"Circle the Wagons"

In the absence of an effective public consultation process in these times of change, it would appear that we are being asked to leave our future in the hands of a very clearly change averse Norfolk Island Government and its Administration. Consider the following;

The range of responsibilities currently undertaken by the Norfolk Island Government is likely to change as the island becomes more closely integrated into the Australian system.
As a consequence of this, the Norfolk Island Administration will need to change the scope of its activities as it potentially sheds the more appropriately national responsibilities of border security and social security in favour of increased activity in municipal services and the provision of policy and administrative support to the NIG.
Change in the public sector, however, can be extremely difficult to progress as public servants (understandably) resist any change that might cause them to lose their jobs or have to undertake roles outside their normal comfort zones.
This behavior is neither unique to, nor universal within, the Norfolk Island public service.
The Norfolk Island Administration is a bureaucracy that has learned many of the lessons of process fairly well. However some processes within the Administration will have changed little in the life of self government and some officers will have been in the same role for a long time and will have received little in the way of training to equip them for new roles in an evolving bureaucracy. This is largely because the bureaucracy has not been evolving in any meaningful way.
The Hong Kong-based Political and Economic Risk Consultancy said in a report
on Singapore's bureaucracy, "the Singapore bureaucracy during normal times, when the system is not stress-tested, operates very well, however, during difficult times - or when mistakes are made that reflect badly on the system - there is a tendency among bureaucrats to circle the wagons in ways that lack transparency and make accountability difficult". Reflecting also on the Indian Bureaucracy the report went on, "they are a power centre in their own right at both the national and state levels, and are extremely resistant to reform that affects them or the way they go about their duties". These same traits exist to a greater or lesser extent in any tenured public service and are certainly found in the Norfolk Island Administration. A job for life in the public service does not serve the public well if the organisation remains frozen in time.
Public Administration (the public service) should, by definition, be driven by a culture of responsibility, accountability, and one would hope, altruism. However the degree to which a public service embraces these qualities will depend on the extent to which these qualities are found in their political masters. By contrast, the forces at work driving performance in commerce are substantially different. Commerce lives or dies on its responsiveness to change, it has no choice with profit being the primary driver of performance. It is ironic then, that the changes we all will be expected to live with are for the most part being driven by reluctant stakeholders while the enthusiasts for change sit on the benches.

The NIGs failure to understand the importance of investing in capacity building within its Administration may prove costly for us all. In dealing with the Commonwealth bureaucracy, Norfolk Island is seriously mismatched at both a political and an administrative level; it's a David and Goliath scenario.
It remains to be seen if, against this recalcitrant background, the Norfolk Island community can get a good outcome?

Public Sector Efficiency

Efficiency Dividend is inefficient:

The Norfolk Island Government /Administration has toyed with the idea of using the
efficiency dividend approach to save public money. The Chief Minister in the 12th Assembly, Andre Nobbs, spoke of the application of the ED approach during the dying days of the 12th Assembly, presumably on the advice of the then, and current CEO, George Plant, but those words have not been uttered of late. Maybe just as well.

Danger of waste on the way to a surplus
A new paper from the Centre for Policy Development examines the flaws
caused by blanket budget cuts and puts forward alternatives.

"As anyone who has tried budgeting knows, there is a limit to the
effectiveness of most cost-cutting measures. People who buy expensive
take-away food for their work lunches will find it relatively easy to save
money by bringing food from home instead. However, those already taking
homemade sandwiches every day will struggle to reduce their spending
further and still provide nutritious lunches.
After 20 years of the Efficiency Dividend, the public service is now at
the 'vegemite sandwich' stage of budgeting. Spending has been cut back to
the point at which Departments now need to reduce core functions in order
to deliver ongoing savings."

CPD's latest paper 'Beyond the Blunt Instrument: the Efficiency Dividend and
its alternatives' by CPD Fellow Jennifer Doggett discusses the many
problems caused by the Efficiency Dividend and recommends alternative
measures "

Public Sector Reform Essential

The $3.9m to be provided by the Commonwealth will provide little respite for the struggling Norfolk Island private sector. In the meantime the public sector continues to remain a safe harbor in these difficult times. Part of the rationale for this is that public sector wages trickle down and thus provide a degree of stability in our fragile economy. 

That argument can only be sustained for so long. 

All around the world, in Ireland, USA, Greece, Spain and France to name a few, governments are taking the hard decisions to trim public sector costs understanding, as they must,  that if government expenditure grows, or remains static, and public debt rises while revenue derived from the private sector shrinks, the outcome is inevitable.

The Norfolk Island Government has obviously come to the conclusion that the current model of government and its attendant administration cannot be sustained.

 

In seeking a bailout, Greece and Ireland, have acknowledged the need to restructure their respective administrations and this will in all probability play badly for them domestically when next they go to the polls.

In Bloombeg Business Week 04/12,   Ken Wattret, chief euro-area economist at BNP Paribas in London, wrote;

“Good news in the short run does not mean problem solved,”. “As we saw with Greece, securing financial support does not eradicate the underlying problem: the need for multi-year fiscal austerity to win back the markets confidence over the outlook for the public finances. That is going to be tough.”

