Federalism and Benchmarking in Australia (Overview)

FEDERALISM AND BENCHMARKING IN AUSTRALIA
Roger Wilkins AO
Head of Government & Public Sector Group, Australia & NZ, Citi
Former Director-General of The Cabinet Office in New South Wales, Australia
Précis
Since 1993, Australia has had a system of benchmarking government services
delivered by State (Länder) governments.
There is an annual report on performance published by an independent Federal
body called the Productivity Commission. The report covers services such as
housing, health, education, policing, courts and justice, community services, and
indigenous affairs. All of these services are delivered by the States (Länder).
It is a system that uses common definitions and methodologies and thus
promotes comparability of performance between the States (Länder).
Progress has been made over the last 15 years in refining the system, but much
still remains to be done in agreeing on and defining outcome measures.
State politicians sometimes find the report politically embarrassing, and the level
of State support has been mixed. It has, however, enabled a degree of
comparability and competitive federalism to drive efficiencies and innovation.
The new Australian Government (Labor elected in November 2007) has an
agenda of wide ranging reform in government service delivery. It also works to
get the federal system to work more efficiently. A focus on outcome measures
and benchmarking is likely to see the reinvigoration/reform of the current
benchmarking system.
A major feature of Australia’s federal system is the level of vertical fiscal
imbalance the Federal Government raises most of the revenue; and there are
large transfers to the States. This is an important reason why Federal
governments have been able to encourage or coerce the States into benchmarking
and reporting performance. But State Treasuries/Finance Departments and
Premier and Treasurers have also found benchmarking a useful discipline in
driving efficiencies.