Tuesday, 12 January 2016

The institutional placement of the Indigenous Affairs portfolio


The stars are aligned for further change to the Indigenous affairs portfolio. The transition from Prime Minister Abbott to Turnbull breaks the nexus with the previous decisions on the administrative arrangements orders within the Government.

A reshuffle is widely expected in February to deal with the likely resignation of Deputy Prime Minister Truss. It will thus necessarily involve some adjustment to National Party representation in Cabinet, and this may also impact on Senator Nigel Scullion, who has chosen to sit with the Nationals in Canberra.

In the bureaucracy, Martin Parkinson will shortly take over from Michael Thawley as head of the Department of Prime Minister and Cabinet (PMC), the third Secretary of the Prime Ministers Department since Prime Minister Abbott decided to place the Indigenous Affairs function within his Department.

The decision to place the administration of Indigenous Affairs within PMC, taken at the very beginning of the Abbott Government’s tenure, was presumably made to give force to Prime Minister Abbott’s promise to be the ‘Prime Minister for Indigenous Affairs’. While this is not the place to attempt a full assessment of that aspiration, it is fair to say that Prime Minister Abbott found delivering on this promise harder than he originally thought.

A couple of stage managed visits to remote parts of the country, some stirring rhetoric on ‘sweating blood’ for constitutional recognition, an arguably premature overhaul of Labor’s barely implemented Remote Jobs and Communities Program, and the most severe budget cuts to Indigenous programs since 2007 are hardly the break-through achievements we might have expected from Prime Ministerial engagement in this area.

Within the executive arm of the Government, former Prime Minister Abbott put in place a confusing array of functional responsibilities for Indigenous related issues. As well as proclaiming his own personal engagement with the area, he appointed a Minister for Indigenous Affairs (Nigel Scullion), a Parliamentary Secretary (Alan Tudge) to deal with Indigenous welfare related issues (and perhaps to provide a Liberal counterweight to the Nationals’ Minister), and an Indigenous Advisory Council chaired by a close confidante of the Prime Minister, Warren Mundine, and which included a number of corporate heavyweights along with its Indigenous members. This quadripartite structure continues to this day, despite its cumbersome nature and potential for internal conflict.

While it is clear that Prime Minister Turnbull is not particularly focussed on Indigenous Affairs, there is every indication that he will wish to see it managed effectively at both political and administrative levels, and he will be attuned to its potential to create negative problems for the Government if mishandled.

I am even more confident that Martin Parkinson will not be keen to see the indigenous affairs function continue to be located within his Department. It was not a good fit when first placed there, and it is not a good fit now. PMC’s strengths and comparative advantage do not lie in policy or program implementation, but in strategic management of whole of government issues. By placing a particular policy and program function within PMC, a Prime Minister runs the risk that PMC’s core responsibilities are compromised (at least in relation to that functional area) and takes direct ownership of the responsibilities and risks inherent in any complex functional area.

Indigenous affairs has its fair share of political and policy risks, and it seems highly unlikely that Martin Parkinson would not be looking for the first opportunity to move to a more coherent and conventional arrangement.

That first opportunity will come with the forthcoming ministerial reshuffle. It would not necessarily require a change of minister, but would probably benefit from simpler executive arm arrangements which merged the responsibilities of the Minister and Parliamentary Secretary.

What then are the options for new administrative arrangements for Indigenous Affairs in the Commonwealth?

In broad terms, apart from the status quo, I see four broad options:

        i.            A transfer of the existing function from PMC to another line agency (such as DSS, Health, or Employment).

      ii.            An  autonomous agency within a portfolio;

    iii.            A Department in its own right;

     iv.            A ‘mainstreamed’ arrangement where all policy and program functions are located with the relevant mainstream department, with a small oversight unit located in a central agency (probably PMC).

There are two separate but linked questions I would like to briefly explore. First, working from first principles, what would be the most appropriate structural arrangement? And second, what option is the more likely outcome of any change?

Bearing in mind Aaron Wildavsky’s insight that public policymaking is an art and craft and not a science, and that there is thus no objective yardstick to measure these options against, I would venture the following observations.

The status quo is severely flawed, both in terms of its impact on PMC’s core business, but also in terms of the inevitable constraints which being part of PMC would impose on the Indigenous parts of PMC. In particular, driving effective policy and program implementation in remote contexts is made more challenging under the current arrangements.

The PMC culture tends to give priority to generalist or managerial skills over functional knowledge. Since the change of government, there appears to have been a conscious attempt to replace officers with background in Indigenous policy with others less inclined to identify detailed concerns or constraints. Think too for example about the logistical difficulties of ensuring that all PMC’s IT systems are secure for national security purposes across the remote network.

