG meeting was an
agreement to take a national approach to restrict the availability
and use of handguns. This will reduce the number of handguns
in the community and strengthen controls over access to handguns.
The importance of ceremony
Ceremony plays an important role in sharing the trauma of national
tragedy and recognising national achievement. It provides a
means to articulate, with great symbolism, the mood of the nation.
The department organised a National Remembrance Service at
St Christopher’s Cathedral, Canberra, on 11 September
2002 to mark the anniversary of the September 11 (2001)
terrorist attacks in the United States. In the sad aftermath
of the Bali bombings on 12 October 2002, the department
also organised a National Memorial Service for the victims in
the Great Hall, Parliament House, Canberra, on 24 October 2002.
We organised the welcome home parades and receptions in Sydney
(18 June 2003) and Perth (20 June 2003) to honour Australian
Defence Force and Defence civilian personnel who contributed
successfully to operations in the Middle East.
Supporting Cabinet
In a wide-ranging speech to the Committee for the Economic
Development of Australia in November 2002, the Prime Minister
announced an extensive review by Cabinet of the government’s
broad strategic priorities. The priority setting exercise was
a key element of changes to the Cabinet process proposed by
the Prime Minister earlier in 2002, with the purpose of strengthening
the strategic leadership role of Cabinet. The department, in
its traditional role of supporting the Cabinet process, played
an important role in the successful implementation of the reform
agenda.
As a result of those changes to the Cabinet process, Cabinet
is now able to focus on the business most in need of collective
discussion. There has been a significant structured increase
in the opportunities for discussion of broader strategy at each
Cabinet meeting and two special meetings of Cabinet were held
during the year to consider the government’s major strategic
priorities.
Towards the end of 2002-03, arrangements were being finalised
to transfer responsibility for supporting the National Security
Committee of Cabinet and the Secretaries’ Committee on
National Security from the department’s International
Division to its Cabinet Secretariat. This will bring the processes
for these two important committees closer to those of Cabinet
and other Cabinet committees, and concentrate the support responsibilities
in a specialised support area.
A new Cabinet Implementation Unit will also be established
early in 2003-04 to ensure that Australian Government
policies and services are being delivered to the community in
a timely and responsive manner. As I said to my staff in May,
in emphasising the need for committed delivery of services on
behalf of government, ‘we should aspire to an APS which
is respected as much for its capacity to deliver as for its
ability to develop policy’. Together with the Cabinet
Secretariat, the unit will form part of a new Cabinet Division,
working with agencies to ensure timely and effective implementation
of government decisions.
Contributing to social support
programmes
Sustainable social support systems in health, welfare, education,
immigration and indigenous services are critical to maintaining
the fair, compassionate society of which Australia is so justly
proud. But with limited resources, governments face difficult
choices. Often, there are no easy solutions. Effective development
of policy options requires a whole-of-government, interdisciplinary
perspective founded on open discussion, debate and collaboration
across the Australian Government, between jurisdictions, and
with experts and stakeholders in the community.
The Department of the Prime Minister and Cabinet is in a unique
position to develop further whole-of-government perspectives,
bringing departments together and leading the debate within
government. The Social Policy Division helped shape the debate
in a number of key areas during 2002-03.
Strengthening the health care system
Sustainability and effectiveness are key issues in health.
Our health system needs to keep pace with advances in medical
science and technology, and the improvements to health and welfare
that they offer. But the government also needs to keep costs
under control. With these objectives in mind, the department
helped develop balanced government responses to new proposals
for Medicare, playing a significant role in the development
and negotiation of the A Fairer Medicare package. We
assisted with a review examining how to ensure the future sustainability
and effectiveness of the Pharmaceutical Benefits Scheme. The
department also worked collaboratively with other agencies to
find ways to improve private health insurance regulation, the
population health programme and the hearing services programme
and to curb damage to individuals and our community through
drug and alcohol abuse.
