The economics of government service failure

Today I want to cover a topic that I have not discussed previously. I have often thought about posting on it but it wasn’t until I had a discussion on another thread that I realised how important the topic might be for others.

The catch cry of the public is “why does the government waste so much money”. The simple answer is that “there is no mechanism within the governments internal systems that requires and/or rewards financial efficiency”.

To a person who has never worked for a government bureaucracy these words may seem like blasphemy, but to those who have they will probably ring true. Let me explain.

Firstly there is a broad underlying conflict with the government’s mandate towards the public in terms of economic credentials. On one hand you have an underlying bias of the public to complain about overall government spending such as this piece from Gittins! . This however is in direct conflict to the public’s other bias which is to demand increase spending to them individually. This is well understood in the aisles of government and plays a big part in shaping policy decisions. It also plays a big part in the PR spin around economic management.

That however is not the biggest issue.  There are far greater problems.

The leaders

The public seem to have a misguided  misconception that the minister of a government portfolio has in-depth knowledge of it. This is in fact very rarely the case. The minister for roads is rarely a civil engineer, the minister for human services a social worker, the minister for innovation and software specialist. This is sometimes not the case in business either, but the difference is that business leaders who may not have the content knowledge are usually selected for their previous history in running enterprises successfully. Government ministers on the other hand are selected from a pool of people who got their jobs in a popularity contest.

This lack of content/operation experience means that in most cases the person who is supposed to be at the helm of the ship doesn’t even know what a ship is. There is an expectation from the public that this person is “in charge” but the reality is most ministers don’t have a clue about their portfolios above a basic level, and due to this lack of operational experience they flounder badly when trying to deliver long term outcomes. Most don’t bother and simply defer to their bureaucracies in expectation of postive outcomes which in their minds is “good news” in the newspapers.

The bureaucracies

Government departments are run in the most part by long term public servants. Many have worked their way through the system and have little private enterprise experience, however that is not the real issue. The biggest issue is that the reward structures within the government and private industry are very different because the goals are not the same. In private industry the goal is higher profits, in government it is good public relations. If you think about any project/program within a private company, with the exception of compliance,  the underlying premise is that it will in someway improve the profitability of the company. If it does not then it will probably not get past “concept” stage as the business case will not stand up to any rigorous debate.

However within the government money is not a mechanism of reward, therefore decisions made by the government very rarely list economic efficiency as a required outcome. The ultimate positive outcome for a government department is a happy minister which means delivering them two things; whatever they want to hear and good press. So the bureaucracy as a whole isn’t rewarded for economic efficiency or for that matter actually delivering a good service. The department is rewarded for making sure nothing bad is said about the minister in the newspaper and that the minister themselves believes the department is trying to deliver a good service to the public. Within any department there are huge numbers of people whose only job is to determine what makes the minister happy and making sure he/she stays that way at all costs.

The outcomes

So now you can see the problem. The public thinks the minister is running the show, the minister is pretending that they are, but are really deferring to the bureaucracy whose only real job is to make sure that the minister’s name only appears in the media as part of a “good news” story. You will notice that absolutely none of these things have anything to do with money,  in fact the departments themselves have a vested interest in delivering a service that is “just good enough” because there is no reward for any higher level of service.

This paradigm is prevalent at all levels of the public service which itself has no built-in financial reward mechanism for working harder or smarter or more efficiently. I believe this stems from the fact that the government does not want to be seen to being financially corruptible, but what is actually does is creates a wage structure that rewards the guy who does nothing the same as the work-aholic. In many cases the person who is actually good at their job is held back while the inefficient are promoted upwards, because once again nothing in the system supports financially motivated reward. Public servants cannot be rewarded with money, or anything that comes close to being like money,  they therefore have little incentive to worker harder or smarter than a minimum standard. The bureaucratic structure is made worse by rewarding higher level public servants with salaries based on the number of staff that report to them not how efficiently or effectively they perform their duties.

It all sounds crazy, because it is. In my dealings with the public sector I have seen many knowledgeable technical people ( engineers, accountants , project managers ) literally have mental breakdowns trying to navigate the system in an attempt to deliver what they believe to be a rational outcome which ultimately fails. The simple reason being that they were trying to deliver an outcome based on economic efficiency to a system that can see no value in such as thing.

