Does government get the right advice?

Glyn Davis
G'day, I'm Glyn Davis and welcome to The Policy Shop, a place where we think about policy choices.

Female
How do you suggest we find out what's going on?

Male
Yes, yes, yes, I do see that there is a real dilemma here. In that, while it has been government policy to regard policy as the responsibility of ministers and administration as the responsibility of officials, the questions of administrative policy can cause confusion between the policy of administration and the administration of policy, especially when responsibility for the administration of the policy of administration conflicts, or overlaps with, responsibility for the policy of the administration of policy.

Glyn Davis
The Australian public service was established at federation in 1901 as the Commonwealth Public Service. Its name may have changed, but its role has not: to provide efficient, effective, professional and impartial support, and in this episode of the Policy Shop, we want to explore this public service.

How has its role changed? Is government getting the right advice? Can it still reach the high water marks of years gone by?

To help us answer these questions, we're joined today by the nation's most senior public servant, Dr Martin Parkinson, the Secretary of the Department of the Prime Minister and Cabinet, amid a distinguished career in the public service recognised through high office and the award of both a public service medal and an order of Australia. Martin, welcome to the podcast.

Martin Parkinson
Thank you very much Glyn, pleasure to be here.

Glyn Davis
Martin you self-described as a working-class kid, you grew up in Ballarat before moving with your parents to Adelaide and you once noted that you share humble origins with almost every treasury secretary since the 1980s, including Bernie Fraser, Ted Evans and Ken Henry. How important has your background been in shaping your understanding of the role of government?

Martin Parkinson
Glyn, I think if you look at Bernie or Ted, Ken or myself, our background's probably been absolutely critical. I was born in Stawell, absolutely as you said working class kid. Grew up in country Victoria, in Ballarat, Mansfield and then went to a technical school. The sort of bright kids who were going to go on to white collar jobs or go to university. They went off to high schools which went to Year 12 not Year 11.

Glyn Davis
I think Martin, you described your tech school as a place where you learnt woodwork, carpentry and sheet metal if you were a bloke and typing if you were a girl.

Martin Parkinson
That's exactly right. As a result of that, when I went to Adelaide, which was the beginning of Year 11 and had to start to pick up some courses at a high school. I didn't have the prerequisites to do languages or a lot of the other things that high schools taught. I hadn't done English literature, I hadn't done English grammar. So looking around for a subject to pick up, so looking around for a subject to pick up, economics was the one that stood out for me.

What was so important about that was, it gave me the opportunity to begin to think about, why is it that no matter what happens, it seemed to me at that age the poor people remained poor. The whole concept of human capital combined with the access to financial capital, the idea of opportunity costs and comparative advantage, all became things that essentially illustrated to me the path forward with my career ever since.

Glyn Davis
You studied economics at the University of Adelaide. You secured first class honours in economics and then you chose to join the public service in 1981, can you tell us about that choice?

Martin Parkinson
Yeah, it was very funny actually. I saw an ad for Treasury, offering cadetships and I thought, oh that's really interesting, but a place like Treasury would never be interested in a kid with my sort of background. Ironically it was my class mates and my teachers who essentially convinced me to put in an application to Treasury for the cadetship. I did that and Treasury therefore funded me, very generously, to do my honours year.

So in '81 it was really the combination of having done honours and coming to Treasury to pay back the obligation I felt I owed to Treasury because of their funding of me. But I never had an intention to become a public servant. I saw this really as a stepping stone on the way to go to ANU to do a master's degree. Like most young people, I suspect coming out of university who have not done anything else, you sort of thought, well maybe university wasn't a bad place to stay.

Glyn Davis
It makes sense. It's 1981 and the public service you join has just come out of a very extensive royal commission, the Coombs Royal Commission which reported in 1977. Can you say something about the Treasury and the broader APS as you found it in 1981? And did you see any consequences from that long period of examination that had just come to a close?

Martin Parkinson
I don't think I really did. I was 22 in my first job, probably more trying to think about how did I succeed? What was it that I needed to do? I was aware of Coombs and the Royal Commission but not in the sense that I had a benchmark against which to assess things. The Treasury I went into was a very, very different beast to the Treasury that I spent most of my career in. It was the era of John Stone, a very strong central sort of determination of what views were.

