Future of the Public Sector

Posted on: Wednesday, 22 April 2015 at 10:25:52 AM

5 March 2015 Article from the AICC(WA)’s Dr Harold Clough AO OBE Annual Event featuring keynote presenter, the Hon. Dr Mike Nahan MLA, Western Australia Treasurer; Minister for Energy; Citizenship and Multicultural Interests, Government of Western Australia, speaking on “Taming the Behemoth: Reforming The WA Public Sector

In a now long-established tradition, the AICC(WA) hosted its annual event to honour Dr Harold Clough.  In the presence of highly respected members of the WA business community, the KPMG boardroom was a fitting venue to once again deliver a tribute to the dedication and achievements of Dr Clough.  Mr Gary Smith, KPMG Chairman of Partners welcomed guests by acknowledging the ongoing contribution to Western Australian business by Dr Clough, his family, and corporate entities.

It was also fitting that WA Treasurer Dr Mike Nahan was guest speaker to the 2015 Clough Annual event.   As noted in an introduction by Stephen Quantrill, Chairman of McRae Investments, Dr Clough served as a friend and mentor to Dr Nahan for many years.

The Treasurer was tasked with addressing the topic “Taming the Behemoth – Reforming the Public Sector”.  With great insight and dedication, Dr Nahan delivered his audience a diligent, practical and well-constructed case for reform.  Noting that the word behemoth is Hebrew in origin, and colloquially depicts size and power, it was apt that the AICC(WA) was able to draw on Israeli innovation and invention to showcase models of productivity.

 Future of the Public Sector

Dr Mike Nahan MLA, Western Australia Treasurer; Minister for Energy; Citizenship and Multicultural Interests, Government of Western Australia

Dr Nahan shared three pieces of advice that he had learned from Dr Clough.  The first is to be surrounded by the best people.  The second is to be innovative, and the third is to take necessary but calculated risks. 

He proceeded to then examine the evolvement of the public sector in WA through the prism of the economic cycle. Citing $575 billion of business and public investment through the period of a sustained resources boom, Dr Nahan noted that WA had prospered, in addition to drawing and maintaining major resources business into the State.  Describing the 2000’s as “the mother of all booms” he outlined the rapid response required by the Government to cope with substantial population growth, infrastructure and service demands, and a sudden imbalance of supply and demand within the labour market.

Future of the Public Sector

The transformation of Perth over the past decade was as rapid as it was prosperous.  The Government was able to invest in new projects and pay down debt.  Nonetheless, an economic slowdown has now led to inevitable fiscal challenges for the Government and its diverse public sector operations.  Struck with a combination of a decline in both mining royalties and GST revenue, in conjunction with committed operational costs, Dr Nahan has the unenviable job of producing the 2015 State Budget.  This occurs at a time when people are shifting industries, and WA business prepares to move from construction to production.

In order to lead reform, Dr Nahan posited that the only alternative to spending cuts and tax increases (both of which have occurred through the previous budget), was to drive efficiencies in the public sector.  He stated “When you are shifting gears, businesses and households cannot always sustain large tax increases”. 

Demonstrating that WA public sector spend levels relative to other states and territories were highly positioned, and evidencing the legacy of an economic boom, the Treasurer noted he has now challenged Director Generals of the public service to drive efficiencies through reform.  A natural decrease in the size of the workforce driven by attrition, coupled with procurement savings, cost control and automation is now being driven across the public sector.  Dr Nahan drew on examples within the education, health, police and justice systems to show how creative management of service delivery and the sourcing of alternative mediums of supply can be effective.  He particularly noted the importance of ICT deployment, the regeneration of the labour force, and the accommodation of private sector expertise that is required within his vision of the reform process.

Concluding that this was something that WA “had to do”, Dr Nahan also recognised the necessity for the public sector to compete in the labour market and to attract talent into the sector by delivering opportunity and job satisfaction. 

The perspective provided by the Treasurer was endorsed by Pip Marlow, Microsoft Australia Managing Director, as event sponsor.  She noted that people, innovation and risk are also inherent values that drive Microsoft’s business development and that reimagining a public sector is an important task which will bring new age skills, diversity and technology into the core service delivery of Government. 

The AICC(WA) extends its appreciation to Dr Nahan for his astute and highly constructive address, which moved beyond articulating problems, towards proposing and demonstrating solutions.  So too, the patronage of Dr Harold Clough, and support of event hosts and sponsors has once again enabled  the AICC(WA) to facilitate critically important dialogue for Western Australian business.

Future of the Public Sector

Dr Harold Clough AO OBE, Chairman Emeritus, McRae Investments Pty Ltd and Mr Gary Smith, Chairman of Partners, WA, KPMG

Future of the Public Sector

From L to R - Mr Gary Smith, Chairman of Partners, WA, KPMG, Mr Graham Laitt, President, Australia-Israel Chamber of Commerce (WA) and Managing Director, Milne AgriGroup Pty Ltd, Dr Mike Nahan MLA, Western Australia Treasurer; Minister for Energy; Citizenship and Multicultural Interests, Government of Western Australia, Professor Lyn Beazley AO, FTSE CIE, Sir Walter Murdoch Distinguished Professor of Science, Murdoch University, Ms Pip Marlow, Managing Director, Microsoft Australia, Mr John Cluer, Chief Executive, Australia Israel Chamber of Commerce (WA)

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