Why reports matter

This episode of Shorewalker On Reports looks at a foundational question: why do we bother to create public reports at all? With Gary Banks, Saul Eslake, Nick Gruen and Peter Martin.

Presenter: David Walker

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Presenter: In this episode we mostly talk about policy reports. These reports assemble facts and evidence to help readers understand complex issues and to form a response. These reports might be on a narrow field, like, say, how to make a particular defense purchase, or how to change some educational qualification. Or they might be very broad, looking at issues like reform of Australia’s entire tax system. They might aim to be neutral, taking no specific position on the issue; or they might aim to persuade readers in a particular direction.

Let’s start by addressing the elephant in the room right away. Not every report really gets written to help the public, or to make government work better. Many reports do get written to deepen public understanding of tough issues. But some reports get written for other reasons.

Saul Eslake knows this. He’s a consulting economist, and he’s well-known in Australia. He has been chief economist for finance groups such as the ANZ Bank, and he’s now an expert advisor to organisations including the federal Parliamentary Budget Office. Back in the 1990s he led the writing of a landmark report into Victoria’s government finances and management. Here’s Saul Eslake.

Saul Eslake: In the British sitcom, Yes, Minister and Yes, Prime Minister, Sir Humphrey Appleby, the senior public servant, would routinely advise Jim Hacker as Minister for Administrative Affairs and subsequently Prime Minister that you never call an inquiry until you know what it's going to say.

And there are often reports commissioned by government with terms of reference that make it very clear what the inquiry is expected to find or to recommend, and usually staffed by people whom the government can trust to give it the answers that it wants to hear.

Presenter: Saul Eslake has a list of these examples.

Saul Eslake: Another example was the inquiry which is still afoot was the inquiry by the House of Representatives Standing Committee on Revenue into housing affordability and homeownership, which has been given terms of reference that clearly indicate that it is meant to find that the main reason for deteriorating housing affordability and declining homeownership is a want of housing supply – and oh, dear, that's mainly a state and local government responsibility, so there's not much the Commonwealth can do about it.

Presenter: So that’s a dark side of public reports. But there’s also a brighter side, where reports really do help people understand what’s going on.

Saul Eslake: There can be other occasions when a report is commissioned with a genuine intention of finding out facts – and when it's in response to a disaster or scandal, usually to come up with recommendations that will prevent the same sort of circumstances from happening again. And royal commissions that have been called into bushfires, for example, by state governments are good examples of that, as are the Royal Commission into Responses to Institutional Child Sexual Abuse, and more recently, into the aged care and disability care systems. I think those are inquiries that – perhaps under enormous public pressure to do so – have given those inquiries pretty wide latitude to establish facts which are not generally known in advance, or at least not widely agreed about in advance, and to come up with recommendations that may well be challenging for governments as to how to prevent those mistakes or those errors from being implemented. So a lot comes down to what the government of the day is seeking to achieve and how much pressure it is under when it decides to commission the carrying-out of an investigation and the writing of the subsequent report

Presenter: Like Saul Eslake, Gary Banks is an economist by training, and a prominent one. For 15 years up to 2012, he ran Australia’s Productivity Commission. The Commission is a significant independent advisor to Australia’s federal government on economic, social and environmental issues, and it uses public reports to deliver most of that advice. Governments don’t always follows those public reports’ advice. But Australian policymakers do take them seriously.

Gary Banks argues that if reports are done right, they’re an important element of the public policy process. Indeed, he says, they may be more important than ever – partly because they can confer credibility and trust, in an era when many people think government is, well, a bit suss.

Gary Banks: There's probably less trust, less acceptance of governments than they used to be. When they do surveys of trust in different institutions, you know, politicians don't rate highly, generally. So I think, if a politician says, I think this, this is the best way to go, trust me, it's less likely to get currency and have an effect and influence than if he or she says a report has been done by this eminent institution or person, which I'm going to adopt, because I think it makes sense, and gives the arguments from that. [So I think people –] even though experts themselves have come into fire a little bit – I think, if a study has been well done, particularly if it's a study that involves public engagement, and so on and had a draft report, then a government is better able to, I think, prosecute a reform agenda or a policy agenda than if they don't have something like that to use.

… You need to engage with the public so that they can be educated to some extent about the trade-offs and be more likely to be supportive of the outcome.

… Public reports are particularly important, I think, when there's a contentious issue, right, because [you'll have,] the politics will be tougher. Getting a preferred policy option through, by definition, will be harder. So the more that the public has been brought along with the process of reaching a policy conclusion and recommendation, the better. And so I think that's a very important reason for having a public report – in a sense, to bring people along and get get a bit more of a meeting of minds that might otherwise have occurred.

… A second, part of the answer to that question relates to the fact that, you know, undertaking a public report, or various kinds of public study can be quite expensive, can be time consuming, can demand quite a lot of the participants. And so you don't want to do it for things that aren't significant. You want to do it for things that are ideally not only contentious, but quite complex, and where that kind of engagement and process will have a big payoff. Or to put it the other way: if you got the wrong answer, you'd find that the costs were quite high.

Unfortunately, you know, we've seen over time, you know, policy decisions made without that kind of process, which proves the point, you know, that they have involved costs. Sometimes they've had to be policies that have had to be withdrawn after a short period of time. I mean, you think about, for example, the, the export ban on live cattle to Indonesia, right, which happened after a Four Corners program. So within two days of that program, or within three days, a decision was made to ban live cattle exports to Indonesia, because it looked like they were being maltreated in the abattoirs in Indonesia. That had to be reversed. And that wasn't based on anything other than sentiment really, in the sense that it'd be good politics, but the costs were very high. And in the end, they had to come to another way of dealing with the problem. So I think the more significant the issue, the more contentious, the more important it is to have that kind of, you know, systematic approach.

