Efficiency, Effectiveness and Equity in Public Administration.

Speech by Pru Goward Sex Discrimination Commissioner, 2005 Institute of Public Administration National Conference, Wrest Point Conference Centre, 410 Sandy Bay Road, Sandy Bay, Tasmania, Friday 4 November 2005

Thank you for the opportunity to address you today.

When I first started to think about your conference title, “Exploring the Three E’s, Effectiveness, Efficiency and Equity”, I had to admit my first thought was why are we still talking about this? Why are the connections between these three outcomes still considered to be a matter of debate, why do we still need to make the case that equity is a legitimate concern?

The truth is that policy makers still struggle with the concept of equity.

I suspect there is still a view amongst many managers that equity is a cost, a nice to have interference with good public administration that may make people feel better and keep ministers out of the news, but also takes up a great deal of public service time, discourages the appointment of people on merit and builds in complicated work-place arrangements such as part time work and flexible hours which make managing harder and less efficient.

Deep in the senior executive’s heart, way down where they really live, I fear there is the view that an effective public service must be frugal and efficient, in a book-keeper way, in its use of tax payer funds. That the public sector too must be an on- merit employer with a focus on outcomes rather than its own Byzantine internal processes protecting the well being of underperforming fat cats. Equity doesn’t fit.

But it’s also true that an effective public service is one which responds well, and in a timely way, to the political demands of the day with policies and processes that are low in administrative cost, well targeted, fair, transparent and meet the tests of national interest.

And herein lie the links between efficiency, effectiveness and equity. Equity as a tool. Equity meaning people really are employed on merit and that public policy really does provide the choices and opportunities for its citizenry as it is ultimately meant to do, equity ensuring that public policy is effective.

But that is not all. Equity is more than a tool, it is also an end in itself.

The goals of a fair go, of making sure women have the same chance of economic security as men, making sure no one lives in poverty in their old age because they did nor did not care for children, or that children from both rich and poor families have the same basic start in life, are essential to the survival of democracies and sustainable communities. The role of the public sector is to ensure they meet the mark as employers as well as policy makers.

So of course e quity must be a national goal. It has to do with the fundamental right to opportunity of all our citizens. It has to do with the management of difference. Differences between genders, races, capacities, even classes.

It is about managing difference to both preserve its benefits and exploit its potential, but also ensure we may live peaceably and comfortably together, not divided into subgroups riven with resentment and hostility.

But it is also true that equity is a catalyst. It enables us to attain other national interest goals such as economic growth, low unemployment, reduced poverty and improved competitiveness.

A major Arab Bank study of low economic growth rates in the Arab world, for example, found most of their desultory growth (1/2% a year on average) could be explained by the absence of education, human rights and in particular women’s rights. In other words the absence of equity.

In particular, being mindful of the times, it can be argued that the encouragement of a peaceable and affable society makes us safe. Equity promotes security, national security. Anyone who doubts that ought to remember the French Revolution and the rule of the mob. Or for that matter, the riots in the suburbs of Paris overnight.

Equity is a catalyst that converts spending tax payer’s money into effective policy. And as I will explore later in this paper, not just social policy.

It used to be the case that social policy was bribes for the poor, industry policy was bribes for the rich and taxation policy made sure that in the end no one was really any better off. Social policy was meant to achieve equity, economic policy was to ensure growth and the two were never meant to mix.

We have begun to move on. Thank goodness.

For instance it is now recognised that income distribution and the welfare policies employed to achieve some re- distribution, in particular benefit withdrawal rates, also affect work force participation and economic growth.

These issues also influence fertility and Australia’s ageing which in turn contribute to macro-economic outcomes.

How we manage aged policy will also have economic consequences for our children, who are the taxpayers and workers of tomorrow.

My policy work as sex discrimination commissioner has very consciously promoted the linkages between gender equity and other aspects of the national interest. If the public sector is to be efficient and effective, it must employ an integrated approach to public policy.

Coherent Public Policy, my name for this approach, requires us to consider the impact of one policy on everything else. It is not so difficult although it is certainly about more than improving the Cabinet CoOrd process, circa 1980s, or running the country on IDCs, circa 1990s.

