The Australian way of government and public sector commercial reform: from a lucky to a clever country?
| Author | GUY CALLENDER,JUDY JOHNSTON |
| DOI | http://doi.org/10.1002/(SICI)1099-162X(199702)17:1<55::AID-PAD923>3.0.CO;2-0 |
| Date | 01 February 1997 |
| Published date | 01 February 1997 |
The Australian way of government and public sector
commercial reform: from a lucky to a clever country?
GUY CALLENDER and JUDY JOHNSTON
University of Technology, Sydney
SUMMARY
In recent years, Australia has struggled to remain in the top twenty developed countries,
globally. The reality is that Australia's natural resource and agricultural bases no longer serve
to provide sustainable national competitive advantage. In the past decade, therefore,
government initiatives have aimed to produce a range of industry policies, apparently designed
to strengthen the economic base, enhance government and industry responsiveness and
productivity, and to attract increased overseas investment. The modernization of Australian
public sectors and the adoption of private sector business principles, especially
commercialization and privatization, have been critical aspects of competitive reform. This
article examines several of the key strategies adopted by Australian governments, especially
those designed to enhance national competitive advantage, to determine which strategies may
be working, or not working, and why. Particular emphasis is placed on the role of
governments as corporate business managers and their ability to respond to commercial
realities on a business management, as distinct from an ideological, basis. (&1997 by John
Wiley & Sons, Ltd.)
INTRODUCTION
Australian governments at a national and subnational level, like many governments
globally, have moved towards an economic rationalist-managerialist (ERM)
paradigm of governance (Savoie, 1994). The broad business-focused policy themes
of public sector reform, including downsizing, corporate management,
commercialization and privatization, demonstrated by the Thatcher and Reagan
governments in the United Kingdom and the United States of America and, the
Lange government in New Zealand during the 1980s, have been instituted (Kelsey,
1995). The national, subnational and local governments in Australia, while differing
in terms of the intensity with which they have embraced such policies, have all largely
followed a similar agenda. While the early years of dramatic change that occurred
during the mid-1980s brought considerable criticism of the harsh economic policies,
especially from academics, there seems to have been a general acceptance of these
policies (Barnet and Cavanagh, 1994; Kelsey, 1995; Walter, 1996).
The discourse of the ERM paradigm is part of everyday language and is reportedin
newspapers and other media. The Australian polity seems reasonably well informed,
at a super®cial level, about governments' policies. Recent moves towards more
community- and customer-focused public sectors have also facilitated the changes.
Yet, as global and local factors continue to impact on national and subnational
PUBLIC ADMINISTRATION AND DEVELOPMENT, VOL. 17, 55±70 (1997)
CCC 0271±2075/97/010055±16$17.50
&1997 by John Wiley & Sons, Ltd.
Guy Callender and Judy Johnston are academics in the School of Management, University of Technology,
Sydney, P.O. Box 123, Broadway 2007, Australia
governments in Australia, the challenges become more complex and policy responses
seem more simplistic (Carroll and Manne, 1992; Stewart, 1994; Walter, 1996). While
Australian governments, in general, have made signi®cant gains in reforming their
public sectors and supporting business growth, some inability to make commercial
decisions on a business and ®nancial basis is also manifest in a range of industry
policy problems to be discussed later in this article.
These problems also suggest that reformist governments are still unclear about the
way in which government and business should cooperate. Governments seem to have
dif®culty working to a long-term plan, partly because of the limitations created by
the typical three- or four-year cycle between elections. Furthermore, Australian
governments, by adopting ERM principles, have apparently rejected the successful
models of economic management demonstrated by several of Australia's major
trading partners, including Japan, Malaysia and Singapore. These nations eschew
rationalist economic management and pursue policies more in keeping with the
models of competitive advantage advocated by Porter (1990).
The ERM paradigm of governance, de®nes only a broad framework of reformist
policies, based largely on an interpretation of private sector corporate practice, but it
does not provide speci®c prescriptions for strategic decision making and
implementation (Self 1993). At one extreme, such an agenda is driven almost
entirely by harsh economic decision making, which results in a radical platform of
downsizing and privatization. At the other extreme, economic decisions are balanced
with social, environmental and other `softer' concerns. The full consequences of
taking any position within this spectrum are, seemingly, still not well understood by
governments. While adherents to radical economistic managerialist ideas promote
them as value neutral and rational, they are not just that.
The role of governments, as major corporate players, clearly goes beyond that of
the private corporate sector because of their responsibility to electorates and the
insistent pressure of interest groups. This suggests that the private corporate sector
may, therefore, only have a limited amount of expertise and ideas to offer
governments embarking along this corporate track. Furthermore, no real ethical
parameters have been set in relation to governments' corporate, social, political,
environmental and other roles within this paradigm, although there appears to be
much greater attention given to these issues in more recent years (Coady, 1993).
The reform agenda of governments involves rational, emotionaland political issues
and raises a number of critical concerns. Governments need to apply concentrated
intellectual reasoning and strategic capacities to these dilemmas. For example, how
do governments work towards supporting national, competitive advantage? On what
basis do governments make decisions about what business they should be in,
including what approach to privatization they should take? What does competition
really mean within a government and democratic context? To what extent can the
business sector actually assist governments with these complex problems?
DEVELOPING NATIONAL COMPETITIVE ADVANTAGE: FROM A
`LUCKY' TO A `CLEVER' COUNTRY?
Until the late 1970s, Australia, had enjoyed many years of successful trading based
on the basis of being a lucky country, rich in natural resources. However, a rapidly
56 G. Callender and J. Johnston
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