Hangover may take a little while to cure

I THINK it was Keith Suter who compared the global financial crisis to a 'big weekend' - too much to drink on Saturday, hangover on Sunday, cleansed and ready for work on Monday, the social commentator told a recent Technology and Industry Advisory Council forum (with a twinkle in his eye).

In other words (I think), if you are looking for local positives from the world economic meltdown, it's that government and business will be purged of excess and inefficiency and emerge better and wiser for the experience.

As hard as it may seem to comprehend, the message is that we should see the current shakeout as presenting opportunities and prepare to move on them.

Not only might some rents and executive salaries come back to earth, but the talent being offloaded by business in a hurry should find a grateful employer in the public service, which has been battling a brain drain for years (more on this later).

Young lawyers and accountants fresh from university will no longer have the upper hand at job interviews, while beaten-up weatherboards in Shenton Park have stopped selling for millions of dollars.

You get the picture. No-one's saying this is the (looming) recession we had to have but there is a sense that if something good is to come of these troubled times, it will be in the fine-tuning of the way we do things.

That's what the WA Government's Economic Audit Committee will be doing in relation to the public sector, but when it's considering issues of service delivery standards and the like, the committee should have a good look at the impact the Corruption and Crime Commission has had on the workings of the state bureaucracy.

Putting it kindly, it's been counter-productive.

The CCC findings against senior public servants Mike Allen and Paul Frewer, later dismissed, have not only tarnished the careers of innocent men, they sent the rest of the public service into a state of retreat.

While the CCC was created with the best of intentions and its operatives go about their business honourably, there is no doubting the effect it has had on the process of decision-making within the public service. To some extent, decision-making has stalled.

The feedback I have been receiving is that many mid and senior level bureaucrats have been reluctant to go about their business for fear it might be interpreted as crossing the line.

Let's take planning as an example. The process of managing planning applications necessarily requires discussions with interested parties. It involves interpretation, particularly when handling medium and high-density living propositions against dated residential codes. In a climate of fear, bureaucrats are more likely to leave that decision to someone else.

Being cooperative is not the same thing as being compliant, but no bureaucrat wants to risk any confusion on the part of the CCC.

These delays and referrals must surely carry an economic cost. That climate of fear also kills off innovation and creativity, the type of approach that can accommodate, say, planning proposals that are more environmentally sensitive than those ever anticipated by the standards when they were drafted.

This is not the bureaucratic setting we need as the government contemplates the pros and cons of using more public private partnerships for the delivery of projects and services.

At last week's Committee for Economic Development of Australia discussion on the topic, there was consensus across the expert panel of Ernst & Young's Darrin Grimsey, Minter Ellison's Fred Tinsley and CEDA's own Michael Porter that for PPPs to work effectively, an empowered, skilled and motivated public service was critical.

And here lies an awkward irony. Just as until-recently privately employed talent starts knocking on the door of a brain-drained public service looking for work, the government has called for a 3 per cent efficiency gain and, in some quarters, that's been translated as a job freeze.

Dr Suter's hangover looks like it could last more than a day.

n Tom Baddeley is state director of the Committee for Economic Development of Australia.