In most OECD countries, the size of public sector employment today represents between 5% and 28% of the workforce . The Norfolk Island Census does not differentiate between public and private sector employment, conservatively though one could say, that Norfolk is at the high end of this range, if not beyond it.  
Any downsizing of the public sector is likely to impact on future election outcomes. 
It is that reality which retards action on the part of our politicians as much as the very real conflicts of interest present when friends, relatives and partners are effected by any tough decisions.

The unavoidable fact is that unless the private sector grows or the Commonwealth becomes extremely magnanimous the Norfolk Island public sector  is set for a serious downsizing.

At some point NIG will need to establish what is the core business of government and set about the task of re-engineering itself.

Memorandum of Understanding for Financial Assistance

In order for the Norfolk Island Government to gain financial support from the Commonwealth, both governments signed an MOU which outlines the basis on which the funds can be supplied.

To see the MOU, go to   http://tinyurl.com/2368ayl

Where to From Here ?

In his address to the community at Rawson Hall on Wednesday night Mr Robert Patch from the Dept. of Regional Development added, almost as an afterthought, “where to from here?”
A pretty standard wrap up for any forum where there is a requirement for subsequent action.
Mr Patch then gave an outline of the things that were expected to happen in order for Norfolk Island’s bids to find their way into his Department’s budget and ultimately into the Commonwealth budget cycle.
It is sobering to think that the Norfolk Island Government and the Administration have roughly 12 weeks to come up with the quantum of dollars that they are seeking from the Commonwealth for 2011/2012; their supporting arguments; and then for the Commonwealth to agree to this, or not; and for the basis on which there is to be agreement, or not, to be articulated.
The first part of this is probably the easiest. Truth be told, they’ve done it already.
You would expect that with financial collapse imminent any responsible government would know what it needed to survive and get ready for a bailout and include some contingencies to maximize the size of it depending on their appreciation of the disposition of the bailee.

Imagine you’re a sinking ship, your engines have failed, and half the crew has abandoned ship. The first thing needed is to prevent the ship from sinking e.g. plug the leaks. If that works then maybe you could ask a nearby ship’s captain for some engine parts so that your no longer leaking ship could get under way.
Then you might decide to stretch the friendship and broach the subject of some assistance with a crew because it’s not much good just fixing the leaks and getting underway only to have the ship sail around in circles with no understanding of “where to from here”.
To have some understanding of how the other ship’s captain might react is useful. If in the past you have been reluctant to accept assistance when it was offered, and if you have bad-mouthed other ships crews, then they might be inclined to leave you flopping around in the sea.

Taking the sinking ship analogy a little further, once the ship is out of danger and you have steerage and power, it might be a good time to talk to the passengers. Do they want to continue the cruise? Do they want to go forward, or backward? Standing still is not an option, so “where to from here?” This is where the important supporting arguments come from – all the passengers.
My point is, are we expected to leave our future in the hands of a few “faceless men” such as those of Mr Nobb’s as yet unnamed economic advisory committee, or to the fate of the Canberra lobbyists paid for by other “faceless men,” or do we get a real opportunity for input.
Should the future direction of the good ship Norfolk be dominated by the views of Norfolk Labor, the Chamber of Commerce, or the Pitcairn Society?

The answer, of course, is that the views of all should be factored in as openly as possible. This is a momentous time for Norfolk Island, it is crunch time, we all have a stake and we all need a hearing.

For this to occur the NIG, or the Commonwealth, needs to act fast and establish a process that we can have confidence in. For example:

1. Mail out to all residents on Tuesday December 7th 2010.
2. Call for submissions from organizations and/or individuals.
3. Closing date for input, Friday 22nd Jan 2011.
4. Review all submissions.
5. Tabulate all.
6. Cross reference all with NIG positions already determined.
7. Explain why a particular course of action will not be followed.
8. Provide all the above with final submissions as evidence of having considered the views of all stakeholders.

This is not rocket science, but it is good democratic process.

Fred Howe – Norfolk Island

(note: the writer is Vice-President of the Norfolk Island Chamber of Commerce)

Australia provides a $3.9m assistance package for Norfolk Island

Norfolk Island's Chief Minister, David Buffett, announced to the Norfolk Island Assembly today that the Commonwealth Government has agreed to provide $3.9m to help our cash strapped government address a range of "urgent and needed" issues.
In agreeing to provide this short term package it is understood that the Commonwealth has not agreed to pick up existing Norfolk Island Government liabilities such as those related to the contractual arrangements for the provision of air services to the Island.
The Norfolk Island Government is now committed to working closely with the Commonwealth to determine the basis of longer term financial support and this may bring to an end the income tax free status of the island.
Minister Simon Crean is likley to visit Norfolk Island in February for discussions with the NIG. It is expected that Norfolk Island Government's proposals will be then go forward into the Commonwealth governments budget cycle for 2011/12.
At a public meeting in Rawson Hall later in the day, the Chief Minister and Mr Robert Patch from Minister Crean's Department, spoke to a large group of community members regarding the next steps to be taken in the process.