The department oversighted, and provided advice to the Prime
Minister on, the implementation of the COAG decision to ban
human cloning and to regulate research involving human embryos,
particularly in the development of the Commonwealth legislation,
which was passed in December 2002. We will continue to work
closely with the states and territories to implement a nationally
consistent approach on this issue.
A further challenge in the coming year will be to oversee the
work of a new taskforce, jointly chaired by this department,
which is examining options to reduce the amount of ‘red
tape’ faced by general practitioners to allow them to
spend more time caring for their patients. I see this work as
having wider implications. As public servants, carefully constructing
delivery programmes for the very best of policy reasons, we
can sometimes fail to appreciate the administrative complexities
faced by recipients. The question, at least, is simple: do the
benefits that derive from the policy outweigh the red-tape costs
involved?
Supporting individuals, families and communities
This was a turbulent year for Australia. The drought, bushfires
and the Bali terrorist attack had a profound impact on many
Australians. To assist families and individuals, the department
played a key role in coordinating appropriate responses. We
helped to facilitate the provision of health services, travel
and other financial assistance for victims of the Bali bombings.
We played a key role in developing a suite of measures in response
to the drought affecting large parts of Australia.
The department’s involvement in the development of the
National Agenda for Early Childhood illustrates the department’s
role in cross-portfolio initiatives. The agenda provides directions
for a whole-of-government approach for future investment in
early childhood and explores the causal pathways that lead to
destructive experiences for children and young people. The agenda
explores early intervention approaches to prevent homelessness,
violence and crime.
The higher education sector too faces profound challenges.
How can universities diversify, reward quality and meet cost
pressures? How can ‘uniform mediocrity’ be avoided?
To address these concerns, the department worked with other
agencies to develop the reform package Our Universities:
Backing Australia’s Future. The reforms will allow
the sector to develop in a way that is sustainable, promotes
diversity and choice, supports high-quality outcomes and is
equitable. Through the proposed extension to student loans,
more Australians will have the opportunity to undertake a university
degree that is free at the point of education.
This year the government examined better ways of providing
settlement services to migrants in the Australian community,
resulting in the report Review of Settlement Services for
Migrants and Humanitarian Entrants. The ability of the department
to achieve whole-of-government solutions means that in the year
to come we will chair a taskforce that will look at ways to
maximise the nation-building benefits of Australia’s migration
and humanitarian programme.
Working with the states and territories
The most difficult challenges of public policy defy jurisdictional
boundaries. The Australian Government endeavours to assist and
work with states and territories. It provides both funding and
strategic direction to assist them with a range of social support
systems. This year several agreements for this funding are being
renegotiated. In partnership with relevant agencies, the department
played a key role in developing the Australian Government offers.
The agreements included the Commonwealth-State-Territory
Disability Agreement; the Commonwealth-State Housing Agreement;
the Australian Health Care Agreements; and the Australian National
Training Authority Agreement.
Intergovernmental issues of national significance are largely
pursued through COAG. The department continued to chair the
COAG Senior Officials’ meetings and provide secretarial
services to COAG, advancing a range of important national issues.
In April 2002 COAG agreed to trial a whole-of-government cooperative
approach in a number of indigenous communities. The aim of these
trials has been to improve the way governments work with each
other and with communities and, through greater cooperation
and flexibility, to deliver more effective responses to the
needs of indigenous Australians. These trials are an important
opportunity to construct new ways of working with communities
across jurisdictions. Hopefully, the lessons learnt will be
able to be applied more broadly. The department is taking a
keen interest in their progress.
Work and family
The department led the Work and Family Taskforce, established
by the Prime Minister, to review policy and develop options
for the government to consider in a range of areas, including
paid maternity leave, financial support for families, child
care, employment services and family-friendly workplace policy.
It is anticipated that the results of these endeavours will
emerge in the year ahead.