I suppose if anything, what I was struck by was two things when I arrived. The first, it was like walking into a foot club locker room with testosterone sloshing around your ankles. By that I mean it was a very, very blokey place. Gender issues were just not on anybody's agenda. It felt like you were surrounded by alpha males. It wasn't, to me, necessarily a particularly comfortable place.

The second thing that struck me about it was, and remember this is the end of the Fraser years, and a very strong sense that government had stopped listening to the Treasury because Treasury was a bit of an ivory tower handing down sermons from the mount and not really engaging either with the rest of the public service or with the government of the day.

Glyn Davis
Presumably the split between Treasury and Finance that happened in 1976 had taken away from Treasury lots of its traditional roles and engagement with the sort of day to day work of government.

Martin Parkinson
It had, and I think to be fair, the department was probably still finding its way. So I mean the advantage was that both Finance and Treasury were in the same building. So people who had been working next to one another, might now have had a Treasury hat versus Finance hat but in terms of the overall ability to support government out of the two departments, it hadn't changed.

What we ultimately found was the separation of Treasury and Finance actually gave two strong voices on economic policy issues in the cabinet whereas previously there had been, you know, it had fallen predominantly to the Treasurer.

Glyn Davis
I just want to pick up a couple of themes though from that early time. When people talked about the APS in the '80s they were still talking about the influence of that post-war group, Nugget Coombs and Sir Roland Wilson and Sir John Crawford and so on. That powerful group of senior public servants who shaped the post-war era and which were sort of coming to an end as you were joining, did you still have a sense of the potential of the public service to be really important in the nation's future?

Martin Parkinson
Yeah, I did and in fact the interesting thing is that I went there in '81. I moved to ANU and did a masters in '82, and then much to my own surprise I actually went back to Treasury. Part of the reason for that was because in the 12 months or so I'd spent in the department before I went to ANU, I'd become captured by the power of policy. The ability to use policy to truly shape a better Australia, to deliver outcomes for people that would actually make people better off.

I'd sort of understood that in abstract at university and to see the public service in operation - and even though, as I said, perhaps the Fraser Government wasn't listening to the public service or at least not to Treasury and Treasury was perhaps detached, you could see what influence it had had. You could see what influence it could have when the circumstances turned again. As it turned out - you know I came back at the end of '82, beginning of '83 and we had the election of the Hawke Government.

I had absolutely no idea that we were on the verge of two decades where economists were going to be absolutely central to pretty much every public policy debate in the country.

Glyn Davis
Indeed the 1980s was when economics took the reins, very much so.

Martin Parkinson
Absolutely.

Glyn Davis
So there you are a fresh master's graduate. You've re-joined Treasury and there you are with a very fresh-faced Ken Henry and Larry Cavanagh and all sorts of other interesting people working on tax reform in particular the capital gains tax in the 1980s and following by, of course, the fringe benefits tax and many of the other arguments.

Can you tell us about that moment, and in retrospect it seems an extraordinary fertile time for policy development, did it feel so at the time?

Martin Parkinson
Oh yeah, it felt like nothing that I'd ever experienced before. I mean we had in Paul Keating, and his tax advisor, Greg Smith, two people who were absolutely committed to large scale reform. They weren't interested in tinkering at the margin, life was too short for that. In the department we had Ted Evans who went on to become secretary. David Morgan, as you said, Ken, Larry, myself and a bunch of others and we really felt like we'd been given almost a blank cheque in terms of an authorising environment. What could we do if we really just dropped the shackles and thought broadly?

So that's where we came up with the broad-based consumption tax, the fringe benefits tax, the capital gains tax, massive reform of personal income tax scales and a desire to basically set up Australia for a period where it had a globally competitive efficient tax system. Just to be given that opportunity and remember I'm all of 27, 26, 27 when this is happening. Ken's a year older than me, Larry's a year or two younger than me. David Morgan was well on the way to an outstanding career, as was Ted. It was just an absolutely remarkable period of time.

The opportunities it threw up for us were just fantastic.

