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Research Paper 24 1998-99

Departmental Machinery of Government Since 1987

John Nethercote
Politics and Public Administration Group
29 June 1999

Contents

Major Issues

Introduction

The 1987 changes

Cabinet and ministry

Departments

Department secretaries

Evolution of the Departmental Machinery of Government, 1987 to 1998

Central departments

Foreign Affairs, Trade and Defence

Industry departments

Human resources departments

Welfare departments

Arts, Sport, the Environment, Tourism and Territories

Immigration

Veterans' Affairs

Aboriginal Affairs

Functional nomads

Appraisal

Endnotes

Appendix 1: Departmental Machinery of Government, 1987-1998

Appendix 2: Chief executive personnel affected by the Machinery of Government changes, July 1987

Appendix 3: Departmental Machinery of Government: significant changes since July 1987

Major Issues

On 14 July 1987 the then Prime Minister Bob Hawke announced major changes to the ministerial and departmental structure of Commonwealth Government. A two-tiered ministry was established, composed mainly of Cabinet ministers heading departments, and other ministers each appointed to administer a particular department under a Cabinet minister. The number of departments was significantly reduced.

It is the purpose of this paper:

  • To explain the background and character of the 1987 machinery of government settlement as it affected the ministry and departments
  • To trace its subsequent history, and
  • To offer some analysis of its durability, noting that because of other changes in administrative policy and practice, the departmental machinery of government has been less stable than appears to be the case in a formal sense.

The principal findings of the research are:

  • The ministry was enlarged from 27 to 30, of whom 17 were members of the Cabinet. The number of departments was, by contrast, reduced from 28 to 18 by rationalisation and amalgamation. Of the 18, 16 were headed by Cabinet ministers. The exceptions were the departments of Veterans' Affairs and Aboriginal Affairs, the latter scheduled for abolition once a new statutory authority, the Aboriginal and Torres Strait Islander Commission, had been established
  • in establishing the two-tier ministry it was necessary to overcome long-standing opinion that the Constitution, section 64, only permitted appointment of one minister to each department, a view held strongly by Sir Garfield Barwick but not by a number of other eminent lawyers such as Sir Douglas Menzies, Sir Kenneth Bailey and the then Solicitor-General, Dr Gavan Griffith. In instituting the new structure, the Government acted on the advice of the latter. The new ministerial arrangements were upheld within two months by the Federal Court ( Mr Justice Beaumont) in a decision of 16 September 1987
  • as part of the changes, the Public Service Board was abolished. A number of its personnel powers, especially those relating to the Senior Executive Service, were vested in a new statutory officer, the Public Service Commissioner. Pay and conditions of employment functions were assumed by the Department of Industrial Relations. Other powers, often by delegation, were transferred to chief executives (such as secretaries) within the field of public service employment
  • as a consequence of the changes the following Cabinet departments continued, variously with augmented or reduced functions: Prime Minister and Cabinet; Treasury; Attorney-General's; Finance; Administrative Services; Defence; Industrial Relations (previously Employment and Industrial Relations); Social Security; Immigration, Local Government and Ethnic Affairs
  • the amalgamated departments were: Foreign Affairs and Trade; Primary Industries and Energy; Industry, Technology and Commerce; Transport and Communications; Employment, Education and Training; Community Services and Health; the Arts, Sport, the Environment, Tourism, and Territories
  • there were non-Cabinet departments, Veterans' Affairs and Aboriginal Affairs
  • although some of the new departments were seen as 'giants' or mega-departments of the type created in Britain from the late 1960s to the mid-1970s, they were not only on a much smaller scale to counterparts abroad but also smaller than the largest Australian departments, Defence and Social Security, neither of which was significantly affected by the 1987 restructure
  • the two-tier ministry has endured in all key respects. Since 1990, a new third tier, parliamentary secretaries, has evolved: there were four in the Fourth Hawke Government (1990-91); eight in the First Keating Government (1991-93); 10 in the Second Keating Government (1993-96) and the First Howard Government (1996-98); and 12 in the Second Howard Government (since 1998)
  • although all the major amalgamations except Foreign Affairs and Trade have been altered, the departmental structure instituted in 1987 remains essentially in situ 12 years later notwithstanding a number of changes of name
  • this is true both in terms of its organisational framework and most of the specific allocations
  • in particular, with the exception of the Department of Tourism (1991-96) and the partial exception of the Department of Housing and Regional Development (1994-96), there has not been a reversion to the former practice of creating small, narrowly-focussed departments
  • notwithstanding particular observations about specific aspects of the new structure, it was generally welcomed both in Parliament and by commentators in the media and elsewhere
  • a particular indicator of the workability of the new structure is the absence of any changes in the departmental machinery of government following the 1990 elections, the first time this had occurred in more than two decades. The first change of significance occurred in June 1991 following Paul Keating's resignation from the Hawke Government
  • unusually for machinery of government changes, but not surprisingly in this instance, there was, for nearly five years afterwards, continuing interest in the development of the new arrangement, and especially the fate of the larger amalgamations. Most of the commentary was by individuals with responsibility for making it work and the views were generally favourable. The absence of any running criticism, for example, in the press, suggests that the new arrangement did settle down with relatively few difficulties apart from those which often accompany major organisational change, and
  • notwithstanding the general durability of the new departmental machinery of government, there has continued to be considerable organisational change within portfolios, especially through hiving off, corporatisation and privatisation, for instance, by creation of Centrelink, based on the regional networks of the departments of Social Security and Employment, Education and Training, or establishment of bodies such as the Civil Aviation Safety Authority and the Australian Maritime Safety Authority within the Transport portfolio.