After all, economists in Federal Treasury are now able to model the economy and twiddle with the levers of economic policy accordingly, Ann Harding’s Stinmod model allows us to predict the equity outcomes of changes to benefits and taxation arrangements; demographers like Peter McDonald are playing around with fertility models; Helen Hughes I vaguely recall once developed a development model for the entire Korean economy; it is only another step to build an integrated Australian public policy model which anticipates change across a much broader range of variables.

If that’s too hard, a check list of the obvious connections would not hurt.

Perhaps the reason why equity is frequently seen as a barrier to the achievement of these other great national interest goals is the confusion between formal equity and substantive equity.

Formal equity means you give people the opportunity and leave it up to them to make the most of it. So the State funds free public schools, meaning everyone has the same chance of a decent education and it is then up to each student to make the most of it.

Ditto public hospitals and Medicare.

Ditto laws which make discrimination on the grounds of sex, race or disability unlawful.

Of course it is never that simple. Making university education free, for example, scarcely changed the socioeconomic profile of university students and arguably was actually a regressive measure.

The development of regional universities begun by the Dawkins reforms, by contrast, appears to have opened up the possibility of university to a much broader socioeconomic range of students.

The HECS scheme, heralded as a fair way of enabling students to pay for their own education, has not always worked that way, especially for women who leave the workforce to raise children and can end up taking their HECS debt with them to the grave.

In two of those examples, so called equity programmes have produced unintended results and may well be described as ineffective and even inefficient. Why? Because these programmes failed to address the substantive inequalities between potential university students and in so doing merely confirmed, perhaps exacerbated rather than diminished, existing inequalities.

Gender inequity is similar. What is the point of being an employer on merit when women with children find it so much more difficult to manage the demands of a job designed for someone without children or child-rearing responsibilities?

Why do people think the solution to the problem of the low numbers of women on boards is to have an affirmative action policy when in fact the absence of women from feeder groups, namely CEO positions and line management positions, is to blame?

What is the point of adopting a policy of formal equality at the board level when substantive inequality at all other preceding levels is largely responsible for the problem?

Consider this; we talk constantly about the low number of women in Australian management- of the ASX’s top 200 companies, only 10% of their executives are women.

Recruiting on merit, having a woman at the interview, is a very small part of the solution.

Policy, either public or private sector, which fails to distinguish between formal and substantive equality, is doomed to fail. To not only make little change to the equity outcome, but to also diminish effectiveness and efficiency. Sadly, policy makers often blame this on equity instead of policy design that has failed to account for the underlying causes of inequity.

Internationally there is a similar recognition that social policy has often failed to meet its own goals. The need for social policy in particular to address substantive inequality in order to achieve formal equality now sees the OECD, for example, talking about active social policy.

The OECD recently released a paper entitled “Extending Opportunities”, how active social policy can benefit us all. The concept of active social policy it defines as quote “stressing the importance of shifting the focus of social programmes from insuring individuals against a few, well defined, risks towards investing in their capabilities and making the best use of them” unquote.

Making the best use of them - for themselves, their families, the nation. The point about poverty is that it is a waste- a waste of people’s lives. It’s a waste for them and for all of us.

Australia is recognised as already employing some aspects of active social policy in government programmes, or at least acknowledging the problems of not taking an active policy approach.

Well may we ask ourselves about the point of providing income support to poor families in such a way that the effective marginal tax rate of the second earner, usually the woman, is raised to such a level that it is rational for her to withdraw from the workforce- with all the risks to low socio-economic status households that flow from relying on one earner, including the greater risk of poverty for her children. Then you can add in the cost to the economy of having one less worker available to work.

As a result, there is now a much improved awareness of the impact of EMTRs on macro economic as well as welfare outcomes.

The common feature of active social policies is that they do more than shore up minimum living standards- their purpose is to realise human potential.

The OECD paper also identifies horizontal integration between agencies and vertical integration between different levels of government as important in ensuring the effectiveness of any one policy. Slightly different to active policy but certainly an important part of policy coherence, especially in a federation as complex and regulated as ours.

