Second Reading
Resumed from 12 September.
[Speeches and comments from various members]
HON ALISON XAMON (North Metropolitan) [3.53 pm]: I rise as the lead speaker of the Greens on the Public and Health Sector Legislation Amendment (Right of Return) Bill 2018. This bill will make a number of changes to the employment of our public servants in the senior executive service, the SES. Their right of return will be changed in three ways. Firstly, they will be able to elect to include a right of return only in their first employment contract. They will no longer be able to elect to include it in subsequent employment contracts. Secondly, they will return to the department or the organisation that they are from, except for CEOs, who will go to the Public Sector Commission. I understand the second change is a fairly minor one that will not prevent them from transferring to another department or organisation, but simply ensures that someone has ultimate statutory responsibility for their employment rather than that person being left in limbo. Thirdly, the right of return will expire on the earliest day after the first contract of employment is terminated; or, if the term of appointment exceeds two years, two years after the person was first appointed; or, if the term of appointment does not exceed two years, the day after the end of the contract. For those who do not return, if they are entitled to compensation, this bill will reduce their compensation from being determined with reference to their entire remuneration to being determined with reference only to their salary component. The government has said that it estimates that this will save about 15 per cent per compensation payment.
The transitional provisions will apply to people who are currently on an SES contract and if people on their first contract elect the right of return, if the term does not exceed two years, their right of return will be preserved for that contract, and if the term exceeds two years but they have served less than two years, their right of return will expire after the later of six months or two years after their appointment started, unless the contract is terminated or expires earlier. If the term exceeds two years and they have already served two years or longer, their right of return will expire after six months, unless the contract is terminated or expires earlier. If elected, the right of return for people on a subsequent contract will expire after six months—again, unless the contract is terminated or expires earlier—and the bill’s new provisions will apply unchanged to where they return to, and how any compensation entitlement is calculated. The bill’s new provisions will also apply unchanged to calculate any existing compensation entitlement that has not yet been determined.
From the outset, I want to make it very clear that the Greens do not support employers unilaterally changing workers’ existing employment arrangements to those workers’ detriment. Insofar as this bill does exactly that, we vigorously oppose it. It is not okay, whether the employer is a fast-food place, non-government organisation, mining company, charity, local government, state government or a small business. It is not okay, whether that employee is a pink-collar worker, a blue-collar worker, a white-collar worker, a senior executive or even a teenage child who happens to be in their first job. The principle is the same. This is not a precedent that the Greens are prepared to agree to. The Greens are strongly of the view that employment contracts need to be honoured and that it is unacceptable to unilaterally deviate from contracts that have been entered into in good faith. To try to push this through Parliament is a particularly grubby way to do it. Our objection, of course, does not apply to future employment contracts that a potential SES officer is free to accept or reject as they wish. They will at least have some idea of what they are signing up to. In that regard, the Greens do not necessarily have a concern. By all means, put in future contracts that employees have to turn up wearing clown shoes, if they like, as long as a future employee has had the opportunity to make that assessment and weigh up the pros and cons, depending on the opportunities that may be available to them. They can then make an informed choice about whether that suits the circumstances of their lives with their families and, indeed, their desired career prospects at that point.
For future employment contracts, the Greens still hold a different concern, and that is whether what is going to be on offer for future SES officers will be good enough to attract and retain accomplished, professional and committed people of integrity. That is exactly what we should be doing with our public service. I stress the importance of ensuring that we retain senior executive service officers. I remind members that the government of the day is not permanent, and ministers of the day tend to be even less so. The public sector therefore becomes an extremely important repository of corporate knowledge for a new minister to tap into and rely on.
The “Special Inquiry into Government Programs and Projects, Final Report, Volume 1 — February 2018”, which is an instrument of this government, put it this way on page 77 —
The achievements of ministers so often depend upon the support of a team of public servants who time and again turn ministerial vision into reality, who prepare the plans and budget documents in line with strategic intent, and who are behind virtually every briefing which equips each minister to navigate his or her portfolio in a highly competent manner.
When we talk about the importance of senior public servants, we need to ensure that they are able to give frank and fearless advice. We recognise that that is an extremely important part of their role. I emphasise that in addition to that, they need to give fully informed advice, and for that to happen, quite simply, they cannot all be newbies. We need to start respecting particularly those senior public servants who have been around for a very long time and who have learnt the system extraordinarily well. Ministers and government cannot do sound, evidence-based work if that evidence has been forgotten or lost, not without wasting time and taxpayer money doing the same work and, indeed, making the same mistakes over and again.