Sustaining economic growth and supporting
economic prosperity
Australia has been able to sustain strong economic performance
over the past decade, notwithstanding the Asian financial crisis
in the late 1990s, a series of recessions in Japan and sluggish
growth in Europe and, more recently, in the United States. As
a consequence of our strong performance more than one million
jobs have been created in the past seven years, the unemployment
rate has fallen by two percentage points and real household
income has risen by an average annual rate of almost 2 per
cent.
Australia’s strong economic performance has reflected
sound fiscal and monetary policies on the one hand, and the
cumulative effect of widespread and ongoing structural reform
on the other.
During the year, Economic Division and Industry, Infrastructure
and Environment Division provided policy advice to the Prime
Minister aimed at maintaining Australia’s growth potential
over the medium to longer term. The objective is to maximise
the benefits of reforms to date and to embrace a number of significant
new areas of reform that will help underpin further growth or
address market failures.
Macroeconomic policy
This year was a very testing one for the Australian economy
in the face of the worst drought in a century, global economic
weakness, the war in Iraq and other international tensions.
The department played a pivotal role in providing economic assessments
to the Prime Minister and analysing the implications for policy
settings.
The department, through its role on the Budget Coordination
Committee of officials, and in supporting the Prime Minister
in his role as Chairman of the Expenditure Review Committee
of Cabinet, played a central role in ensuring an effective 2003-04
budget process. As always, it provided coordinated advice to
the Prime Minister on fiscal strategy, expenditure and taxation
priorities. Policy advice across the many areas of the department
was coordinated to ensure that it was consistent with the government’s
fiscal priorities and a whole-of-government approach to policy
issues.
Medical indemnity insurance
In April 2002 the nation’s largest medical indemnity
insurer, covering around 60 per cent of the nation’s doctors,
went into provisional liquidation. The Prime Minister asked
the department to convene a secretary-level taskforce, supported
by departmental officers, to consider what government initiatives
might be appropriate. The taskforce initially advised ministers
on a guarantee to underpin the stabilisation of United Medical
Protection and its subsidiary Australasian Medical Insurance
Limited (UMP/AMIL). The guarantee allows UMP/AMIL members to
continue to practise until the end of 2003 in the knowledge
that claims will be met and that they will not be personally
bankrupted by negligence claims.
Following extensive consultations with a wide range of medical
and insurance groups on the complex issues involved, the taskforce
then provided advice on a comprehensive strategy. A package
of measures was announced by the Prime Minister in October 2002
to address rising medical indemnity insurance premiums and ensure
a viable and ongoing medical indemnity insurance market. A number
of supplementary measures to fine tune and extend the original
package were subsequently developed and announced, to respond
to issues that arose during detailed implementation and ongoing
review of the effect of measures taken. The overall response
to measures announced has been positive. The medical indemnity
insurance situation has been stabilised and improved to the
benefit of medical practitioners and the community.
Other insurance issues
The Australian economy has also been adversely affected by
sharp rises in the cost of public liability, professional indemnity
and general insurance, coupled with the reduced availability
of insurance. This has required the Australian, state and territory
governments to cooperate in developing measures to improve the
affordability and availability of insurance.
The department has played a key role in preparing an Australian
Government position for the series of Australian Government-chaired
ministerial meetings on public liability and professional indemnity
insurance issues.
Natural resource management
The department is leading the development of an Australian
Government position on water. Following the December 2002 COAG
meeting, a water taskforce was established within the department
to progress the issue on a whole-of-government basis. The department
has also been chairing a Commonwealth-State working group,
reporting through the COAG Senior Officials’ meeting to
COAG. The group has been forging agreement from all states and
territories on a proposal to develop a National Water Initiative.
This important work will be a focus of our activities in the
year ahead.