Our discussion paper Striking the Balance: Women, men, work and family is very much framed around this notion of active social policy.

Striking the Balance has ventured into dangerous territory, territory not usually the domain of public policy. It has ventured into the home, into the private world of unpaid work and unpaid responsibilities, whether they be caring for children, adult disabled children, ageing parents, dogs or houses.

It has not all been plain sailing, as the high level of public interest testifies. Not everyone likes being told that the system ain’t working and we need to fix it.

Striking the Balance is an examination of the role of unpaid work and care in determining equity outcomes for men and women; the conclusion to the project will need be coherent but also active social policies which aim to not only improve equity but will do so through improved economic empowerment, health and even family stability.

There is no doubt that issues around unpaid work and caring in the home are the source of great deal of angst and discussion in families. There is a sense of unfairness about it.

Much of the commentary in the media and the feedback I am receiving from the community, has focused on the statistics around paid work and family care and the inequity of who does what in the home.

These statistics will be familiar to many of you, but are worth repeating briefly because they so starkly illustrate what is going on in the homes of Australian families.

Time use data from the Australian Bureau of Statistics (ABS)1 and the Household Income and Labour Dynamics Survey (HILDA)2 tells us that:

  • While single men and women do around the same amount of housework, once they partner women begin doing more – a woman with a male partner does 71 minutes a day more housework than her partner;
  • With the birth of a child, unpaid work more than doubles for men and women – men’s increases from 50 minutes to 2 ½ hours per day and women’s increases to just under 8 hours per day;
  • Overall, women’s housework accounts for 70 per cent of all household work – including traditional male ‘outdoor’ tasks3 such as car maintenance, lawn mowing, rubbish removal etc
  • Including childcare, fathers spend an average of 10.7 hours a day in paid and unpaid work, while women spend an average of 12.6 hours4
  • In couple households where both women and men are employed full time, women do more than twice the amount of indoor household tasks than men – 14.3 hours compared to 6 average hours per week
  • When their youngest child is more than 5 years old, fathers do less housework than men in childless couples.5

It is interesting to think about why the response to these kind of numbers has been so vehement.

Perhaps one of the reasons is that it is because what people want and what they do are two very different things at the moment.

Attitudes to parenting and housework among Australian men and women show strong acceptance of flexible and egalitarian gender roles and research indicates that men and women believe that housework and parenting should be shared, not divided by gender.6 Do as I say, not say as I do if you like.

Another reason may well be the discomfort caused by public policy moving out of what we have traditionally considered the public sphere and into the kitchens and lounge rooms of Australian families.

Perhaps the discussion paper has rekindled old disputes between couples about who does what and how much.

Perhaps because despite conversations in some quarters about the personal and political, Australian society generally went along with the changes for women at work, but left untouched the life at home.

Yet society has changed.

  • Girls on average outperform boys in secondary schooling and women now make up more than half of all university graduates;
  • Women, particularly women with children have surged into the paid workforce in recent decades and now more than 60% of women with dependent children are employed; a majority part-time.
  • 40 per cent of mothers return to the paid workforce within a year of giving birth;
  • Family units are getting smaller with less capacity to care for our elderly and family members with a disability or illness at the same time as our population ages dramatically;
  • Paid work is taking up more and more of our time with an average full time male employee working 42 hours per week and an average full time female employee 38 hours.
  • Women no longer live behind their neat suburban fences, care full time for their babies, keep their house tidy, volunteer for meals on wheels, do their mother-in-law’s shopping and have a nutritious balanced meal on the table when their 2.5 children and husband arrive home that evening.

The world of paid work has changed dramatically. The nature of the modern family has changed with it. There is no going back.

The ageing of Australia will see to that.

As the recent Productivity Commission report highlighted, by 2044-45 one in 4 Australians will be aged over 65 – more than double today’s figures. Formal aged care needs alone are expected to increase by between 180 and 250 per cent of current expenditure in that time.
Treasury Secretary Ken Henry recently estimated that the taxation required to fund this level of aged and health care would be equivalent to a 22% GST. Perhaps improvements in productivity driven by continuous technological improvement will mean Australians will be so wealthy in forty years time they will be happy to pay taxes at this level. I would like to think so but as the tax debates of the past fifteen years have demonstrated, there is a general tendency for governments to cut taxation levels because that is the preference of voters.