Introduction

Three days after the general elections of 11 July 1987 for both the Senate and the House of Representatives, the Prime Minister, Bob Hawke, as he later reported in his memoirs, announced 'sweeping changes to the structure of Commonwealth administration'(1). The number of departments was reduced from 28 to 18 and the number of ministers increased from 27 to 30. All departments except Veterans' Affairs and Aboriginal Affairs were to be headed by Cabinet ministers. Several departments were to have one or two other ministers of non-Cabinet rank, responsible for specific functions. As part of these changes, the Public Service Board was abolished; a number of its personnel functions, including those relating to management of the Senior Executive Service, were vested in a new statutory officer, the Public Service Commissioner; its industrial functions were transferred to the new Department of Industrial Relations; other powers were transferred to chief executives (for example, department secretaries).

Like most machinery of government changes, especially those which follow elections, there was very little consultation or discussion. At the media conference announcing the changes the Prime Minister said: 'This is a Hawke decision, in regard to which I have had consultation ... with a number of people'(2). His memoirs show that there was consultation with various faction leaders, securing support for an enlargement of the ministry in the context of reducing the number of departments.(3)

This restructuring of the ministry and departments was the most significant change in the departmental machinery of government in the history of the Commonwealth. It was more wide-ranging than changes occasioned by war (and, later, return to peace), and certainly on a scale unprecedented in peacetime. Even the expansion which had marked the establishment of the Whitlam Government administratively on 19 December 1972, or the major reorganisation of departments effected by Prime Minister Malcolm Fraser in mid-1982, which affected about one-third of staff, were less complex even if on a similar scale in terms of numbers affected.

The actual changes made in July 1987 have worn well, as a broad comparison with the departmental arrangements in place since the 1998 elections shows (see Appendix 1, columns 1 and 5). More significantly, the organisational framework of the 1987 departmental settlement have in all critical respects endured. With only one or two exceptions, notably the creation by the Keating Government of the Department of Tourism in December 1991 (subsequently abolished in March 1996) and, to some extent, the creation of the Department of Housing and Regional Development in 1994 (abolished in 1996 also), there has not been a return to the former situation of numerous, small, relatively narrowly focussed departments.

It is the purpose of this paper:

  • to explain the background and character of the 1987 settlement as it affected the ministry and departments
  • to trace its subsequent history, and
  • to offer some analysis of its durability, noting that because of other changes in administrative policy and practice, the departmental machinery of government has been less stable than appears to be the case in a formal sense.

