Section One: Overview of APS Reform

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The APS operates in a dynamic and evolving context

APS reform has been an ongoing effort for many years and momentum is accelerating. The Thodey Review was an important bedrock for reform in 2019. Since its release the operating environment of the APS and the public’s expectation of government has shifted. The COVID-19 pandemic shone a light on the need for fast and effective government decisions. Community needs have emphasised the value of human-centred policies and services built on public engagement. The failures of the Robodebt Scheme highlighted the importance of integrity and frank advice from a professional and apolitical public service.

The APS is being called to deal with increasing policy complexity, rapidly fluctuating international and domestic dynamics, and delivery demands where public sector organisations need to keep pace with the private sector. The APS Reform agenda builds on reform efforts to date and positions the APS to be future-fit and capable of adapting to changing and rising expectations.

APS Reform addresses current and future needs

In October 2022, Senator the Hon. Katy Gallagher, Minister for the Public Service, outlined the Government’s plan to deliver comprehensive and enduring changes to strengthen the public service. The Minister outlined four priority areas, or pillars, for APS Reform:

1. An APS that embodies integrity in everything it does
2. An APS that puts people and business at the centre of policy and services
3. An APS that is a model employer, and
4. An APS that has the capability to do its job well.

In addition to the Thodey Review, APS Reform draws on a broad set of source materials including:

• Lessons learned from the COVID-19 pandemic;
• The National Partnership Agreement on Closing the Gap;
• Other jurisdictions’ experience of public sector reform including recent reforms in New South Wales, Western Australia, and New Zealand;
• The Government’s election commitments, such as commitments to establish a National Anti-Corruption Commission, and to achieve Net Zero in the APS by 2030; and
• Past APS reforms such as the 2010 Ahead of the Game review and the 2022 independent APS Hierarchy and Classification Review; and ongoing reforms being led by Secretaries Board such as the establishment of the APS Academy, APS Professional Stream, and Secretaries’ Charter of Leadership Behaviours.

The agenda aims to strengthen and empower the public service and increase trust and confidence in Australia’s public sector institutions. Initiatives will build the capability and capacity of the APS, support greater transparency and genuine partnership with the community, and position the APS to work in collaborative and dynamic ways. This will enable the service to better support the Government to deliver on its agenda now, and into the future. Collectively the initiatives within the APS Reform agenda represent a significant and impactful package of reforms to the public service, and build on past efforts and success.

Program of work

The APS Reform agenda, as assessed in this report, is structured around four priority pillars, eight program outcomes, and an initial portfolio of 44 initiatives. Exhibit 1 on page 10 provides a summary of the program of work and its structure. It shows how all reform initiatives are closely aligned to a reform pillar and their related reform outcomes. This ensures that collectively the initiatives are working to achieve the full scope of the Government’s reform agenda, and that there is a clear alignment between high-level and working-level understandings of reform. This does not mean that reform initiatives contribute to only one pillar or outcome. In most cases they will help progress multiple outcomes, and furthermore their combined changes will work together to enable a greater degree of improvement than they could have accomplished alone.

While all reform initiatives will be implemented in practical ways across the APS, their design and initial delivery is being led by 12 departments and agencies. These agencies have long-held leadership of related policies, services or regulations. As a result central agencies are responsible for delivering the majority of initiatives, although the design, development and final implementation of the initiatives draw deeply on the insight and support of all agencies.

Investment in APS Reform

As part of the 2022-23 Budget, the Government announced a three-year $72.9 million commitment to the APS Reform agenda. This initial investment enabled the first step toward making cultural, structural and legislative changes to further strengthen the APS and ensure it is more aligned to the community it serves. This funding provides:

• $40.8 million over three years to design, deliver and support initiatives that deliver immediate benefits for the public sector and the broader Australian public.
• $25 million to establish an APS Capability Reinvestment Fund to fund projects to build organisational capability in the APS.
• $7.1 million for initial work to help meet the Government’s APS Net Zero 2030 target. Including to establish the APS Net Zero Unit within the Department of Finance, which assists agencies with capability, implementation and reporting.

The 2023‐24 Budget builds on the support provided in the 2022‐23 October Budget, with the first distributions from the APS Capability Reinvestment Fund. The Government has allocated $18.5 million over two years from 2023‐24 from the $25 million APS Capability Reinvestment Fund. This includes $8.4 million for 10 service-wide capability building projects, identified through a competitive process.

