Labor to ‘pick up and run’ with Thodey public sector reforms

Denham Sadler
National Affairs Editor

The Thodey review of the public service has been a “missed opportunity” so far, and a Labor government would “pick up and run” with its reform agenda, Shadow Treasurer Jim Chalmers says.

Treasurer Josh Frydenberg and Mr Chalmers faced off at the traditional National Press Club Treasurers election debate on Wednesday afternoon.

The Treasurers were asked about the importance of the Australian Public Service (APS) and Labor’s plan to cut government outsourcing by $3 billion over four years.

Mr Chalmers said the opportunity presented by the Thodey Review, which found that “substantive changes” are needed in the APS along with a “deep cultural change”, has not been achieved.

“I thought there was a missed opportunity out of the Thodey review during the last term of government, so I think there are opportunities to pick up and run with that agenda,” Mr Chalmers said at the debate.

“Part of that is investing responsibly in people and the APS so they can continue to deliver the high quality of services and advice that we need in this country and that Australians deserve for their taxpayers dollars.”

Shadow Treasurer Jim Chalmers

Labor last week unveiled a plan to cut government spending on contractors and consultants by $3 billion over the next four years, and to scrap the controversial APS staffing cap. The Opposition has slammed the “privatisation of the APS by stealth” through this outsourcing, and pledged to reinvest $500 million of the savings to “begin rebalancing and rebuilding the internal capacity and capability of the APS”.

Proper investments need to be made in the APS to ensure it is operating effectively, Mr Chalmers said.

“It’s one thing to respect and admire the APS, and it’s another thing to invest in its capacity,” he said.

“As part of our trimming of spending on outsourcing in the APS is an investment in the capacity of the APS in key areas where it has been especially hollowed out. We have high expectations here and so we should.

“[The APS] is one of the finest in the world and it’s got a lot to be proud of. But as governments and alternative governments we need to make sure we’re investing an appropriate amount in its capability and capacity.”

Mr Frydenberg said it’s important to not overspend in this area.

“It’s about making sure they work most effectively and efficiently, because ultimately they’re paid by the taxpayer,” Mr Frydenberg said at the debate.

The Coalition government responded to the Thodey review in late 2019, with $15 million for a rapid planning phase to transform the APS, and an audit of government ICT capability.

The Coalition rejected the recommendation to make the Digital Transformation Agency a standalone central department, and did not commit to embed its decision-making authority in legislation.

In total, the government agreed in full to 15 of the Thodey review’s 40 recommendations, agreed in part to 20, noted two and rejected three outright.

The review found that the APS was “ill-prepared to grasp the opportunities of the future” as a result of long-running under-investment in people, capital and digital capability.

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