The 1987 changes

There were two inter-related elements to the 1987 changes. The first was to introduce a two-tier ministry. The second element was an extensive rationalisation of departments and consequential reduction in the number.

There were a range of reasons which led the Government to take these steps in July 1987 after it had resisted doing so in December 1984 following the previous elections and in the intervening period. There was pressure within the governing party (ALP) for a bigger ministry, partly justified by enlargement of the Parliament in 1984 and by the size of Labor's win in the 1987 elections.(4) There was, however, opposition on political and administrative grounds to any increase in the number of departments which, under the practice prevailing until July 1987, would have been necessary to accommodate a larger ministry. As Hawke has written: 'I would have baulked at simply expanding the ministry'(5).

At the same time there were strong views that a rationalisation of departments was needed for reasons of better policy, efficiency and effectiveness, including improved Cabinet coordination. A two-tiered ministry was essential if there was to be any expansion of the ministry and any rationalisation of departments. As Prime Minister Hawke saw it: 'The appointment of three additional ministers and the cost was minuscule against the massive savings effected by the restructuring.(6)

Constitutional considerations had been a major hurdle in introducing a two-tiered ministry. A long-standing opinion of Sir Garfield Barwick, Attorney-General, 1958-63 and Chief Justice of the High Court of Australia from 1964 to 1981, held that it would be unsafe to have more than one minister in a department. The weight of all other legal opinion (for example, Sir Douglas Menzies, Sir Kenneth Bailey and the then Solicitor-General, Dr Gavan Griffith) leaned the other way; that opinion prevailed in 1987.(7)

It was soon confirmed judicially. On 16 September 1987, Mr Justice Beaumont of the Federal Court of Australia, citing opinions by Professors Geoffrey Sawer and Enid Campbell, stated of the Constitution, section 64, that:

The language is general enough and there is no logical reason to restrict administrative arrangements which might be desirable in the interests of good government. On the contrary, there is every reason to suppose that flexibility was desirable and therefore intended to be conferred. Nor, in my view, is the principle of responsible government any obstacle: both Ministers would remain answerable to Parliament. ... [T]he provisions should be liberally construed so as to afford a proper opportunity to the Executive to introduce administrative arrangements which are appropriate in particular circumstances.(8)

In as much as it was relevant, experience of two-tiered ministries in Britain and Canada was mixed but it was felt that such problems as might arise could be managed, even in Australia where (some believed) egalitarian sentiment was stronger.

Cabinet and ministry

The essence of the two-tier ministry was that, as a general rule, all departments would be headed by a Cabinet minister and, thus, all departments would be represented at the Cabinet table (whilst, at the same time, keeping the size of the Cabinet at a reasonable number). Cabinet ministers would be supported by ministers who would be assigned to departments specified with a designation and nominated responsibilities determined by the prime minister.

Under the arrangement established in 1987 there were 17 Cabinet ministers. Of this number, only one did not head a department-the Special Minister of State, Senator Susan Ryan, who was located in the Department of the Prime Minister and Cabinet with responsibilities for the Office of the Status of Women, the Bicentennial and the Australia Card. After she resigned early in 1988, her place in the Cabinet was taken by the Minister for Trade Negotiations, assigned to the Department of Foreign Affairs and Trade but also with responsibilities in the Industry, Technology and Commerce and Primary Industries and Energy portfolios.

Several departments did not have a second minister: Finance; Industrial Relations; and Social Security. On the other hand, a number of ministers were assigned responsibilities in several portfolios, for example, in addition to the Minister for Trade Negotiations whose responsibilities are outlined immediately above, the Minister for Consumer Affairs, located in the Attorney-General's portfolio also assisted the Treasurer in relation to prices.

This 1987 structure of the Cabinet/ministry replaced one in which all ministers headed departments but only the top 12-16 were members of the Cabinet, although non-Cabinet ministers customarily attended Cabinet for discussion of any submission they lodged. This system was instituted by the Menzies Government in 1956. It had prevailed since then except during the Whitlam Government which reverted to the pre-1956 structure in which the Cabinet and the ministry were co-terminous.