The public service will pay lip service to private sector ideals; each business area will do a business plan, program areas will do program plans, there will be strategic plans and operational plans etc etc. But in my almost 20 year dealing with the public service I have never seen one implemented and I certainly have never seen one where financial efficiency gains were a perform measure.

This is the same for the government’s external dealings with service providers.  Non-government organisations are funded to provide services on behalf of the government. This is done in the name of “efficiency” but it has little to do with it. The real reason is that by shipping the service provision to an NGO the government has some separation between itself and the risks associated with actually delivering a service.It also gives the associated minister the opportunity to get lots of media time with a multi-million dollar announcement for the private sector. Most government departments claim to use “output based funding” models, however the reality is that they actually have no internal systems to record and/or report on such things and in many cases there are legislative restrictions on their capacity to do so once they have outsourced a service.

With the ministers having little idea about actual service delivery and the department being  rewarded for providing “just good enough” services the system regularly breaks down. As soon as the media runs a story about a government bungle you get a true display of how the system actually works. The minister quickly announces an inquiry which ultimately he/she has no ability to perform because they have no operational knowledge of what their department actually does. The department goes into damage control with internal investigations which take hundreds of public servants to document whatever they are directed to report happened. Ultimately the same minster, who has no idea how to actually deliver what they are promising the public,  rewards the department with more funding so that is can return to providing the same level of “just good enough” service, this time with even more public servants and more funding.  It isn’t difficult to find examples of what I am talking about , just search google for “government failure enquiry additional funding”

The losers

Ultimately anyone who thinks the government is capable of providing an effective and efficient service will be disappointed. Anyone who is relying on it to is in real trouble. As I explained above the government is incapable of delivering such an outcome because it has no internal reward mechanisms that gives it the ability to do so. The best outcome that can be expected from the current system is the “bare minimum” with constant lapses into complete failure.

The winners

Surprisingly there are some winners in this. They are the companies who understand how the government actually functions and are able to exploit it for their own financial gain. The most profitable enterprises are those who are lucky enough to catch the government coming out of a crisis with the money cannon ready to fire. In these cases the government will quite literally promise anything to the public, so any company who can convince the government that they can deliver on that promise will be rewarded.

I have seen a number of large firms paid hundreds of millions of dollars by government departments because they said they could deliver on what the minister promised the public coming out of a crisis. Do you think they delivered on time and on budget ? Nope. Do you think they actually delivered on the promise ? Nope… Did they make lots of money? Obviously. How hard is it to be profitable when the acceptable outcome is “just good enough”?


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Comments

    • Hi Gordon,

      well it is a difficult question because I think the public needs to clear up its expectations of government services.

      There has long been a push to provide “econmic effeciency” in the government, which has led to outsourcing and as Manorina rightly points out these often end in utter failure.

      The reason is that the government provides many services that simply could not be provide by the private sector because they are basically not profitable enterprises, and in many cases trying to make them so would be in direct conflict with their expected outcomes. Think welfare services.

      So my first question would be “does the public actually want financially efficient public services?” and if so “does it actually understand what it is asking for ?”

      If the answer to both those questions is Yes. Then there would be a need to push efficiency based financial rewards system into the public sector. This is however not a trivial exercise as there is massive amounts of legislation at all levels of government to stop just this thing.

    • Simple answer Gordon.. VOUCHERS.

      Instead of providing budgets directly to health and education bureacracies, provide vouchers to individuals which go towards health and education services.

      By allowing the end consumer of the goods to have some say, and be able to ‘vote with their money’ by spending it where they choose, it would force public enterprises to reform and innovate, or perish.

      At the moment, those bloated and inefficient public enterprises just try to get by without bad attention or criticism, and they are guaranteed their ever-increasing annual budgets.

  1. Nice Openner,
    “Why does the government waste so much money”
    Can I have ago..
    ‘Cause a miss-guided private sector ,has a coyote moment…and Parachutes aren’t cheap..
    Arr..sorry thinking of something else ..Did you mean in General..cheers JR

  2. Thanks for giving us a glimpse of some of your ideology which is basically all this article is.

    There are many functions in our society which are a natural monopoly and the provision of essential services is most often in this category.The past and current ideology of privatization of these functions has resulted in a lot of money being made by certain elements in the corporate sector but usually zero improvement in the service and also an increase in costs.

