Peter Shergold is worried. During the final years of the Howard government, Shergold sat at the apex of Australia’s federal bureaucracy as secretary of the Department of Prime Minister and Cabinet.

Recently, as president of the Institute of Public Administration Australia  (IPAA), he surveyed more than 800 IPAA conference attendees, mostly current and former public servants.

“I was shocked by the results,” Shergold said recently. Australia’s public servants were suffering a “crisis of confidence”.

Just two in five public servants felt they delivered projects well and made effective use of taxpayers’ money.

Just two in five felt they delivered projects well and made effective use of taxpayers’ money. Almost half said their institutions had become more political.

The majority said ministerial advisers played too great a role in governance (60 per cent), and 70 per cent thought the same of consultants.

Most worryingly, just 30 per cent thought the public service remained “frank and fearless”.

“Such gloom comes at the worst possible time,” says Shergold. “The foundations of liberal democracy appear to be increasingly fragile. Populist responses to complex public policy conundrums are becoming attractive to disillusioned voters in search of simple answers.”

Shergold says there is a “rising tribalisation of Australian politics and culture”. “In this ‘post-truth’ world, the value of a skilled public administration, trained in looking at all sides of a political proposition in a considered and thoughtful manner, is no longer regarded as a civic virtue.”

He is not alone in expressing concern about the health of Australia’s democratic process: the system whereby elected officials, assisted by frank and fearless public servants, draft, explain and implement public policies that advance the interests of society.

Losing the democratic faith

Public faith in democracy in Australia is in decline, according to a range of recent surveys.

Slightly less than half of Australians aged under 45 agreed that “democracy is preferable to any other kind of government”, in a Lowy Institute poll this year.

And satisfaction with democracy is at its lowest ebb since the aftermath of the shock dismissal of the Whitlam government in 1975, according to the Australian Election Study, run out of the Australian National University.

“There is a combination of factors leading to the decline in democratic satisfaction,” says Dr Sarah Cameron, a political scientist at the University of Sydney. “Voters have largely disapproved of the changes of prime minister that have taken place in between elections over the past decade, under both Labor and Liberal governments.

“There’s a perception that the government is run for big interests, and that politicians are looking after themselves rather than governing on behalf of the people they are elected to represent.”

But while “political dysfunction” is playing a role, deeper economic reasons also seem to be driving the results, says Cameron.

“In recent elections, voters have become increasingly pessimistic about the state of the economy. In 2016, just 10 per cent of voters believed economic conditions in Australia had improved over the past year – down from 43 per cent in 2004. These negative attitudes about the economy are related to dissatisfaction with democracy.”

A democratic disconnect

The envy of the world, as it enters its 27th year of continuous economic growth, the Australian economy in November earned a place on the cover of The Economist magazine for the first time, in an edition titled “Aussie rules: What the world can learn from Australia”. The special feature extolled Australia’s economic success while expressing only mild perplexion at the revolving door of prime ministers Down Under.

But Aussies are not buying it.

Just 5 per cent of Australians feel they have personally gained a lot from our record-busting economic run, according to a Community Pulse survey in April by the Committee for Economic Development of Australia (CEDA).

In contrast, 74 per cent believe large corporations have “gained a lot”.

Amid the scandals unearthed by the banking royal commission, Australians also made international headlines last month when they erupted with fury over the placement of corporate advertising emblazoned across the Sydney Opera House.

The head of CEDA, Melinda Cilento, says Australia is suffering a “democratic disconnect”.

“No matter how impressive we feel our track record of growth has been, very few people feel that they personally have gained much. ”

When you step back and look at the aggregate, we have done really well.

Melinda Cilento

Yet this is unfounded, says Cilento. While there remain areas of entrenched disadvantage, particularly in Indigenous communities, most Australians have benefited from the fruits of economic growth, including low unemployment, rising incomes, tax relief and rising asset prices.

“When you step back and look at the aggregate, we have done really well. We have this brand of economic development – which is a type of democracy – where we make sure that we sustain growth but we have a really strong social compact that sustains our values.”

The hostility to business is particularly troubling, says Cilento. “Maintaining the competitiveness of business – big and small – is fundamental to future economic opportunities. We know that business investment plays a critical role in supporting improved productivity and, in turn, higher incomes.

“However, this is clearly not connecting to the aspirations of the community, even where the link is direct – for instance, through shareholder returns to superannuation. More needs to be done to reduce this disconnect.”

