Governance in Centrelink
Introduction
Centrelink, an Australian Government Agency, was established in 1997, under the Commonwealth Services Delivery Act, 1997. It was instituted mainly for the purpose of creating a link between government services and creating a one-stop shop, where one could access services at one particular place where possible, guided by the best practices in delivery[1]. It was an agency prescribed under the Financial Management and Accountability Act of 1997, and derived its statutes from the Public Service Act 1999. This agency delivered a wide range of support and services to all citizens of Australia, by working closely with the government as well as other relevant organizations[2]. With revitalization of its governance, Centrelink has experienced a marked progress in its customer delivery practice, offering support at all times to customers who visited the call centers, those who contacted the customer service center, and even to those who accessed them through the web; colloquially referred to as on-spot, online and on-paper1.
From its inception, Centrelink has been subject to numerous driving forces as well as constraints. Its guiding authorities, particularly the CSDA 1997a, described its new responsibilities as provision of services with respect to service arrangements, other functions detailed within the enabling legislation; and any other direct instruction from the minister[3]. Moreover, the company is expected to expand its operations on service delivery towards encompassing income security payments, as well as provide an administrative and guiding framework for incorporating access to service of the Commonwealth category; so that people could get help from anywhere. In light of this, the government had very high expectations from the agency, and envisaged an improvement in service delivery to the community and individuals, from a customer-oriented approach[4].
With regard to all these expectations and performance heights set for the agency, it had an obligation to transform its scale of operations, towards a holistic and efficient customer-focused type of governance. In recent years, the governance system of Centrelink has undergone a great revolution, to become one of the world’s best service delivery agencies, with over 35,000 personal computers processing over 14 million transactions every single day[5]. This paper proceeds to analyze critically the changes in governance, attempted within Centrelink; aims of the changes; the strengths and weaknesses of the chosen approach; and the legacy set by the Centrelink strategies.
Key Changes in Governance in Centrelink
Changes in governance and similar paradigms have been commonly described by theorists based on their welfare arrangement, and specific changes in social policies. A clear distinction that characterizes a greater percentage of these changes is the difference in the type of governance practiced in the post-war regime, which was universal and had institutionalized social details; and the current neo-liberal state whose social policy is residual and disciplinary. In this era, most public institutions and multinational organizations revel in superfluous autonomy, having separate entity from the state and being at liberty to exercise control over their system of operation. Perhaps, neo-liberalism is the driver of most developments in organizations, and the Centrelink administration certainly has not missed out.
The Australian national benefits agency instituted reforms within the organization to improve service delivery to its clients. Three major welfare reforms are explicit in this regard: sanctions policy applied on individual beneficiaries who falter in observance of set rules; adoption of a one-on-one service delivery system; and the techniques of risk management in the welfare organizations[6]. Centrelink has moved from its earlier entrepreneurial approach of benefits administration, to a more bureaucratic mode of administration. These shifts have targeted and affected major areas in the governance at Centrelink, including changes in performance, introduction of decentralization, and reform of informatization systems[7].
Notable Changes in Performance
The Centrelink organization was faced with challenges that demanded a revolution in its governance system. The government expected it to achieve all policies and outcomes, integrate the CES in addition to other functions, provide current DSS services, become more focused on customer service provision and satisfaction, streamline and simplify services as well as show marked improvement in performance in terms of effectiveness and operational efficiency4. These stakes set by the state had overarching logic and meaning to the governance of Centrelink. If well implemented, the organization would have the benefit of being some of the best performing welfare organizations in the world.
In order to bring these desired changes into perspective, operational strategies were formulated for concepts and processes. Numerous underlying considerations were made, including stakeholders’ expectations regarding the planned changes, and its legislative and political mandates. The main aim of formulating these strategic plans was to achieve sustainable survival and growth by developing suitable business, corporate and functional strategies. This process was allocated to the Business Development Group, which was mandated to analyze Centrelink’s strategic options[8]. To ensure achievement of long-term goals, a combination of strategies were instituted by the organization including product and market development, concentrated growth, vertical and horizontal integration, innovation, strategic alliances and concentric diversification5. These strategies were implemented in a properly monitored and evaluated manner, and they resulted in increased performance in service delivery and operations within the organization.
The development of the DSS planning strategy enabled staff members to come up with clear, specific and reasonable performance indicators and program objectives. The staff focused their efforts towards achieving government policies and outcomes; foster development of business and sustainable company positioning; scale the heights of business performance and operational decision making; develop brand value, culture and identity of the organization; and put in place systems that would be able to improve efficiency, innovation, and quality of customer service.