But whatever uncertainty there is about Australia’s future economic prospects, of the consequences of ageing there is no doubt. Ageing is a double-edged sword for Australian families, resulting in increased pressure to engage in both paid and unpaid work.

It is happening now and there is some early evidence that although Australians are caring for their elderly parents, they frequently resent the juggling burden this places on them, especially when trade offs need to made between their children’s interests and those of their parents.

Much of this pressure is already falling on women – many of whom are finding themselves in the sandwich generation providing simultaneous care to dependent children and elderly relatives. 71 per cent of all primary carers of older people and people with a disability are women and 91 per cent of parents requiring primary care in Australia are currently being cared for by their daughters.

The ageing population is also increasing pressure on workers to financially provide for their own retirement by working longer and accumulating more superannuation.

Women are already two and a half times more likely to live in poverty in old age then men and it is estimated that by 2019 men will have contributed double the superannuation of women.

It is important to note that these are not problems that are faced by Australia alone. The OECD’s active social policy report recognises similar patterns across OECD nations.7

In particular, while countries throughout the OECD have experienced significant economic growth and the development of social protection systems, in recent decades, this has not addressed the problems of widening inequality.

On the positive side, improvements in economic wellbeing have been extraordinary in historical terms over the last 50 years with average real growth in per capita GDP since 1973 effectively doubling living standards every 35 years.

Gains in real incomes have been accompanied by an accumulation of assets that families can use when faced with difficult circumstances – the net worth of average households across the seven major OECD economies ranged between 5 ½ and 7 times their annual disposable incomes.

Life expectancy is increasing at a rate of nearly 2 ½ years per decade with infant mortality dropping by three quarters in the 30 years to 2002.

The average amount of time spent in education has increased by a year per decade to a level of 11 ½ years across OEDC countries in 2000.

How wonderful to be so rich- this is good news. But we only have to look at the Productivity Commission report on Indigenous indicators8 if we need evidence that the real economic gains of our society are not being equally shared. The plight of indigenous Australians is evidence of that, culminating in the 17 year gap in their life expectancy compared with the total Australian population.

This widening of inequality in the distribution of market incomes is common to many OECD nations where income inequality is increasing and parts of the population continue to miss out on the benefits of economic growth.

Curiously, as the OECD paper identifies, there is a slight negative association between rates of imprisonment, divorce, drug use, suicide, crime and road accidents and a country’s per capita income. Relative poverty rates and income inequality is also associated with growing per capita incomes by country.

Perhaps these increases in social disengagement (and we aren’t even counting child hood obesity in here) are a consequence of the growing income gaps some say has fuelled greater levels of economic growth.

Relative poverty is clearly a factor in social exclusion since it stresses the deprivation of individuals and families who are denied the goods and services that are CUSTOMARY in a given society.

Social exclusion also relates to a lack of support or help from friends, family or the community where individuals live. The paper finds that there are higher levels of potential support across the population as a whole than amongst those in the lowest quartile of income distribution. The risk of social isolation, it concludes, is 10% higher among low income people that the population at large.

So- despite the advantages of economic growth, higher material well-being is associated with lower social development (and you can add public sector costs such as the cost of crime and imprisonment).

Surely, in these circumstances, government policies and institutions play an essential role in ensuring economic growth and social development move in tandem.

Surely a singular challenge for effective public policy.

It is clear that these problems cannot simply be addressed by relying on traditional economic policy levers of tax and public transfers the report claims, if for no other reason that the tax base is becoming increasingly stretched throughout the OECD by the demands of aging populations.

It is clear that these problems are more than social problems, of interest to policy makers other than social policy makers.

Take our stagnant literacy rates- again common throughout high income countries. This isn’t just a problem for libraries, or for education departments. This is a problem for our labour force planners, for employers, especially if Australia is to remain internationally competitive. Literacy rates are especially low in the bottom income quartile home- where fertility rates are also the highest. A compounding effect on the future of Australia’s work force, again, not just a social issue.

