Since its election in October 1992, the Kennett Government has demonstrated a highly distinctive approach to public policy and managing the public sector. One of the key characteristics of the Kennett Government is that the accountability of public managers and policy advisers to the Premier and his political executive has, by a variety of devices, been greatly reinforced. At the same time, however, there has been widespread concern in the community that other forms of accountability in Victoria have diminished. This situation has already led to what many would regard as serious consequences for several areas of public policy.

This paper explores how the Kennett Government has redefined accountability in Victoria. It focuses on changes to public administration, identifying evidence of change to accountability in four areas the organisation and staffing of the public service, grievance and appeal mechanisms, access to information and the reconfiguration of executive power. In doing so, the paper draws some conclusions about the state of accountability in Victoria and questions whether the new accountability paradigm implemented by the Kennett Government will necessarily deliver better outcomes.

Introduction

I am very pleased to be a participant in this national conference on 'Liveability'. However, I must emphasis that I stand before you not as an urban planner, or an architect, or a local government representative, or even as a developer! I am none of these, I'm afraid, being a management academic with an interest in the Victorian public sector. I have thus naturally been fascinated by developments since the election of the Kennett Government in October 1992. This in turn led to research with colleagues on a number of the changes brought about by the incoming government which culminated in a book, The Contract State: Public Management and the Kennett Government.(John Alford and Deirdre O'Neill (eds) The Contract State: Public Management and the Kennett Government, Deakin University Press, Geelong, 1994)

IIn The Contract State we argued that the Kennett Government had set about to revolutionise Victoria's public sector and concluded that this goal had been achieved within a very short space in time. At the core of this revolution, we suggested, was a belief in market mechanisms and the benefits these were assumed to bring. These market mechanisms werepursued via a variety of means, but a principal device among these was the contract. Under the Kennett Government, contracts have replaced previous arrangements for the employment of senior public bureaucrats and the provision of many public services, and facilitated the introduction of casemix funding in the health sector and Schools of the Future, to name but a few examples.

The appeal of the contractual form to government is obvious. Contracts appear to address many of the deficiencies traditionally associated with managing the public sector. Supporters of contracts claim they bring a more business-like approach to the management and delivery of public services. By introducing market mechanisms into the public sector, they argue, contracts provide an incentive structure which would otherwise be missing, make responsibilities and accountabilities far more transparent, and eliminate or at least reduce the possibility of policy making and resource allocation being captured by vested interests. In short, contracts appear to offer a simple and uncomplicated answer to much that is wrong in the public sector.

To the Kennett Government there had indeed been much that was wrong in the way the public sector in Victoria was managed. The traditional Westminster model, which guaranteed public servants security of tenure and protection from arbitrary dismissal, was deemed to be at least partly responsible. To the Kennett Government the traditional model of managing the public sector was inflexible, inefficient, unaccountable and in need of replacement. According to this critique, a new model of public management which would resemble far more the management style of the private sector, employ far fewer staff and ensure greater accountability was required. The Kennett Government thus came to office with very clear plans for how it would manage the public sector and it lost no time putting these plans into place. (The legislation which revolutionised the public service in Victoria was before the parliament within a month of the Kennett Government's election along with other key legislation such as the Employee Relations Act and the State Owned Enterprises Act. It was then rushed through before the Christmas recess, involving all night and weekend sittings.)

Since 1992, the public sector in Victoria has been transformed in ways that will be difficult to reverse. The most obvious change is in the size of the public sector which has been dramatically reduced by around 50,000 (Nicole Brady: 'Slashing 50,000 PS jobs is biggest landmark: Kennett', The Age, 3 October 1995). This reduction has not only been achieved by what is fashionably termed 'down-sizing' or 'right-sizing' - euphemisms for redundancies, retrenchments and early retirements. The declining size of the state's public sector is also accounted by the ambitious privatisation and outsourcing programs aggressively implemented by the Kennett Government. These programs have seen the longstanding, and in many respects pioneering, role of government in Victoria as both producer and provider of an extensive range of goods and services irrevocably altered.