Glyn Davis
An extraordinary group of people. Can I ask about the monetarist thinking that was going through the 80s? So this is a time when Margaret Thatcher's at her height. There's a very strong narrative about the public sector adopting the managerialism of the private sector and about monetarist policies. Public assets are being privatised. Government regulation is being wound back and described in very pejorative terms.

So much were achieved through this market driven narrative, but it also, in retrospect, seems to be the tipping point in which public confidence in the public service to deliver large scale public projects begins to wither. Did you sense that at the time?

Martin Parkinson
I'm not sure I actually agree that confidence began to wither then. You've got to accept that there were a whole variety of reforms underway in various places. We'd floated the dollar. We'd started to deregulate the banking system. We'd started to make changes to the labour market, product market, protections for tariffs and quotas were being removed. But we didn't, I think, have a comprehensive plan for what we were doing. A lot of it was opportunistic. I think it looks much more structured ex-post than it did at the time.

We made changes and we saw what happened and that gave us the confidence to make changes in other areas. But I do think that one area where policy was badly founded was actually in monetary policy at the time. The sort of monetarist approach - it didn't deliver what it promised and you saw central banks move away from that because they realised that simple nostrums of controlling the money supply weren't actually allowing them to help manage the economy.

So the Reserve Bank, for example, moved into what was called the Checklist Approach. But that also didn't have an underlying analytic framework to it of the sort that the central banks themselves would develop, by the time it got to the late '80s, early '90s.

Glyn Davis
What was the attraction of monetarist thinking? Why was it so influential? Because it won hearts and minds and it was implemented, not just hear, but in many nations.

Martin Parkinson
I think you've got to go back and think about the circumstances. Now context is always incredibly important thinking about policy. We had gone through a period with the recession in the '70s and the subsequent recession in the early '80s where, for a decade, we had very, very weak growth and high inflation. We had a very strong sense in the community, it was a bit inchoate but it was there, that Australia had lost its way.

Lee Kuan Yew was talking about Australia becoming the poor white trash of Asia and then Paul Keating in '86 saying we're on the way to becoming a banana republic. I think that what that meant is that everybody, policy makers, the politicians, the community were looking for answers. One of the things that was really striking was that if you looked at the areas I talked about earlier in terms of reforms around product markets, labour markets, exchange rates and so on, there was a consensus in the economics profession about the sorts of policies that needed to be pursued.

The problems were well defined, the objectives were clear, the solutions were apparent and broadly there was consensus in the economics' profession and what we needed was political support.

Whereas if you look at monetary policy, we didn't have consensus. We had just been through this long period of high inflation and monetarism seemed to offer, in my view at least, a relatively simple and straightforward way of saying, you could get this under control through some relatively simple policy.

Ultimately what the problem was though, was that the objectives were unclear. The objectives for monetary policy were not at all clear back in that period. We weren't transparent about what we were doing and as a result, it wasn't at all surprising that any policy that you'd pursued would probably be unsuccessful. But personally I don't think a monetarist approach to monetary policy was ever going to be successful.

Glyn Davis
Can I ask about your decision toward the end of this period to head to Princeton to do a PhD?

Martin Parkinson
I'd always had this hankering that I wouldn't mind seeing whether I could cut it on a big stage. The choice for me really became a personal one.

Glyn Davis
So the subject matter you chose for the doctoral thesis?

Martin Parkinson
Very Australian in a way. It was to think about how labour markets operated over the course of a business cycle. So if you recall Australia had heavily centralised wage fixing system. So when you got an external shock, that external shock was propagated into the system by fixed exchange rate and then transmitted throughout the economy by a centralised wage fixing system and rigid industrial relations.

I was interested in whether labour markets actually behaved differently at different times during the course of the business cycle. You go to the US and the labour market by contrast, heavily deregulated, the sort of level of unemployment didn't vary much over the business cycle, whereas for us it just kept ratcheting up after each recession.

So I hooked up with Ben Bernanke who went on to become Chairman of the US Fed and looked at what had happened in the United States during the Great Depression and how labour markets had operated there and compared that to what was happening in Europe at the time. Because as you recall Europe in the 80s was not much different to Australia.

