Private sector primed to make inroads into state

Treasury Secretary John Whitehead. Photo / Sarah Ivey

The private sector looks set to gain influence over Government departments, starting with the Treasury, which will soon establish a board drawing on external expertise.

Treasury Secretary John Whitehead revealed the plan as he underlined his view that the public sector needs to "do more with less" to strengthen Government finances and the economy's ability to withstand financial shocks.

Speaking to senior finance officials on the need to increase the pace and scale of the current public sector restructuring that has resulted in 1500 job losses, he said it was not widely understood how serious the 2008 financial crisis had been.

"Another significant financial shock could undo all the good work since then ... Thatis yet another reason to maintain urgencyin our adjustment," Mr Whitehead said.

Aside from reducing the extent to which the public sector "can crowd out private-sector activity that generates jobs and wealth", the public sector also needed to be more accountable and transparent.

The Treasury planned to subject itself to additional scrutiny with the establishment of a "governance-focused board", he said.

"The Treasury board will bring expertise, experience and viewpoints from outside the public sector that provide additional discipline and challenge for the Treasury's senior leadership."

He later said the board, which should be in place within two months, would be made up of private- and community-sector representatives and would provide advice at a strategic level rather than dealing with policy detail.

While the intention was to reproduce as full a governance model as possible, Mr Whitehead said he would retain the right to veto board advice and would continue to answer to the State Services Commission and the Finance Minister. "I don't see any reason, if it works well for us, why it won't work well for other departments."

State Services Minister Tony Ryall said the proposal was not completely unique and was "a way that chief executives can get good support to help them do their job".

He saw value in the plan but said it was up to other departments to decide whether they followed suit.

Public Service Association national secretary Brenda Pilott criticised the plan as "more privatisation of the policy function" which would result in less rather than more transparency in policy formation.

Ms Pilott also said Mr Whitehead's comments about the need for changes in the public sector given the constraints on Government finances were reminiscent of "Treasury rhetoric from the 1984 to 1990 period" which accompanied a "very fast, very comprehensive restructuring of the public sector".

"There's always room for improvement, but the emphasis needs to be on good rather than fast."