Drivers of productivity

In 2013, the PSC engaged Deloitte Access Economics to identify key drivers of productivity in the public sector. It found that priority areas where reform in public sector organisations can lead to change include:

  • increasing the contestability of service provision
  • adopting new technologies
  • improving workforce flexibility
  • employment measurement and benchmarking
  • developing a skilled workforce
  • establishing a culture of innovation.

While different drivers affect productivity across agencies, one of the common drivers is establishing a culture of innovation with the right environment for ideas and action, and where employees are given incentives and opportunities to come up with innovative approaches to the services they provide.

Findings from the 2014 People Matter survey revealed that while public sector employees feel they are encouraged to be innovative in their work (73%), only 56% feel the sector as a whole is innovative. Those with the highest positive results for being encouraged to be innovative were in the Education and Communities, Premier and Cabinet, and Treasury and Finance clusters (see Figure 20). The group of employees with the highest positive scores was senior managers (85%), followed by employees aged 20–24 (80%) and new or temporary employees (81%).

Figure 20: Employee perceptions of innovation


The NSW Government has a commitment to introduce more contestability in the delivery and funding of public services and is developing a new strategic commissioning framework, led by the Department of Premier and Cabinet.

Strategic commissioning focuses on service outcomes and identifying the best way to deliver public services to customers. It requires careful consideration of community needs and the best type of service or system to enhance innovation and reduce inefficiencies and costs. Contestability is the practice of providing opportunity for competition in public services. The intention is not to assume that other sectors are more efficient or better, but to adopt a more strategic approach to the delivery of public services.

The importance of developing a skilled workforce has been discussed throughout this report, together with a focus on workplace flexibility. Flexibility can mean different things, from identifying service areas with higher levels of employee over-qualification or under-utilisation, to focusing on skill mix and job redesign, flexible working hours and role flexibility, and mobility within and beyond the employing organisation. Mobility is discussed in some detail below.

It is widely acknowledged that a rapid adoption of technologies across agencies is vital for greater workplace and service delivery efficiency. Technology was the most frequently raised issue when agencies were asked in the Agency survey to identify one thing that would improve the effectiveness of their workplace. Work processes were rated frequently by employees for the same question in the People Matter survey, and customers were critical of government processes in the Customer survey.

The future of service delivery

Professor Peter Shergold, Chair of the Public Service Commission Advisory Board

The size and scope of the public sector as a program funder, service deliverer and market regulator means that it should constantly seek better ways of meeting the needs of the community. Strategies must focus on improving state performance through identifying and measuring outcomes, and assessing the most effective means of delivering them.

A 'public economy' is emerging that requires public servants to facilitate the engagement of both the not-forprofit community and private sector businesses in service delivery. Public servants can no longer go it alone. A wellconsidered approach to commissioning the procurement, delivery, funding and evaluation of services can maximise public value. The goal should be to improve outcomes for customers, increase choice for users and enhance flexibility for providers. Organisations from other sectors can add significant public value in a manner which complements government-delivered services.

Change is already evident. Innovation within the NSW public sector is leading to exciting new approaches such as the introduction of Australia's first Social Benefit Bonds. What sometimes seems to be missing is the vision or courage to turn disparate elements of change into systemic transformation. A burden of red-tape micro-management is too often imposed on front-line staff and contracted service providers in order to avoid any risk. This stifles the creativity that might come from diversity, program flexibility and customer choice.

Cross-sectoral collaboration is essential. Increasingly the role of NSW public servants will be to facilitate the best means to deliver public benefit, working in partnership with community organisations and businesses.


The Office of Finance and Services (OFS) is leading ICT reform in collaboration with public sector agencies. The NSW Government ICT Strategy sets out a plan to deliver better, more customer-focused services and to gain better value from public sector ICT investment. It focuses on best practice service delivery, open data and information management, infrastructure and procurement, and ICT skills and innovation.

The public sector has adopted the industry standard Skills for the Information Age ICT Capability Framework, which will allow for a consistent approach to skills and capability across the sector. PSC is working with OFS to build the capability of public sector ICT professionals.

The Accelerating Digital Government Taskforce will develop a vision and a roadmap for the transition to digital government in NSW. Technology, innovation and creativity are changing the ways we communicate and are transforming our lives. The Taskforce will develop recommendations on how to improve community participation in policy development, how to redesign public sector processes using 'digital by design' principles, and how to ensure that citizens have high-quality, digital services. This may include leveraging social media tools for industry and community engagement, sharing information more effectively across the public sector and encouraging takeup of online services.

The NSW Identity Hub will provide every public sector employee with a Government Employee Number (GEN) as the key to accessing cross-sector computer systems and applications such as the booking of vehicles through State Fleet. There are also significant opportunities for the GEN to improve sector-wide management, measurement and analysis of employee mobility, capability and career paths – between agencies and in and out of the public sector.

Snapshot – Productivity and collaboration

Department of Premier and Cabinet

Property Exchange Australia Limited (PEXA) is developing a national electronic conveyancing system that will allow real property transactions (including mortgage creation, discharge and property transfers, conveyances of land) to be conducted and settled electronically.

It was formed in 2010 with seed funding from the state governments of NSW, Victoria and Queensland, with Western Australia joining as a co-investor shortly afterward. PEXA was initially established as a public company limited by guarantee, with a Board including representatives of the four states, the Australian Bankers Association, the Law Societies and the Australian Institute of Conveyancers. Subsequently, the company was converted into a public company limited by shares, and the four major banks joined the states as investors.

Further capital has since been contributed by other private sector investors, including the Macquarie Group, and PEXA is now approximately 50% owned by the State shareholders and 50% by the private sector. It is expected that the four shareholding states will eventually sell their shares in PEXA (possibly by way of an Initial Public Offering).

The company has commenced real-world operations, initially involving transactions from 10 financial institutions (including the four major banks) and land titles offices in the four largest states (such as removal of caveats and mortgage discharges). Simple transactions involving lawyers and conveyancers commenced on the PEXA platform in June 2014. In November this year, the full suite of transfer transactions involving banks and practitioners will be available on PEXA and this will be delivered for the first time in New South Wales as part of the national rollout.

If successful, PEXA will have delivered a major new piece of national infrastructure, improving the efficiency of land transactions, as well as providing a positive financial return to the originating states.

There may also be opportunities in the future for the technology to be licensed to other countries. Once fully operational, the information collected by PEXA may also be of value to industry and macro-economic policy makers (eg instantaneous property transaction data).


The Public Service Commission acknowledges the Gadigal people of the Eora Nation, the traditional custodians of the land on which our office stands.