    A good example of this is the privatization of electricity retailing in QLD (and other states) which has enabled criminally corrupt and incompetent corporations to rip off the citizens facilitated by an equally corrupt and incompetent state government.

    The previous system of a government owned and operated electricity generating,distributing and retailing system worked well and at much less cost and complication.

    There is no intrinsic reason why a government run essential service in an area of a natural monopoly can’t be made to be reasonably efficient and effective.In fact,such a service is much more responsive to public input because of the political connection via the minister and ultimately the ballot box.

    • >Thanks for giving us a glimpse of some of your ideology which is basically all this article is.

      I assume by this you are suggesting that I believe everything in the public service should be outsourced.? This is in fact the wrong conclusion to make, but is also not the point of the post.

      The intention of this article was not to push a certain agenda. It was to inform a discussion about the economics of providing public services by discussing the reward systems built into the current system.

      I suspect that people who have never worked at the higher levels of the public service were not even aware of how the system works, so this post was to highlight that.

      >There is no intrinsic reason why a government run essential service in an area of a natural monopoly can’t be made to be reasonably efficient and effective

      Actually there is as I have explained above, but that depends on your definition of “reasonably”. Is that “just good enough”?

      Your statements do however highlight the public issue with government service provision. Many of the public’s expectations on government services are in direct conflict with each other, which was the point of the first paragraph.

    • You yourself admit that the government is criminally corrupt, and yet you think they should be in charge of electricity ?

      Whenever a private-public partnership is setup, you shouldn’t blame the failed outcomes on privatization. After all, it is a heavily regulated environment with huge government ownership of resources, so its far from a free market outcome.

  3. My first response DE: Bazinga. You hit it on the head without resorting to the usual “government is crap – markets are perfect” line we hear so often.

    The last couple of paragraphs got me thinking immediately about McMillan Shakespeare (MMS) = no I don’t own any, and they are far too expensive to consider owning = but they perform the majority of the QLD gov’t HR/payroll functions (in terms of the fringe benefits that a lot of public workers get in exchange for lower wages).

    Extremely profitable company that knows how to game the government system.

    You point about government ministers is apt: I’d rather see ministers voted US Cabinet style from a pool of candidates vetted by the Senate.

    How can an MP possibly be a good Departmental minister AND provide a voice for his local electorate?

    Anyway – no simple answers. Great post.

  4. Great article.

    All initiatives are somewhat trial and error operations, as none of us has perfect foresight, government or private.

    In small business it’s a lot of trial, and mostly error, as private individuals have no more foresight than government employees. However in small business the errors are quickly weeded out through lack of profit. The successes live on and bring great benefits to all.

    In big business unaided by government errors are still weeded out, if somewhet more slowly.

    In big business aided by government through bail-outs and the like, the errors proliferate and magnify.

    In government the errors proliferate unless constrained by some other means, such as the need to tax the private sector or to borrow from the private sector at interest (i.e. no QE).

    Also, the larger the government grows, the larger the big businesses that rely on government grow, forming a very unhealthy symbiosis.

  5. DE, another good discussion though everybody could more and less get same understanding yet more entertained by watching the good old “Yes, Minister” and “Yes, Prime Minister” TV series.

    Most people understand that you cannot expect public services to deliver performance with both great effectiveness and efficiency, heck..you’re lucky if you get either one in every governments in the world.

    However, though we cannot compare public service’s performance with private sector – we also cannot ignore the fact that some government / public service regimes are more effective and/or efficient running the country than the others. In this case, I could only say Singapore government / bureaucracy comes to my mind when talking about public policy effectiveness, budget efficiency / prudent spending / low waste and low corruption level. The state’s small size and small population may help in this case but I expect the “underlying culture” of the people which is more self-sufficient / self-reliant and not having too much expectation on govt’s welfare also plays a role in their high performance.

