Photo: Norman Plant
The Secretary's Review normally provides an overview of achievements. I am breaking with that tradition to provide a better sense of the department itself and of the people who pursue the national interest in this part of government. This Review will therefore repeat some of the themes and information conveyed in different speeches I have given over the past couple of years.
The Review will also highlight some of the obvious challenges ahead.
By and large, people in and outside government see the Department of Foreign Affairs and Trade as a 'policy department'. This is true, but it is only part of the story, as the department is anything but mono-dimensional. Indeed, the extent to which the department is both a policy and a functional department is often under appreciated.
The Department of Foreign Affairs and Trade provides the following functional services:
- Passports, with some 1.7 to 1.8 million now issued each year. This function is a big one, involving over 20 per cent of the department's A-based staff.
- Consular, with over 1,500 cases active at any one time, in the context of a widening gap between the expectations and reality of what government can and can't do for Australians abroad. Dedicated consular officers number only about 160 of the department's 4,598 employees (i.e. permanent, part-time and contractors). However, officers from across the department are trained in consular matters and are brought in to assist in times of crises. For instance, as mentioned in the 2010–11 Annual Report, 34 per cent of all Canberra-based staff were involved in responding to the simultaneous crises in early 2011 in New Zealand, Japan and the Middle East.
- Managing the $1.6 billion of government owned property abroad through the Overseas Property Office.
- Providing and maintaining the government's global classified communications system.
- Providing common services for departments and agencies represented at Australian Missions abroad.
Taken together, these functional activities embrace over 40 per cent of the department's total staff.
The department's corporate and policy activities are also more complex than might appear at first sight. Corporate management in the Department of Foreign Affairs and Trade involves the usual activities of human resource and financial management. In addition, there is a component of psychological, medical and security activities well above that which would be found in domestic agencies. Staff deployed to Kabul, Tarin Kowt, Kandahar, Baghdad and some other places must be extensively tested to ensure they are able to meet the obvious demands and challenges. Security, which is a high cost commodity, must be taken especially seriously in many places around the world. And staff deployed to some locations are entitled to expect access to a minimum of medical care. So the department's corporate costs are higher than what one would find in a normal government department.
The so-called policy work of the department involves a lot of hands-on activity, which is as much doing as thinking. For instance, organising prime ministerial and ministerial visits, high level business and trade delegations, and public diplomacy activities. A successful DFAT officer must be able to be as much a visits organiser and an events manager as a policy thinker.
It is against this background that care needs to be exercised in examining the percentage of staff posted abroad and the percentage of staff with a foreign language. In point of fact, many DFAT staff work in areas where a posting is not part of the job and where a foreign language is not required.
As of 30 June 2012, there were 2,479 A-based officers in the department i.e. excluding contractors. Of these, 1,140 were policy officers or what popular perception might see as so-called 'diplomats'.
Of the 1,140 policy officers, 559 (49 per cent) were working with the department in Australia, 397 (35 per cent) were overseas and 184 (16 per cent) were off-line. The latter encompasses the 50–70 officers who are, at any one time, working in other parts of government or at Parliament House; officers on language training in Australia; officers accompanying spouses on overseas postings; and officers on maternity or other leave.
Officers in the department are increasingly indicative of the Australia they represent. In recent years, for instance, graduate trainees have been born, not only in Australia, but in countries as diverse as Indonesia, China, the Sudan, Somalia, Afghanistan, India, South Africa, Lebanon, Malaysia, South Korea, Sri Lanka, Bahrain and Italy.
The department has continued to improve gender balance at senior levels, the employment of Indigenous Australians and people with disabilities, but still has some way to go to be even satisfactory on such measures.
The balance of policy and non-policy officers abroad has changed significantly since 1996.
In 1996 there were 680 A-based officers posted abroad, of whom 370 (54 per cent) were policy officers. Despite the fact that, as of 30 June 2012, the number of officers posted abroad had reduced to 594, the number of policy officers on posting had actually increased by 27 to 397 (67 per cent). So the department has already undergone the sort of rebalancing which the Foreign Office in the UK has undertaken with its downsizing over the past couple of years and which the New Zealand Foreign Service is currently undergoing.
Relative to Australia's size and our global interests and regional priorities, the department's resources are thinly spread, although the spread does reflect those interests and priorities. For instance, about 52 per cent of the department's staff abroad are in Asia/Pacific, 16 per cent are in Europe, 11 per cent are in the Americas, 15 per cent are in the Middle East and Africa and six per cent are engaged in multilateral work e.g. UN, WTO, IAEA etc.
And the location of staff has changed over time to reflect global and regional changes. In 1996 there were 83 DFAT policy staff in Europe; in 2012 there are 58, a decrease of 30 per cent, despite the fact that the EU remains one of Australia's most important and significant economic partners, both in terms of trade and investment.