The “2017 State of the sectors, Sustaining public trust through change” report refers to the role of senior executives in the public service. I will quote the following, which can be found on page 35 —
Only senior leaders can rise above the details of the business, recognise emerging patterns, make connections, and identify points of maximum leverage for action.
Page 39 of the same report reads —
Leadership ‘bench strength’ has never been more important in light of the structural and policy changes around SES officers currently being experienced in the public sector.
...
Striking the right balance between competing priorities is critical. Leaders also need to remain vigilant about the subtleties of workplace culture, employee engagement and accountability during these times to ensure the overall ‘good health’ of the workforce during change.
Performing those functions necessitates detailed corporate knowledge and an understanding of corporate history. Again going back to the Langoulant report on the importance of the role of directors general and chief executives, it reads —
The Directors General and Chief Executives have a relatively greater coherence in approach to issues and reasonable levels of mutual respect. This group is vitally important to the successful development and implementation of the government’s agenda and efforts to build the group as a high performing body must be given priority.
We must attract and, just as importantly, retain capable and committed people as SES officers or, quite simply, the Western Australian public will suffer.
Going back to the “2017 State of the sectors” report, it reads —
As leadership is aspirational for many public officers, leadership roles must be valued and be seen as valuable in developing strong sectors and communities.
The Greens remain very concerned that even without the Public and Health Sector Legislation Amendment (Right of Return) Bill 2018, which, I think, will make matters even worse, SES officers are not being attracted, managed and retained in the way that they should be if they perform well. The Langoulant report included a quite telling quote from one particular director general, who was named in the report. I will not name that DG in Parliament today. Members can look at page 78 of the report. The director general said —
... If I was to say to my younger self, If you’re interested in public policy, I wouldn’t stay in government. I’d go somewhere else and advise back into government ...
That is deeply concerning and something of which all members should be mindful.
The final report of the Service Priority Review, which is called “Working Together, One Public Sector Delivering For WA”, considered the issue of SES officers. Chapter 5.1.2 made a number of very important points and noted that SES officers —
... are generally considered to be highly professional and hardworking —
I know quite a number of SES officers who work incredibly long hours, a bit like me —
and tend to possess strong technical expertise within specific agency or policy areas.
It noted that nevertheless they are not being used as envisaged under the Public Sector Management Act 1994, which envisaged SES officers being deployed within and between agencies to promote efficiency in the sector generally, as well as in individual agencies. It noted that the reasons they are not being used as they should be included that SES officers are so valued that agency heads do not want to let them go; that career progression is considered more likely if the officer stays at the same agency; and that the establishment of SES officer positions are based on technical and specialist skills rather than generic and transferable skills. The report also noted the disparate classification levels between agencies for similar roles and said that it is not clear whether current arrangements are delivering the best outcomes for attracting, retaining, managing and removing SES officers. The report further noted the significant differences between Australian jurisdictions as to the nature of their employment and what is offered to them, including issues with their terms and ongoing employment. There are also differences with the right of return.
The Service Priority Review report also said that it is not clear—this is a particularly pertinent point—what effect reducing the number of SES officers, removing their right of return and reducing their termination payment would have on the structure, composition and culture in the long term. Some of that work should have been done before contemplating the sorts of measures that are in front of us today. It also said that being an SES officer should be an aspirational career goal, providing rewarding and varied careers for high-performing public sector leaders. It states that the Public Sector Commissioner is in a position to lead a revision of arrangements to support agency heads in attracting, retaining and developing the best SES leaders, ensure that the SES is truly mobile and set clear SES performance expectations and assessments. The report noted that Western Australia should, as a matter of urgency, overhaul our SES arrangements to become a stable, mobile and high-performing leadership group. Recommendation 13 contains three suggested actions, the third of which is to —
Revise arrangements for the senior executive service to retain and develop a mobile and high performing leadership group.
It would appear that this piece of legislation is indulgent—I agree with the previous speaker—and it seems to fly in the face of all that considered thinking.