The Hawke Government, prior to the change, consisted of 27 ministers administering 28 departments, of whom 16 were members of the Cabinet.

Since 1987 the main principles have been maintained. The Cabinet has been kept to a size of 16 or 17, with most departments represented (on a small number of occasions particular ministers headed two departments; and, during the first Keating Government, the Minister for Tourism was simultaneously Minister for Resources in the Primary Industries and Energy portfolio). Only for a brief period has a Minister for Veterans' Affairs been a member of the Cabinet (also during the first Keating Government, 1991-3).

On the other hand, during the first two years of the Howard Government, the Attorney-General was not a member of the Cabinet. And the Minister for Immigration and Multicultural Affairs did not join the Cabinet until after the 1998 elections.

The most important change since 1987 has been addition of a third tier, parliamentary secretaries. There had been some previous intermittent use of parliamentary secretaries under the Lyons, Menzies (1950s) and Fraser governments (two and three respectively). During the Fraser Government a statutory basis for parliamentary secretaries was provided (Parliamentary Secretaries Act 1980). In 1971-2, there were also six assistant ministers in addition to the 27 ministers (the McMahon Government).

Following the 1990 elections, four parliamentary secretaries were appointed. Prime Minister Paul Keating's first government had eight, his second, ten. Prime Minister John Howard's first government likewise had ten; there have been 12 since the 1998 elections.

The other observable change in ministerial arrangements since the 1987 changes has been discontinuation of the practice of assigning inter-departmental responsibilities to non-Cabinet ministers. The main circumstance where ministers now have responsibilities beyond the boundaries of a single department is where a minister is designated to assist the prime minister in a particular field. At present five ministers have such assignments on matters such as the status of women, the public service, reconciliation and the Sydney 2000 games. The Ministers for Veterans' Affairs is also Minister Assisting the Minister for Defence: this is the only other 'minister assisting' arrangement.

Departments

There was, and had been for several decades, an almost if not exact correspondence between the number of ministers and the number of departments. During Hawke's 1984-7 Government there were 27 ministers and 28 departments. As mentioned earlier, this correspondence was largely based on a view, held strongly by Sir Garfield Barwick, that under the Constitution, specifically sections 60-64, it was not possible to assign more than one minister to a department, although there was no impediment to a minister being responsible for two or more departments.

As the scope of the Commonwealth government had expanded, especially following the Second World War, this view meant an increasing number of departments, many of which were organisationally small and narrowly focussed functionally. This departmental administrative structure came under increasing criticism for a variety of reasons. Many decisions which desirably should have been made within a portfolio were made inter-ministerially, sometimes even at Cabinet level. Because functional range was restricted, the scope for strategic direction and management of Commonwealth activity was similarly limited; likewise, the scope for expenditure and financial management based on funding new programs by elimination or modification of older, out-moded programs was limited; and there was a resource cost in terms of the corporate services each department maintained to support its operations.

Some of the professional sentiment about what was essentially the post-war departmental structure is conveyed by the following extracts from the 1976 report of the Royal Commission on Australian Government Administration:

It is widely agreed that departments should be organised around a coherent function and that, as departments increase in number, the problems of co-ordination become more difficult. These views led both the Bland Committee in Victoria and the Corbett Committee in South Australia to recommend a reduction in the number of departments. The desire to do this is stronger among those who consider that a large department (like the Department of Defence or the Department of Transport) is the best organisational form for giving effect to government policy. Accordingly, it has been pressed on us that we should recommend that, over a period of time, the number of departments be reduced to about fifteen. This, it has been urged, would make possible a relatively small Cabinet and more effective co-ordination of related government activities.

We are not tempted to specify an optimum number for departments or an optimum size. Administrative considerations are clearly important but ... they must sometimes be subordinated to political factors.

This is not to say that departments should be created, restructured or abolished lightly. Over recent years this has been done with insufficient planning; too many small and weak departments have persisted; and interdepartmental co-ordination has become more difficult ... .