Cut another way, over 70 per cent of DFAT staff abroad are in G20, APEC, EAS and Pacific island countries.
To give an idea of the thinness of the spread of our representation, 72 per cent of our Missions abroad have six or fewer A-based DFAT staff, with 35 per cent having three or fewer A-based DFAT staff.
The Policy Context
The department's work is being progressed within a global and regional environment being reshaped by changing economic and strategic relativities. And nowhere is this more important than in respect of the key Trans-Pacific relationships involving the United States, China, Japan and India. It is the interplay between these relationships, especially between the US and China, which will fundamentally shape the politico strategic environment in which we, as a country, live. Indeed, at the time graduates now joining the department retire, the dynamic will still be being played out. It is the dynamic which will dominate our world for longer than the Cold War dominated the second half of the 20th Century.
We are also seeing big changes in the institutions the world uses to organise itself. Organisations like the UN and the IMF are under structural pressure. And the WTO is struggling with trade liberalisation. Newer forums like the G20 and proto-groups like the BRICS reflect the changing order. But nothing is yet fixed and the system is in flux.
Closer to home our interests in South East Asia and the South Pacific are enduring and always require close and consistent engagement.
Organisations always have multiple challenges. There is never an end point and there is never a point of perfection which, once reached, does not require adjustment. There are always moving parts, so needs and requirements are always changing. At present, in addition to the challenge outlined above in 'the policy context', there are four big challenges which stand out.
The first challenge concerns our own capacity as a nation to seize the opportunity of the forums to which we now belong and to develop integrated strategies in the pursuit of our national interests. Twenty years ago the two forums which Australian Heads of Government attended on a regular basis were the Commonwealth Heads of Government Meeting (every two years) and the Pacific Islands Forum (annually). Today Australian Prime Ministers attend annually the APEC Leaders' Meeting, the East Asia Summit and the G20 Leaders' Meeting.
It is important to stand back and reflect on what this means. For the first time, Australian leaders now sit at the same table, a minimum of three times a year, with each of the leaders of the United States, China, Japan, Russia, Korea and Indonesia. We are at the same table a minimum of twice a year with the leader of India. For the first time Australian leaders are now involved in annual meetings with the leaders of important emerging countries such as Brazil, Turkey and South Africa, and with the leaders of the UK, France, Germany and Italy.
APEC, the EAS and the G20 each have a specific purpose but a country such as Australia should not view them as exclusive domains covering economic, strategic and financial matters. They are much more than that. The new forums which Australian leaders now attend should be seen as opportunities to further particular bilateral relations and to pursue particular multilateral objectives. They should not be pigeon-holed and be seen as separate and distinct from each other.
The second big challenge is to secure a global and regional environment in which the private sector can prosper. This means not just turning back the forces of protectionism, but also supporting Australian businesses in their efforts to trade and invest in global supply chains and tap into areas of high economic growth. This challenge is even more important as the Australian economy undergoes profound changes. The Department of Foreign Affairs and Trade has a key role in opening markets and working with businesses as they seek to compete in an increasingly integrated global economy.
It is important in the changing global landscape to see trade agreements in both economic and broader terms, for instance with countries such as India and Indonesia.
The third big challenge is to continue to manage our near neighbourhood relations with deftness and sensitivity, consistent with our national interests. This is a challenge which confronts successive generations of Australian foreign policy advisers and decision makers. We have had mixed success. But the environment is changing. It is only a matter of time before we have a neighbour in Indonesia which has a bigger economy in nominal terms than our own. We are not used to that. As Indonesia grows wealthier and more confident it will become increasingly difficult for Australia to gain the attention of Indonesian decision makers to the extent that we think our interests might warrant. In other words, we may need to become more selective in what we push and what we ask for.
The fourth big challenge is the obvious one of resources. It is clear that the fiscal environment will remain tight for some time to come. The Department of Foreign Affairs and Trade will need to continue to absorb its fair share of pain. And the pain for the department will be more acute than for some other parts of government, given that we did not grow during the times of plenty in the late 1990s and the early 2000s. Australia's under representation abroad compared to other countries has been well documented in studies by the Lowy Institute and others. The challenge will reside, in large part, within the department itself. In recent years, the department has excluded training and staff development, including language training, from budget cuts. The department has also managed to grow the number of officers abroad despite the budget cut-backs. The department has done this through its own internal management processes, recognising that the value it brings to the table in government is the value derived from its global network. That network will face increasing difficulties over the next few years, especially given the fact that the cost of keeping someone abroad is so much greater than the cost of employing someone in Canberra. So the challenge for the department will be to maintain a clear sense of balance and perspective about its purpose.
Based on past performance, the department can be expected to maintain that balance and perspective.