As a result of the Norfolk Island Legislation Amendment Act of 2015, the Australian Government on 1 July 2016 abolished self-government on Norfolk Island and replaced it with governmental arrangements based on a NSW regional council model, and with substantially reduced powers. The Australian National Audit Office (ANAO) has now carried out a performance audit to "assess whether the Department of Infrastructure, Regional Development and Cities has designed and implemented appropriate governance and administration arrangements for the transition and delivery of sustainable reforms to services on Norfolk Island": the Department (DIRDC) being the Commonwealth department with overall responsibility for Norfolk Island through its Territories Branch. The completed ANAO Audit Report was tabled in the Australian Parliament on 31 May 2019. (1)
The Audit Report gives, for the first time and in public, a clear description of the Commonwealth governmental processes undertaken in the implementation of the Act of 2015, including processes involving the transitional administration. Such a description had not previously been available, so for this publication we must be grateful. However many on Norfolk Island, who have been waiting a long time for a fair and transparent account of DIRDC's conduct on the island in recent times are sceptical about the content and conclusions of the Report. Should they be? Well, "No", and "Yes". Here's why.
The ANAO is the national auditor for the Parliament of Australia and the Government of Australia, and reports directly to the Australian Parliament. The ANAO is located in the Prime Minister and Cabinet portfolio, and ANAO employees are Commonwealth public servants, as are employees of DIRDC. So that despite the independence of the ANAO process, we have one group of public servants reporting on the competence of another group of public servants.
The intra-governmental nature of the Audit Report is easy to see as almost without exception the 113 footnotes in the Report are either explanatory notes on the ANAO's own behalf, or Commonwealth/government-initiated communications, letters, and reports, or those of their consultants and appointees. The former Norfolk Island Government provides source for one footnote, as does the Norfolk Island Regional Council. There is a view that we should not be too concerned with this circumstance – after all the audit is primarily concerned with assessing one Commonwealth agency's performance. However we do need to be aware of the audit's characteristics and limitations.
Public service protocols ensure that public reports by public servants will be in sober tones, with no use of rude, abrasive or emotional language as one might find in say, some independent journalism. So one will not find such crude and direct statements like "DIRDC failed to accomplish what it was responsible for", but rather something like "DIRDC was partially successful in its mission". The over-riding characteristics of public service reports are circumspection and euphemism. There are also other subtle forces working to ensure that such reports resemble blancmange rather than curry. For example public servants tend not to want to rock the boat too much as that might embarrass a minister or two, and could damage their (the public servants') immediate career prospects. Anyone who has watched episodes of the British political sitcom Yes Minister will not find such a circumstance surprising. Some readers of the ANAO Report may well find themselves impatient with this anodyne fare.
Here is a key observation from the Report's conclusions:
The department's advice to the Australian Government presented a range of reform options, which was based on an assessment of Norfolk Island's self-governance arrangements and input from a community consultation process. Elements of the reform design relating to state and local government services could have benefitted from more detailed analysis. (p. 8)
We will consider what the ANAO thought of the "self-governance arrangements" and the "community consultation process" in more detail below, but the final sentence here conveys the blandness within which the Report's conclusions are couched. Here are some further examples:
Roles and responsibilities for the implementation of the reforms were clearly outlined, but the department's prioritisation plans lacked appropriate detail.(p. 8)
Arrangements established for the oversight of the Norfolk Island Health Residential Aged Care Service (NIHRACS) were inappropriate. (p. 9)
That's about as fiery as the Report gets. Whether these and other criticisms in the Report amount to a caning of DIRDC or merely a flogging with a feather duster, is difficult for someone outside the system to tell. But criticisms of DIRDC there are in the ANAO Report, even if self-effacingly expressed.
One major concern with this intra-governmental audit process – at least in the present example – is an acceptance of the governmental view of events, with alternatives or criticisms squeezed out or disregarded completely. (In this regard we have already mentioned the matter of text references.) Here are some other examples.
In relation to the econometric studies carried out by CiE on the Norfolk Island economy in 2014, the ANAO Report states:
A November 2014 report commissioned by the department provided modelling of the economic impact of extending Commonwealth taxation, social security, superannuation and the minimum wage to Norfolk Island. The modelling showed that if Commonwealth arrangements were implemented, the expected ‘higher level of economic activity, increased employment and wages combine to see (nominal) household consumption each year being some $20 million higher than otherwise.’ (p. 24)
This is a deceptive statement because it accepts the conclusion of a DIRDC-sponsored study which was heavily and comprehensively criticised at the time by an independent econometric modelling expert Professor Michael Common, formerly of the Australian National University and at that time at Strathclyde University in the UK. And furthermore there was no mention in the Report of an earlier and similar econometric study by CiE, suppressed by the Commonwealth, which reached a very different conclusion. (2)
Again, in relation to the "community consultation process" carried out on the island in the lead-up to the implementation of the 2015 Act, the ANAO Report states:
In his report to the Minister on the consultation process, the Administrator stated that ‘there is now widespread general agreement with the JSC recommendations.’ The Administrator’s report, which formed part of the submission to the Australian Government, included dissenting views and commentary from the public meeting for the Australian Government’s consideration. (p. 27)
This merely accepts the Administrator's view of the process, which was against the totality of evidence in the public domain, to the contrary. The Administrator's view was widely discussed and challenged at the time, but never defended. (4) The Audit Report appears to have declined to investigate the truth or falsity of this matter, of which it was well aware (5), choosing rather to ignore the matter completely.
Again in terms of the "community consultation process", the fact that over years DIRDC systematically declined to respond to queries put to them by members of the Norfolk Island public, did not even rate a mention in the Report as relevant to DIRDC's performance.
Well, in responding to these claims of ignore, one view would be that, of necessity, ANAO must of take a circumscribed view of the area it will consider. But there is a problem: Where does that leave the audit assessment when it is made on only a part of the evidence? The fact that "modelling of the economic impact" and a "community consultation process" were carried out by DIRDC is in practice meaningless: what is relevant is the content of those exercises. The constriction of the area of interest that the ANAO was prepared to entertain in its audit, and the steering away from controversy, are problematic because ANAO evidently wants to appeal in its assessment to broad merit but then takes a very limited view of the information it is prepared to accept. The Report provides no indication as to what the legitimate bounds of its exercise are, and without it the Report must be taken as compromised and deceptive.
This article will continue next week when some more general matters will be considered.
– Chris Nobbs
(1) ANAO, 2019. The design, implementation and monitoring of services reform on Norfolk Island, Auditor-General Report No. 43, 2018-19, 31 May.
(2) Common, M., 2015. A Comparison of Two CIE Reports (2006, 2014) on the Economic Impact of
Norfolk Island Reform Scenarios. Also: Nobbs, C., 2015. Norfolk Island Reform Scenarios - Comparing the two CIE reports (2006 and 2014), The Norfolk Islander and Norfolk Online News, 28 November; reproduced in (3).
(3) Nobbs, C, 2017. Australia's Assault on Norfolk Island 2015-16: Despatches from the Front Line, Amazon, pp. 30-33.
(4) For example: Nobbs, C., 2016. Was there ever a majority of Norfolk Islanders in favour of the removal of self-government? The Norfolk Islander and Norfolk Online News, 13 February. Reproduced in (3), pp. 60-66.
(5) Nobbs, C., 2019. Submission to ANAO Performance Audit of DIRDC, 11 November.
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