A Vision for Australia – Part 2

Global Access Partners (GAP) is developing a ‘big picture’ vision and roadmap for Australia. In this second of three blogs, the Chairman of GAP, Peter Fritz, discusses how to modernise health and education, productivity and public funds.

Health and education are matters of great social importance and can offer significant commercial opportunities. The issue of early childhood education is particularly acute, as positive experiences in the first years of life can greatly improve a person’s later prospects.

The Gonski Report is often cited as a lost opportunity, but ‘Gonski’ failed to recognise the driving effect of technology. ‘Gonski’ was not implemented through reasons of costs, as economists simply extrapolated the required budget increase of current practices into the future. GAP’s research regarding its proposed eConservatorium of Music proves that a fresh approach to education can reduce service costs while providing a better and more accessible product to more students. A modernised, digitised approach to education is therefore not only warranted, but mandatory.

‘Gonski’ is a wonderful paper for the 1980s, but it was past its ‘use by’ date even when it was published, which is a few years ago now. This is not to criticise ‘Gonski’, but to argue that a more agile system of ongoing review would allow policy to constantly adjust to changes in circumstances and technology. Such a programme of continuous updates, in preference to the traditional major inquiries beloved by governments seeking to postpone difficult decisions, should be adopted in a range of areas. It is always assumed that a major inquiry will continue to present useful insights and policies well into the future, not least to justify the time and cost of such affairs, but in truth it may already be obsolete on its first day of publication. Technology is changing at such pace that this process of continual review should be carried out by permanent entities focused on implementation.

Broadening Productivity

Productivity remains a fair and useful concept, but it is still defined too narrowly — as the number of ‘widgets’ produced per unit of time. In reality, such figures are affected by a host of other factors, not least fluctuations in the exchange rate which can affect the apparent productivity of an economy far more than actual shifts in production. Gross Domestic Product is another imperfect barometer of national success, as it fails to account for, or even acknowledge, the importance of social progress and individual wellbeing in a society.

Moreover, 80% of a company’s assets are intangible and rest in the experience and expertise of its workers, yet they are completely excised from its profit and loss accounts. As knowledge increasingly replaces capital as a central factor of production, this outdated oversight will hold modern companies back, unless accounting methods are modernised to keep pace with reality.

Tracking Public Funds and Complex Projects

The most important factor hampering Australian productivity is not unduly high wages or over-generous worker protections, but the startling lack of management and accountability regarding government transfers of funds. Virtually no effort is given to tracking the vast sums of money which the public purse transfers. Nor are there serious investigations regarding their true impact, good or bad, on society and the economy. This, in turn, means there is no hard data by which to judge where such funds should be allocated in the future for best effect. Rigorous efforts should therefore be made to ‘follow the money trail’ from the moment it is released by government agencies. At the moment, we do not look at ‘Australia Inc.’ as an entity, or what public spending achieves.

Billions of dollars have also been wasted through the failure of numerous complex projects around the world. Decision makers tend to ‘hang onto’ failing projects far too long without changing course in the light of unforeseen difficulties, or abandoning a doomed project altogether, because there is no system to allow ‘bad news’ to trickle up to the top. There is a natural resistance to hearing bad news, rooted deep in human psychology, and every existing incentive encourages people to prevaricate, avoid reality or merely hope for the best until it is too late.

The ICCPM/GAP Taskforce on Complex Project Management identified the ‘human factor’ as a common element in the failure of numerous domestic and international schemes of every type. The tax payer can no longer afford such financial disasters, nor the country succeed without the benefits those projects should have delivered. We must therefore develop a safe mechanism for whistle-blowers to raise the alarm without harm to their reputation or careers. Even more importantly, there must be new management practices installed which can accurately and honestly report slippages in schedules to allow relatively cheap and effective remedial action to be taken in good time.

Defence projects, in particular, are notorious for their extraordinary cost overruns and delays. A preference for domestic defence procurement, improved by better complex management techniques, could bolster Australia’s defence capability and its vital engineering base.

Read the other blogs in this series:

A Vision for Australia – Part 1
A Vision for Australia – Part 3