I was able to get access to really rich data across a whole range of countries. So I would have loved to have been looking at Australia. Europe was a more interesting comparison.

Glyn Davis
And you were able to draw policy conclusions from that presumably later on for your career?

Martin Parkinson
Yep, it was just one of those wells that - you know the old joke, as you'd well remember is that, the one thing about going and getting a PhD is you get a single lightbulb and you sit under it for the rest of your life. I hope both of us have moved on and had multiple lightbulbs but you do learn some things which you can go back and draw on. That was one of them.

Glyn Davis
That's a fantastic way to actually force yourself to think through from first principles about a particular policy problem and then think about how you might handle it. So after that, though not instantly after that, to the International Monetary Fund which was an unexpected move, but why that choice?

Martin Parkinson
Well I came back to Canberra in the end of 1990 and spent a couple of years up in Parliament House working first at the very end of John Kerin's Treasurer-ship and then as Deputy Chief of Staff to John Dawkins while he was Treasurer. It was an incredibly challenging time because as you recall this is '91 to '93.

Glyn Davis
The recession is on.

Martin Parkinson
So Australia is in deep recession and only slowly coming out of it. So having come back from effectively studying these sort of issues in my PhD, I had the opportunity to sit there as the Treasurer's Deputy Chief of Staff and actually help Prime Minister Hawke and then Prime Minister Keating and Treasurer Kerin and then Treasurer Dawkins try and craft sorts of policies that were necessary to get us out of that. That was again, an incredibly intense two-year period.

After that I went back to Treasury for a few years and it was, you know, one of those points in my career where people like Ted Evans was saying to me, well the next thing you've got to do is you've got to broaden out in this way. They were encouraging me to think about going on an overseas posting. I thought, well do I really want to go and work at an Australian Embassy for Treasury or would I be better off doing something completely different.

Ted had come back from, that's Ted Evans, had come back from being Australia's representative at the IMF and he encouraged me to think about going to the Fund. So I went there and spent almost four years there, working initially on South Africa, which was incredibly interesting. This is the sort of period after Nelson Mandela's been release and the ANC has formed government and they're trying to work out how to get the South African economy back on track and to bring marginalised black Africans into the mainstream.

Then the Asian Financial Crisis hit, and so I spent almost the rest of the four-year period working on issues around reform and the global financial architecture. Which again in a way is interesting, the way it played back to my PhD, because my supervisor, Ben Bernanke, of course, had made his name through looking at financial system issues during the Great Depression.

Glyn Davis
And looked forward as well to your next role in the Treasury, so it was an important set of lessons.

When you looked Australia from an IMF perspective, when you looked back to your home country, how did you see it in the world setting?

Martin Parkinson
Look it was then, as is still today, an undoubtedly prime example of showing what good policy can actually deliver. I mean little did we realise then that we were on the way to 26 years of uninterrupted economic growth in Australia. A period without contrast amongst the developed nations of the world.

You can really attribute that to the payoff we got from the reforms of the '80s and '90s. So first of all with Keating and Hawk and the two Peters, you know, Cook and Walsh and the two Johns, Button and Dawkin, but also importantly supported by, in opposition, people like John Howard and John Hyde and then from '96 onwards the likes of John Howard as Prime Minister and Peter Costello.

Basically, I think between Hawke, Keating, Howard, Costello, you've got the four people who essentially shepherded Australia onto a pathway which has allowed us to avoid a recession for 26 years. We couldn't see just how impressive that was at the time, but you could see from afar, looking at Australia and comparing it to other countries that we did look like we were onto something.

Glyn Davis
You then went on to tackle one of the most difficult policy problems of them all, you became the Secretary of the Department of Climate Change from its establishment in 2007, and although economics is always contentious, here you were trying to make policy in the face of a political debate, in which not everyone accepted even the evidence of the problem you were trying to solve. Why the choice and how did you find that experience?

Martin Parkinson
Why don't I take those in reverse order? How did I find it? Setting up the Department of Climate Change was a truly amazing experience and I say amazing in the true sense of the word. When Kevin Rudd asked me to set the department up, I had no staff. I had no building. I had no bank account, I had no funding. I didn't even have an ABN number or a telephone. I don't think anyone before or since, or very few people before or since, have ever had to set up an entire government department from scratch.