The objective of the initiative is to increase both the productivity
and the sustainability of water use nationally through improved
water management arrangements in states and territories, building
on the 1994 COAG water reform agreement. In particular, the
initiative will improve the security of water access entitlements
(including by clear assignment of risks of reductions in future
water availability), implement regimes to protect environmental
assets at a whole-of-basin, catchment or aquifer scale, encourage
the expansion of water markets and trading across and between
irrigation districts and state borders (where systems are physically
shared), and encourage water conservation in urban areas.
As an adjunct to this work, the department will lead the development
of an agreement with New South Wales, Victoria, South Australia,
and the Australian Capital Territory, to expend $500 million
over the coming five years to address water overallocation in
the Murray-Darling Basin.
The department is also leading the Australian Government participation
in negotiations with Queensland and key stakeholders over a
proposal to reduce land clearing in that state. This would make
a substantial contribution to meeting the Australian Government’s
objectives for greenhouse emissions and biodiversity.
The National Action Plan on Salinity and Water Quality and
the Natural Heritage Trust are two Australian Government flagship
programmes, underpinning national work to improve natural resource
management across Australia. The department intends to play
an increased role in overseeing the implementation of these
key programmes.
The drought created massive problems throughout Australia during
2002-03. The department advised on the development of
a series of drought relief measures including changes to Exceptional
Circumstances assistance, the provision of one-off income support,
and other drought initiatives such as small business interest
rate relief.
The department also played a key role in advising the Prime
Minister on establishing a national bushfire inquiry, in the
aftermath of the tragic bushfires over the 2002-03 bushfire
season. Once agreement of the states has been obtained, the
inquiry will commence operation, with a report to be presented
to governments in early 2004.
Land transport infrastructure
The department advised the Prime Minister on measures to improve
the provision of road and rail services across Australia, including
the development of the Auslink Green Paper, which aims to achieve
a better integration of land transport infrastructure.
Energy
The department continued to provide the Prime Minister with
advice on energy matters. Its review of natural gas issues in
2001-02 led to further work on energy and resources matters,
including on strategic investment, and a Productivity Commission
Review on natural gas regulation. As mentioned earlier, we also
provided the Prime Minister with support in bolstering the North
West Shelf successful bid to win an important natural gas contract
in China.
In order to give greater focus to the development of a long-term
strategic approach to energy policy, an Energy Taskforce Secretariat
was established in January 2003. It will examine and report
to the Prime Minister and to the Energy Committee of Cabinet
on a broad range of energy policy issues. The first package
of decisions, relating to fuel excise, was announced in the
2003-04 Budget.
Government operations
The decision by Dr Peter Hollingworth to stand aside from the
position of Governor-General and his subsequent resignation
involved the department in the provision of advice on a range
of legal and administrative issues that had not previously arisen.
As the financial year ended, the department was preparing for
the swearing in of the new Governor-General.
The year saw the conclusion of the two royal commissions established
by the government in 2001. The Building and Construction Industry
Royal Commission reported to the Prime Minister on 24 February
2003 and the HIH Royal Commission on 4 April 2003. The
department provided advice on the recommendations of the commissions
and was responsible for the significant task of ensuring appropriate
management of the records of the commissions.
Women
For the Office of the Status of Women (OSW) there were a number
of highlights during 2002-03.
The women’s data warehouse, launched in February 2003,
provides a single source of data for and about women across
a variety of important issues, such as employment, education,
income and superannuation. It also includes population data
from the Census.
The women’s internet portal was launched in March 2003.
The internet portal provides a single point of online access
to government information for and about women.
OSW hosted the second national women’s conference, Australian
WomenSpeak 2003. The forum enables discussion and information
exchange between governments, service providers, women and women’s
non-government organisations. A theme of the conference was
to recognise women of achievement and to pay tribute to the
Hon. Dame Margaret Guilfoyle DBE and the Hon. Susan Ryan AO
for their outstanding contribution to women in politics.
The Time Use Fellowship programme was established by OSW to
encourage and support original research using time use data
from a gender perspective. The first fellowship was awarded
in January 2003 for research on time pressure within the family
unit. The second fellowship was granted in July 2003.
