Article from SMH by Bruce Loder
Bruce Loder
In NSW, until about 1980, there was a clear separation of government and the management and administration of public works and services. The government established the public policy and the non-political public service and government instrumentalities delivered the required works and services in accordance with the law and in the public interest.
The NSW public service has accomplished some extraordinary achievements. The country rail system, the Sydney metropolitan rail system, the Sydney Harbour Bridge and associated underground railway, and the Sydney water storage are prime examples. Of these, the services of overseas consultants and contractors were used only on the Sydney Harbour Bridge and on that work all the planning, including the preliminary design and feasibility assessment, was done by the NSW Department of Public Works.
The respective heads of the departments and instrumentalities were eminently qualified to run their departments and were supported by competent staff. For the most part the heads were selected from staff groomed for senior positions within the "permanent" service and enjoyed some certainty of tenure.
The situation began to change about 1980. About that time there was a move within the public service proper, as distinct from the instrumentalities to promote the re-election of the government as a primary aim. Subsequently, the procedure and criteria for appointing department heads was changed. As a consequence, department heads are now often unable to provide ministers with the sound advice and guidance they require to administer their portfolio and ministers have assumed a greater role in the functioning of the individual departments, for which they are ill-equipped.
These are the circumstances in which the economically and financially disastrous Cross City and Lane Cove tunnels were conceived and built.
The Government, which allowed the works to be built (and even boasted of the achievement), assured us no government money was involved. Lucky for them. Governments do not have any money; they only direct how the public's money is spent. The public will pay for the tunnels through tolls that are higher than they should be, because the scope of the work was far more extensive than required to achieve an economic solution.
But of more concern is the extra travel cost incurred and extra pollution caused by those who suffer the increased congestion created by traffic diversion and lane closures and those who divert to alternative routes. While the extra travel cost for each individual is small, the total will amount to a substantial sum over the term of the toll franchise. This in turn will have an adverse affect on the economy.
Over the past 30 years the state Treasury has increased its control over the expenditure of public funds. In common with the Commonwealth and other states the NSW Treasury is opposed to public debt and does not differentiate between operating expenditure and investment. While tolls have been used on appropriate public works in the past to discharge public debt the so-called public and private enterprise partnerships evolved to overcome Treasury opposition to public debt.
Of the seven such partnerships completed on the Sydney metropolitan road system to date only the Cross City and Lane Cove tunnels have been abject failures. The Sydney Harbour Tunnel, M4, M5, M2 and M7 were all economically sound and financially feasible and were constructed to satisfy a transport need. The Cross City and the Lane Cove tunnels were seen as investment opportunities by the private sector which apparently convinced the government of their merit.
Unfortunately, the Roads and Traffic Authority failed in its role as guardian of the public interest probably because, in common with the rest of the public service, it no longer has the ability to do so.
Both the Cross City and Lane Cove tunnels are ill-conceived and doubtful economically. It goes without saying that neither are financially viable as toll roads. The Lane Cove Tunnel has the further defect of virtually eliminating Epping Road as an effective link in the Sydney Metropolitan road system. In effect a toll is being levied on a previously existing untolled road - a technique used only as a means of limiting vehicular access to a centre as in Singapore and London.
The deterioration in management and skills in the public service exemplified in the Roads and Traffic Authority extends throughout the service and explains in part the problems of delivery being experienced in health, transport and public works.
It will not be easy to restore the public service to an effective provider of works and services and guardian of the public interest, but until then and until the roles of government and public service are once more clearly defined, we can expect the standard of government in NSW to continue to decline and the quality of services in NSW to continue to fall relative to other states.
Bruce Loder is a former NSW commissioner for Main Roads.
Greg Sutherland
13 April 2008 07:49 PMBruce Loader “Poor vision for the state in blurring of the divide”, SMH10 April, provides a succinct overview of what currently bedevils the delivery of essential and necessary public services and infrastructure in NSW.
As he rightly notes over the past 30 years the state Treasury has increased its control over the expenditure of public funds. The pernicious impact of Treasury’s Thacherite economists and related pointy heads, who have neither experience in nor responsibility for the delivery of state services, is only too evident in our crumbling hospitals, decrepit schools, run down and unreliable public transport and the failure to deliver new essential projects.
It is noteworthy that these Treasury experts have continually underestimated the income side of successive State budgets and the resulting surpluses have been used to fund feel good tax cuts. Tax cuts and an unused triple A credit rating do nothing to provide more nurses in our hospitals or extend essential services to growth areas.