The business case for reform

Business is worried too.

“Business is clearly in no position to lecture anyone,” says Jennifer Westacott, the chief executive of the Business Council of Australia. “But it is very hard to get anything done.

“And it’s not just political instability. I think clearly that is part of it –although I’m always taken aback by how resilient our institutions are when we now have this more frequent leadership change.”

In contrast to the big reform era of the 1980s, Westacott says the problems facing today’s modern economy are more nuanced.

“I think the problem we’re trying to solve is not evident to people. So, we end up going down a path where people say, ‘Why are we doing this again?’ I think sometimes things are just so complex. In the past, people have just trusted governments to get things done. Now, people aren’t just willing to say, ‘These people in power know what they’re doing’. That lack of trust means complexity becomes more difficult to manage.”

Westacott is scathing of the “often very poor process” by which public policies are formulated today, citing the lack of a business case for the NBN. Energy policy, she says, is “a mess”.

When people float an idea it just seems to get killed.

Jennifer Westacott

The architect of the Coalition’s abandoned National Energy Guarantee, the Energy Security Board chair, Kerry Schott, recently expressed similar frustration. “I characterise the general state of affairs right now as anarchy,” Dr Schott told an Australian Financial Review energy summit.

Westacott backs a recent observation by economist Ross Garnaut that there had been a death of the “independent centre” in Australia.

“We haven’t seen a green or white paper for some time in Australia,” she says. “When people float an idea it just seems to get killed. They get asked, ‘Are you going to rule this in or out?’ As you rule more and more things out, there is less freedom to reform.”

There is much at stake, she says.

“The simple reality is that wages have been not growing as fast as people want or need and that’s directly linked, whether people like it or not, to productivity. Our productivity is poor and our productivity is driven by investment, which is driven by our competitive settings.

“We have to ask ourselves, as a business lobby, what do we really stand for? We want to see a stronger, better economy capable of caring for its people. Is that a bad thing?”

A “basic competency” issue

In 2012, former NSW Treasury secretary Percy Allan oversaw the release of a study titled “Public policy adrift”. It rated 18 public policies against whether they met the Wiltshire test (devised by University of Queensland academic Kenneth Wiltshire) for good public policy development: including establishing a clear need for policy reform, creating a green paper identifying reform options, extensive public consultation, producing a white paper with reform recommendations, and having a strategic communication strategy to convince voters of the merits of a reform.

Ten out of 18 policies assessed failed the test, including the NBN and the GFC stimulus “Building the Education Revolution” and home-insulation programs.

Good policy is not a left-right issue; it is an issue of basic competency.

Simon Breheny

This year, the study was repeated – in a novel fashion. In an Australian first, think tanks from opposite ends of the ideological divide – the right-wing Institute of Public Affairs and the left-wing Per Capita - came together to assess the rigour of the development process behind 20 policies.

There was striking agreement, with both think tanks identifying four policies, in particular, that showed an “unacceptable” level of rigour: the same-sex marriage postal survey, the decision to create a federal Home Affairs department, the NSW government’s local council mergers policy and the Queensland government’s laws on vegetation management.

“Good policy process – from actually undertaking cost-benefit analysis to having a detailed plan for how a policy will be rolled out – is not a left-right issue; it is an issue of basic competency,” says the IPA's director of policy, Simon Breheny.

From Westminster to Washminster

Allan, who now consults to the private and public sector, points the finger at the growing role of political advisers in perverting the policy process, crowding out the advice of public servants.

“The situation now is that ministers have more advisers in their private ministerial offices. Many of them are recruited from politically affiliated lobbying and polling organisations where the skill set is political analysis and marketing rather than policy making,” says Allan.

Australia has gradually moved from a traditional UK Westminster government to a polyglot Washminster model.

Percy Allan

“Australia has gradually moved from a traditional UK Westminster government to a polyglot Washminster model that borrows from the Washington style of public administration.”

In Washington, Allan explains, top bureaucrats are political appointees: “It’s only from the middle to lower tiers of public service management that American public servants are recruited on merit, not political affiliation. In America, there is an army of senior public thinkers who move between the bureaucracy (when their chief is president or governor) and think tanks (such as the Brookings Institution when their party is out of power).

“This has advantages (e.g. bright people committed to a government's agenda are in charge of effecting policy) and disadvantages (e.g. ideologues take control of the administrative apparatus of public policy-making and override evidence and consultation in advancing solutions to complex problems).”