The department’s people
I expressed in my address to staff on 14 May this year
that I have been extraordinarily impressed by the performance
of the department and its people. And I continue to be particularly
pleased by their commitment to achievement, their willingness
to sacrifice in order to get things done, and the support that
I have received from them.
In that address I identified four departmental goals we should
set in order to be able to serve the Prime Minister and
the government most effectively. First, we need to be open in
the way we deal with other public service agencies, to share
information, to seek agreement and to be outward looking. Second,
we must ensure our role is seen by other public servants to
be supportive, recognising that all parties are able to contribute
equally. Third, we need to make sure our approach is collegial,
seeking to work collaboratively rather than to ‘second
guess’. With that in mind I have been talking with my
secretarial colleagues about the prospect of up-and-coming officers
from other agencies, particularly line departments, working
in this department for a time under a scheme which I have called
the Development Opportunity Secondment Scheme. Fourth, we need
to have a strategic approach providing a longer-term vision
to government.
In short, we should see our role as seeking to ensure that
we have a whole-of-government approach to the provision of information,
the development of timely and accurate policy and the seamless
delivery of programmes. That is why whole-of-government issues
are the subject of the first major review to be undertaken by
the Management Advisory Committee under my chairmanship. There
is no higher priority for the Australian Public Service.
I want to do more to support and recognise the people who support
me. I have established a new People and Resource Management
Branch which will place a much greater emphasis on investing
in ourselves. This will involve providing on-the-job workplace
training, skills acquisition training and more career development
opportunities. The branch operates within a new People, Resources
and Communications Division that will manage more strategically
our finances, information technology, communications, and our
people.
This new arrangement is complemented by a new Management Strategic
Advisory Committee and a People and Leadership Committee. The
latter, which I chair, will focus on providing increased support
and recognition to staff and improving workplace flexibility
to allow more opportunity to balance heavy workplace pressures
with the need to enjoy a fulfilling personal and family life.
Building our resources
To undertake our role and responsibilities to a high standard,
we need resources that are structured appropriately and managed
with an emphasis on organisational performance. I will be committing
additional funding provided in the 2002-03 Budget to assist
the department in meeting the increasing policy demands associated
with the government’s strategic priority areas, in oversighting
the effective delivery of government programmes, and in taking
the lead role in the coordination of national security and counter-terrorism
policy. Further capital funding will be used to enhance information
technology, communications infrastructure and building security.
Nourishing team spirit and supporting
the community
The department values the importance of team building. By way
of fostering camaraderie and giving back to the community, the
department supported the Social Policy Division’s initiative
to volunteer to help Pegasus, a Canberra riding school for people
with disabilities. Staff used the time to undertake necessary
repairs to Pegasus property and infrastructure. In between shovelling
horse manure, stacking hay and fixing fences it was possible
to cultivate closer working relations between staff at all levels!
The department also introduced a workplace giving programme
during the year, providing staff with a simple and convenient
way to donate to one or more of their preferred charities or
non-profit groups by way of regular payroll deductions.
The department also participated in the ‘world’s
greatest shave for a cure’ in March 2003, raising a substantial
amount of money for the Leukemia Foundation. My deputy, Andrew
Metcalfe, appeared to impose greater authority once I had shorn
him. Photographs of some of the staff who participated in those
activities are featured in the following section, ‘The
year in pictures’.
Outlook for 2003-04
The coming year will be full of challenges. I have no doubt
the department will meet them with its usual professionalism.
We will continue to promote strategic, defence and security
policies that protect Australia from terrorism and promote regional
and international stability. We will provide support for the
Prime Minister in his ongoing efforts to further a whole-of-government
agenda on a wide range of national and domestic policy issues.
It is my sincere wish that, in improving the way we serve the
Prime Minister, we will at the same time be supporting, recognising
and rewarding the greatest strength of the department -
our people.
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