    As you mentioned, people cannot have both high expectation on government services on everything (e.g. welfare, hand-outs and general services) and same high expectation on efficiency. Singapore’s government can be more efficient running the country because its people don’t expect too much other than standard government roles like provision of state defence / policing and public infrastructures which provide less opportunities for stuff-ups, wastes and corruptions in service delivery. The people though don’t feel missing too much because the government runs efficient budget and needs only low-level taxation that translates to more incomes kept by the people.

    I guess this just shows different cultures of different people between self-reliant preference or wanting govt to take care everything.

    Just my 2c.

  6. Ahh Singapore – if I can quote Lee Kuan Yew:

    “In a different world we need to find a niche for ourselves, little corners where in spite of our small size we can perform a role which will be useful to the world.

    To do that, you will need people at the top, decision-makers who have got foresight, good minds, who are open to ideas, who can seize opportunities like we did…

    My job really was to find my successors. I found them, they are there; their job is to find their successors. So there must be this continuous renewal of talented, dedicated, honest, able people who will do things not for themselves but for their people and for their country. If they can do that, they will carry on for another one generation and so it goes on. The moment that breaks, it’s gone.”

    • Yeah Prince, Henry LKY is legendary politician not only in his country but in the world. That’s why despite its less than flattering record on democratic / political rights for its people, most people agree that the Singapore’s government has done reasonably good job, especially under his leadership. I could not vouch for the next leadership succession though.

    • Ahh the ‘efficient Singapore hypothesis’.

      If it wasn’t for them laundering Straits of Melacca proceeds and stolen Indonesian oil money, Singapore would be poorer than Malaysia.

      Anyone who has worked there knows of the complete myth of the ‘Singapore work ethic’.

      The average Singapore private sector worker has less work ethic than the average Australian public sector worker. They may be in the office between 9am to 9pm, but that involves 2 hour lunch breaks, 2 hours on the phone talking to friends and more idle behaviour. Twelve hours in the office is due to the culture of ‘Kiasu’ than dedication and work ethic.

      As far as corruption goes, its dynastic nepotism is glaring. It’s more of a personal fiefdom than anything else.

      But, it works for the local populace, as long as that luandered money gives them their bread and circuses, they’ll remain passive.

      • I know about the story of dodgy funds coming from corrupt Asian officials (read Indonesian & Malaysian) and maybe it’s true. But, that does not dilute the fact that the Singapore government managed to bring it from poor and little trading hub in 1960s (after independence from Malaysia) to such advanced, modern, clean and efficient society in current days. Even if the story about the dodgy fund is right, you cannot deny that their economic development is astonishing with such modern electronic manufacturing in the 70s that have evolved more into regional trading and financial hub industries in current days. This is not something to be considered easy / trivial for any government regime.

        Look I am not promoting Singapore government here and I’m not a Singaporean but everybody with un-biased view will see what I mentioned above. As for working ethics, you cannot say some rotten examples you saw / experienced in the past as real situation in general much like you cannot make similar assertion for lazy /in-efficient public servants in most other countries. I may not live there but from my extensive visits in the last 10-15 years, I could see a society governed effectively and efficiently with limited waste /corruption and low taxation and that’s top game for me.

        Ask everybody travelling there, how’s their perception on Changi Airport and Singapore Airlines ? Not to bad-mouth Australia here, but I think even you can see that Sydney Airport (or any other airports in Australia) and Qantas are not their match in terms of effectiveness and efficiency of services.

        • “Even if the story about the dodgy fund is right, you cannot deny that their economic development is astonishing with such modern electronic manufacturing in the 70s that have evolved more into regional trading and financial hub industries in current days. This is not something to be considered easy / trivial for any government regime.”

          It is easy when the government is authoritarian and a great amount of money comes from laundering piracy proceeds and oil money. Considering this only has to shared amongst 4 million citizens is why there is a lot to go around, thus it appears, and is, prosperous in a material sense. Much like Luxembourg, but it’s analagous to listening to people argue about bermuda aas a reason to have no/low tax.

          Bermuda, Luxembourg and Singapore couldn’t and can’t fund an education system that underlies it’s operative and lifestyle standards.

