Last November, I wrote a blog on Australia’s diplomatic service which argued, among other things, that more resources should not be spent on Australia’s diplomatic service until there had been significant reform of the underlying structure, especially of the Department of Foreign Affairs and Trade.
Recently I have discovered further information about postings which adds weight to my proposition. It seems that the officers in DFAT have good reason to be obsessed about a posting; it brings wealth. For officers on a dual posting, to a hardship location, the rewards can be staggering. Is it any wonder that policy officers want a stint in DFAT’s human resources department to guarantee themselves a plum posting?
I am reliably informed that many DFAT couples plan their families around postings: it is cost-effective to have children at a posting. If the statistics were available, it would be interesting to compare the birth rate for a given age cohort on posting to that in Canberra. In one egregious example, a female head of mission became pregnant and took off one year of her posting on maternity leave. That’s 1/3 of the duration of an extremely expensive posting.
Then we have all of the parents who are posted and who send their children to the best private schools (or elite government schools) for tens of thousands of dollars each and for which the Australian taxpayer picks up 100% of the cost. They don’t even need to make co-contributions when their children go on excursions. It would also be interesting to compare the behaviour of those same parents when back in Canberra – do they send their children to state schools or (say) Boys/Girls Grammar? It seems that when a posted officer returns to Canberra, the taxpayer picks up the tab for school fees at Canberra’s most expensive school until the end of the school year. Do they then put them back in state schools?
Then our erstwhile overseas public servants (which is what they all are, Ambassadors included) enjoy access to the most expensive hospitals and health care while on posting, and need only contribute a maximum of $250 or so each year. Some of the maternity costs must be staggering. How many Canberra couples have children in our public hospitals in Canberra, but then insist on using the most expensive private hospitals to give birth when on a posting?
Then look at Ambassadors. They all have cooks, butlers and drivers. Why? In some cases where labour costs are low, or security considerations justify a driver, perhaps it is reasonable. But surely not in some of the best capital cities of the world where there is ample public transport and lots of taxis.
An Ambassador who travels on a holiday is entitled to be taken to and from the airport by his / her driver even if overtime is required (say it is on a Sunday). Ambassadors can send their car and driver to the airport to pick up their friends – so Ambassadors with good networks among their DFAT colleagues can enjoy a VIP reception wherever they travel on holiday.
Their cooks are principally used for their private business – it would be cheaper to hire cooks for the relatively few representation functions that most Ambassadors host. Really it is absurd – cooks and drivers should only be used for official business, but instead they are happily used to look after the Ambassador’s family and friends.
Here are some other allowances that I’ve discovered – some of which are reasonable, but many of which are extravagant.
- a transfer allowance on departure to post (and return from post) which varies by the size of the household but ranges from around $4000 to $7000
- an interest-free loan (outlay advance) of $15,000
- for heads of mission, clothing allowance of around $5000
- generous removal entitlements to post and storage of goods in Australia
- free accommodation at post, including free electricity and other services – the accommodation being of an exceptionally high standard in fantastic and expensive locations. For Ambassadors, effectively living in a Palace
- Australian-rate postage to and from post through the diplomatic bag
- a cost of posting allowance, a fortnightly addition to salary, based on a percentage of salary and which varies depending on whether the officer is accompanied or unaccompanied
- a cost of living adjustment, a fortnightly addition to salary, to compensate for the additional cost of purchasing goods and services at the post. Curiously the COLA is always positive, even when the post is significantly less costly than Canberra
- hardship allowance – an additional fortnightly amount for those in designated hardship posts
- household maintenance assistance to pay for a cleaner and other household help
- for Heads of Mission: a car with driver, a chef, butler and full-time cleaners and for some posts gardeners and security
- depending on the posting, often tax-free purchases (particularly of alcohol, petrol and tobacco) and tax-free purchase of motor vehicles and effective immunity from getting traffic violations
It seems that DFAT officers tend to retire significantly older than other public servants. Is it any wonder? When one is looking for the next Ambassadorial posting and being treated like a prince? To be able to enjoy the life of an old money multi-millionaire while being employed as a mid-level public servant?