It is sometimes argued that departments should as far as possible be brought to a relatively uniform or 'ideal' size. We see no particular benefit in such uniformity. Nevertheless, plans for reorganisation should take size into account. On the other hand, there is inflexibility which tends to beset big organisations more than small, and the tighter esprit de corps and greater capacity for concentrated effort characteristic of smaller units. On the other, the more diverse resources of large departments can be a source of strength, and can enable many conflicts to be resolved internally rather than by collective ministerial processes.

On the whole our inclination is towards reducing rather than increasing the number of departments. But if ministerial control is to remain effective, there would in some large departments be a case for more than one minister ... .(9)

Another insight into the thinking of officials on the matter was provided by Sir William Cole, a former secretary to the departments of Finance (1976-8) and Defence (1984-7), and chairman of the Public Service Board (1978-83), who wrote in the wake of announcement of the 1987 changes that:

Over the years we have had too many Mickey Mouse departments in Canberra. With all the talk about mega-departments now, it should be remembered that on a world scale even our bigger departments are not really very large.

Some argue that the number of departments doesn't matter very much. But apart from added administrative overheads, more rather than fewer departments makes for more power bases and more pressures to spend. Priorities which might be better sorted out within a large department land on the Cabinet table for settlement.(10)

The judgment that a general rationalisation of the departmental machinery of government was needed was essentially based on experience in Australia. It was not conclusive, however. Amalgamation of Defence in 1973 had worked, but not without difficulty.(11) On the other hand, the attempt to forge a unified transport administration between 1973 and 1982 had not endured. Comparable attempts in Britain and Canada to rationalise the departmental structure, extending over two decades, offered only limited lessons for Australia (one of which was the desirability of amalgamating at several levels of the hierarchy and not only at the most senior if expected benefits were to be secured).(12) Especially in Britain, partly because it is essentially a unitary government in which the central government has many State-type as well as national functions, amalgamated departments, known variously as giant, jumbo or mega departments, were very much larger than any Australian counterpart and had a management task on a scale rarely encountered in Australia. This aspect, in fact, led Dr Michael Keating, Secretary, Department of the Prime Minister and Cabinet (1991-96), to write of the major 1987 amalgamations:

The description of those bodies as 'super' or 'mega' departments is a dreadful misnomer, because while the average number of employees per department rose in 1987, none of the new entities compared with the size of our two largest departments, Defence and Social Security-neither of which was affected by the 1987 changes. On average, the newly created departments are generally smaller than our largest private sector companies, such as BHP, and they are certainly smaller than their equivalents overseas.(13)

The 1987 changes had both general and specific purposes. The general purposes were set out at the time as:

  • enhanced ministerial control
  • better coordination and decision-making processes
  • broader perspectives and greater coherence in policy advice and program development
  • greater scope for delegation to portfolios
  • reduction in overlap and duplication-with consequent savings, and
  • greater flexibility in portfolio operations and potential stability in machinery of government.

The specific purposes of the changes were identified as follows:

  • allocation of export promotion of commodities and manufactures to the relevant domestic industry departments, and merging responsibility for bilateral and multilateral trade negotiations with the Foreign Affairs portfolio; [this objective was accomplished by establishment of the Department of Foreign Affairs and Trade (author's note)]
  • amalgamation of education and training and labour market function; [this objective was met by establishment of the Department of Employment, Education and Training (author's note)]
  • drawing law enforcement functions under the Attorney-General's umbrella
  • bringing health policy, community services and housing assistance under the one umbrella, and linking the Veterans' Affairs and Aboriginal Affairs functions into that portfolio; [achieved by establishment of the Department of Community Services and Health (author's note)]
  • bringing together the major service functions of Transport, Aviation and Communications; [accomplished by creation of the Department of Transport and Communications (author's note)]
  • joining the related elements of the former departments of Arts, Heritage and Environment and Sport, Recreation and Tourism, and placing a separate ACT Administration within that portfolio; [the department to which this purpose was directed was Arts, Sport, the Environment, Tourism and Territories (author's note)], and
  • placing most Government common services into one portfolio [Department of Administrative Services (author's note)].(14)

The departmental structure which emerged was thus:

Continuing departments (some with augmented, others with reduced, functions) were:

  • Prime Minister and Cabinet
  • Treasury
  • Finance
  • Attorney-General's
  • Administrative Services
  • Defence
  • Industrial Relations (previously named Employment and Industrial Relations)
  • Social Security
  • Immigration, Local Government and Ethnic Affairs.