The recently tabled independent review of the Public Sector Commission made some further points. It confirmed the need for an efficient, mobile, high-performing state executive service. It identified that for this to happen, conditions and arrangements for the SES needed harmonising. It also identified that CEOs do not feel well enough supported in their employment or performance development. That should be of concern to everybody. The review strongly supported the intent of the service priority review to create one public sector working together to achieve big, bold initiatives. I reiterate that one public sector working together can hardly be achieved in the absence of corporate knowledge.
Traditionally, the public sector attracts and retains people who could otherwise earn more in the private sector by offering them non-monetary benefits, particularly job security and workplace flexibility, yet, the government is taking away one of those very attractions for some of our best and brightest. Currently, SES officers are offered contracts of up to five years, with the option of returning to a non-SES role afterwards. If after that first contract they get a further contract, they can again elect the option of returning to a non-SES role afterwards. I note that most SES officers elect to have a right of return. When I was briefed on this bill in early October, the figures I was given indicated that 281 out of the 405 current SES officers, so 69 per cent, had made that election. I note that precise figures of how many SES officers take up that option in the end apparently have only been kept for a very short time, Ibelieve since March 2017. Iunderstand from the briefing that the voluntary scheme in September 2017 was targeted at 49 SES officers who had a right of return and 21 of them, so 43 per cent, chose to exercise that right and return. The 28 officers, or 57 per cent, who chose to accept severance did so with the act providing for compensation to be calculated taking all remuneration into account. I note that perhaps fewer of them would have accepted severance if this bill had amended the act, because it would have made the severance pay based on only the salary component of their remuneration and therefore about 15 per cent less.
This bill is a big double whammy for SES officers. The Greens are not persuaded on the information provided to us that the bill leaves enough incentive to attract and especially to retain SES officers of the high quality that Western Australians deserve. We cannot see why anyone would want to stay in the SES longer than the right of return lasts—that is, two years at the most. I cannot see how this is a good outcome for a strong public service. In fact, the outcome strikes us as being strongly counterproductive to WA having a properly functioning SES. There are very good policy reasons for having a properly functioning SES and for having a cohort of very senior, capable and nimble public servants who move between departments and agencies and who have the potential to break down those silos and improve efficiencies. Page 17 of the 2017 “State of the sectors” report, which I have already referred to, states —
With fewer people in the SES and other senior leadership positions across the sector, the medium-to-long term strategy will be around redefining and flattening organisational structures.
Flat structures are typically intended to break down barriers and improve ‘lateral’ communication and networking across different parts and elements of the organisation ... Over the longer term, public sector agencies will be required to consider how to break down organisational silos in an effort to streamline processes, reduce duplication, more effectively share information and data and ultimately deliver better services to the community. It is anticipated this will take some time to fully achieve.
Page 24 of that same report refers to Ernst and Young’s 2016 assessment of the public sector’s recruitment performance, and that identified six key themes, one of which was dealing with the silo effect. The report states —
... the sector would benefit from better knowledge sharing to avoid duplication and promote better sector-wide outcomes.
The Langoulant report also identified a need for effort to be put into breaking down silos and for central agencies to work together to ensure that directors general and CEOs are able to provide frank and fearless advice to their ministers. The Greens believe that this bill is completely inconsistent with those aims.
I would also like to draw members’ attention to the relationship between this bill and the subject matter of the non-government business motion moved last week, on 1 November. I foreshadowed this point on that day. That day One Nation moved a motion about reforms needed in the interests of good, transparent and democratic government, and as part of that motion it called for a two-year blackout period for public servants joining private operations that stand to benefit from insider knowledge. I remind members that the Green supported that. As I said then, it is gravely concerning when senior public servants are able to benefit commercially from the knowledge and trust placed in them as public servants and use it for their own personal benefit once they leave. If this bill passes, SES officers of two years or more stand to lose their permanency, and as a result they are going to have to look for work elsewhere, most notably in the private sector. Again, as I said during that debate, if we are going to be serious, as we should be, about maintaining the integrity of our public service and limiting public servants’ ability to go to the private sector and benefit there, we are going to have to protect their permanency and this bill does not do that. I note that the Community and Public Sector Union–Civil Service Association of WA opposes this bill on the basis that the removal of job security leaves public sector leaders vulnerable to losing both the right of return and adequate compensation if they have to supply inconvenient advice. For that reason, and many others, the Greens will oppose this legislation.
Debate interrupted, pursuant to standing orders.