Wage wars, tech woes, the Nationals' gambit: how 2017 changed the public service

An old war continued into a new year as public servants entered 2017 with long-fought workplace battles still raging.

Twelve months later, peace has fallen on multiple fronts of the conflict that ignited over new industrial agreements following the Abbott-era workplace bargaining policy, but the Christmas shutdown has started with as many questions unanswered for public servants. 

Former Nationals senator Fiona Nash announced the Coalition's decentralisation push in April. Photo: AAP

An armistice was drawn following prolonged industrial fights at several departments as Defence, Prime Minister and Cabinet, the ATO, Human Services and Agriculture voted up new deals, but the war remained hot in the Immigration department where its high-profile industrial showdown entered Fair Work arbitration and stand-offs continued at the Federal Court and the weather bureau. 

Tech meltdowns, job cuts, a growing consultancy spend, the departure of veteran mandarins and the creation of a massive new department combined to rattle and reshape the Australian Public Service, but none of these were its greatest agent of potential change.  

Nationals leader Barnaby Joyce drew criticism for driving plans to relocate the pesticides authority to Armidale. Photo: Alex Ellinghausen

The harbinger for the Coalition's most controversial plan for its bureaucracy in 2017 emerged late last year when a small government authority, with a mandate to serve an industry most Australians pay scant attention, was hauled into national focus by deputy Prime Minister Barnaby Joyce. 

With his decision to move the Australian Pesticides and Veterinary Medicines Authority north to Armidale, in his New England electorate, came a rush of staff to the exit that coincided with plummeting performance levels.

Soon, its leader Kareena Arthy was among those getting out and her successor, former Howard government adviser Chris Parker, was tasked with executing the controversial move.

The forced relocation, which has drawn accusations of pork-barrelling against Mr Joyce, was contentious from the start but its true meaning for public servants working outside the small agency of 190 staff emerged with shocking clarity on April 19. 

Former Department of Human Services boss Kathryn Campbell defended its "robo-debt" system at a Senate estimates hearing. Photo: Andrew Meares

Confusion followed when former Nationals senator and deputy leader Fiona Nash described the Coalition's plan to decentralise the public service from the major cities and embark on a wholesale campaign to push agencies into the regions. As details emerged, the bureaucracy learnt the project would only touch its non-policy arms, but the prospect of jobs leaving Canberra remained live.

Barrages of criticism gave no pause to the government as it began considering business cases to relocate public service jobs, a push its own economic advisory body the Productivity Commission has called a dud. 

Assistant Minister for Cities and Digital Transformation, Angus Taylor, pictured with Veritec CEO Keiran Mott, pushed through reforms to the government's IT agenda. Photo: Rohan Thomson

The beginnings of the year's other greatest bureaucratic controversy are also traced deep into 2016, if not beyond, but a scathing public response to Centrelink's "robo-debt" system tracking down welfare overpayments drew more attention to the government's troubled IT reforms than any other program in 2017. 

By December, the online compliance intervention system comparing the Human Services department's information with Tax Office data had drawn censure from a Senate inquiry, criticism from the Commonwealth Ombudsman and had been a driving force in the Labor push for a parliamentary probe into the government's multibillion dollar tech spend. 

The Human Services department pushed back against claims it had sent letters to welfare recipients with debt amounts estimated in error. 

As the saga unfolded, scrutiny of its service standards did not waver as the department admitted more than 55 million calls from welfare recipients met an engaged signal last year and clients waited an average 30 minutes to have their calls answered by several Human Services lines.

Dennis Richardson finished a long career in the public service in 2017. Photo: Andrew Meares

Elsewhere, tech meltdowns dogged the government, as online systems at the Australian Taxation Office failed at tax time and the agency conceded public trust would suffer from repeat crashes. 

The Coalition quietly killed off one of its biggest plans for "digital transformation", the hugely ambitious GOV.AU website project, and later recruited former NAB executive Gavin Slater to lead its Digital Transformation Agency in a bid to get its reforms on track.

Kelly O'Dwyer became the new minister overseeing the public service in a December cabinet reshuffle. Photo: Ben Rushton

Liberal MP Angus Taylor, who ended his stint as minister leading the DTA in December, steered the government's IT upgrades in a new direction as he announced a cap on the value of contracts in a radical rethink of its $10 billion tech spending designed to bring more smaller firms into projects. 

The federal government also embarked on a massive overhaul of its troubled technology effort by putting more than 100 projects, each worth more than $10 million, under the microscope.

As the government grappled with other technological change, the public service commission unveiled tough new social media rules that could put public servants in breach for 'liking' Facebook and Twitter posts.

Arguably the most remarkable missive from an APS boss in 2017 came from former Defence secretary Dennis Richardson, who before departing the public service following a long career told staff he would be a "mongrel" if his executives did not trim the numbers of public servants working at the department.

Michael Pezzullo was named the boss of the new Home Affairs mega department. Photo: Alex Ellinghausen

Consultants, contractors and other "service providers" had outnumbered Defence's public service workforce, something that frustrated the veteran public servant following deep staffing cuts.

A move to reverse the trend emerged in the May budget when the Defence Department revealed plans to hire up to 850 new staff in the next two years, offset by a reduction in the numbers of contractors at the giant department.

But hundreds of job cuts were reported at the Health department, Immigration, key indigenous education agency IATSIS as well as nearly 1200 jobs that were slated to be cut from Human Services.

Later in 2017 an audit report revealed Coalition government spending on private consultants with specialist skills had doubled since 2012-13. Prior to the launch of a parliamentary inquiry in December into the government's growing contractor spend, Centrelink plans to outsource work to 1,000 staff from labour hire firms met fierce resistance, as did its decision to contract call centre work to Serco.

Mr Richardson's departure preceded a round of musical chairs among the APS leadership, as fellow mandarin Martin Bowles stepped down from leading Health and Gordon de Brouwer left Environment and Energy, Kathryn Campbell joined Social Services vacating her Human Services role for Renee Leon and Prime Minister Malcolm Turnbull's former chief of staff Greg Moriarty took over Defence.

When Liberal MP Kelly O'Dwyer replaced Michaelia Cash as the minister in charge of the public service, hopes were raised of a reset with the public service, in contrast to the hardline approach brought by her predecessors including Eric Abetz and the bitter response to more than 15,000 job cuts in recent years.

Immigration boss Michael Pezzullo's elevation to lead the new Home Affairs department was one of the larger promotions for 2017 as the government formed the new mega portfolio that will take in Australia's major security agencies. Despite resistance from within the Coalition and commentary it was creating a "behemoth", the department was born in December and will welcome ASIO into its fold early next year.