New Public Management Reforms and Modernization Changes in Australia

New Public Management Reforms and Modernization Changes in Australia

Tarek Rana (La Trobe University, Australia)
DOI: 10.4018/978-1-5225-3731-1.ch001
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This chapter explores and explains recent modernisation changes in the Australian Public Sector and provides insights on implications of new public management style reform for public sector accounting, auditing and accountability systems and practices. By adopting a narrative analysis approach, this chapter reconnoitres the change by dissecting the public-sector governance, performance and accountability reform and identifies significant modernisation changes in public sector management which has switched focus from a “rules-based” to “principles-based” accountability framework. Moreover, this chapter highlights the changes, challenges and opportunities that arises with the implementation of the new framework which can be seen as an innovative determination of modernisation. The modernisation change in Australia has produced new ideas of good governance and requirements for meaningful accountability systems and practices by mobilising various accountability mechanisms such as accountable authority, corporate plan, program evaluation, performance measurement, and risk management.
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Public sector management is important and significant for any government across the globe. While considerable resources have been devoted to the development and implementation of public sector reforms the existing approaches have fallen short in delivering meaningful and understandable accountability framework (Bovens, 2005; O'Flynn, 2007; Osborne, 2010; Barrett, 2014a, 2014b). Despite the several decades of modernisation reforms in Australia over many years, there is no evidence that the perceived nature of accountability has actually changed (Broadbent and Laughlin, 2005; Egan, 2009). This chapter seeks to address the modernisation change in accountability regime by exploring how Australian Public Sector (APS) has begun to minimise the missing link and started developing an innovative framework for public sector management.

A growing body of work has investigated the role of financial and administrative reforms through the new public management (NPM) ideas and their implications for public sector accounting, auditing and accountability (Parker and Guthrie, 1993; Guthrie, 1998; Jacobs, 1998; Guthrie and Parker, 1999; Lapsley, 1999; Hoque and Moll, 2001; Funnell, 2003; Lapsley et al., 2009; Ezzamel et al., 2014; Hyndman et al., 2014; Kartalis et al., 2016). Numerous scholars have argued that it is epitome that public sector embrace the idea of modernising accountability ethos for successful design, implementation, delivery, and evaluation of government programs and interventions rather than rationalising modernity (Pallot, 1992; Lapsley, 1999; Parker and Gould, 1999; Hoque and Moll, 2001; Barrett, 2014a, 2014b). Moreover, Guthrie (1993) and English and Guthrie (2001) argue that central to most of these public sector reforms should have been the idea of improving accountability.

The concept of modernisation of public service is central to the idea of new public management (NPM) and largely evident in the research focusing on public sector accounting, auditing and accountability (Hoque, 2008). However, the significant growth of NPM ideas has increased economy, efficiency and effectiveness demands (Guthrie, 1993; Lapsley, 1999). Power (2003, 2007) and Hood (1991, 1995, 2010) illustrated this trend in the financial accounting, performance auditing, feedback, and evaluation activities due to the prominence of accounting based modernisation efforts through NPM reforms in the public sector. The growth in this type of modernisation efforts has made managerialism, economic rationalism, and financial management major vehicles for practicing accountability (Broadbent and Guthrie, 1992, 2008; English et al., 2005). This view of accountability is narrow which treats public sector as a simple system or structure and values financial accounting and reporting in isolation. Consequently, the input/output focus on public sector performance created conditions for a reductionist accountability framework by strengthening a compliance-oriented managerial focus to meet public interest requirements.

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