Inquiry into the operation, effectiveness, and consequences of the Public Governance, Performance and Accountability (Location of Corporate Commonwealth Entities) Order 2016: Regional Australia Institute Submission

Decentralization in government Regional planning Public service Economic development Australia
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1. The Regional Australia Institute supports the development and implementation of a long term decentralisation policy for the Australian Government. This submission is focused on the wider merits of decentralisation policies for the public service. It responds to Terms of Reference b(ii), b(iii) and d.

2. Currently the Australian Public Service (APS) is highly centralised with 83 per cent of jobs located in Australia’s largest cities. Most of the 17 per cent of APS jobs located outside Canberra and the big five cities are lower paid and have little influence in the decisions impacting how government policies are made and delivered.

3. The direct economic benefits of APS employment flow primarily to major cities. On a per capita basis, the APS spends four times more on wages in metropolitan areas than in regions ($1001 vs $281). For senior roles, the spend is 12 times higher per person ($436 vs $36) due to the concentration of senior roles in Canberra.

4. Relocation can have risks for the APS and regions. Benefits are limited if the transition is poorly managed by agencies, if the relocation is short term and if it is used as a mechanism to artificially cover a regional economic weakness.

5. International and local evidence confirms that there are significant benefits to locating additional APS staff beyond Canberra and the five largest Australian cities. These include lower costs for the APS and our largest cities and more jobs, enhanced career pathways and specialist employment clusters in regional Australia.

6. The aims of a long term decentralisation policy should be to: a. Achieve a better balance in the spend on APS wages in metropolitan and regional economies; b. Provide a wider range of public sector career options for residents in regional areas; c. Enable local decision making and strengthen policy implementation for regional issues; d. Foster regional economic development by strategically locating APS agencies in regional areas in combination with related public or private sector activities; and e. Maintain decentralisation effort over the medium term to ensure benefits are realised.

7. As well as identifying relocation options and setting clear goals for relocations, the policy should embed the Scottish approach which requires the consideration of location whenever: a. The creation of a new unit, agency or organisation occurs; b. The merger or reorganisation of an existing organisation occurs; or c. A significant property break, such as the termination of an existing lease, occurs. This would serve to embed the process of decentralisation within the regularly changing activities of government and support a long term effort for decentralisation to regions.

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