Most of the time when you create a new government department you mash two of them together or three of them together and you carve them up in different ways. So you've got management information systems. You've got people who have got financial and HR skills and the like. In this case, I had a title. I had the title of Secretary. I had a Minister, Penny Wong and that was it.

From there we had to scramble because as you would recall, just after the election, like within a week of Penny Wong as being sworn in as Minister and me being announced as Secretary we were off in Bali at the Climate Change Conventions, the Council of Parties where Kevin Rudd signed the Kyoto Convention.

Glyn Davis
It's a big start isn't it?

Martin Parkinson
Yeah, it was a massive start and we had to develop an emissions trading scheme, put that in the context of a broader mitigation policy. We had to negotiate international agreements. We had to foster the science and focus on adaptation. If you think about the circumstances, as you said, a significant group of people just absolutely outright rejected the evidence, no matter that the sort of basic chemistry of what's been going on has been known since the mid-1800s.

This is going to sound dramatic, but it had almost a conspiracy of silence between the true believers of climate change and the true deniers of climate change.

The true believers did not want to talk about adaptation because they felt that that would take away from a focus on mitigation, and the true deniers didn't want to talk about adaptation because to do so you would have to talk about the fact that climate change was real. So the debate became one around the merits of a particular approach to mitigation which was emissions trading scheme.

It was one of those terrible coincidences but the support, the consensus that had existed in the business community and indeed in the broader community for action to introduce an emissions trading scheme, because remember we went to the 2007 election with both the Rudd opposition and the Howard Government promising to introduce an emissions trading scheme.

Glyn Davis
That's right.

Martin Parkinson
But the GFC, the Global Financial Crisis came along during that period and suddenly a lot of people in the business community who had been supportive of action on climate change, found themselves in a much more existential situation of trying to save their businesses. In that environment, they were much more focused on that than on supporting action around climate change.

You can understand the circumstances, but it did just make it very, very hard to try and fashion a bipartisan approach. But we should never lose sight of the fact that we almost got there.

Glyn Davis
We've dealt with the consequences, haven't we? Subsequently and still without resolving them.

Martin Parkinson
Well exactly. Why is it that we have the requirement for the Finkel review and now the National Guarantee, the Energy Guarantee? It's because we've spent a decade without bipartisan support for a particular course of policy. When you're thinking about building an electricity generator, you're talking about an asset that's going to live for 30, 40, 50 years. You are not going to commit the billions of dollars that are needed, when you think that there's a chance the rules might change.

That's basically fed into a situation where we've had investment that's been quite short term in nature and quite unbalanced in terms of what's been required for Australia's longer-term energy requirements and Australia's longer-term emissions reduction goals.

Glyn Davis
So in the middle of this very important public debate, you're called back to Treasury. From 2011 you serve as the Treasury's Secretary and you're in the most politically turbulent period in most people's living memory, five Prime Ministers in a little more than five years.

How challenging was it for you as a Secretary? And for the broader public service, given the reins of power were changing hands so frequently?

Martin Parkinson
Look I think it was incredibly hard for anyone during that period to have confidence that the direction the policy was being set for could be sustained over time. I think with hindsight people were over confident at the speed with which one could come out of the GFC. I recall Treasurer Swan saying, if you're going to be a Keynesian on the way in, you've got to be a Keynesian on the way out and people believing that that then meant we would be able to get back to a better fiscal situation rapidly. When in fact we were constantly surprised by how weak revenue was.

I think it's fair to say that the political circumstances meant that the constraints that you would otherwise have seen on the outlay side were very hard to manage. So it was a very, very challenging period for the public service. But look I think when you look at the people who led the public service through that period, my predecessors like Terry Moore and Ian Watt, I think they did a very good job in very, very difficult circumstances.

Glyn Davis
Martin, one of the significant changes through your public service career, I imagine, is the development of a media cycle and the intense scrutiny that is now possible, what is it like to develop policy amid those sorts of pressures?

