Coalition begins decentralisation process for federal departments

The Coalition government is trying to open the way for a mass clear-out of government departments and the public servants who work there from the national capital.

Fiona Nash, Deputy Leader of The Nationals wants every APS department to justify its presence in Canberra or face a forced move to the bush. Photo: Louie Douvi

Fiona Nash, Deputy Leader of The Nationals wants every APS department to justify its presence in Canberra or face a forced move to the bush. Photo: Louie Douvi

It’s important for government to lead by example and invest in rural, regional and remote Australia, creating long term careers and confidence in those communities.

Excerpt of Senator Fiona Nash's April 19 address

The government announced a policy on April 19 that would force Commonwealth departments to justify their continued presence in Canberra or face a forced move to rural or regional Australia.

As the controversy surrounding the compulsory relocation of the pesticides authority out of the capital continues, Nationals Deputy Leader Fiona Nash announced that all departments in the 155,000-strong Australian Public Service were to be assessed for "decentralisation" from Canberra and other capital cities. The move is a massive escalation of the Nationals' policy, pursued with the acquiescence of their Liberal coalition partners, of moving small agencies in the Agricultural portfolio out of Canberra and into Nationals-held seats.

Now, giant operations like Immigration and Border Protection, Defence and Human Services, each of which has many thousands of public servants based in the capital, must justify their presence in Canberra or face the same fate as the Australian Pesticides and Medicines Authority.

"I'll be responsible for creating a template for government ministers to assess which departments are suitable for decentralisation by mid-year," Ms Nash said. "Departments will need to either indicate that they're suitable to move to the regions or justify why all or part of their operation is unsuitable.

"All portfolio ministers will need to report back to Cabinet by August on which of their departments are suitable to be moved to regional Australia, and relevant ministers will need to report to Cabinet with robust business cases for decentralisation by December."

Regional Australia Institute chief executive Jack Archer endorsed the Senator’s call. “It’s time for the metropolitan monopoly on Australian Public Service jobs and public power to end,” he said.

But forcing public servants to move from cities to country Australia is no miracle cure for regional economic woes, the Productivity Commission has warned.

The commission's report Transitioning Regional Economies cites the controversial move of the pesticides authority from Canberra to Armidale as a cautionary tale, warning that vital skills in highly specialised agencies can be hard to find in the the regions.

While the Productivity Commission found that a government presence can make a difference in regional economies, citing the corporate watchdog ASIC's call centre operation in western Victoria, much of the time, the numbers of jobs involved were too small to make meaningful change.

"Although public sector agencies can operate effectively in regional centres, attempts to relocate employment as a form of regional assistance can have unintended consequences, and each instance needs to be considered in its own right," the commission writes.

"The nature of the skills required in relocation proposals is critical. Where the skill requirements are highly technical and specific, relocation to a region might diminish the organisation's effectiveness.

“It may be that the types of jobs required by the ASIC registry can be easily found in Traralgon, but finding qualified scientists for the APVMA in Armidale might be problematic."

Nationals' leader Barnaby Joyce called a press conference on April 20 to back away from the full scale of the policy ambition outlined by his deputy Fiona Nash at the National Press Club a day earlier, nominating several key departments that would not be moved to the regions.

Mr Joyce's intervention came as the criticism of the scheme from Canberra business, academic and political leaders heightened, including friendly fire from the Coalition's local senator and the leader of the Canberra Liberals.

There is uncertainty over which Commonwealth employers fall under the scope of the policy after Senator Nash refused to limit options on Wednesday but Mr Joyce ruled out certain moves on Thursday.

"You will have the vast majority of government, your Taxation Department, Treasury and Finance will be in Canberra,” he said.

“We won't be moving the Treasury Department to Albury. That is obvious.”

But ministers will still be given until August to report back to Cabinet on which of their departments, agencies and other entities are considered suitable for relocation, with Mr Joyce and Senator Nash warning they will be expected to "actively justify" why any agency is unsuitable for relocation.

Business cases are expected to be with government by December.

Stephen Byron, chief executive of Canberra Airport, which has major public service departments among its tenants, said the decentralisation push out of Canberra was proving to be unsustainable.

"When you're seeking to move public servants out of Canberra, you're getting an 80 to 90 per cent attrition rate in the organisation," Mr Byron said.

"It's completely unsustainable for a government that wants to govern well and implement its policies to be moving chunks of itself and stripping out 80 to 90 per cent of its capabilities.”

  • Additional reporting by Tom McIlroy