In the traditional system of Centrelink governance, each department had its own delivery or policy function. This made correlation and synergistic operation within the organization very difficult, since every department was independent and viewed itself as possessing separate roles from the rest of the workforce[9]. Progressive organizational operation strategies dictate that team members should work together to supplement each other and learn from their counterparts. In addition, there was overlap of delivery offices and networks, such that clarity of specific responsibilities of each office was not achieved. The current management of Centrelink, however, ensures that customers access services from a single location, with any department being able to respond to their needs[10]. With the institution of numerous call centers, customers can conveniently visit any of the branches, as opposed to the traditional, centralized system. Performance of the welfare society of the state has been greatly uplifted due to this move, which ensures frequent surveys of services offered to customers; presence of relations unit for customers in all sub-branches; buttressing the interesting ‘one-to-one service delivery system; integrating service delivery in every office, such that a customer never enters any ‘wrong office’; and shifting the onus from customers to staff to enhance matches between available products and needs.
A performance-recording, communicating and reporting tool was also introduced in Centrelink’s strategic plan to improve in its performance. Tracking of performance is an important aspect in company governance, as it is crucial in ensuring that performances meet basic set standards, and that they are in line with the guiding strategy. The tool, referred to as the National Balanced Scorecard, was introduced on the basis that it helped identify the most important performance attributes that the staff of Centrelink had to achieve in order to meet their goals; it allowed tracking and monitoring of continuing company performance based on crucial measures relevant to achievements and weaknesses, thereby allowing opportunity for improvement in performance; it collected and provided correspondence about performance results across the company, to foster continued planning; and it also provided comparative data on performances over the years, to help track the progress and implement new strategies[11].
The scorecard brought motivation and pressure on staff members to work harder, with all the departments showing marked increase in the delivery services. Precisely, more than 70 different ranges of products and services have been introduced to meet the diverse needs of customers, including social work, financial information, passport call, career counseling, jobseeker assistance services and adjustment packages for industries as well as refugee, disaster and crisis assistance[12]. Notably, this wide range of product and services made Centrelink a real one-stop shop for Australians, as had been anticipated by the state.
Decentralization
The introduction of new public management has transformed most public institutions, working on the assumption that task specialization begets efficiency in service delivery. In lieu of this logic, several governments have moved towards structural desegregation of mother monolithic organizations in the public sector into smaller units, allowing them some degree of autonomy. Centrelink was the result of such an initiative, with increase in devolution and decentralization, as well as an obvious expansion of the number and types of autonomous agencies. During this revolutionary time, two other major changes accompanied decentralization: phase change in policy cycles, including policy design, implementation and evaluation; and emphasis between politics and administrative duties[13]. This development has resulted in a number of autonomous and specialized organizations, with specific mandates in service delivery to the general public. Centrelink now offers over 70 ranges of products and services, operating from 22 state government and Commonwealth agencies under one big banner of welfare services.
Decentralization is defined as the transfer of responsibility and authority of public functions from a centralized government to a quasi-autonomous or subordinate organization or to the private sector. It was viewed as an important step that would improve the quality of services offered to customers, as well as increase company performance thereby bringing in more productivity. With this structure, managers would have the opportunity to manage their quarters well, as they would have their own budgets as well as their own personnel, whom they could control with some degree of freedom. The government would only come in and conduct an ex post evaluation instead of ex ante input system of control. In this regard, organizations are believed to be improving in their performance due to the adoption of a performance-based system of control and awarding more autonomy to managers, which enables them to approach management through a private sector style. Basically, this system resulted in specialization, which gave rise to two common mechanisms for proliferation of organizations: the number of such autonomous organizations increased in the public sector, and these organizations became more heterogeneous, due to reduction in uniformity and standardization of their management practices.
Creation of a neo-liberal agency like Centrelink is a devolution responsibility of the government, which is enacted through a series of mechanisms including marketization, commercialization, and privatization. The demise of the socialist-market economy brought the need for reformation in the style and form of governance in public and private sectors. Within the government, this move is viewed by managerialist critiques of the old system of bureaucracy, as the main reason behind lack of performance in public sector organizations[14]. A decentralized system adopts and entrepreneurial fashion of governance that gives more attention to the satisfaction of service users. This is closely related to the current system of risk management, which encourages individuals to take personal responsibilities towards managing those risks, and getting the best positive outcomes from them. This has been the trend in Centrelink, which has adopted a personal touch and link with the customers, and integrating itself into their risk management systems, leading to ultimate satisfaction of their needs.