Then we have all of those locally engaged staff who watch the A-based (Australian-based posted public servants) come and go and who must observe some pretty appalling behaviour. They probably store up some pretty outrageous examples which can be raised whenever there is talk of cutting staff numbers / improving efficiency etc. I’m pretty sure there are a lot of hollow logs in many of our overseas posts. While I’m confident that most of our overseas public servants are acting ethically and perform reasonable service, there are substantial temptations that long-term staff would find increasingly difficult to resist. Are we getting value for money? I doubt it.
Are we using all of our overseas-owned and leased property and capital fully and getting good returns? I also doubt that. Even our very junior overseas officers enjoy large plush private offices in expensive capital cities when they would be in open plan back in Canberra.
I maintain that significant savings could be extracted from DFAT while further improving the quality and effectiveness of our diplomatic presence. Certainly there is no case to increase DFAT appropriations until there has been a root and branch review of that organisation and its overseas posts and the recommendations of such an independent review have been implemented.
There are some immediate measures that could be implemented though:
- remove all drivers from countries which have sufficient public and private transport options
- provide that cooks should only be employed when cost-effective and are only permitted to be used for official business
- publish transparently all representation functions so that taxpayers can judge whether they are getting value for money – it would be interesting to see whether the same old faces are going to these numerous cocktail functions and dinners
- downsize significantly office space requirements to the same as in Canberra. That is, a first secretary should have the same office space allocation as an EL1 in Canberra.
- charge a reasonable co-contribution (say 50%) from officers for education expenses to capture the private benefits that they are receiving. For medical, perhaps remove the DFAT system and require officers to take out private health insurance.
- set a cost-of-living allowance based upon real cost differences between Canberra and the relevant post. Don’t assume that the family will consume the same diet as in Australia (that’s one of the reasons COLA is so high in Tokyo – as if the officers would buy steaks every day!). If calculated properly, COLA would often be negative.
- charge rent for living in Australian-leased premises, even if subsidised
I can’t imagine that the current diplomatic structures in the world will long survive. With high quality communications, there is no need for an Ambassador to have the formal independence of action that he generally had in the past. As communications continues to improve, and transport gets faster, Embassies may be redundant sooner than we think. They are a relic of the Ancient world and should be reformed. Of course there are a lot of vested interests in slowing reform – especially those who see the next posting awaiting.
Nowadays, most of our posted officers are glorified travel agents, ensuring that ministers, parliamentarians and senior public servants have comfortable and well organised tours of major capitals, and to organise the meetings which themselves are justification for the trips. In effect we have a mutual dependency between those public servants and politicians wanting a nice overseas jaunt, and the missions which help organise those jaunts and which itself justify their presence. Maybe that’s a bit of an exaggeration but it does hold an element of truth.
Don’t forget who pays for those politicians and public servants who travel overseas and for those public servants employed overseas: you, the taxpayer. Are you confident that your money is being wisely spent? One only needs read stories of Peter Slipper’s $300,000 of travel expenses over the past six months to know that much of that expenditure is unnecessary. That $300,000 does not count the at-post costs involving the time and efforts of our posted officers. Surely their opportunity cost is more than zero?
So the taxpayer can save money in two ways: by cutting the number of overseas trips taken by politicians and public servants which then allows a reduction in the number of people employed at each post. I’ve heard many posted officers complain about how time they spend organising trips – this would save a lot of time!
To be fair, I do acknowledge that many officers on posting work quite hard and are subject to stresses not apparent in Australia. Their families can be uprooted – this can be positive and negative; some spouses put their careers on hold and I’m not sure that DFAT (and Defence for that matter) productively use the talents and skills of the spouses of posted officers. These issues should also be considered in any review. But just because someone is working hard is not evidence that the work is valuable to the taxpayer.
I forgot to mention any indulgence. I’m told that every Ambassador / High Commissioner acts one level higher. So if a post is rated as say an EL2 Ambassador, the Ambassador gets paid as an SES Band 1, and so forth.
What type of joke on the taxpayer is that?
And then we find SES B3 officers being Ambassador of notionally SES B1 or SES B2 posts but not taking a pay cut. It is a one-way street, and the taxpayer loses out.
So, for example, if a post is rated as an SES B1-level Ambassadorial appointment and an SES B2 officer takes the job, he or she will be paid as an SES B3.