Social media’s perfect storm

Tim Gartrell is the former national secretary of the Australian Labor Party who helped deliver Kevin 07 to power. He agrees there has been a “hollowing out” of the federal bureaucracy.

“I do think there’s a problem,” says Gartrell, who also points to the relentless rise of social media for the apparent breakdown in good public policy-making.

“There’s just less considered thinking about things, the speed and velocity of how things are decided. I hear less and less, ‘We should sleep on this, we will make a better judgement in the morning.’ It’s a worry.”

As interest wanes, politics makes more noise to be heard, only to further alienate the public.

Peter Lewis

But even as the media cycle has intensified, fewer Australians are truly engaged with politics, says Peter Lewis, the executive director of Essential Media, which has also conducted research showing dissatisfaction with Australian democracy.

“I think the results are a response to that fact that the structures that underpin our democracy are getting weaker. Fewer people consume news. Fewer people trust their public institutions. Fewer people think politicians represent their interests,” says Lewis.

“As interest wanes, politics makes more noise to be heard, only to further alienate the public in the process. This creates a climate for easy solutions and hero figures to come in and clean up the mess.”

So where to from here?

Amid an increasing sense of policy chaos, a new microcosm is forming around finding ways to fix Australian democracy.

Percy Allan just wants politicians to return to the old way of doing things, committing to an evidence-based policy-making process run more by public servants and less by “political cabals”.

“That involves establishing the known facts and stakeholder views about a situation, identifying the alternative policy options, weighing up their pros and cons, sharing that with the public and inviting its reaction, after which finalising a policy position to put before Parliament or effect by regulation,” says Allan.

The public has turned against government not so much over policy but the way policy is decided, announced and executed.

Percy Allan

Winning back public trust in the process of government is crucial, he says: “I believe the public has turned against government not so much over policy but the way policy is decided, announced and executed.”

Peter Shergold agrees the public service needs to restore its policy advising capabilities while partnering more with business and community groups to get their views.

“In today’s uncertain environment,” he says, “the ability of public administrators to serve successive governments in an apolitical manner has become significantly more important to the healthy functioning of the machinery of democratic government.”

A campaign is also needed, says Shergold, to restate the importance of a rigorous, independent public service as “central to the operations of the maintenance of a civil society” and as “bedrock of democratic governance”.

Ian McAllister, a professor of political science at the ANU, and co-director of the Australian Election Study, offers some more radical solutions, including fixed four-year parliamentary terms and Senate reform.

Australians rejected the idea of four-year terms in a 1988 referendum because they prefer to keep politicians on a “short leash”, McAllister says – but governments need a chance to govern.

“[Four-year terms] would put less pressure on political parties to perform in the short term and give them more time to actually do something, and voters could either punish or reward them at the next election.”

Senate reform is also needed, says McAllister. Australia is one of only four countries globally where the upper house can veto legislation from the lower house – the US, Switzerland and Germany being the others. “It has long since ceased to be a representation of the states and territories. It's a microcosm of party conflict. That wouldn't matter, except it's extremely powerful.”

McAllister would also like to see reform of parliamentary procedures, including the appointment of an independent speaker and limits on question time.

We need a process that says these are all just good ideas until people of goodwill come together and resolve to fix the system.

Ralph Ashton

Ralph Ashton is the executive director of the Australian Futures Project, a not-for-profit, charitable organisation formed with the mission to fix “short-termism” in Australia.

“The biggest thing that has to happen is there needs to be a recognition that the system – even if it’s not broken – is struggling to be functional in the current context, and that’s because there has been rapid change and the system is under stress,” Ashton says.

“My top solution is the meta solution. We need a process that says these are all just good ideas until people of goodwill come together and resolve to fix the system, even if it takes five to 10 to 15 years.

“We need to go beyond the natural human instinct of getting angry and looking to lay blame and realise that a lot of different people are responsible and, in some way, the world just changed.”

CEDA’s Cilento agrees. She says public policy decision-making will need to become more transparent, involving more engagement with citizens, to restore public trust in democracy. “I think that the way we are going to have to go about policy is different to the way we have in the past.”

Most of all, says Cilento, Australians need to avoid falling prey to excessive gloom about their future. “We need to be more optimistic. We should have faith. We have fixed our future before. When you look back to the late 1970s, people would have thought the future was pretty bleak, and we fixed that. We just have to keep talking about it.”