The Centrelink Experiment

The Centrelink Experiment: Innovation in Service Delivery

John Halligan
with Jules Wills
Copyright Date: 2008
Published by: ANU Press
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  • Book Info
    The Centrelink Experiment
    Book Description:

    Centrelink was established in 1997 as part of the Howard government's bold experiment in re-framing social policy and re-shaping service delivery. Centrelink was the embodiment of a key tenet of the Howard vision for public service: a specialised service delivery 'provider' agency separated from the policy functions of the 'purchaser'. Carved out of a monolithic Department of Social Security, Centrelink was established along 'business lines' operating 320 service centres and delivering payments to 10 million Australians. Although enjoying 'monopoly provider' status, the organisation was required to deliver services to many different clients on behalf of its 'purchasing departments' (up to 25 in total) under the terms of quasi-contractual service agreements. It was meant to demonstrate a greater level of both transparency and accountability for the administration of payments amounting to over 60 billion of Commonwealth expenditure. For many years there was a real 'buzz' around the Centrelink experiment and staff and clients were generally enthusiastic about the transformation. However, after around eight years, the experiment was reined in and Centrelink was placed under closer ministerial direction and under a new managing department. The experiment continues, but its trajectory reflects the different pressures impacting on such dedicated 'services delivery agencies'. John Halligan, Professor of Government at the University of Canberra, is a foremost Australian expert on public sector governance and has published extensively on the evolution, form and behaviour of the public sectors in Australia and overseas. This volume is the culmination of an exhaustive empirical study of the origins and experience of 'the Centrelink Experiment'. I commend this book to researchers, policy practitioners and students with an interest in policy innovation, change management and the realpolitik of public sector reform. John Wanna, Sir John Bunting Chair of Public Administration, The Australian National University

    eISBN: 978-1-921536-43-4
    Subjects: Political Science

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-x)
  3. Professor John Halligan
    (pp. xi-xii)
  4. Preface
    (pp. xiii-xiv)
  5. Acknowledgments
    (pp. xv-xvi)
  6. Introduction: Centrelink as a field of study
    (pp. 1-14)

    Centrelink has attracted more sustained public attention and scrutiny (including international attention, for example, Husock and Scott 1999a; Smullen 2007)¹ than most other public organisations in recent Australian history. For the customer, it dispenses a wide range of welfare services and payments. For the government and taxpayer, it reflects a new style of organisation that emerged in the 1990s in Australia and overseas. At the same time, it differs from traditional bureaucracy and ‘new-style agencies’ that have become fashionable overseas because of its multifunctionality and the breadth of its role within the public sector.

    The relevance of this experiment, nationally...

  7. 1. Designing a delivery agency
    (pp. 15-28)

    The creation of a large public organisation is a significant event because such a major institutional commitment is rare.¹ Democratic governments normally have limited capability for radical design (Olsen 1998) as the conditions for major change occur infrequently, but a window of opportunity occurred in Australia in mid-1996.

    Australia has had large public organisations before and the progenitor of Centrelink, the Department of Social Security (DSS), was large in the departmental pantheon. There was also the ‘mega-department’ experiment from 1987, which resulted in agencies of greater complexity but not necessarily of more substantial scale (Halligan 1987). In Centrelink’s case, the...

  8. 2. Centrelink’s development
    (pp. 29-48)

    Centrelink was established in July 1997 as a statutory agency within the social security portfolio with a simple and quite original task. This was to enter into arrangements with department heads to carry out functions and to be responsible for delivering federal government services and benefits to Australia’s unemployed and social welfare recipients. The Prime Minister, John Howard, called the establishment of the new CSDA ‘probably the biggest administrative reform of recent times’, with its combination of ‘efficiency with sympathetic and responsible service’ (Howard 1997: 6).

    This chapter examines how this administrative reform has been played out since its creation...

  9. 3. Strategies and management structure
    (pp. 49-66)

    From its inception, Centrelink was subject to several driving forces and constraints. Its enabling legislation (CSDA 1997a) described the new agency’s functions as providing services in accordance with service arrangements, functions conferred under other legislation or under direction from the minister and anything else related to the performance of its functions. The accompanying second reading speech (Ruddock 1996:7623) noted that the organisation was expected to expand on the delivery of income security payments and services for the DSS and provide ‘an administrative framework for integrating access to Commonwealth services by consolidating services so that, where possible, people can get [the]...