          The first two accomplish by enticing expats by being a tax haven, and Singapore does it by billions of dollars of other peoples money.

          —-

          “for working ethics, you cannot say some rotten examples you saw / experienced in the past as real situation ”

          This wasn’t a few rotten apples, this was the norm.

          “I could see a society governed effectively and efficiently with limited waste /corruption and low taxation”

          Well it isn’t really governed, that might be a point, there are very few government services. The rest is user pays.

          “Ask everybody travelling there, how’s their perception on Changi Airport and Singapore Airlines ? Not to bad-mouth Australia here, but I think even you can see that Sydney Airport (or any other airports in Australia) and Qantas are not their match in terms of effectiveness and efficiency of services.”

          Singapore Airlines is heavily subsidised, much like Qantas used to be prior to keating floggin it off.

          Back then, Qantas was a complete standout in global standings, and in fact SG Airlines used to buy Qantas’ second hand planes.

          Thus, when the playing field was even, we did it better, pretty much like everything else in comparing Australia and Singapore.

          Remove media scrutiny and offer the highest wages for our politicians, and you’ll get Singapore style governance standards here too. Considering we wouldn’t require to launder other people’s commondity/energy, we’d go alright attracting talent.

          And well, Australian airports are attrocious all round, that’s what privatising a monopoly will do. Compare Changi to something like KLIA and you’ll get a better standing of this Singaporese efficiency, considering how notoriously inefficient Malaysians are.

          • Sorry for off-topic discussion here, but I mentioned Singapore before only as example of what IMHO as comparatively better government model and not to defend it on its other vices, if any. Therefore, this will be my last reply on the issue.

            It is easy when the government is authoritarian and a great amount of money comes from laundering piracy proceeds and oil money.

            I guess it’s fair to say we have different take on this as I have already written above. As people observing from sidelines, it is usual to feel any achievement / result as “easy” to get.

            This wasn’t a few rotten apples, this was the norm.

            Again, this is just your word against mine though as the one making assertion, to be fair the onus should be on you to provide objective reference to back it up.

            Well it isn’t really governed, that might be a point, there are very few government services. The rest is user pays.

            Agreed and and this model is working well there as I mentioned. IMHO, low taxation and less services are better than big government model with much waste and corruption / rent-seeking.

            Singapore Airlines is heavily subsidised, much like Qantas used to be prior to keating floggin it off. Thus, when the playing field was even, we did it better, pretty much like everything else in comparing Australia and Singapore.

            Again, this same accusation is always given to SIA and Emirates in the past though they always deny and back it up with their own arguments. Though I don’t have enough info to disprove it, I doubt you’d have something solid to prove it either.

            As observer on sideline, I could see the most obvious difference between the successful SIA / Emirates and dodgy Qantas is the existence of strong union power in their workforce. Based on this issue alone, I would not be surprised to see such difference in performance.

            Remove media scrutiny and offer the highest wages for our politicians, and you’ll get Singapore style governance standards here too.

            That’s a bit ironic because I see a lot of examples pollies being too happy with media attention in Australian politics. Maybe it’s only me. In terms of politician’s compensation, not sure though how Australian MP’s compared to Singaporean MP’s but most Australian I think would agree that currently the MPs have been more than generously remunerated to do their job. Again. maybe it’s only me who think like that.

            Considering we wouldn’t require to launder other people’s commondity/energy, we’d go alright attracting talent.

            That’s another irony that considering Australia is blessed with abundance minerals / energy – the performance level of its MPs are a bit lacking especially in the last couple years. Maybe the problem is not about attracting talents, but the shortage of the talents. You can check with Boganomics article tomorrow 😉

            Compare Changi to something And well, Australian airports are attrocious all round, that’s what privatising a monopoly will do.

            IMHO it’s relative, for example you could see the contrast between the result of privatisation of Telstra and SingTel.

      • An Aussie Expat in Singapore

        Quite right – My observations of the huge hours Singaporeans put in at the office are that it is all about ‘being there’ – not actually getting anything done. They have also managed to build a society of passive/aggressives which makes it very hard to implement corporate change. I do giggle when I hear of Singapore efficiency. It’s a laugh!