The Directors and shareholders of a large public company, such as BHPBilleton, would not countenance the company’s finance director being given the right of veto over the managing director nor other directors appointed for their specific skills in the company’s areas of operation. Yet, today in NSW, Treasury can deem a project “too expensive” as illustrated in the SMH’s report on the M4 extension p5, 10 April. At the same time Treasury’s Office of Financial Management is housed in the most expensive public service office accommodation in NSW, something that rankles the real workers in the public sector who often operate from rundown and ill equipped facilities.
I fully support Bruce Loader’s call to restore the public service to an effective provider of works and services. A good start would be to return Treasury to its position as the financial adviser to government as an equal partner (and no more) to other specialist advisery departments and agencies. Its current right of veto should be removed forthwith.
Peter j Billington
21 December 2008 10:48 AMThe Newcastle RTA is a basket case everything you have said fits the division perfectly - A very large developer and another building just 100 houses a year both from Queensland have looked at the hunter region to build house and lanf packages - NO WAY they are going to get into a stupid RTA ego instilled battle to just do some subdivisions . When the culture changes ?? they will revisit the area. Go to www.hexhamjunction.com.au to look at correct modelling to see some of that egomania at work . Re F3 to Raymond terrace Extension. Tomago intersection and botanical Gardens . To bad about our Tourism industry trying to encourage new entrants and clients to the area. Once again your comments of lack of ability shines thru with this one . Retired RTA officers, men of integrity and astuteness are very upset that once cadets (now an excuse for engineers ) are putting infrastructure back 20 years instead of enhancing everyones future.
Richard Barnett
22 June 2009 01:42 PMFormer Department of Main Roads Commissioner Loder's comments are well founded particularly in relation to the inability of the RTA to serve its Ministers, protect the public interest and above all to deliver timely infrastructure development needed for effective and efficient transport. The wider issue associated with the management of NSW LGA Councils needs to be fleshed out a bit.
Professor Wilinski investigated the Department of Main Roads (DMR) of which Mr Loder was Commissioner - the findings showed DMR was a well respected and efficient organisation. The DMR gave impartial yet supported guidance and the DMR insisted on 10 yr advance planning from every NSW Local Government Area (LGA) Council while they themselves engaged in both 10 and 20 year advance planning.
In conjunction with Councils the DMR reviewed these LGA Council infrastructure based 10 year plans on an annual basis but Councils no longer have such plans due to the change of administrative direction allowing financial and administrative people to manage our important infrastructure. A very important question that needs addressing: Why is it now necessary in 2009 for the NSW Govt. to legislate to make it mandatory for LGA Councils to engage in 10yr advance planning?
Why Professor Wilinski found the DMR to be effective and efficient might be gleaned from its basic management philosophy that was underpinned by a strong and independent team formulating hands on staff training and development for all levels across a multi disciplined organisation. Senior Management also encouraged the use of external cross pollination to activate new thinking.
The concept of quality management within the DMR was by its very structure seen to be viable as notwithstanding Senior Management reservations it was informally encouraging bottom up management from as early as the 1970s and by the early 1980s some of the DMR policies were being founded and piloted in field offices throughout NSW.
The DMR supported the University of NSW and student engineers as they progressed with their studies could be found actively questioning DMR managers at various levels across all disciplines including those of research, science, political, accounting and financial. This was one activity that also delivered self regulation to achieve best practice within the organisation.
Civil Engineers wishing to advance to managerial positions within the DMR were obligated to obtain their Masters Degree within a specified time frame and were encouraged to achieve formal university qualifications in business management. All managerial positions within the DMR received recognition and encouragement to be an active member of the professional body of their particular discipline thus minimising key staff from becoming complacent.
It was also mandatory for DMR support staff to hold formal qualifications relating to their vocation before they could progress to supervisory and management roles.
Senior Administrative people for Divisional (NSW Regional) management positions were obligated to demonstrate proficiency in implementing outcomes from field budgets through HR management, cost accounting, payroll and security, materials and stores, plant and haulage contract operations, major contract administration, effective communication and it was mandatory to hold tertiary qualifications including legal studies in the administration and auditing of grants to LGA Councils.
From the continuous development pool of expertise within the DMR LGA Councils received up to date advice and support without any cost to participating Councils. Contemporary DMR Engineers were able to professionally relate to the many otherwise insular LGA Engineers offering up to date technical advice. They also provided achievable independent benchmarks relevant to that area of NSW for road and bridge works both in terms of quality and cost.
Similarly, the DMR administrative staff focussed LGA GMs and Engineers attention to timely submissions for the receipt of available funding and methods of how they could legally use specified funding before it lapsed. LGA Councils were also obligated to justify value for grant monies spent by explaining to the independent umpire (DMR) over or under expenditures relevant to the approved scope of works on which funding was advanced.