Martin Parkinson
That's a very good question. It's different. If I think back to the reform processes of the 80s, you had the quality broadsheets. The Age, The Australia, The Sydney Morning Herald, plus the Financial Review, all doing really quite serious and thoughtful pieces about the policy challenges and the policy options in front of us.

Indeed I remember overseas visitors, public servants, politicians and the like saying, during the 80s that the quality of the media discussion about policy challenges and policy choices, that they saw when they visited Australia had no peer anywhere in the world.

If you look around now, the journalists don't have the opportunity, they don't have the time to do those thoughtful pieces. The policy processes had to be sped up because it's become so easy to focus in on sort of gotcha moments. You know government's doing work on something, so all of a sudden it's called secret work. You begin to try and have a conversation with stakeholders about an issue and all of a sudden the rest social media campaigns are running either for or against the policy option.

This is why you're still trying to work out what the options might be, nevertheless think that you've begun to land on something and that makes it much, much harder to do this sort of thoughtful, careful analysis and policy design that in the past we were able to do, essentially with a little bit of time. Now it doesn't mean it can't be done, but it means we have to do it in different ways. We have to find different groups of trusted interlocutors. We have to find different vehicles in which we can engage.

I'm not sure that we've quite found our equilibrium yet. I think it's still a work in progress for us.

Glyn Davis
2013 proved to be a difficult year and on a change of government, you and three other departmental heads were removed from office which Laura Tingle in the Australian Financial Review described as shocking the public service and seen as punishment fulfilling your job as a public servant in developing a previous Labor Government's climate change policy.

I'd like to ask you about, in retrospect, your view on the role of Departmental Secretaries on changes of government and whether the rules, as they stand, are optimal for the continuity of the public service?

Martin Parkinson
Oh I think that's a really challenging question. I mean I think back to when I first joined and Secretaries were called Permanent Heads. Essentially ministers came and went and they carried on. Yes Minister is not an accurate of reflection of public service and hasn't been for decades, there was an element of that that had probably a degree of truth about it if you're thinking about the '70s and the beginning of the 80s.

But it was the Labor Government, it was in fact John Dawkins, when he was, I think he was Finance Minister in the very early years of the Labor Government that basically removed tenure from Secretaries.

Glyn Davis
Because previously if you wanted to fire a Secretary you had to abolish the department.

Martin Parkinson
You had to abolish the department from underneath them and then create a new department. Secretaries had tenure removed and in exchange for giving up tenure, existing Secretaries got a pay rise, but all subsequent Secretaries were on maximum five-year contracts.

When John Howard came in in '96 and sacked Secretaries, he was, in a sense, simply exercising the power that the Labor Government had given to future governments in '82. When Tony Abbott then decided to dispense with us, I didn't take that personally. You know I - unlike the other three of my colleagues who left immediately, I in fact didn't go for another 15 months.

Glyn Davis
Indeed you had the Treasurer Joe Hockey making clear that he wished you would stay.

Martin Parkinson
And I had Prime Minister Abbott asking me to stay on till the end of G20 because it was such an important issue for Australia. So I didn't have then, and I have now, no personal animus towards Mr Abbott. I mean during that period, 15 months when we knew I was going, we had a perfectly professional relationship. Very open and honest, he asked me my views, I told him. He listened respectively. Sometimes he agreed, sometimes he didn't and you couldn't ask for anything more.

You could have achieved the same outcome that he wanted to achieve far more subtly if people had stopped to think about it and without the damage I think it did to the public service because there were instances after that happened of senior colleagues reporting their staff saying, well I'm not going to put my hand up for a controversial role because this is what happens. You follow on the democratically elected, legally mandated directions of the government of the day and you get sacked as a result.

Now I think a lot of water's gone under the bridge since then and those sorts of concerns in the public service have been ameliorated, but there's no question that for the service as a whole, I think it came as quite a shock.

Glyn Davis
So was it a difficult decision when you were invited to return as the Head of Prime Minister and Cabinet?

Martin Parkinson
It was actually because in that period between December 2014 and January 2016 when I came back, I had commenced a career in the private sector. I'd joined the board of a great Australian company Orica and I had accepted another couple of roles which had not yet been made public and I had good colleagues and mentors who were advising me that I could look forward to a very rewarding and challenging career in the private sector. I didn't feel as though I had unfinished business.