Behind many of the changes in Victoria has been a professed concern for public sectoraccountability. Poor accountability, it was argued, led inevitably to the worst excesses of public management - bloated bureaucracy, timeserving staff, low productivity, inefficiency and so on. The theme of accountability thus permeated much of the new Government's rhetoric, with improved accountability the justification for many of their more unpopular measures. As the Premier advised the Parliament at the time, 'the government makes no apology for making itself accountable, nor for introducing accountability into the public service'(Victorian Parliamentary Debates, Assembly, Vol. 409, 27 October 1992, p.8)

The Kennett Government and Accountability

Many actions of the Kennett Government demonstrate how it differs from other governments in its definition and application of public sector accountability. The almost perpetual discourse in the media about matters of governance in Victoria is a constant reminder of this. However, it is not possible in this paper to discuss all of these in any detail. Instead, I propose to examine one initiative which I would argue tells us a great deal about public accountability under the Kennett Government. At the time it was introduced to Parliament in October 1992 as part of what one observer termed 'a blitzkrieg of guillotined legislation'( Bill Russell, 'Corporatisation takes shape', Directions in Government, vol.16, 1993),the Public Sector Management Act attracted little attention. After all, it was alongside the Employee Relations Act and the State Owned Enterprises Act. However, in its own way, the Public Sector Management Act was just as significant as these other pieces of legislation.

With the Public Sector Management Act, the Kennett Government signalled its intentions to restructure the accountability framework in the public service. It did this in a number of ways. Amongst other things, the new legislation created mega-departments, reducing the number of such agencies from 22 to 13. The Public Service Board, the statutory authority responsible for the independence and integrity of the personnel management function across the public service, was abolished. It was replaced by a Public Service Commissioner with much reduced powers, the more significant Board powers having been distributed between the Premier and the heads of departments. The Act also dispensed with the concept of tenure for senior public servants, replacing it with contract employment for all chief executives and senior executives. These contracts required only four weeks notice on either side and made the Premier the employer of all departmental heads, while departmental heads became the employers of all other staff. Performance based pay, which had been applied in a limited sense previously, could now constitute up to 20% of salary.( Deirdre O'Neill and John Alford, 'The New legislative Order', in Alford and O'Neill (eds) The Contract State, op. cit. pp 24‚25)

These changes did away with the traditional model of public management. The clear line of accountability from departmental secretary to minister which had characterised the old model was now complicated by two developments. First, the Premier's role as the employer of all CEOs (with the power to hire and fire them) suggested that CEOs were now at least in part accountable to the Premier as well as the minister or ministers formally responsible for an agency. This impression was reinforced by the creation of the State Coordination and Management Council, (SCAM), comprising all departmental CEOs and chaired by the Premier (The unfortunately acronymed SCAM has been called 'the Black Cabinet' by some bureaucrats who see it as an extra level of executive control). Second, the new mega-departments now usually had several ministers with no formal identification of who among these was to be the senior minister as was the norm in other jurisdictions.

But the development which created the greatest concern in terms of accountability was the replacement of the principle of public service security of tenure with contract-based employment. Permanency, which had long been understood to be a precondition of delivering 'frank and fearless' advice to government, was gone, replaced by employment contracts with a maximum term of five years. In the case of departmental secretaries, it was the Premier who would now decide if a contract was to be renewed or not. Departmental secretaries exercised this power in relation to their senior executives. There was no longer a Public Service Board with statutory powers to ensure consistency and equity in HRM matters across the service and to exercise an important role as one of the checks and balances against executive excess and interference. The Board's replacement, the Public Service Commissioner, had much reduced powers and limited annual reporting obligations. Grievance and review mechanisms for a range of matters across the service were either abolished or watered down.

