Des Pearson is Auditor-General of Western Australia. He was chief auditor for the Northern Territory at 26, an associate director of corporate services at the Canberra Institute of Technology, and senior assistant director for policy development and services at the Australian Quarantine and Inspection Service. He is a member of the Deafness Council of Western Australia and of two employment services for school leavers with disabilities. He is married with three children, and is a Fellow of AIM.
AIM: What was your first management role?
Pearson: My first real management job was as chief auditor for the Northern Territory when I was 26.
AIM: What was the secret to getting such a role so young?
Pearson: It comes back to adaptability and being prepared to take on a challenge. I was selected for one position and then I was offered another at a higher level. It was a wonderful opportunity. There were real challenges of isolation and staffing, but on the other hand I got an overview of the public sector and saw how to facilitate the move towards self-government.
AIM: How do you understand the role of auditor-general?
Pearson: It is important in our system of government to have accountability; it is a vital check in the public sector. In the private sector you have financial statements to tell you how you are operating. In the public sector it is more a question of: “How much funding did you have?” In most programs you are rationing limited resources against potentially unlimited demand.
AIM: How does accountability differ in the public sector?
Pearson: We are required to audit operational management, legal compliance, and the efficiency and effectiveness of programs. In the public sector there is a much more subjective, value-based focus on probity and propriety. It is more difficult to demonstrate how well you are operating than in the private sector, where you know how well you did from the bottom line.
AIM: With the increasing incidence of privatisation, have you formed a view about what should be kept within government and what can be farmed out?
Pearson: Law and order, and economic management are core businesses of government. Regulation and policy are core businesses that shouldn’t be privatised, although that is not to say that advice can’t be garnered. At the other end of the spectrum, some government services are more susceptible to contestability. Clearly, public transport can be outsourced. Some areas of health can be done that way.
AIM: Is privatisation going too far?
Pearson: I have some concerns about quality. There is an increasing pace of change, and I am concerned that government programs with long time horizons are often subject to short-term decisions. That is something to watch.
AIM: You mean short-term management horizons?
Pearson: Or political influences. You are seeing a lot of single-interest groups wielding political influence and I wonder what the effect will be.
AIM: How intense is the monitoring?
Pearson: In a management sense, the tight feedback is not there. In the public sector people tend to be focused on a particular program and on their spending. We can’t audit every agency for efficiency and effectiveness, but we do seek out areas where the greatest value can be added.
AIM: How do you define “efficiency” and “effectiveness”?
Pearson: Efficiency is costs relating to inputs and outputs; effectiveness is not just cost, it is also equity and probity. When you spend taxpayers money, you not only have to spend it wisely, you have to demonstrate you spent it wisely.
AIM: What was your view when the Victorian Government outsourced the Auditor-General’s role?
Pearson: I had a strong concern about those initiatives, and I was relieved when they were reversed. The auditor-general is unique in the Westminster system of democracy in reporting to Parliament. Outsourcing the position neuters the role.
AIM: With the advent of ageing and globalisation, the role of government is likely to be reduced. Do you have thoughts on that?
Pearson: I see new challenges and new risks. In the public sector, you are seeing more contracting out, which brings new risks. In the past, public servants dealt with public servants. Now you have public servants on a set salary working with private operators who are working on incentives. Governments are also getting into longer contracts: five to seven years; 20 years in the case of hospitals. I see problems in managing that. It requires astuteness: enough flexibility to cope with change, but enough rigidity to enforce the conditions.