And again, it is not just the widening inequality which poses a threat to western societies like ours.

The challenge is to be able to strategically manage inequality and poverty in such a way that other national challenges, such as the impact of ageing on national prosperity or the impact of long working hours on family life, are also addressed.

The kind of active social policies that are needed in response to such conditions are ones which give greater emphasis to investing in people so as to maximise their potential for self sufficiency, and policies based on a life-course approach.

And policies which are about people and the course of their lives are very much centred in the kitchen and the lounge room.

The OECD suggests that policy developments around paid work and family are a significant part of the three key objectives in social policy.

From the outset, children in disadvantaged households are much more likely to do poorly at school, have difficulty finding work, and be unemployed, sick or disabled as adults, precipitating an intergenerational cycle of disadvantage.

Not only can family instability impact on those chances but inadequate care – from parents who may lack time and skills to raise children.

While public transfers to families continue to remain important across the OECD in insuring against childhood disadvantage, active social policies combine a number of other critical ingredients. These have been identified as:

  • early investment in children,
  • giving a greater emphasis on increasing the employment rate of mothers with children and
  • giving a greater emphasis on reconciling paid work and family responsibilities so as to provide an environment which is less stressful for parents and more supportive of child development.

There is clear evidence that increasing the employment of mothers reduces childhood poverty. Across the OECD, an average increase in the employment of mothers of 12 per cent led to a decline in child poverty of around 10 per cent. (slightly higher in sole parent families, slightly lower in two parent households).

Giving a greater emphasis to policies which allow families to balance their paid and unpaid work commitments is obviously a key. Even where family friendly working conditions are notionally available, the evidence demonstrates that access to these conditions is highly dependent on an employee’s type and size of workplace, their position and level of training, the industries and occupations they work in and the sector in which they are employed.9

There are a range of policies which will assist in this area:

  • ensuring the widespread availability of quality and affordable childcare,
  • providing leave – particularly paid leave as I have argued in relation to maternity leave – which allows parents, particularly mothers to take time out of the workforce and return to it following childbirth,
  • flexibility in working time arrangements and
  • leave forms which allow families to care for a range of dependents.

Although the community needs to weigh up the advantages and disadvantages of these policies, among the reasons we need policies which allow us to balance our paid and unpaid work is the question of family instability and its impact on children.

I am not suggesting that fighting over who does the dishes and who folds the laundry is solely responsible for our increasing divorce rate, but of the research that has been carried out, it has been shown that women who perceive their division of household labour as unfair are more likely to divorce and women are more likely than men to file for divorce10.
A Relationships Australia survey found that 89% of Australian agreed that relationships suffer because of work and family conflict.

There is no doubt that the drivers of this debate in terms of family breakdown and its consequences have strong emotional impact. It has been challenging for men and men’s organisations to get involved in this debate which is so much about the private sphere of home and family. But there are such strong reasons for them to do so. Not the least of which concerns family breakdown.

For men one the greatest impacts of divorce is on their ongoing relationship with their children. The traditional pattern of unequal unpaid work responsibilities is reinforced in post separation arrangements.

Where there is disputed custody, the Family Court, driven by the interests of the child, are likely to award residence to the parent with demonstrably stronger bonds with the child. Which in most cases is the mother, who has been responsible for primary day to day care, and with whom the child is more familiar.

Men frequently lament the loss of their children; it is a cause of great sorrow. They say it’s not their fault that they haven’t been as involved with their children as the mother has. And on many levels I think that they are quite right.

When you’re spending fifty or sixty hours a week behind the wheel of a bull dozer there just isn’t the time to go to your son’s football match or help your daughter with her maths homework.

The choices that men and women make about questions of paid work, unpaid work and family care are not made in a vacuum.

The choices are made in the context of what supports our society has set up to allow us to make those choices.

Our tax and welfare systems also encourage mothers to work less, especially through high effective marginal tax rates which discourage mothers of young children from working full time.

A recent study by NATSEM suggests that reductions in family assistance and increasing costs of childcare deter mothers with small children from working full time and for families with two or more children, mothers are likely to be far better off working part time11.