The creation of a one-to-one service delivery system in Centrelink has been made possible by the numerous call centers that it has instituted around the Australian republic. Apart from enhancing increased convenience, the call centers have also enabled service providers to interact personally with users to provide for their needs adequately. In addition, the whole process of decentralization has brought with it several cost and managerial benefits including, savings in recurrent costs through cheap labor; enjoyment of economies of scale resulting into more profits and cost savings; enhancing increased employment and regional growth; catalyzing change in business approach; use of improved technology which improves quality of services delivered; and better communication between regional and national offices.
Informatization
As aforementioned, decentralization has an advantage of integrating new technology in the management of quasi-autonomous agencies like Centrelink. As a result of this devolution process by the government, Centrelink has made several strides in the technological world, by adopting current ICT and integrating them into its operational network. Informatization is defined as the extent to which an economy, geographical area or a society is increasing in its information base and labor capacity. Currently, there are over 35,000 computers in the numerous call centers across Australia, which process over 14 million transactions per day. Moreover, Centrelink has improved its customer service centers to accept calls from clients either through physical visits, online or on-paper[15]. This implies that customers can easily be served right from the comfort of their homes, due to proliferation in communication technologies.
One of the reform agenda of Centrelink’s management, in line with other organizations of similar nature such as Medicare Australia and DHS, was to impose substantial changes to its system of information and communications technology[16]. They argued that a holistic and perfect information and communications system would provide a solid foundation for improvement of customer service delivery, as well as granting easier access to the services. Customers would also be able to provide information regarding necessary improvements to the customer service officers, which would be crucial in meeting specific and diverse needs of clients. The strategic service delivery committee, which replaced the strategic management committee, was given the task of overseeing that there is a channel of communication and collaboration among various departments as well as other members of the portfolio. This has enabled information sharing especially on pertinent issues concerning Centrelink’s governance and its relation with other relevant organizations[17]. The committee would ensure that customers had access to information in any way they deemed fit, be it online, on-paper, or on-site, depending on their circumstances.
Several strategic improvements have been made in Centrelink in line with information and communications technology, all aimed at improving access to information by customers. For instance, a single phone number and website has since been launched as a long-term strategy to improve customers’ access to information, which will enable quicker, convenient and easier communication between customers and service providers[18]. The single phone number implies that customers can make any general inquiries concerning products and services offered via one contact point, though they are still at liberty to visit any call center for elaborate discussions. Additionally, the Job Seeker Contact Project was also launched to provide all job seekers with a regular self-service reporting system, while taking into account the privacy of all clients using the service. This was put in such a way that it could be accessed either online, or via mobile phones, thereby offering more convenience to customers. Besides, the Scanning Operations Center, which was recently constituted in 2010, has gained a milestone in achievement of ICT in Centrelink[19]. This is a central location for all correspondence of customers sent via mail, which provides a single postal address and scans all messages and produces their digital versions, which are then attached to a customer’s electronic record. Over the past periods, Centrelink’s scanning capacity has doubled, with over 30 million pages being scanned per day.
The success of Centrelink’s ICT upgrading strategy has been contributed to by a joint family of relevant agencies and departments, as well as policy areas. It has worked closely with over 20 information and communications technology expert teams, who have worked tirelessly to build the networks and make the system effective and easier to use. The indigenous service officers have worked hard to sustain these high standards, to ensure continued perfection in customer service delivery. They were a point of contact between the management and the community, which provided more views on possible channels of improvement in performance of the welfare agency. Through improved informatization, the Australian Government Emergency Information has been able to answer several calls from distressed members of the public, coming close to 560, 000 calls from those affected by floods alone[20]. Conclusively, informatization as a strategy of improved governance has realized positive results in Centrelink, thus emerging as a strong tool for raising performance in autonomous and quasi-autonomous organizations.
Aims of Centrelink’s Change in Governance Structure
Reformation of governance in public sector organizations has one general aim: to improve service delivery to service users. All measures taken by the government to make public organizations autonomous and decentralized are all geared towards setting in specialized structures of product and service delivery, and improvement of access to these services. As opposed to the traditional system, where government corporations were co-located, the system of decentralization factors in the diverse needs of customers for convenience and efficiency[21]. This has formed the foundation for reforms in Centrelink, which set its objectives focusing on customers and their satisfaction. Each reform agenda that the agency championed had its own goals, formed under one umbrella of improved performance in customer satisfaction. Its aims were guided by the expectations of the government, including expansion on delivery of payments of security and services; provision of an elaborate administrative framework for integration of easy access to Commonwealth services so that people could get what they wanted in a single place; and provision of more effective and efficient services to all service users by adopting a customer-focused approach in its operations. The agency was expected to uproot all weaknesses existing within it, so as to make it an adorable, independent organization where customers would find solution to all their needs.
