Feb 26, 2018

Good governance must be the top priority

Poor governance of infrastructure projects is costing billions of dollars and delivering questionable benefits to the community, say guest writers Roger Taylor and Ken Coghill

Alan Davies — Editor of The Urbanist

Alan Davies

Editor of The Urbanist

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Governance, a critical issue in State transport planning, was the catalyst for a forum held at Melbourne’s Richmond Town Hall late last year. The forum was prompted by concerns that poor governance was at the heart of deficient decision-making on transport and that unless it was addressed billions of dollars would continue to be at risk on projects that deliver little value to citizens.

The West Gate Tunnel Project as a case study highlighted recent trends in declining standards of governance at the Victorian State level but there is growing concern among analysts that governance standards are declining more generally in Australia and extend to many areas with implications for all tiers of government. The cost to the community of poor or corrupt governance is profound. In Game of Mates – how favours bleed the nation, Murray and Frijters demonstrate the influence of privilege and rent-seeking across the Australian economy.

How democratic institutions ‘govern’ defines a society. The activities and processes that governments carry out, including their relationships with non-government organisations such as businesses, we call ‘governance’. The quality of governance in Australia ultimately determines our quality of life and capacity to deal with growing challenges in years ahead.

The problem is not yet entrenched but appears at times at all levels of government: too close a relationship between public officials and private corporations, unaddressed conflicts of interest, too little transparency, lazy analysis of problems – grasping at instant solutions imbued with ‘optimism bias’, manipulated supporting data, enfeebled public scrutiny. It even includes examples of outright corruption both at the political level (e.g. campaign donations by beneficiaries of government decisions) and within what used to be trusted departments of the public service (e.g. procurement fraud exposed by IBAC).

Many of the problems we face today have their roots in what can be described as a revolution in political thinking about governance in the early 1990’s. It was a time in which many of the checks and balances, often referred to as “red tape”, were removed. This was accompanied by major institutional change, which included changes in terms of employment and departmental objectives. Many institutions were abolished or substantially restructured with a managerial style that resembled the corporate world of the private sector. Much of the work that used to be carried out within government departments was outsourced. In the process, key competencies and expertise within these departments were progressively lost (much of it transferred to the corporate sector), and the ability to provide frank and fearless independent advice was reduced.

In her recent book, In search of good government, Laura Tingle quotes Ken Henry, former Secretary of the Treasury, as saying:

I think many departments have lost the capacity to develop policy; but not just that, they have lost their memory. I seriously doubt there is any serious policy development going on in most government departments.

But governance problems we are facing today are not confined to policy advice and strategic planning; they apply to all aspects of government administration.

Perhaps more fundamental however is the diminished understanding by politicians themselves of their responsibilities as elected officials in public office – that the very purpose of democracy is to serve the aggregate interests of the community, and apply the public trust principle, or public trust doctrine as it is known in the USA. This doctrine is still fundamental to the rule of law in our political system and is designed to provide checks and balances in the exercise of political power. The public trust principle applies to all levels of government and is enshrined in the Victorian Local Government Act which requires councils and councilors to act in the best interests of the community as a whole.

In a parliamentary system of government, that accountability is to the parliament in the first instance and is an important part of the checks and balances that constrain the risks of wasteful, unethical or corrupt misuse of political power and public resources.

According to this public trust principle in our common law, all holders of public office are under a public trust. Holders of public office – public officers – are those elected or appointed to exercise state sector functions. In terms of better governance, the public trust principle should be rigorously applied at every level, from members of parliament to throughout the public sector and its contractors. Those contractors include consultants engaged to advise Government and public sector agencies. Breaches of this common law can lead to prosecution for misconduct in public office.

Whilst there is no single solution to poor governance standards or malfeasance, many actions can be taken in response. In the short or immediate term, the only options are to apply political pressure by protesting/ campaigning against poorly conceived or improper actions and vote accordingly at election time. Other options include enforcing political integrity through anti-corruption commissions and banning parliamentarians from holding private sector positions for five years after leaving office. Also required is back up from other members of civil society, media and relevant institutions to “keep the bastards” honest.

For the longer term, action is required to restore the kinds of institutional checks and balances that have been lost over recent decades. Key is to restore the capacity of government departments to provide expert high quality independent advice without fear or favour, to be able to plan and administer the delivery of services they are ultimately responsible for, and to provide the necessary support mechanisms. Many actions will be required to achieve administrations with such capacity and will need a fundamental change in the political mindset.

Politicians who seek to control administrations without heeding fundamental principles of checks and balances of power are not expected to tackle this without substantial pressure for change. This pressure must come from civil society and advocacy groups. Institutions that have been set up to administer the law and its compliance by governments and other bodies can be persuasive because of their moral or professional standing. Institutions set up to act as checks on legal compliance by governments can also be used to challenge decision making which contravenes proper processes.

More fundamental changes will ultimately be required to the mindset of politicians themselves with respect to their responsibilities under the public trust principle in common law.  This applies to members of the Executive – ministers – their staff and public servants, and others empowered to act in accordance with the law. As noted above the public trust principle needs to be supported by organisations such as IBAC that oversee and monitor governance compliance at every level.

Roger Taylor is Chair, Transport for Melbourne. The Hon Dr Ken Coghill was member for Werribee, Parliamentary secretary and Speaker in the Victorian Parliament. He is an Associate Professor at Monash University

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3 thoughts on “Good governance must be the top priority

  1. hession

    Yep the Vic Govt have pretty much handed govt over to the big ‘consulting’ firms, who are all morons who steal your watch to tell you the time. The public sector are useless and riddled with corruption.

  2. Carlos Gaivoto

    It’s not only in Australia, in this “unequal and combined geographic world”, these issues are transverse and neo-liberal agenda enhanced this “state of art”. Effectively, more democratic control and enhance one of the key solution, i.g., “[…] action is required to restore the kinds of institutional checks and balances that have been lost over recent decades. Key is to restore the capacity of government departments to provide expert high quality independent advice without fear or favor, to be able to plan and administer the delivery of services they are ultimately responsible for, and to provide the necessary support mechanisms. […]”. If there is “expert high quality independent” on government departments, it will be one of the pre-condition.. but the most important is to have a mobilization of active society and to have not fear.

  3. gjb

    Outsourcing has reduced gov judgment and capabilities, they are now completely risk adverse. Management for managements sake is why we hear so much bullshit in all arenas public administration, politics and private organizations

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