On many counts this is good for children, but frequently not for the women themselves. Especially if the work is casual and provides no superannuation.

Our workplaces also drive families to make the decisions they do. Paid maternity leave, while available to only around 60 per cent of the female workforce compares extremely favourably to paid paternity leave. In 2002-03 only 7% of certified agreements featured access to paid paternity/secondary carer leave.12

Recent research carried out for the Department of Family and Community Services has found that there still remain significant barriers to fathers taking up family-friendly working provisions. 13 These included:

  • the unevenness of provision of family-friendly conditions;
  • the novelty of men’s utilisation of family-friendly conditions;
  • doubts about the legitimacy of men’s claims to family responsibilities;
  • negative attitudes on the part of immediate supervisors;
  • informal practices and taken-for-granted assumptions;
  • the workload burden resulting from measuring performance by outcomes rather than by length of time spent at the workplace.14

Employees, supervisors and even some senior managers thought that breaks or reductions in working hours could irreversibly damage men’s careers.

Are men the perpetrators of this, or, like women, merely the unwitting victims of social and economic arrangements that rob them of choices and some would argue in the case of men, of life? Men live, on average, seven years less than women and are twice as likely to die before the age of forty five than women of the same age.

It is clear that our existing policies, institutions and the culture of our workplaces and our homes very much influence the choices we make. There is a strong gender component to the choices we make, free or constrained is unclear.

There is growing consensus that this genderfication of life choices plays a major role in family poverty and in a number of other outcomes of national concern such as workforce participation and social dislocation.

Inequity costs.

Inequity makes all that we do in public administration less efficient, less effective. This means social policy is not just the soft stuff in a department run by women always asking for more money from the Treasury, a department run by blokes who do the tough accounting stuff. It’s got to work together or we are all wasting our time.

Thank you.

  1. ABS How Australians Use Their Time 1997 Cat No 4153.0
  2. HILDA data Wave 1 analysis has been carried out by Janeen Baxter, Belinda Hewitt and Mark Western for a forthcoming article “Post familial families and the domestic division of labour” (2005) 36 Journal of Comparative Family Studies 4 I THINK THIS IS PUBLISEHD NOW – CAN WE CHECK
  3. Michael Bittman and Jocelyn Pixley The Double Life Of The Family Allen and Unwin St Leonards 1997
  4. Lyn Craig The Time Cost of Parenthood: An Analysis of Daily Workload SPRC Discussion Paper No 117 UNSW Sydney 2002
  5. Lyn Craig The Time Cost of Parenthood: An Analysis of Daily Workload SPRC Discussion Paper No 117 UNSW Sydney 2002
  6. Michael Bittman and Jocelyn Pixley The Double Life of the Family Allen and Unwin St Leonards 1997, p 145.
  7. Organisation for Economic Cooperation and Development Extending Opportunities How Active Social Policy Can Benefit Us All OECD Publishing Paris 2005
  8. SCRGSP (Steering Committee for the Review of Government Service Provision) 2005 Overcoming Indigenous Disadvantage: Key Indicators 2005 Productivity Commission Canberra.
  9. Matthew Gray and Jacqueline Tudball “Access to Family-Friendly Work Practices: Differences within and between Australian workplaces” (2002) 61 Family Matters
  10. Michelle L Frisco and Kristi Williams “Perceived Housework Equity, Marital Happiness, and Divorce in Dual-Earner Households” (2003) 24 Journal of Family Issues 1, pp 51-73 at p 68.
  11. Matthew Toohey “The Effectiveness of Child Care Benefit at Improving Returns to Work for Women” Paper presented at the Families Matter: 9 th Australian Institute of Family Studies Conference Melbourne 9 February 2005, pp 7-14.
  12. Department of Employment and Workplace Relations and Office of the Employment Advocate Agreement Making in Australia under the Workplace Relations Act 2002 and 2003 DEWR and OEA Canberra 2004
  13. Michael Bittman , Sonia Hoffmann and Denise ThompsonMen’s Uptake Of Family Friendly Employment Provisions Policy Research Paper No 22 Department of Family and Community Services Canberra 2004.
  14. ibid