  7. I worked on a Govt. IT contract a few years back and the inefficiency was an eye-opener for someone coming from private industry.

    Need a $200 piece of software? Submit a bunch of paperwork, signed off in triplicate, wait a month for the purchase dept. to authorise it etc. etc. whereas in private-land my boss would say yay/nay in 30 seconds.

    We ended up delivering Stage 1 of our project under budget and within deadline, and that was so unheard of we won an award! 🙂
    Later stages got bogged down in the usual quagmire though.

    Modus operandi seems to be to file a business plan w/ appropriate budget, and once it’s approved to spend your cash asap and then go back looking for more, usually garnered from those projects who’ve been a bit more prudent. Empire-building is all that counts.

    On the flip side, Govt. doesn’t have the luxury of choosing its market, so it always going to be worse than private industry who can choose to ignore the areas of the market where the potential returns are too low.

  8. Great article which rings true from my personal experience.

    My first job was with a state government department working on a small “project” based national program with an overall budget of around $300,000 per annum.

    At the end of the financial year, I was required to do the financial report and propose the budget for the next year.

    GOVERNMENT Vs PRIVATE:

    In the Government sector, if I managed my project really well and was efficient…and say had a $50,000 surplus….then my budget for next year would be $250,000 and I would not get any “reward” or incentive for doing a “good” job and saving money…except for the normal yearly increase in wages which every PS would get regardless of how they did their job.

    If I had some difficulties in my project or some cost blow outs or just went over budget by say $50,000…I would have to have a big meeting with my section chief and our finance people and explain the blowout and justify it and so on….and the end result would be that next year I would get a budget of $350,000.

    So overall….good job equals no reward and less budget….bad job equals more money.

    If this was private sector and I “saved” $50,000…I would probably get a big pat on the back, a pay rise and probably a bonus as well!! That would give me incentive to work harder and become more efficient and so on….

    Therefore, what the general Government environment breeds is an overall mentality about how to work. Over time, each person needs to work out how to use the system to get “results” and dedicate their time to managing the internal systems rather than doing a better job.

    On another note, the way that the politicians and ministers work is all about the politics and nothing really to do with long term action and results….its better for Pollies to come into a situation and fix a mess, than to put into place a long term strategy and preventative measures because they will be long gone before the outcomes are achieved!

    I dont know how you change the system to make it work better, but from my experience of working in it….there is something fundamentally wrong with the whole process.

    • Thanks Rich,

      This is exactly what I am talking about. You can consider it like evolution in some ways. In the private sector economic efficiency ( that is provision of a “fit for purpose” service at the lowest cost ) is rewarded, therefore people shape their behaviour to match this reward mechanism. The system breeds people who have a financial efficiency acumen, those best at it rise to the top.

      The public sector however is a different eco-system with a different set of rewards. It therefore breeds people with a different kind of acumen.

      This the reason people who have spent long periods of time in either system find it very difficult to make a transition into the other.

  9. Brilliant article, I’ve heard myself make this exact same argument to many other fans of government bureaucracies and provision of public goods:

    “The department is rewarded for making sure nothing bad is said about the minister in the newspaper and that the minister themselves believes the department is trying to deliver a good service to the public.”

    I guess we’ll be stuck with bloated public sector monstrosities like Centrelink, which spends over $100 billion each year, until people have the honesty to realise that welfare isn’t some kind of core right or freedom.

    The socialists all want to reclassify everything that we consider ‘desirable’ as a right. Health, education, welfare, tolerance, public transport.

    If we instead realised these are desirable items that most of us could buy in the marketplace, then the role of government could be reduced to a sensible one – law and order, courts, roads, infrastructure.

  10. I think that the problem is a real one and that the superficial capacity at which ministers serve does no one any favors. But the representative democracy system is probably the best from a cost/benefit perspective for a private citizen that just want to get on with their normal life.

    I would like to point out that a clear example of why government doesn’t really change is to contrast most ministerial action with actions of turnaround expert CEOs. Normally turnaround jobs involves lots of firing, lots of reshaping of culture, and rebuilding of strategy. I cannot think of one minister that would have the capacity and will to push through anything remotely similar.

    The result is all talk and no real change.

