Budget's changing winds favour the public service

Almost every department and agency has received an increase in resources and staffing. Average staffing levels are estimated to increase from 168,912 in 2020-21 to 174, 276 next financial year - an ASL increase of 5364. Total departmental expenses grow correspondingly. The numbers are outlined in budget paper four.

That paper includes a preface from Simon Birmingham, the Minister for Finance, that delivers high praise for the public service. He says "the APS will be at the forefront of delivering the government's agenda ... government trusts the APS as a partner in policy development, helping find practical solutions and broker reforms ...".

It is a far cry from the Prime Minister's speech to the Institute of Public Administration in August 2019. Among other things, on that date he said "the public service is meant to be an enabler of government policy, not an obstacle", and outlined a relationship whereby ministers would set policy and the role of the public service was "implementation and delivery".

Between then and now came the COVID-19 pandemic. The Prime Minister and other ministers realised that they needed to work closely with the public service and heed its advice. To be effective, the relationship needed to be more like a partnership than one of a master and a servant.

What the preface to budget paper four also reveals is the extent to which the government wants the Australian Public Service to go digital. Boosting digital and data capability is a priority - including online services, telehealth, improved functionality for the myGov portal, increased cyber security and connectivity, and a digital atlas of Australia to be made available in late 2022.

This is shown clearly in the published measure (contained in budget paper two) on the government's deregulation agenda.

Almost all of it is digital: a health products portal, data integration for fishing vessels, a new childcare website, automated data transfer capabilities for the Clean Energy Regulator, automatic mutual recognition of occupational licences, and so on. One of the initiatives is as broad and vague as "explore and promote new ways of assisting employers through regulatory technology".

Rather than less regulation, the agenda is mainly about reducing the burden of regulation by making it more digital.

The implication for public servants is that they can continue to regulate, provided they do it digitally.

The preface is a broad-brush outline of the government's goals for the public service, including skills development and diversity. It may not have started off with that intention, but it has emerged as a useful complement to the Public Service Commission's State of the Service report. The former is about targets and directions, the latter reports on how things are.

A disappointing aspect of the preface, however, is the discussion on diversity. The three groups identified are Aboriginal and Torres Strait Islander people, people with disabilities and women. There is some, albeit slow, progress being made on the first two groups, and women are now a majority of the APS and reaching parity at senior executive levels. All of that is welcome.

There is, however, a missing part of the diversity picture: people of Asian or African descent. Asian-born people are around 12 per cent of the Australian population, almost certainly more when numbers come out after the census. Yet they have nothing like this level of representation in the senior ranks of the APS. It is a blind spot in the APS that should be addressed.

This is a budget that sees government payments as a percentage of GDP reach an estimated all-time peak of 32.1 per cent this financial year, 2020-21, and remain above 25 per cent of GDP for the whole of the forward estimates period. That is, government spending accounts for more than a quarter of the Australian economy for the foreseeable future.

Some of this is due to the pandemic, including $1.9 billion over five years to purchase and administer vaccines, additional funding (the amount not disclosed to protect the government's bargaining position) for the purchase of Pfizer vaccines, and additional funding for the states and territories under the COVID-19 national agreement.

These are, however, only a few of a raft of measures seemingly targeted at almost anyone the government can think of, from pre-schoolers through to aged care, mental health, roads, training, women's safety, brewers and distillers, the list goes on. There are almost no offsetting savings - that is, existing spending programs have been maintained.

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This is all financed by debt, with net debt forecast to peak at 40.9 per cent of GDP in 2025 before declining slowly to 37 per cent by 2032.

Alarm about debt and deficits - does anyone remember how agitated the Coalition was when net debt reached 10 per cent of GDP under Labor? - has disappeared. And that is reasonable: what recent budgets have demonstrated is that debt is nowhere near as important an influence on our standards of living as the underlying performance of the economy.

The changed attitude to debt, coupled with the experience of dealing with the pandemic, means the Coalition is now a party of big government. It wants an active and effective public sector.

This represents a significant realignment of where the political parties stand. While likely inside the Coalition there are still parliamentarians and party officials who would like to shrink the public sector, they are not calling the shots. Labor remains committed to supporting the public service.

This means the public service can expect growth in future budgets as well, under either the current or an alternative government. There's a bumper sticker there somewhere: "Public service: big and digital", perhaps?