The government of Australia, by establishing Centrelink, aimed to create a link between government services in a single place, especially where this arrangement could be possible, so as to achieve the best practice in delivery of services[22]. Before this initiative, government services were not co-located, such that customers had to go to a central point to be served. The result was slow and poor service delivery, lack of proper satisfaction of customers’ needs, and adoption of a non-customer oriented management. However, the establishment of Centrelink aimed to spew out all these weaknesses, and instead offer a more convenient alternative to customers, focusing specifically on their diverse needs. For instance, it currently holds ‘strengths-based’ customer interviews, which involve asking of open-ended questions regarding one’s personal desires in life, and achieving better results through engaging them more empathically and appropriately, with the main aim of identifying and removing barriers in their lives[23]. This particular pathway, coupled with other innovative ideas like offering one-to-one service delivery mode, is a personalized approach that has gone a long way on transforming Centrelink’s way of governance from the government’s old style, to a more customer-oriented form.
The reformation of Centrelink from a state-controlled organization to a quasi-autonomous agency was a major landmark that held numerous visions for the welfare agency. As aforementioned, organizations under the control of the government performed poorly in terms of service delivery and offering of special attention to customers. Though Centrelink is seen to be operating in an ambiguous environment, being budget significant and political salient, the agency has covered noticeable strides in separating itself from government’s control, to manage its own funds, employees and set its own goals[24]. The fight for autonomy was aimed at eliminating the influence of the government, which had been linked to failures in the public sector, and inventing a private sector-approach in its operations. It would later stand out as a hybrid organization combining autonomy through special and innovative ways of setting p corporate governance arrangements, and operating with other informal features that promote conformity to basic requirements of the state[25]. In this respect, the agency operated like a state department, although it technically was a statutory agency that sought to be benchmarked against other independent organizations in the private sector; and to adopt an entrepreneurial arrangement.
It can be concluded that the two principal models of autonomy: political and managerial, are all aimed at obliterating the influence of political forces in the management of public service delivery organizations, including appointment of the board and managers, as well as expunging constraints associated with the traditional public service model that was bureaucratic and less performing. The political model thus promoted separation of administration from politics to forestall any interventions that are not in line with the purpose of an organization which serves the interest of the public.
Strengths and Weaknesses of Centrelink’s Approach
Two main approaches are distinct in Centrelink’s change of governance, which are, movement from a controlled state agency to an autonomous, self-controlled welfare organization; and adoption of a customer-oriented approach to service delivery. These approaches have both advantages and drawbacks, as applicable in every organization of a similar nature. For instance, the preference for political and managerial autonomy has proven to drive out various constraints in the public service, as well as replace the bureaucratic features of state organizations with more user-friendly and faster private-sector forms of leadership[26]. The strength of this approach lies in its ability to institute separate management of public corporations from a more specific standpoint, rather than the general government perspective that gave little attention to clients. Since organizations are able to manage their own budgets and employees, improvement and assessment of performance becomes easier, thus raising the level of service delivery.
One particular weakness with this model, especially the political model of autonomy lies in the imperatives and power of executives in the political sphere, especially where there are very high stakes. It tends to be much of a function of politicians’ willingness to demarcate boundaries and zones of influence in the agencies[27]. In the end, an organization may not be autonomous at all, as there might be a very thin line between its independence and interference by government operatives. Besides, the management model has a difficulty of retaining its separation in practice. Two scenarios are usually evident, one being that the separation from state control may go too far, such that the agency may be inadequate to survive on its own; or the distinction may be insufficiently supplied, in which case the organization will only be under the assumption of a quasi-autonomy[28]. This state is particularly confusing and challenging especially when it comes to execution of managerial duties and sanctioning of major operations, since many signatories may be required, making the system more or less bureaucratic as the old state-controlled agencies. Summarily, the move towards autonomy may impose several challenges of sustainable independence, as a newly formed agency may still be lacking in resources and capacity run on its own.