I'd never sort of looked at Secretary of Prime Minister and Cabinet and thought, that's a job I want to do. I'm the first person who's ever both been Secretary of the Treasury and then Secretary of Prime Minister and Cabinet. So those two things, you know, it was ne're the twain shall meet, historically.

Glyn Davis
Indeed.

Martin Parkinson
So the idea of coming back to do it caught me by surprise when the Prime Minister asked me to do it. But Prime Minister Turnbull can be very, very persuasive and as somebody who is a public servant in the true sense of that word of serving the people of Australia through the government of the day. If the Prime Minister of the day asks you to do something, you better have a very, very good reason to say no. When I thought about the reasons I, on balance, felt that it was a bit hard to say no to a Prime Minister.

Glyn Davis
As well as the media cycle, we have a highly partisan and politicised public debate. I'm just curious again about how the public service runs a line through the middle in a world in which opinions can be so sharply divided.

Martin Parkinson
I think the public service has to constantly come back to the fact that it serves the people of Australia through the government of the day, but the fact is the people of Australia can change the government.

So at all times, you have to act with professionalism and integrity and it's fine to explain government policies, but public servants can never become advocates for a particular policy because advocacy means you've moved from that sense of impartiality to taking one side or the other.

The politicians who have been around for a while understand and respect that and that's true whether you're looking at the members of the current government or the members of the current opposition. I think it's less well understood by some of the more recent members of either side of politics, and it's less well understood, I think, by the cross benches.

Glyn Davis
I'd just like to close reflecting on the public service that you now lead.

In a recent report Peter Shergold wrote about, good government is founded on good policy and good policy depends on good advice. He wrote that in the context of looking at a number of conspicuous failures including the home insulation scheme which was the subject of his report. Is it difficult to get ministers to weight up technical advice against political imperative?

Martin Parkinson
I don't think it is any more difficult today than it has been in the past. Let me go back to what I think are sort of some of the lessons that I draw from looking back at my career because I think it highlights the question you've asked Glyn.

I think the first thing is that you've got to recognise that effective leadership is a skill that gives you the capacity to change the world around you in some way.

So if you want to change the world then you've got the capacity if you're able to lead. The second thing though is, to be an effective leader, you've got to have a deep appreciation and context in which one is operating. You've got to understand how it's changing. You've got to have a strategy to get to a better place and tactics or policies that allow you to implement the changes that you need.

If you've got that, then you've got the grounds to convince a politician to go in a particular way, but to get that appreciation of context, you've got to open minded. You've got to be able to base positions on really rigorous analysis. You have to recognise you're not the repository of all wisdom and basically go out and consult widely, and in particular, don't talk to people who are just going to be an echo of what you say. Talk to people who are going to challenge you.

I think the other thing in all of this is to recognise that public policy is a repeated game and it's contestable. So you might win the argument this time, but if you treat people with a lack of respect, they may treat you with a lack of respect if they win the next round of the argument. So you've got to recognise that you need to be professional, you need to have integrity and there are no shortcuts.

My experience is if you bring those four things to the table with a politician, they will respond positively. I have never seen a minister who didn't value, even if they didn't like it at the time, who didn't value what it was a senior public servant said to them. The question is that the public servants [are robust] to appreciate the value of what the ministers might say to them in return and perhaps at times we're not as robust as we should be.

Glyn Davis
That's a great summary of what it means to serve the nation through the government of the day and the values that you bring, Martin, to the role as Secretary of the Department of Prime Minister and Cabinet.

It's been a great pleasure to interview today, Dr Martin Parkinson, secretary of the Department of Prime Minister and Cabinet. It's great to talk.

Martin Parkinson
No worries, all right, see you mate.

Glyn Davis
See you later, bye.

Voiceover
This Policy Shop is produced by Eoin Hahessy with audio engineering by Gavin Neighbour. Research was by David Threlfall, with thanks to the BBC for the use of the clip from the series Yes Minister.

The Policy Shop is licensed under Creative Commons. Copyright the University of Melbourne, 2017.