Departments based on amalgamations of two or more previous departments were:

  • Foreign Affairs and Trade
  • Primary Industries and Energy
  • Industry, Technology and Commerce ( name not changed when it absorbed the Department of Science)
  • Transport and Communications
  • Employment, Education and Training
  • Community Services and Health
  • the Arts, Sport, the Environment, Tourism and Territories.

Non-Cabinet departments

  • Veterans' Affairs
  • Aboriginal Affairs

More information about the components of the changes is contained in Appendix 1, columns 1 and 2.

Department secretaries

Whilst the changes added to the number of ministers, they also brought a reduction in the number of department secretaries, ten having been displaced, in addition to the three commissioners of the abolished Public Service Board. With two exceptions all those appointed as secretaries in the new structure had been secretaries immediately beforehand; the exceptions were Dr Peter Wilenski, chair of the Public Service Board (1983-87), previously secretary to the departments of Labor and Immigration (1975) and Education and Youth Affairs (1983), who became secretary to the new Department of Transport and Communications; and Tony Ayers, previously secretary to the departments of Aboriginal Affairs (1979-81) and Social Security (1981-86), who was appointed secretary to the Department of Community Services and Health.

Former secretaries who did not receive fresh appointments retained their rank. Nine were assigned to particular departments with the designation of Associate Secretary; this number included two who had been commissioners of the Public Service Board. Others took various posts with statutory bodies, some full-time, others part-time. One was appointed Australian ambassador to the Organisation for Economic Co-operation and Development (OECD). Of those not immediately appointed to head a department in July 1987, only three eventually returned to secretary posts; one former commissioner of the Public Service Board was also subsequently appointed as a departmental secretary. It was only in 1996 that personnel changes from the 1987 restructuring finally worked themselves out, either by appointment to established posts or retirement. By June 1999 only four of the top level personnel involved in the restructuring were still on the government payroll, two heading departments, two in statutory posts. For details, see Appendix 2.

It took some time for the secretary arrangements to settle down. In mid-1988 three heads left their posts, one going to the United Nations as Australian ambassador, another returning to a university professorship and a third retiring. Two of these vacancies were filled by transfer, the third by elevation of a serving officer; of the two vacancies thus created, one was filled by appointment of an associate secretary, the other by a promotion.

Six vacancies arose during 1989. Two of these were filled by transfer, a third by an associate secretary; another was filled by appointment of a full-time statutory chief executive officer; the remaining two were filled by promotions. By contrast there were only three changes (two in the same department) during 1990, an election year; all were filled by elevation of serving officials.

Evolution of the Departmental Machinery of Government, 1987 to 1998

It was neither intended nor expected that the particular configuration of departments and allocation of functions set in place in July 1987 would be permanent. So it has been in the past 12 years that there have been further changes arising from a variety of causes (different policy priorities, prospective improvements arising from a redistribution of workloads, for example). A number of changes bear the hallmark of a considered move fine-tuning particular arrangements (for example, some of those affecting the Department of Industrial Relations/Workplace Relations and Small Business). A number have arisen following elections, though the 1990 elections are notable for the absence of any organisational change afterwards for the first time in more than 20 years. But, as is to be expected, a new Government taking office in 1996 made some significant changes at the time and more as it familiarised itself with the workings of administration. Ministerial resignations and subsequent reshuffles in 1991, 1994 and 1997 have also been occasions for change. The significant changes since July 1987 are contained in Appendix 3.

Notwithstanding the increasing frequency of change (partly the result of a new government taking office), what is of interest is that not only has the basic framework of the 1987 structure worn well, so too have the actual arrangements themselves (especially given the instability which had marked the previous decade and a half and the ease with which such changes can be made in Australia). This feature is evident from Appendix 1 (columns 1 and 5) but may also be readily seen in an examination, sector by sector, of the departmental system since July 1987.

