Identifier
Created
Classification
Origin
07CANBERRA1788
2007-12-21 04:03:00
CONFIDENTIAL
Embassy Canberra
Cable title:  

RUDD SHAKES UP AUSTRALIA'S FEDERAL BUREAUCRACY

Tags:  PGOV AS 
pdf how-to read a cable
P 210403Z DEC 07
FM AMEMBASSY CANBERRA
TO SECSTATE WASHDC PRIORITY 8760
INFO AMCONSUL MELBOURNE PRIORITY 
AMCONSUL PERTH PRIORITY 
AMCONSUL SYDNEY PRIORITY
C O N F I D E N T I A L CANBERRA 001788 

SIPDIS


SIPDIS

E.O. 12958: DECL: 12/20/2017
TAGS: PGOV AS
SUBJECT: RUDD SHAKES UP AUSTRALIA'S FEDERAL BUREAUCRACY

Classified By: Political Counselor James F. Cole, for reasons 1.4 (b) a
nd (d).

C O N F I D E N T I A L CANBERRA 001788

SIPDIS


SIPDIS

E.O. 12958: DECL: 12/20/2017
TAGS: PGOV AS
SUBJECT: RUDD SHAKES UP AUSTRALIA'S FEDERAL BUREAUCRACY

Classified By: Political Counselor James F. Cole, for reasons 1.4 (b) a
nd (d).


1. (SBU) SUMMARY: Prime Minister Kevin Rudd has announced
that he will change the structure and responsibilities of
parts of Australia's civil service to better enable him to
oversee the implementation of his policy agenda. He has
broken up and created new Cabinet Departments, and has merged
the Department of Employment with the Department of
Education, creating a "super Ministry" under the leadership
of Deputy Prime Minister Julia Gillard. Rudd has also stated
that public service spending is out of control, and he has
committed himself to looking for ways to cut expenditures.
There will no wholesale purge of Departmental heads appointed
by the previous government and his changes to the public
service will be moderate, incremental, and consultative. END
SUMMARY.


DEPARTMENTAL RESTRUCTURING


2. (SBU) On advice from Rudd, the Governor-General has issued
his Administrative Orders which outline the new division of
labor in the public service. The most notable departmental
restructuring is the merging of the Department of Employment
and Workplace Relations with the Department of Education.
The Coalition has criticized this as a downgrading of
education but some industry groups believe there are
synergies between education and employment in the context of
targeting education to address skills shortages and lift
productivity. It is a heavy workload for the responsible
Minister, Deputy Prime Minister Julia Gillard. In a second
significant change, Climate Change and Water will be taken
out of the Environment portfolio and moved to the Prime
Minister's portfolio -- but still under the direction of a
cabinet minister: Penny Wong. Rudd has held off establishing
a Department of Homeland Security pending further review.


A "RAZOR GANG" TO CUT EXPENDITURE


3. (U) Rudd has also promised to cut public service spending,
which his Finance Minister Lindsay Tanner has characterized
as being "out of control." The new government's current
plans are to impose a two percent "efficiency dividend"
across the entire federal bureaucracy, on top of the existing
1.25 percent annual efficiency dividend. These announced
cuts are likely to be followed by further cuts in areas where

the new government believes it can eliminate waste.


NO NEED TO PURGE DEPARTMENT HEADS


4. (SBU) On taking office in 1996, former Prime Minister John
Howard quickly replaced six Departmental secretaries. Rudd
has indicated such a purge will not occur under his
administration because it would not be conducive to a smooth
transition and, he has claimed, it would compromise the
tradition of an independent public service. That said, it is
likely that several Departmental heads will resign or not
seek to have their contracts renewed. The former head of the
Department of Education, Science and Training, former
Costello adviser Peter Boxall has been appointed Secretary of
the new Department of Resources, Energy and Tourism -- a move
generally regarded as a demotion. As head of the new
Department of Climate Change and Water, Rudd has appointed Dr
Martin Parkinson, generally regarded as an Australian Labor
Party (ALP) sympathizer. Rudd holds the Secretary of
Treasury, Ken Henry, in the highest regard, and he has said
he will retain Defense Secretary and ex-Howard advisor Nick
Warner.