Presenter: So Gary Banks values public reports on government policy because reports examine an issue systematically and because they present ideas that have broad community respect.

Nicholas Gruen is another economist who has served on the Productivity Commission. He’s also worked for senior Australian federal government ministers in the Hawke and Keating governments, chaired the 2009 Web 2.0 Task Force and now runs an economics consultancy, Lateral Economics. In those roles and others, he has helped to write quite a few reports. He’s also one of Australia’s best-known innovation experts.

Like Gary Banks, Nick Gruen wants reports to reflect community aspirations and concerns.

But Nick Gruen also emphasises something else: reports can present ideas that may not command strong support on day 1, but which will become more important over time.

Gruen points to the attitude of the economist Friedrich Hayek, which Hayek expressed in a 1947 speech. Hayek’s formula was this: You should set out the evidence for ideas that seem right today, but you should also remember that those ideas may become more popular in the years ahead. That worked for Hayek. He was a fringe figure in 1947, but 27 years later, he won a Nobel Prize.

Here’s Nick Gruen talking about Friedrich Hayek’s influence:

Nick Gruen: He said: 'We must not constrain our vision to what we can immediately sell to a politician. So we must try to influence the thinking of the secondhand peddlers of ideas.' And so that is what a good report will do. I mean, a good report that may not be in a position to even want to try and do that. It might be a very specific thing – how do we fix this particular problem, airport noise or whatever it is. But the reports that matter, that do big work, are reports that … find a way to look at a complex subject in a simple way that that will stand on the shelf for five or 10 years, and that people will find themselves coming back to. So don't … if people start harassing you and saying, well, the government simply won't accept that, that's fine. That's something to think about. That means that you might not want to serve up a concrete recommendation, which they feel obliged to reject. But you need to stick with the analysis; you need to stick with putting the case explaining its importance. And then you might start thinking about: Well, let's fantasize about a decision-maker in that position that we're writing for, who really wants to go in this direction, but can't do it immediately? What would they like to see from us? Would they like to see options? Yes, they would.

That was a perennial chestnut in the Productivity Commission: If we provide options, then we give these politicians easy ways out. Well, yes. Wakey wakey, you're not that powerful as the Productivity Commission. You're offering advice. So try to be helpful to the people who want to do things. Keep the arguments as clear as you can. And then, as far as recommendations are concerned, you are probably not the expert about how ambitiously and how speedily a particular agenda should be pursued. But you are trying to say: This is the agenda. And I'm speaking, just a few days after a new Labour Government has been elected. And it's times like that, that new things become possible. But it's unlikely that … it's suddenly possible to move very fast in a direction other than the one we were going. So … you try to remain alive to possibilities, but not necessarily short-term possibilities.

Presenter: So Nick Gruen argues that reports have a life beyond the moment when a government minister get handed their findings.

The economics journalist Peter Martin makes this argument too. Martin is a former Commonwealth Treasury official; he has reported on economics for the ABC and for The Age newspaper. He is now Business and Economy Editor of The Conversation website.

Take as an example the Asprey Review of taxation. It published its report in 1975, but had most of its effect a full decade later. Here’s Peter Martin, talking about the effect of the Asprey Tax Review.

Peter Martin: Reports are not wasted if they're not acted on. The most famous [example] was the tax review that preceded the Henry Tax Review, preceded by 20 or so years. And it made a lot of recommendations that were ignored at the time. These were recommendations for a capital gains tax, for instance, these were recommendations for fringe benefits tax. Eventually, someone – it was, it was treasurer of Paul Keating in the 1980s – eventually, someone got out that old report that the Treasury there, so they have another look at it produced their, their draft white paper, and, and introduced them. The various climate change reports … even if ignored, they can be used, particularly now things are on the internet, you'd be surprised at how much at a later date … People sort of go to them if if it's a good report, if it covers things and sort of synthesizes something. It's the same as the Henry Tax Review itself. A lot of that wasn't acted on. People can go back to it. years later. We had a retirement income review, we had a banking Royal Commission, not all of those recommendations were acted on at the time, but they're still useful documents. Even if something doesn't get into the media at the time, if you push it in front of the right people, it's there.

… The provision of things on the internet, and the fact that they stay there forever, has meant there actually is a way of settling arguments, that there wasn't before. So I think on balance, while people use it to go backwards and forwards, it can often settle arguments. The provision of reports on the internet has also made life much easier for the media, because it means you can do research without leaving your seat, or without picking up the phone. And that's good.

Presenter: So reports will sometime influence all sorts of people for a long time. If you’re helping to write a report, this is important history to know. What goes into the report may have a life beyond the enthusiasms of this month, or this year, or indeed this decade.

And that should often influence how you write your report.

How much it should influence your report will depend on both the subject matter and the immediate environment. Groups like the Asprey Committee wrote far-sighted, big-picture reports. And they did so in part because they were given a license to do so by the politicians who ordered those reports up.

Gary Banks makes an important point when he says that where possible, reports should bring their audience along with them. The point that people like Peter Martin and Nick Gruen are making is a little different: the most influential reports have spoken not just to today’s audience, but to the future audience as well.

Show notes

Guests

Saul Eslake, independent economist and company director

Gary Banks, former head of Australia's federal Productivity Commission

Nicholas Gruen, CEO of Lateral Economics

Peter Martin, The Conversation business and economics editor