Central departments

The departments of the Prime Minister and Cabinet, the Treasury and Attorney-General's have survived the period, though not without major change in the case of the latter two. There have been some small changes at the Department of the Prime Minister; for example, the Office of Multicultural Affairs, was located within its establishment until it was transferred, reduced in function and staff, to the Department of Immigration and Multicultural Affairs by the Howard Government. A post of Chief Scientist was also located in Prime Minister and Cabinet for several years; these science activities have now been relocated to the Department of Industry, Technology and Resources. An Office of Indigenous Affairs was established in 1993 and reports to the Minister for Aboriginal Affairs who is now within the Prime Minister's portfolio.

The Treasury, both departmentally and as a portfolio, has acquired a range of economic bodies from elsewhere in the administration, including, in 1996, several from Attorney-General's, reflecting an increasingly market-based rather than law-based approach to business regulation. The then Industry Assistance Commission (IAC) was transferred from Industry as part of the 1987 reconstruction. It is now the Productivity Commission and has absorbed the IAC, the Economic Planning Advisory Council (EPAC) secretariat and parts of the Bureau of Industry Economics. Similarly, the Australian Competition and Consumer Commission (ACCC)) has been transferred to the Treasury portfolio. The portfolio also includes the Australian Competition Tribunal, the newly-established Australian Prudential Regulation Authority, the Australian Securities and Investments Commission, and the National Competition Council. Various divisions of the Attorney-General's Department concerned with business law, together with various business regulatory agencies, were transferred to the Treasury in March 1996.

The growth of the Treasury Department and portfolio illustrate some important characteristics of the post-1987 structure of Commonwealth administration. That structure is marked by a comprehensive definition of function where previously function had been conceived on a specialist, not to say limited basis. In so shaping the administrative structure, another feature of its predecessor has been increasingly diminished, namely administrative pluralism, an approach justified as providing ministers (in particular) with alternative (sometimes competing) sources of advice. As the Treasury portfolio has been enhanced, the Treasurer personally has had multiple sources of advice-for instance, the Department, the Reserve Bank and the Productivity Commission. But there is less scope for inter-agency discussion across portfolios as when EPAC was located within the Prime Minister's portfolio, the Industry Commission under the Industry minister and the forerunners of the ACCC within the Attorney-General's jurisdiction. This approach was often cited as a justification for the administrative structure developed by the Whitlam Government and underlined by Prime Minister Whitlam himself in his observation that:

We have not altered the traditional role of the Public Service in the policy making process, but by greatly increasing our sources of policy advice ... we have provided for a meeting of minds, a re-stimulation which is coupled with a leadership from the political level. Where this has resulted in tension it has in the main been creative tension, and that is our object.(15)

A reported comment from the late 1980s underlines the diminution of administrative pluralism:

... Suddenly we no longer had those arguments because there was nobody left to argue with ... they were all in this portfolio. So that was a great step forward.(16)

In October 1998 the Australian Customs Service was transferred from the Industry portfolio to the Attorney-General's, thus bringing all Commonwealth agencies involved in law enforcement together in one portfolio; excise collection was transferred to the Treasury.

The departments of Finance and Administrative Services were relatively stable until October 1997; the main change was a period of a year when the Arts formed a part of what was called, at the time, the Department of the Arts and Administrative Services (DAS (1993-4)). In October 1997, in the wake of ministerial resignations over abuse of travel allowances, DAS was abolished and many of its common service functions were located in the newly-renamed Department of Finance and Administration, an augmentation of Finance. The change had been implicitly foreshadowed as long ago as 1994 when, following the election of that year, the Minister for Administrative Services was omitted from the Cabinet and DAS was brought, for Cabinet purposes, under the jurisdiction of the Minister for Finance. This arrangement was maintained by the Howard Government when it came to office in 1996.

Foreign Affairs, Trade and Defence

The Department of Foreign Affairs and Trade has proven to be a great survivor of the 1987 settlement. The two antecedent departments had historically been rivals, particularly when John (later Sir John) McEwen was the Trade Minister (1956-71) and Sir Alan Westerman the department Secretary (1960-71). After an uneasy start the new department appeared to rise above its history, so much so that Austrade, first located in the Industry portfolio, was transferred to Department of Foreign Affairs and Trade in 1994.