    From a bottom up perspective, it is also not helpful to have an elected minister being your boss’ boss. There is zero certainty in strategic changes. Each initiative can only be counted on to last until the next election. Given the lack of financial rewards it is unlikely that any employee would want to fully invest in anything outside of the norm.

    The result is nodding heads and agreement with the boss and no real action.

  11. The Prince’s comment on LKY and his search for successors leads me to suggest that one possible way forward is to separate the upper echelons of the public service from the cannon fodder, and facilitate and encourage much greater interchange between public and private sector senior management. A little like the French model, only preferably with a greater emphasis on customer service (in both private and public sectors!)

    One other comment: far too much of the inefficiency in the Australian public sector is caused by divisions of responsibility between Federal and state level. This is compounded by the fiscal mismatch of the Commonwealth having the majority of the income and the states the majority of the spending responsibility for vital things like healthcare, infrastructure and transport. The endless buckpassing that follows sets my teeth on edge.

  12. Here at the coalface level of public service delivery, I can assure you that in my area at least, the focus on efficiency is such that the level of manpower and resources devoted to the job are between half and one third of the equivelant job in the private sector.

    I know this because I have worked for both.

    I therefore like to think of myself as quite efficient compared to the private sector. The fact that the job is so undermanned and underresourced as to render it often ineffective (as opposed to efficient) is beside the point I guess.

    I attended a training seminar a few years ago where a regional finance manager told us that we should think of shcools as a business and childred as the product – you can’t get much more efficient than that!

    DE is correct I think in alluding to government responding to a degree of doublethink on the part of the electorate.

    The point is that at the coalface, departments deliver a service to the commmunity that a monetary value cannot be easily placed upon. It would not make sense for the private sector to provide them, unless they attatch themselves to the public teat. Of course, as you move up away from the coalface in the department, it ceases to be an education department or a health or police department and morphs instead into a political department.

  13. Most of your arguments are pretty facile. For example, you say that ministers aren’t subject-matter experts. However, subject-matter experts don’t make good CEOs. E.g., why would a road engineer make a good minister for roads? Would a checkout chick know how to run Woolworths? The skills needed are totally different.

    Want more proof? Take a look at the boards of major corporations; the majority are not SMEs in the business that they run. Like government ministers, they have access to SMEs to provide advice, but their job is to make broad-based decisions that deal with organisational and policy issues, not man the cash registers or operate mining machinery. I know that Ayn Rand was of the view that the experts should run everything, but even the writers of the Simpsons knew how that would turn out.

    You claim that senior public servants are only motivated by “good public relations”. Please provide proof.

    You say that “the departments themselves have a vested interest in delivering a service that is “just good enough” because there is no reward for any higher level of service.” Hello? Every business on the planet delivers a service that is “just good enough”. Please let me know if any of the following concepts are familiar to you: planned obsolescence; cheap plastic crap from China; charging as much as the market will bear; surly sales staff. Businesses have to be forced to provide an adequate level of service; if they didn’t we wouldn’t need consumer protection laws.

    “Ultimately anyone who thinks the government is capable of providing an effective and efficient service will be disappointed.” This is a pretty crap generalisation. Every single day people experience “effective and efficient service” from government departments, just as they get shitty service from private enterprise organisations. They may not get what they want, but then again the service they’re after is usually more complex than buying a TV or hailing a taxi, so I find it hard to see how a comparison can be made.

    Lastly: having worked in both, I can say with 100% certainty that sloth, arse-covering, waste and lack of accountability are all endemic in the private sector as well as government. These things are a feature of all large organisations, public and private. Public and private organisations do different things, and neither is inherently good or bad. Or if you like, they’re equally bad.

  14. As a Federal public servant, the main issue is the size of government not what it does. The larger the behemoth the larger the road show that goes with it. The projects that I work on are stifled by multi-layered bureaucratic hoop jumping required to appease some 2 person section that happens to wield alot of power. The sooner government is streamlined for deliverables and efficiencies properly reward the better we’ll all be.

    At the same time, big business can also be inefficient. Having worked in the mining industry, alot of waste occurs on the larger sites but because the industry is so profitable, it’s overlooked. Mates still often say “If only management knew”.