The Government also allocated $14.3 million (including $4.2 million from existing resources) to other projects aligned to the purpose of the APS Capability Reinvestment Fund, including $10.9 million over two years to provide start-up funding for an in-house consulting function and $3.4 million over two years to boost First Nations employment in the APS.

Exhibit 1: Reform program logic and summary of program

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Taking a phased approach to deliver APS transformation

The Government has set a high mark of ambition for the APS Reform agenda. This is reflected in the quantity of reform commitments, the breadth of expected impact across the public service, and the depth of change necessary to embed lasting improvements. Exhibit 2 outlines the multi-year approach adopted to deliver upon this ambition, with activities phased over three horizons.

Exhibit 2: Summary of phased approach to reform over three time horizons

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Since October 2022, the Department of the Prime Minister and Cabinet’s APS Reform Office and the Australian Public Service Commission have worked across the service to design and stand-up an implementation approach for reform that can support a multi-year effort. Upfront efforts centred on establishing:

• A principles-based implementation approach to guide planning and decision-making, and
• A program logic and with clear Phase One objectives for initiatives.

Some initiatives have been prioritised and sequenced to deliver early outputs, while others have been scheduled for implementation once key foundational pieces of work are in place. In some instances a single product or output may achieve the lion’s share of a reform goal, while in others, a methodical and sustained effort to drive culture or behaviour change will be necessary for genuine impact to be felt across the service, and by the Australian community. Simultaneously accomplishing the totality of these changes is not feasible.

The eight program outcomes of APS Reform provide an organising framework through which decisions can be made about the potential inclusion of new initiatives in the agenda over time

Principles-based implementation approach

Secretaries Board endorsed a fit-for-purpose implementation approach in December 2022 based on six principles that reflect lessons learned from past public sector reform efforts and transformation best practice. This includes advice outlined in the Thodey Review.

The principles, summarised in Exhibit 3, continue to be a source of guidance when the reform agenda adapts in the future.

Exhibit 3: Summary of six implementation principles

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Committed and accountable leaders	Clear purpose, outcomes, and priorities	Measure and report what matters	Coordinated and fit-for-purpose delivery plans	Capability empowerment	Consistent communications and engagement
Establish an authorising environment with clear expectations and accountabilities for reform, focussed on long-term objectives.  Actively engage governance entities to oversee and drive reform.	Define clear and measurable overall target outcomes within a project logic that ensures reform projects achieve the Government’s intended transformation outcomes. Agree a process for prioritising and sequencing initiatives to maximise impact of outcomes.	Tailor approaches to reporting to ensure minimum necessary requirements, which enable proactive intervention, timely delivery and assure impact.	Ensure the APS Reform Office guides and maintains transformation efforts.  Ensure varying agency operating contexts (priorities, interests, capability, capacity) are factored into roles and expectations for reform across the APS.	Empower agency-level innovation and project delivery expertise.  Provide central, enterprise-wide steering and support to unlock barriers, uplift capability, and embed reform.	Deliver clear, continuous, two-way communication to build awareness, establish buy-in, and celebrate success.

Phase One, objectives for initiatives

In Phase One of APS Reform, reform initiatives are focussed on delivering one or more of the following near-term objectives to set the foundations for incremental and cumulative change:

• Laying the initial foundations that enable operational change to the APS. Initiatives that define and enable enduring institutional changes to the APS by amending or introducing new legislation, setting new policies, or creating new bodies. Near-term outcomes are focussed on setting institutional levers for ongoing change efforts, at an operational level.
• Refining APS behaviours to match expectations and increase oversight. Initiatives that focus on defining what the APS should be, as well supporting increased oversight and accountability. Near-term outcomes are focussed on refining the behavioural expectations of public sector employees, and the way the APS operates to deliver stronger outcomes for the public.
• Investing in core mechanisms to drive capability uplift and target immediate skills gaps. Initiatives that drive immediate capability uplift to target gaps as well as long-term investment, to ensure forthcoming challenges are addressed.
• Preparing for future reforms by scoping long-term work. IInitiatives that uncover meaningful insights into the state of the APS, its operating context – both current and anticipated - and determine how we might further strengthen the APS.

Achieving these activities is a gateway to reinvigorating APS transformation. It creates change that is both impactful in its own right, as well as setting up future phases of reform that create clear pathways to successfully achieve the overarching reform outcomes.