The DMR also assisted with both technical expertise and in funding for LGA Councils to achieve quality control through the progressive introduction of laboratory infrastructure. LGA Engineering and other Council staff always had civil engineering and/or administrative expertise they could call upon, free of charge to offer advice on technical and financial challenges. Where do remote and insular LGA Councils go to get such support in 2009 and at what cost and what NSW Council encourages and supports such activity?
The formation of the RTA by amalgamating with the DMR the Prof Wilinski identified poorly run Dept of Motor Transport also led to a repeal of the DMR legislation and an end to it being mandatory for experienced Civil Engineers to visualise, plan and with the support of their respective Minister to direct outcomes under a technical focussed commission in the development of the road and bridge transport infrastructure needs not only throughout NSW but also in liaison with other States and the Commonwealth Dept of Transport in the provision of a National Highway system.
The DMR had advance planning interaction with the various public and private sector key players in the delivery of infrastructure for transport by land, sea and air. Since the formation of the RTA decisions were made to abandon much of the advance planning management and importantly in the administrative and technical roles DMR had with LGA Councils resulting in NSW becoming reliant on the 20 year plans the RTA inherited from the DMR taking us to about 2009 and now we wonder why we have transport and other infrastructure problems.
Regular networking to fulfil future societal needs followed by needed funding were normal planning activities of the DMR with the Australian Road Research Board, Bureau of Transport Economics, Commonwealth Dept of Transport, Bus & Coach Association and other players placed the DMR and like organisations in other States in a very good position for administering and in particular for effective lobbying to secure timely funding to deliver the States and LGA road transport networks.
The DMR also kept abreast with overseas counterparts to achieve best practice at all times. To the dismay of the NSW Police Commissioner and his efforts the NSW DMR Commissioner was able to convince their Depts Minister of the worth of a helicopter as a cost effective means for inter alia photogrammetry and route evaluation work throughout NSW - the Police Commissioner was thankful of its use from time to time.
As Mr Loder pointed out the turning point for a decline in NSW ability to effectively lead was around 1989. Around that time much of the effective and efficient government systems were destroyed by among other things changes in NSW legislation driven by fashionable quests for equal opportunity and in particular financial driven agendas which in evaluating timely infrastructure needs is having the cart before the horse.
Other examples can be found in the repealed NSW Transport Co-ordination Act and the repealed Railways Act. Among other things the former encouraged freight off roads to the rail network and the latter encouraged all railway staff to perform their functions safely and correctly including running all trains on time otherwise the penalties which were mandatory and by to-days standards were quite severe. The railways in the days of Commissions prided themselves on strong mandatory staff training and development to secure any career path.
Certainly there appears that little thought was given to understanding the real worth of repealed NSW laws resulting in a downturn in the needed detail known only to the Minister’s public service Departments which raises a question: NSW Ministers receive enquiries from constituents and in not less than 21 days were guaranteed by the DMR to be able to personally sign a written response that in 98% of cases were in keeping with the Ministers perceptions – similarly Ministers could rely on swift DMR attention to the delivery of accurate media information – what happens now in 2009?
NSW are now embracing Super Departments – it would again be a retrograde step not to have all technical fields responsible for the delivery of core infrastructure to be completely separated from the directive focus of administrative, accounting or financial professionals. The latter are very necessary and worthy within the structure but not where they can direct focus away from the real mission of the organisation.
Similarly if we are to have Super Regional Councils in the current climate let us carefully consider that General Managers (GM) and Directors have failed to manage their Councils infrastructure which is a claim supported in Regional NSW by Prof. Allen and his Review To-day Team.
The review delivers a suggestion of merit in LGA Council GMs being a qualified Civil Engineer with not less than a Masters Degree in both Civil Engineering and Business Management majoring in say Administrative or Local Government Law. The position should also call for demonstrated skills in contemporary management practices within a complex multi disciplined organisation.
Senior leadership positions advertised for Super Regional Councils need to call for people who can show they are active in continuous development programs in keeping their skills up to date and in being challenged from within their own professional bodies to perform.
What merit might there be in defining the areas of any new Super Regional Councils to have the same catchment and boundaries as the Regional Water Authorities and incorporate that authority into the structure of the Super Council?
Amalgamation of Councils is said by some not to solve the problems as the existing and in some cases poor performance GMs, Directors etc transfer to the bigger Council on the same or better salary. It is the developed system of amalgamation, appointments and redundancies that is flawed as the process must be at arms length from any Councillor, Council employee or Local Government oriented group with the State government picking up redundancy payments for Council senior staff lost in the process.
Mr Loder is to be applauded for his volunteering his knowledge at a time when others would simply be enjoying retirement.
Learning institutions and others concerned about the state of NSW and the state of NSW local Councils might evaluate the history of NSW’s rapidly changing legislation since the late 1980s to see what past experience shows and contribute accordingly.
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