In all, the Public Sector Management Act increased the accountability of the public service to the political executive, in the person of the Premier, and the departmental heads. This was achieved primarily through the carrots and sticks implied by the new employment contracts. The carrots in this case were generous provisions for performance-based pay and rehiring at the conclusion of the contract. The sticks were early termination or non-renewal of the contract and little or no performance pay in the event of under-performance.

The enhanced vertical accountability of public servants under the 'Pulic Sector Management Act'contrasts with the perceptions of diminished accountability to other stakeholders in the public sector. As already observed, the Public Service Commissioner has much reduced powers compared with the Public Service Board, and public servants have generally less job security and limited options in the event of grievances. Like a number of Kennett Government legislative initiatives, the Public Sector Management Act also amends the Victorian Constitution to limit access to the Supreme Court to redress grievances.

In other legislation, the Government has amended Freedom of Information legislation to restrict access to government documents by expanding the categories of exemption. When considered in conjunction with delays in responding to FOI requests and increased charges for using FOI suggest that the spirit of the legislation is no longer matched by the manner of its implementation (if indeed it ever did). Commercial confidentiality clauses are invoked to shroud much government activity from public scrutiny. Included in this approach are the contents of senior executive contracts. These contain key performance criteria which is oftenhighly indicative of Government priorities and intentions. (An example of this is the employment contract for the Secretary of the Department of Premier and Cabinet, Elizabeth Proust. A copy of this contract was obtained by the Opposition under freedom of Information legislation prior to the last election, It revealed that a key performance target for Ms Proust, if she were to enjoy the 20% bonus at the end of her contract, was to further massively reduce the Victorian public sector. The Government disowned the contract). Confidentiality clauses and attempts to prevent disclosure of employment contracts preclude public scrutiny of such priorities and intentions.

Accountability Redefined?

The basic proposition of the Westminster model is a set of relationships; between public servants and ministers, between ministers and the Parliament, and between Parliament and the people. Running through all of these relationships is a continuous thread of accountability predicated upon the notion that governments and those who work for them should be answerable for all actions taken by them.

One of the best known conventions of the Westminster model is the doctrine of ministerial responsibility which asserts that ministers should be responsible to Parliament for all actions by them or taken on their behalf. The practical application of this doctrine might be argued to have declined in recent years, being invoked more as a matter of political expedience rather than as an acknowledgment of moral culpability. However, changes in Victoria under the Kennett Government suggest that further weakening in this area is now possible. The creation of multi-ministerial portfolios, for example, does not seem designed to enhance ministerial responsibility. Where a portfolio has two or more ministers administering it, which of these will carry the can when things go wrong? And what are the reporting lines of the departmental secretary where there are multiple ministers?

While ministerial responsibility is at the heart of the Westminster system, it is not the only form of accountability within the model. Other forms of accountability, which are lateral rather than vertical, also exist. Some of these, such as the Auditor-General and the Ombudsman, are associated with the workings of Parliament. The Kennett Government's hostility to the current Auditor-General is well documented as are the Auditor-General's views of the possibility that he will have to compete with private firms for auditing work in the public sector. It is difficult to see how the proposed changes to the Auditor-General's role will do other than diminish the capacity of the Auditor-General's Office to hold the executive branch to account. To many, the current furore surrounding the Auditor-General reflects an intention to weaken the form of accountability his office represents.

In contrast to the Auditor-General, the operations of office of the Ombudsman under the Kennett Government have been relatively lowkey. However, there are signs that this function also may have been hindered rather than helped by the Government. Under the Kennett Government, the position of Ombudsman remained vacant for over 12 months and the Ombudsman's annual report - a key event for the Parliament - is now habitually overdue on account of funding shortages. Obviously, neither a prolonged vacancy at the top nor a lackof appropriate funding levels is going to assist the Ombudsman in making the executive accountable.