Secondly, the approach towards adopting a customer-oriented posture in delivery of service comes with several advantages. It was used as the primary reformation tool in Centrelink’s case, in contradiction to government’s approach. Adoption of a one-to one service delivery mechanism is a sure way of building customer loyalty. In this regard, service users become more willing to purchase and use a company’s products and services that they feel regards their needs highly. In addition, this trend increase customer referrals, as satisfied customers are likely to recommend a company that considers their needs to families and friends. Customer density is thus improved due to this approach, and this can be distinctly seen in Centrelink’s case which has doubled its services to cover numerous clients, achieving the rank of the 4th largest customer service agency in Commonwealth programs[29]. Lastly, customer-focused businesses are applauded for their commitment to customer service. It serves a great purpose in position the company in the minds of the customers, as a friendly and caring agency, with dedicated professionals.
Nonetheless, a customer-oriented approach may have a number of drawbacks to a company. For instance, there may be slow growth of innovation, since the business focuses solely on customers’ wants and needs, which interfere with its creativity[30]. This stems from reluctance to create new products, and improve existing ones since customers may be satisfied with the current state of affairs. A common market feature is that customers do not always know what they want, and will always accept new innovations which fit perfectly into their systems. A company should thus always do research into more innovations in order to spice their service delivery systems. Besides, customers have ever-changing needs, which may be difficult to comply with especially if a company id bent on satisfying all the wants and needs of its customers. In retrospect, a company may become self-serving, focusing on their needs and leaving other crucial matters to trail behind.
Legacy of NPM-Influenced Strategies
New Public Management reform strategies assume that efficiency is a result of task specialization. Following this argument, many governments have disaggregated some of the major monolithic organizations into smaller, semi-autonomous agencies. The bequest of such reforms in public management is noticeable in all sectors of the economy. More obviously, this development has led to the emergence of a wide variety of autonomous and specialized organizations that operate with single-purpose tasks, which are active in the disconnected social policy phases. As a result, managers made to manage, and they have an opportunity to exercise their responsibilities as administrators[31]. In addition, they are also able to control their own budget and employees, setting their own goals with respect to special needs of their clients. Government’s interference in such organizations has also changed from ex post performance evaluation to ex ante control system of input.
NPM changes have increased individual organizations and programs’ capacities to resist any efforts of coordination. This was meant to strengthen their sense of individualism and self-reliance, so that they could survive on their own without government’s interference. Though, more recently, frontrunner NPM countries have started putting more emphasis on management and policy coordination[32]. The former is aimed at reducing political control and capacity of the central government, shifting focus from a whole-of-government initiative to an autonomous sector[33]. The legacy imprinted by this movement is an increase complexity in organizations in the public sector.
Another noticeable legacy of the NPM-driven strategies is marked improvement in performance of public sector organizations. Performance management was a central area of focus in the NPM movement, leading to introduction of several techniques and parameters for evaluating performance[34]. A vivid example is the National Balanced Scorecard, which Centrelink adopted as its primary tool of recording, reporting and sending correspondence regarding performance. Commonwealth agencies thus improved in their delivery of services, as opposed to the stagnating traditional forms of state-controlled organizations. This could be alluded the adoption of a more customer-oriented approach to offering of services, which incorporated individual needs of customers and increased convenience and access to public offices.
New Public management has brought into focus more friendly ways of dealing with customers, especially those who breach company rules, as Howard states below:
Replacing the Old Department of Social Security with Centrelink has helped to produce a more active approach to the administration of welfare. As a welfare ‘policeman’, Centrelink has responsibility for ‘breaching’….job seekers who don’t comply with rules…Centrelink recently issued staff with new guidelines about acceptable reasons for non-compliance…[35]
This shows the kind of imprint that NPM strategies have made on governance of public sector organizations, transforming them into empathic partners to service users.
Conclusion
New Public Management has brought numerous positive changes in the governance of public sector organizations. The idea of decentralization of government duties to smaller, semi-autonomous parties led to the institution of Centrelink, an Australian welfare agency which dealt mainly with social security and unemployment. New changes in governance have resulted in improved performance by the agency, putting more focus on customer-oriented approach to service delivery.
Achievement of political and management autonomy, as well as adoption of one-to-one service delivery model are important steps in reforming public sector organizations. These have been found to reduce interferences from politicians and other multinational corporations, and provide enabling environment for managers to exercise their freedom on budgetary and personnel issues. Strategies such as informatization, decentralization and focus on performance improvement are key drivers for reforms, supported by adoption of current Information and Communication Technology. These New Public Management-driven strategies have left innumerable legacies in governance of public sector organizations, including creation of a number of specialized and autonomous agencies, improved performance in the public sector, and shifting of focus to service users’ needs.
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