  10. 4. Leading and managing change
    (pp. 67-82)

    This chapter examines how change was managed in Centrelink. As the origins of Centrelink were in government decisions and legislation, there were high political expectations that the new agency would produce improved performance and administrative savings by combining the operations of the DSS and DEETYA. Centrelink was a risky experiment for the Commonwealth, with its separation of policy from ‘customer’ service and the introduction of purchaser–provider agreements to maintain accountability. Centrelink also faced many obstacles—external and internal. The transitional management challenges included ensuring the government’s policies and directions were complied with; effective coordination between stakeholders; developing a unified...

  11. 5. Reinventing service delivery
    (pp. 83-106)

    One reason for Centrelink’s creation was to improve the quality of service for the unemployed and those on income support. This chapter examines how Centrelink sought to achieve this, considers how its services changed from the customer’s point of view and identifies some of the successes and difficulties. The focus is on the customer’s perspective of Centrelink and its services.

    The rationale for a service delivery agency can be found in how it conceives of and handles its core responsibility. This involves how it engages the customer through its conception of the customer relationship and the design of service delivery...

  12. 6. Governance
    (pp. 107-120)

    Centrelink represents a departure from the APS departmental model because of the scope of its design and operations, in particular its complex and unusual governance arrangements. Its emergence coincided with the growth of corporate governance in the public sector.

    Of the four primary stakeholder groups nominated by Centrelink—the portfolio ministers, client departments, internal customers (board of management and agency staff) and the people using Centrelink services—this chapter is concerned with the role of the minister and the board.¹ The central features of Centrelink’s governance have been, first, the formal political and executive elements involving the minister, board, departmental...

  13. 7. Relationships with client departments
    (pp. 121-142)

    Relationships with other agencies are significant to public organisations. These relationships are especially important for a delivery agency that is defined in terms of the services that it provides for policy departments. This is even more the case when this relationship is formalised through purchaser–provider arrangements.

    By far the most important relationship for Centrelink in its formative years was that with DFaCS. This accounted for most of its services. Centrelink also provided services to a range of other Commonwealth departments although the total proportion was relatively insignificant. They included DEWR, DEST, the Department of Health and Ageing (DoHA) and...

  14. 8. Entrepreneurship and challenging boundaries
    (pp. 143-154)

    The concept of an entrepreneurial public organisation has been commonplace for some time, but it is unusual for a major public service agency to be perceived as operating in the market to secure existing core work as well as to seek new business. Centrelink was concerned with market share and with competition in the public and voluntary sectors, and even with extending operations to the private marketplace. This imperative derived from the government injunction to operate more like the private sector and reflected the in-vogue dictums of the 1990s about new public management and entrepreneurial government (Halligan 2003).

    This chapter...

  15. 9. Lessons from Centrelink’s formative years
    (pp. 155-168)

    This chapter reviews lessons from the Centrelink experience, which together span a significant range of questions about public management. Three themes permeate the discussion.

    At one level, there are questions about designing the delivery of services that might best relate to particular types of agency. There are issues about Centrelink’s organisational form and, as a solution to design questions, about how responsibilities are assigned and relationships between organisations determined.

    Second, there are durable questions of public administration concerning governance, relationships among agencies, external relationships with society and the organisation of policy and implementation. The questions about delivery systems, organisational change...

  16. Epilogue: Back to the future
    (pp. 169-182)

    The resurrection of the traditional machinery of bureaucracy—central agencies and departments of state—impacted significantly on the governance and internal structural arrangements of Centrelink after 2004. The departure of the inaugural CEO, Sue Vardon, on 10 December 2004, heralded the demise of an eight-year period of innovative administration during which Centrelink spontaneously adapted to ever-changing market forces and government agendas.

    It was replaced by a return to a traditional model of public administration based on two theoretical foundations: first, the bureaucratic model of administration, and second, the particular conventions of accountability and responsibility derived from the Westminster system (Hughes...

  17. Appendix 1. The study
    (pp. 183-184)
  18. Appendix 2. Social welfare developments
    (pp. 185-190)
  19. Appendix 3. Strategic directions
    (pp. 191-192)
  20. Appendix 4. Comparing strategic directions
    (pp. 193-194)
  21. Appendix 5. CEO lessons
    (pp. 195-196)
  22. Appendix 6. Tables
    (pp. 197-198)
  23. Appendix 7. Roles of DFaCS and Centrelink in Business Alliance Agreement 2004
    (pp. 199-218)