Canberra culture is killing local procurement: Turnbull


Joseph Brookes
Senior Reporter

Australia’s innovation sector is stronger than ever but isn’t being matched by an appetite to innovate within government, according to former Prime Minister Malcolm Turnbull, who on Friday said a “fear of failure” is restricting ambition.

Mr Turnbull said a “gotcha” culture in Canberra had created an unnecessarily conservative mindset that is permeating to policy and procurement decisions.

“In some respects, the least innovative parts of the country are in government. And it’s because of fear of failure,” Mr Turnbull said during a discussion at The Tax Institute’s Tax Summit conference on Friday.

“Public servants would rather spend hundreds of millions of dollars if not billions of dollars with large international companies than take a risk on an Australian company.”

Former Prime Minister Malcolm Turnbull

Mr Turnbull contrasted Canberra and Washington’s approach to procurement saying Australia’s much larger ally has a more innovative approach.

“Interestingly, in the national security sector, the procurement culture in Washington is much more innovative than it is in Canberra. Now that doesn’t make sense really, does it? Because obviously Canberra is much smaller than Washington,” he said.

“You think small always means agile and, you know, more responsive, and so forth, and big means clunky and slow. So it’s [actually] a cultural thing.”

Mr Turnbull said the Australian Government struggles to not only accept that some innovation ventures will fail, but also to openly declare the failures will be part of a bigger process.

Political pressure to “guarantee” the success of a policy or initiative means ministers too often take the conservative option, he said.

“What you have to do is have the confidence to say, ‘well look, it’s the best idea we’ve got,’” Mr Turnbull said.

Since leaving politics Mr Turnbull and his wife have returned to the venture capital business, backing several Australian technology startups.

He said the local innovation sector is in good shape, crediting his signature National Innovation and Science Agenda for having “fired it up” since 2015.

Mr Turnbull said his promotion of NISA was “in some ways as important as the measures” of the billion-dollar program, partly because of a fear of innovation in Australia.

“Innovation is scary for some. A lot of people hear the word innovation and they think that means ‘some kid with an iPad is going to take my job’. On the other hand, if you’re not prepared to innovate you just get left behind,” Mr Turnbull said.

“So it’s a very competitive world, it’s a very exciting time and there are enormous opportunities here [in Australia].”

InnovationAus.com conducted an exclusive survey of the experience of Australian SMEs selling to government. You can find the results of the survey here.

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5 Comments
  1. Rick 1 month ago
    Reply

    I often disagree with hat Malcolm has to say but in this case he is spot on. Any Australian company trying to deal with the government faces the same problems all the time.
    The view of the bureaucracy is that they are there to provide services and facilities at the best possible price and that any other benefit to the nation should not be considered. Why else would it be necessary to mandate Australian content?
    There again the measure of Australian content includes warehousing and local services. Australian IT companies and manufacturers are at a major disadvantage as their efficiency reduces local content and hands contracts to inefficient overseas firms.
    Good luck with the new VC operation. You could have a more important impact there than as PM.

  2. Roger Buhlert 1 month ago
    Reply

    In the main I would agree with Mr Turnbulls comments but as always there are shades of grey operating here. One of them being that the problem is associated with outsourcing public sector people and roles who may actually go to the main recipients of IT Govt work in particular and lobby accordingly for work from that side of the fence. Then there is the matter of retiring/sacked/stood aside politicians and or executive team getting jobs at the big four consultancy firms on completion of there role in Govt. This is why we need an integrity commission with one main aim to focus on the contract administration processes internally within each department

  3. Bryce 1 month ago
    Reply

    I would agree with Mr Turnbull’s statement. While failure, to some extent, is not uncommon, public servants like to succeed. They like to achieve the objectives of the task set before them. Hence, the like hire what are seen as low risk providers. Do the big four fail? Do the tech giants fail? Yes, they do. But they are seen to have depth and experience and they also succeed and they highlight those successes loudly. Or the public servant could select a smaller, potentially local, company… but have they worked with federal government? Do they have depth, both in people and resources? If things go pear shaped, and they likely will at some point, will the smaller local company fold or will they commit more resources even if it makes a lose?

    When it comes to procurement, the larger international companies are seen as safer choices. And because they have a lot of experience and can spend the money on tender responses, they also address the tender criteria better.

    All of this makes it risky and hard to justify selecting a local company, particularly one with minimal federal gov experience.
    And when/if the project fails or stumbles… a public servant who hired a large company will not get much blame, after all, their peers will understand, but the public servant who hired locally? They will be seen as a bad decision maker who likes to take unnecessary risks. Failure happens in the public service, sure, but the wrong type of failure is a career killer.

    • Digital Koolaid 1 month ago
      Reply

      Hello Bryce. Research conducted at Swinburne University opposed your personal opinion. It identified over 80% failure rates in public sector projects, including Commonwealth projects. There are a number of failure types. Total loss of all inputs is the worst; when the project is scrapped and everything is lost. Partial failure is more common. That is, failure to reach the approved end state. Schedule failure is standard. Major navy projects are many years behind approved timelines. Financial failure is fully normalised, with expenditures 100% and 200% over approved budgets found by the Audit Office. There’s a lot of articles on InnvationAus about this. Suppliers aren’t at fault and can’t fix things. The problems are on the APS side. Their “fear of failure” doesn’t exist – no downside. Failure is the default position and no reason for it to be a career killer. It isn’t.

  4. Digital Koolaid 2 months ago
    Reply

    There’s no “fear of failure” in the public sector. The public sector fails spectacularly, often and with impunity . The reason is that there is no down-side to failure. In fact, failure is a great option because success is a hell of a lot harder to achieve. There are 100 pathways to failure, and maybe 2 or 3 to success. Failure is the easy option, and when you can get the budget again next year, excuse anything at Senate Estimates, re-name the project if you need and pretend that the past never happened because you weren’t there (”Sorry Senator, I was not in the role at the time those decisions were made”) then guys – what’s not to like? There’s no “fear of failure” in the public sector. Research at Swinburne Uni in Melbourne showed public sector projects failing in the high 80s and even above 90 percent of the time. Mr Turnbull’s statement is mistaken. Failure is the best option.

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