The Public Service Act provides Australian public servants with a set of principles and a code of conduct to guide their behaviour.^[42] Because the APS Values are principles-based, their application in particular circumstances is broadly up to the public servant applying them; but there are sanctions for failing to conform to them. The APS Code of Conduct, at section 13 of the Act, includes a general provision that employees must ‘at all times behave in a way that upholds the APS Values and the integrity and good reputation of the APS’. Agency heads and the senior executive service are required under the Act to promote as well as uphold both the APS Values and the Code.

The APS Values, in effect, constitute a professional code of ethics for public servants. Nevertheless, the APS Values are the artefact of legislation, and reflect the views of the executive and the Parliament at a particular point in time about the conduct of public administration. Their presence in the Act is indicative of a conviction, common when the legislation was being drafted and still widely held, that the processes and procedures of public administration could be made more efficient and effective if detailed rules were replaced by broad principles coupled with an emphasis on getting results. It was argued that principles-based decision making would enable public servants to remain focused on what is important—what the APS Value at s.10(1)(k) of the Public Service Act calls, comprehensively, ‘achieving results and managing performance’—while providing procedural flexibility around how to go about doing it.

The groundwork for this approach was laid in 1976 when RCAGA tabled its report. The report used ‘responsiveness’ to refer to a public service that listened to community views; ‘responsiveness’ in the sense prescribed in the Public Service Act was a consequence of its recommendations. One of the ‘persistent themes’^[43] of RCAGA was the need to increase government efficiency, by which it meant both being attuned to government policies and implementing them cost-effectively. Accordingly, RCAGA saw a need to ensure that there was ‘clarity in the objectives of the government and in the priority which is to be attached to them’ (3.2.2); that ‘staff identify themselves with the objectives to which their own efforts are directed’ (3.2.9); that ‘decision makers at various levels have the scope to exercise initiative within the range of work for which they are primarily responsible’ (3.2.3); and that it is understood that ‘performance will be assessed and … officers at all levels are held accountable for their actions and decisions’ (3.2.11).^[44] Recommendations emerging from RCAGA and subsequent Commonwealth reviews progressively embraced concepts and practices from the private sector as a means of increasing efficiency, including contract management, corporate planning strategies, and independent evaluation and performance management systems. These systems made possible a transition from managing inputs into public services through centralised agencies such as the Treasury and the Public Service Board, to managing for outputs and outcomes by individual agencies and managers. This certainly meant that ‘decision makers at various levels have the scope to exercise initiative’ as recommended by RCAGA, but it also meant that they were to do so in the interests of government objectives:

In 1984, the Financial Management Improvement Program (FMIP) was introduced to implement management devolution, improved corporate and business planning, increased public accountability and increased emphasis on the evaluation of effective performance. Budgeting and financial accountability arrangements were adapted from private sector practices for government-based systems through mechanisms such as program budgeting (introduced in the 1980s) and the outcomes/outputs framework (introduced in the late 1990s). Reliance on market-based management systems was ratcheted up. Initially this meant increased use of purchaser/provider splits and market testing for many activities funded through the budget, and commercialisation and privatisation of many activities that were paid for by users (such as Telstra, for example). Some activities were moved out of the budget-dependent sector and into the non-budget sector as they became financially dependent on competitively-based decisions by government agencies.

The financial management changes were complemented by similar changes in personnel management, with progressively increased devolution of authority to departmental secretaries. The overall trend was to treat agencies as separate businesses and departmental secretaries as CEOs.^[46] Between them, the Financial Management and Accountability Act 1997 and the Public Service Act provided departmental secretaries with increased authority with regard to staff management, finances, assets, resources and technology, and performance management arrangements. Employment powers (including those of dismissal) were streamlined, and formal provision was made for secretaries to enter into collective and/or individual employment contracts and agreements pursuant to the Workplace Relations Act 1996. Departmental secretaries were expected to use these powers to put in place a performance management system covering all employees and guiding the movement of their salaries. Such systems were to be results-oriented. They were to be linked to organisational and business goals and to provide employees with a clear statement of what was expected of their performance together with an opportunity to comment on those expectations.^[47]