However the major reason the current administrative structure is flawed is that managing the current complex political structure and players within the executive arm demands a top down, centralist approach to policy development and implementation. Yet Indigenous Affairs, more than any other portfolio, requires a deft combination of top down and bottom up policy engagement. In particular, effective outcomes require that space be allocated for community views and concerns to be incorporated into the policy making process. The current arrangements, reinforced by both bureaucratic culture and managerial necessity, are entirely unsuited to delivering what is required.

Option (i) would involve a return to the arrangements in place under the previous Labor Government where the Indigenous Affairs function was largely located in the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA). The Health function was located within the Health Department (and remains so at present) and the native title responsibility was with the Attorney General’s Department (and remains so at present). These arrangements worked reasonably well, notwithstanding my personal view that native title policy should not be left entirely to the lawyers. Nevertheless, to return to the previous Labor Government’s administrative structures would be an admission of error, and is thus highly unlikely.

Option (ii) and option (iii) are similar structurally, the major difference being that an autonomous agency operates under more intense oversight from its portfolio ‘parent’, whereas a department of state actually does have considerable autonomy. Thus the former AusAID was an autonomous agency within the Foreign Affairs portfolio, thus providing DFAT with the opportunity to guide or influence strategic positioning by AusAID. As it transpired, even this was not enough control, and the Abbott Government under Julie Bishop’s tenure as Foreign Minister decided to bring AusAID wholly within DFAT.

Establishing a separate Department of Indigenous Affairs would require substantial investment in back office infrastructure (finance, HR, IT etc) and there are real doubts whether this would be a cost effective approach. Moreover, establishing a Department of state for Indigenous Affairs still carries a degree of symbolic baggage for Indigenous interests. On balance, the political and administrative risks inherent in establishing a standalone Department are considerable, and in my view are unlikely to be pursued. On the other hand, an autonomous agency within say the PMC portfolio would allow for greater autonomy than at present, cut the tight lines of accountability and responsibility with PMC, while allowing an oversight role to continue, and if necessary access to the parent Department’s corporate services systems. At a future date, the agency might be shifted to an alternative portfolio should this be thought desirable. I think this is the most likely change to Indigenous affairs administrative arrangements.

Option (iv) seems to me to be the optimal arrangement from first principles. The very real risks of having a separate Indigenous Affairs program and policy structure is that it allows mainstream agencies, at both federal and state/territory level to step back and leave it to the feds. There is a long history in the administration of Indigenous Affairs of the mainstream doing just that, and this history continues to the present in a range of areas – think school attendance, remote social housing, remote infrastructure provision (which continues to be an issue of concern notwithstanding the arrangements negotiated with the states by Minister Scullion in 2014).

The counter argument of course is that without a specific locus of policy responsibility for Indigenous policy and programs, mainstream agencies and state and territory Governments will do nothing (and there is considerable historical precedent for this fear too). The solution is to have strong multilateral oversight arrangements, and for central agencies (and especially PMC) to make it their business to ensure that line agencies both federally and in the states and territories) are doing their job in relation to indigenous citizens.

Interestingly, Frank Brennan in his 2015 book No Small Change reminds us that the Council of Aboriginal Affairs established under the Holt Government and chaired by Dr H C Coombs took the strong view that this mainstreamed approach to Indigenous administration should be pursued and Coombs had argued unsuccessfully against the establishment of the Department of Aboriginal Affairs by the Whitlam Government. In my view one of the functions which the Council for Aboriginal Affairs fulfilled in the nine years of its existence from 1967 to 1976 was the central agency responsibility to hold the whole of government to account. As in so many areas, on this issue Coombs was a visionary whose ideas and contribution remain highly relevant to our times.

My own sense is that policy pragmatism will win out over theoretical purity, and that the Turnbull Government will establish an autonomous agency for Indigenous Affairs, probably within the PMC portfolio, either at the next reshuffle, or perhaps following the next election. This would be an extremely positive change, although the significant cuts and changes to staffing over the past two years would mean that any new structure would face ongoing challenges.

However, while positive, any such transition would leave unanswered the deeper reform questions: if we as a nation are to close the gap, it will be imperative that the whole of government (both federally and in the states and territories) is engaged. The portfolio arrangements in Indigenous Affairs which will best ensure this are yet to be fully explored within Australia. The stars may be aligned for positive change, but current astrological portents suggest more radical structural change in the administration of Indigenous affairs is not currently likely.