Percy Allan AM National President Institute of Public Administration Australia Perth 23 rd May 2012

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Percy Allan AM National President Institute of Public Administration Australia Perth 23 rd May 2012

The public policy making process in Australia is adrift, notwithstanding regular affirmations by governments at all levels to an evidence and consultation-based approach. IPAA s discussion paper advocates that public policy making adopt a business case approach. 2

By a business case approach we mean establishing the facts and known views about a situation, identifying the alternative policy options, weighing up their pros and cons (either quantitatively or qualitatively depending on whether the policy is hard or soft ), sharing those findings with the public and getting its reaction, after which finalising a policy position to put before Parliament or to promulgate by regulation. 3

The use of Green and White policy papers is critical to such an approach yet is used sparingly in Australia even though it pays huge political dividends by giving those affected an opportunity to help shape the outcome of policy and thereby have ownership of it. Green papers float proposals for public feedback whereas White papers outline the final form that policy will take before it s reviewed as legislation. 4

The alternative approaches of making policy on the run and policy by fiat and then overselling them through spin-doctoring, are usually a recipe for failure both for the giver (the politician) and the receiver (the citizen). Yet politicians continue to repeat these mistakes probably at the behest of their media advisers who seek a daily profile for them at the expense of their ongoing credibility. 5

Based on an article prepared for the Committee for the Economic Development of Australia (CEDA) by Professor Kenneth Wiltshire of the University of Queensland Business School, the essential elements involved in developing a business case in a public policy context can be summarised in a ten step flow chart. 6

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1. Establish Need: Identify a demonstrable need for the policy, based on hard evidence and consultation with all the stakeholders involved, particularly interest groups who will be affected. ( Hard evidence in this context means both quantifying tangible and intangible knowledge, for instance the actual condition of a road as well as people s view of that condition so as to identify any perception gaps). 2. Set Objectives: Outline the public interest parameters of the proposed policy and clearly establish its objectives. For example interpreting public interest as the greatest good for the greatest number or helping those who can t help themselves. 8

3. Identify Options: Identify alternative approaches to the design of the policy, preferably with international comparisons where feasible. Engage in realistic costings of key alternative approaches. 4. Consider Mechanisms: Consider implementation choices along a full spectrum from incentives to coercion. 5. Brainstorm Alternatives: Consider the pros and cons of each option and mechanism. Subject all key alternatives to a rigorous cost-benefit analysis. For major policy initiatives (over $100 million), require a Productivity Commission analysis. 6. Design Pathway: Develop a complete policy design framework including principles, goals, delivery mechanisms, program or project management structure, the implementation process and phases, performance measures, ongoing evaluation mechanisms and reporting requirements, oversight and audit arrangements, and a review process ideally with a sunset clause. 9

7. Consult Further: Undertake further consultation with key affected stakeholders of the policy initiative. 8. Publish Proposals: Produce a Green and then a White paper for public feedback and final consultation purposes and to explain complex issues and processes. 9. Introduce Legislation: Develop legislation and allow for comprehensive parliamentary debate especially in committee, and also intergovernmental discussion where necessary. 10. Communicate Decision: Design and implement a clear, simple, and inexpensive communication strategy based on information not propaganda, regarding the new policy initiative. 10

Our paper applied the Wiltshire business case criteria to testing the extent to which high profile policies in recent years accorded with good policy making processes. The case studies were selected randomly across portfolios and functional areas. The findings are based on research by Howard Partners, a public policy and management advisory practice. It focused on federal policies since we did not have the resources to test recent policies at a state level or examine those of previous federal governments. Nevertheless we suspect many of our observations apply more generally to governments in Australia past and present. 11

Policies that were considered to have failed the Wiltshire test were: The Alcopops Tax Building the Education Revolution NBN - National Broadband Network Darwin to Alice Springs Railway FuelWatch Green Car Innovation Fund Green Loans Program Home Insulation Grocery Watch Set Top Boxes for pensioners 12

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Policies that reflected the application and use of information, knowledge, and evidence though not necessarily seeking public input before they were announced were: Higher Education Transforming Australia s Higher Education System Innovation Powering Ideas: An Innovation Agenda for the 21st Century Environment Caring for our Country Taxation The Resources Super Profits Tax Water The Murray Darling Basin Plan Energy Emissions Trading and Carbon Tax Disability National Disability Strategy 2010-2020 Regional Development Regional Development Australia 16

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All Governments formally commit to applying a Wiltshire style business case framework to policy making. All elements and phases of public policymaking be open, transparent, consultative and accountable. The business case be founded on a strong evidence base including consultation with those affected directly (e.g. clients) or indirectly (e.g. taxpayers). Education and training programs be developed at all levels of Government to establish policy capability and a culture of policy stewardship. 20

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