5. (SBU) The ALP, when it was in opposition, was publicly
critical of the Howard government for reducing the length of
Qcritical of the Howard government for reducing the length of
contracts for departmental heads from five years to, in most
cases, three years. It will now, however, reap the benefits
of the shorter contracts. The Secretary of the Department of
Prime Minister and Cabinet, Peter Shergold, who had already
planned to leave government service, has stated that he will
not seek an extension of his contract, which ends in February

2008. In addition, the Secretary of the Department of
Foreign Affairs and Trade, Michael L'Estrange, a former
adviser to John Howard, is not expected to seek
re-appointment when his contract expires in January 2009.


RUDD WANTS GREATER OPENESS AND HIGHER STANDARDS


6. (SBU) Rudd maintains publicly that he will have no
hesitation in sacking Ministers that do not perform. He has
also claimed that he will be less willing than Howard to let
Ministers escape punishment for departmental oversights such
as the Australian Wheat Board scandal. Rudd has outlined a
new code of Ministerial Responsibility which includes a ban
on Ministers owning shares except as part of a mutual fund in
which they have no investment authority; a publicly available
register of lobbyists; and an 18-month ban on ex-ministers
working in areas in which they had official dealings.
Critical of what he sees as a "culture of secrecy" in the
public service, he has promised to liberalize Freedom of
Information laws which has endeared him to the media, and
provides the potential to embarrass the Howard Government
over issues such as the wheat board scandal and defense
purchases. Rudd plans to reform the practice of paying
bonuses to senior public servants, believing it encourages
public servants to tell government what it wants to hear.


COMMENT: RUDD'S TENDENCY TO CENTRALIZE


7. (C/NF) From 1991 to 1995, Rudd was director-general of the
Queensland Cabinet Office and essentially ran the state's
bureaucracy. Reports of Rudd's tenure as director-general
contain common themes. He ran a large, activist cabinet
office that did not limit the scope of its activities. Rudd
hired specialists and party operatives and often overrode
ministers and cabinet departments or drastically changed
their submissions. His technique was to impose control on
process and outcomes and consolidate policy-making at the
center. He was convinced there were "right answers" to
political and policy problems. Rudd did not hesitate to dump
a number of non-performing senior state bureaucrats, most
famously assigning some to work in an empty warehouse. This,
and the fact he eliminated hundreds of hospital beds, earned
him the nickname "Dr. Death."


8. (C/NF) One academic commentator, Professor John Wanna from
the Australian National University and Griffith University in
Queensland, believes that Rudd will not need or be able to
exercise the same amount of control over the federal
bureaucracy as Prime Minister of Australia. At the federal
level, the bureaucracy is more talented and has more
policy-making capacity, and senior cabinet ministers will be
much less malleable than their state counterparts. Rudd
learned from the electoral defeat of the Goss government and
his unsuccessful first run for Parliament in 1996 that he
needed to become more relaxed and forgiving. Wanna
maintains, however, that Rudd will retain his centralist,
workaholic tendencies, operating through a few chosen
advisors.


COMMENT CONTINUED: SO FAR SO GOOD?


9. (C/NF) Although Rudd has said he will cut bureaucratic
costs, he still retains the goodwill of Canberra's public
servants, many of whom had become increasingly cynical about
the Howard Government's politicizatQn of the public service.
In keeping with his tendency towards central control, Rudd
will now require input from the Treasury Department into a
wide range of policy decisions. Still on his political
honeymoon, Rudd's rhetoric about Ministerial accountability,
cutting public sector waste and "ending the blame game" on
service delivery has been well received but living up to the
rhetoric will pose a significant challenge to a party that
has been out of government for over 11 years.

CLUNE