Governments are also made accountable by their own legislation. When governments legislate for EEO, they generally require their own agencies to observe the standards specified in the legislation in the same way that a private sector organisation would. In this regard the Kennett Government has a mixed record. When the Equal Opportunity Commissioner criticised decisions by the Office of Corrections to move female prisoners into a fairly unsuitable all male prison, the Government made it clear it had little confidence in her and moved to abolish her office (See Moira Rayner's recent book Rooting Democracy, Allen and Unwin, St Leonards, 1997, pp 21-26). When the Director of Public Prosecutions considered bringing charges against the Premier for comments made in relation to a serious case that was due to come before the courts, the response was unambiguous. Such independence in the exercise of statutory duties was not acceptable and before long moves were afoot to make the DPP's job untenable.

The courts constitute another element within the accountability framework. Many government actions can be challenged in the courts but the Kennett Government's response to this has been to reduce access to the Supreme Court in a number of circumstances. It has done this by a welter of amendments to the State Constitution. The response of the Premier to suggestions that these limitations in effect reduce accountability options is to refer to similar actions by preceding governments. However, it is thought that the number of such amendments by this government is rather more numerous than those of the Cain or Kirner Governments. Judges in Victoria have also felt the wrath of the Government in speaking out against Government policy and actions. The right of the judiciary to speak without fear or favour on matters before the courts is essential if the independence of this arm of government and its role as an accountability mechanism is to be preserved. However, individual judges whose comments have been perceived as critical of Government policy have been themselves subject to considerable criticism by the Government and in one case a resignation of a senior magistrate followed.

The final accountability mechanism which should be mentioned in this paper is the Parliament itself. In a Westminster system, Parliament is regarded as the pre-eminent institution, but in Australia it has been fashionable to describe Parliament as an institution in decline, a rubber stamp for overbearing governments. The exceptions to this have been those Parliaments which have been able to demonstrate a degree of independence. The Senate of the Commonwealth Parliament springs to mind as an example of this. However, in Victoria, the Kennett Government enjoys large majorities in both houses of Parliament and faces a divided and demoralised Opposition. Parliamentary sitting days in Victoria are not numerous. When the business schedule of the Parliament becomes crowded, the devices of the guillotine and the gag are freely used. The overall effect is to reduce the capacity of the Parliament to scrutinise, monitor, review or constrain the activities of the executive branch in any meaningful way.

Conclusion

What emerges from the examples discussed above is not that the Kennett Government is unaware of, or indifferent to, the importance of accountability, but that it is defining it in a fundamentally new way. Accountability in our system of government has traditionally been multi-dimensional with accountability to Parliament paramount. In Victoria, under the Kennett Government, accountability is now largely defined in terms of accountability to the political executive, and in particular, the Premier. Other forms of accountability, the checks and balances essential to provide balance and prevent executive excess, have been weakened. This trend is consistent with the Premier's view that:

The single most important lesson of our experience is that governments must have confidence to stick to the directions they have mapped out. They must not vacillate at the whim of every interest group'(The Hon. Jeff Kennett, 'Breaking the Political Mould: Strategic Governance for the 21st Century', speech to the Asia Society, New York, 16 February 1995).

However, the strategy of the Kennett Government in pursuing the goal of strong executive government with minimal interference from other quarters is not without significant risk. The new arrangements in Victoria place a heavy reliance upon the Premier and his ministers to make the right decision in every case. But this is an unrealistic expectation. Governments of all political persuasions make mistakes which need to be corrected if the communities they serve are to have confidence in the political process. To do this the community must have access to a number of avenues where their grievance can be meaningfully expressed and addressed. It is not sufficient to rely upon the infrequent electoral process to redress unpopular or unjust actions by government. The accountability mechanisms discussed in this paper should not deprive any government of the capacity to govern. But they should be enabled to perform an essential and legitimate role in the complex web of relationships between a government and its citizens. Without this role good governance, which is a prerequisite of modern open societies, becomes a forlorn hope.

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