A contributing factor in the durability of Department of Foreign Affairs and Trade may have been the inclusion, most of the time, of both the Foreign Affairs and the Trade ministers (the latter under various designations) in the Cabinet, the exceptions being the first six months of the new arrangement and during the first Keating Government (1991-93).

The Defence Department was an early case of large scale amalgamation when it absorbed the functions of the departments of Navy, Army and Air, and parts of Supply, in 1973. The Supply component of that amalgamation periodically re-emerged in various guises-Productivity from 1976 until abolition following the 1980 elections; and, in a somewhat different mix, as the Department of Defence Support from mid-1982 until abolition after the 1984 elections. Since then there has been widespread continuity in the basic framework of the Defence organisation.

Industry departments

The Department of Primary Industries and Energy was perhaps the most stable of the industry departments in the post-1987 era, neither acquiring nor losing major functions; this was a feature of one of its two predecessors, the Department of Primary Industry (1956-87; renamed Agriculture, 1974-5). Its other predecessor had a less settled past, its major functions being embodied variously in National Development (1949-72); Minerals and Energy (1972-75); National Resources (1975-77); National Development/National Development and Energy/Trade and Resources (1977-83); and Resources and Energy (1983-7).

And so it was that in October 1998, when the Department of Agriculture, Fisheries and Forestry was formed as essentially a commodity-focussed organisation, that it was the resources function which was transferred to the renamed Department of Industry, Science and Resources. [The secretary of the Department of Industry, Science and Resources, Russell Higgins, was executive director of the Resources and Energy Group in the Department of Primary Industries and Energy prior to taking up his appointment as secretary in 1997].

The Industry department has been most active in terms of name variations, many of which have arisen from modest changes in functions. This is not, however, a new feature of the post-1987 era. In the previous 15 years the Industry portfolio had a variety of names-Secondary Industry (1972-74), which was an up-grade of the Office of Secondary Industry located in the Department of Trade and Industry (1964-72); Manufacturing Industry (1974-75), an amalgamation of the Department of Secondary Industry and the residual parts of Supply not incorporated in the amalgamated Department of Defence; Industry and Commerce (1975-84), whose functions varied during its life, for example, transfer of some to the Department of Productivity in 1976; and Industry, Technology and Commerce, as the Department was named in 1984 when it assumed the technology functions of Science and Technology. Changes since then have been:

  • July 1987. The Department of Industry, Technology and Commerce assumed the functions of the Department of Science and the housing functions of the Department of Housing and Construction (the construction functions were transferred to the Department of Administrative Services)
  • June 1991. Housing functions of the Department of Industry, Technology and Regional Development transferred to the renamed Department of Health, Housing and Community Services
  • March 1994. Upon transfer of regional development function to the new Department of Housing and Regional Development, renamed Department of Industry, Science and Technology
  • March 1996. Renamed Department of Industry, Science and Tourism after absorbing the abolished Department of Tourism; the housing component of the also abolished Department of Housing and Regional Development; the science activities previously located in the Department of the Prime Minister and Cabinet; and consumer affairs functions transferred from the Attorney-General's Department, and
  • October 1998. Renamed Department of Industry, Science and Resources following transfer of resource functions from the Department of Primary Industries and Energy (now the Department of Agriculture, Fisheries and Forestries).

The Department of Transport and Communications was among the most substantial of the 1987 creations in both departmental and government terms. Not only did it combine three former departments, the portfolio itself included major government business enterprises such as QANTAS, the Australian National Line, Telecom (now Telstra) and Australia Post, as well as various regulatory bodies. It was as close as the new creations came to a 'jumbo' department and was the object of considerable interest because an earlier attempt to build a single Department of Transport (1973-82), bringing together previous departments of Civil Aviation and Shipping and Transport, was not regarded as having been very effective.

The 1987 Department of Transport and Communications nevertheless survived until 1993 with reasonably good reputation administratively until the pay-TV and associated controversies of 1993.(17)

On this