Big Breakthrough in NSW Governance

Last week the NSW Legislative Council took a big step to require more evidence and consultation-based government bills. It unanimously agreed that for every government bill (other than a budget bill), the Selection of Bills committee must report whether the bill is accompanied by a Statement of Public Interest.

This win for public policy accountability sets a precedent for all other parliaments and governments in Australia. It reflects a recent opinion poll that government accountability is now one of the top four issues for voters.

The misuse of federal and state grants for political pork barrelling of sports clubs, car parks, and marginal seats has ignited a public furore over how politically partisan government spending can be. But it doesn’t stop there. Poor governance also extends to decisions that require parliamentary legislation, not just cabinet or ministerial approval.

The Statement of Public Interest must address the following questions:

• Need: Why is the policy needed based on factual evidence and stakeholder input?
• Objectives: What is the policy’s objective couched in terms of the public interest?
• Options: What alternative policies and mechanisms were considered in advance of the bill?
• Analysis: What were the pros and cons and benefits and costs of each option considered?
• Pathway: What are the timetable and steps for the policy’s rollout and who will administer it?
• Consultation: Were the views of affected stakeholders sought and considered in making the policy?

Also, a minister introducing a bill must make a statement advising whether such a statement has been prepared. If not, a motion may be moved without notice that the bill lapse until the statement is tabled, or that it be referred to a standing or select committee for inquiry and report. If the motion is passed, further consideration of the bill won’t happen until the statement is tabled or after the report of the committee is tabled.

Two philosophically opposed think tanks – the conservative IPA and the progressive Per Capita – have each found that Australian federal and state governments fall short of basic standards of evidence and consultation-based policymaking. Their work was commissioned by the Evidence-Based Policy Research Project and funded by the Susan McKinnon Foundation.

The think tanks reviewed 80 pieces of federal and state legislation and found only 27 followed an acceptable decision-making process in terms of answering the basic questions of good policymaking. In 19 cases the ratings were well below par. In the balance of cases, the quality of the bills was mediocre. On average the 80 bills scored just 5.7 out of a possible 10.0.

The average score per jurisdiction was 5.4 (Federal), 5.5 (NSW), 6.1 (Vic) and 6.2 (Qld). Anything below 7.0 is considered unsatisfactory. In the private sector, any business case that did not address at least 70% of its evaluation criteria would be rejected, yet two-thirds of government bills that fare worse than this on public case criteria get approved.

The research found that the most common weakness in policymaking was not comparing the costs and benefits of alternative policy options. Other lapses were not identifying different options in the first place, ignoring alternative mechanisms (e.g., using incentives or penalties), failing to explain how a policy would be rolled out, and not inviting public feedback before finalising it.

The media is replete with faulty decision-making processes at all levels of government. If every major government decision was required to state why it was needed, who was consulted, its public purpose, the alternative options considered, why it was the preferred policy, and how it would be administered, the scope for corruption, misallocation, and waste of public money would be diminished.

Having auditors-general, integrity bodies and select committees of inquiry rake over failed policies and processes does not fix the underlying problem which is that no government in Australia consistently addresses the above questions when making policy. The solution is a Statement of Public Interest for each major government decision, including discretionary grants, which answers these questions.

The ability of two ideologically opposed think tanks to broadly agree on what policies were done well and which didn’t suggest that standardising public policymaking to accord with recognised best practice could remove much of the distrust and discord in Australian politics. Indeed, those policy case studies that followed good process appeared to fare better politically than those that only partially met it. Adhering to a good process can make a public policy more widely accepted.

In Australia we pride ourselves on being better governed than most countries. But based on the Per Capita and IPA research findings we should not be smug about our representative democracy because policymaking at both federal and state levels leaves considerable scope for improvement.

After campaigning for a Statement of Public Interest for three years, the Evidence-Based Policy Research Project finally achieved a breakthrough in the NSW Upper House. Most credit must go to Penny Sharpe, Labor Leader in the Upper House who moved the motion.

Thanks, must also go to Mark Latham (One Nation) who introduced the original motion in Parliament that gave the issue traction. And David Shoebridge (Greens) who joined Latham in that quest. Last, but not least, Damien Tudehope, Government Leader in the Upper House, who reversed the Coalition’s long-standing opposition and endorsed the motion as a template not only for bills but also for other policy proposals to Cabinet.

The success of this motion shows that if a group of citizens campaigns hard enough for a sensible governance change that is supported by research evidence with media coverage, our politicians will listen and act, even though the parliamentary approval process is painstakingly slow. Our next target?  The new Federal Government and Parliament which hopefully will be receptive to an Statement of Public Interest, given its precedence in NSW.