While departmental secretaries were becoming CEOs to their staff, their own relations to ministers were taking on a number of features of private sector employment. In 1976, the Fraser Government had legislated to provide that appointments to the position of the head of a department were to be made on the recommendation of the Prime Minister following a report from a committee including at least two departmental heads and chaired by the Chairman of the Public Service Board. In 1984, the Labor Government legislated to give the political arm of government an increased role in managing and dismissing secretaries, and to remove the appointments procedures put in place by the previous Government on the grounds that they ‘are gratuitous and they place inappropriate power in the hands of the public servants involved'.^[48] Instead, departmental heads would be appointed on the recommendation of the Prime Minister, following a report from the Chair of the then Public Service Board. In the same year the Hawke Government amended the Public Service Act 1922 to clarify that department secretaries, no longer ‘permanent’ heads, were to manage their departments ‘under the minister’, and would be appointed to particular positions for a term of five years. Immediately after Paul Keating assumed the Prime Ministership in 1991, three senior departmental secretaries were replaced because ministers wanted someone else. The replacements were ‘described as having impressed ministers as doers but two had also had close connections with the Labor Party in the past’.^[49] In 1994, the Keating Government introduced contracts for secretaries, and encouraged consideration of contracts for the senior executive service. In 1996, six secretaries lost their jobs directly after the election of the Howard Government. In 1999, Paul Barrett was dismissed as Secretary of the Department of Defence. The reason given was that he had lost the confidence of the Minister, John Moore. Performance pay for secretaries was introduced in 1999.

Australia was not alone in legislating for a responsive and results-oriented management in its public service. Similar packages of financial and human-resource changes were also being embraced to varying degrees across a number of public sectors, particularly those in English-speaking countries. While many elements of NPM were the conventional wisdom of the World Bank and the OECD,^[50] its implementation was not at all a single comprehensive program: it evolved incrementally and exhibited different emphases in different cultural and administrative frameworks. The OECD broadly characterised these changes as implementing a transition from a bureaucratic to a market model:

In 1997 the OECD undertook 10 country case studies of public sector reform based on the presence of market and market-type mechanisms. On the basis of these studies, it prepared a map matrix positioning the countries along two continuums—a ‘bureaucracy versus market orientation’ and ‘administrator versus manager orientation’—in order to reach a measure of relative degree of performance-oriented priorities (see Figure 1). The map located Australia’s position at the end of the Hawke/Keating period as only somewhat less performance-oriented than most other English-speaking countries studied.

Source: OECD

As these paradigm shifts were taking place, there was increasing interest in articulating the APS Values and providing a legislative codification of standards of official conduct within the more devolved and flexible system. The Public Service Board had already published Guidelines on Official Conduct of Commonwealth Public Servants in 1979; but that was a consolidated reference document containing the rules and conventions governing ethical conduct. It did not seek to go behind those rules and conventions to articulate values, although of course it did exhibit their application. Some initial work on public service values had been pursued through RCAGA and the Institute of Public Administration Australia (IPAA), with more detailed work undertaken by the then Management Advisory Board and its Management Improvement Advisory Committee (MAB/MIAC). The first official articulation of what was likely to emerge from this process was provided in the 1993 Management Advisory Board (MAB) publication, Building a Better Public Service, which summed it all up as follows:

In 1994 the ‘Public Service Act Review Group’ expressed similar views, believing that a new public service act should be built around a mix of ethical and efficiency-oriented principles and values.

The work of the MAB and of the Review Group heavily influenced the APS Values articulated in the Public Service Act five years later. A number of the core ‘traditional’ principles of public administration that had applied in Westminster systems of government for over 100 years were included in the specific APS Values legislated by the Parliament in 1999 for Australian public servants:

The influence of NPM can be found, in particular, in sections 10(1)(f) mandating responsiveness to government—although an attentiveness to government objectives has always been expected of public servants—and 10(1)(k), which reinforces responsiveness by calling for a focus on achieving results and managing performance. MAB was adamant that ‘these changes do not imply any retreat from traditional values. Rather, the new and the old should reinforce each other’.^[54]