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Published by: Harvard Kennedy School
Published in: 1999

Abstract

When the reform-minded government of Australian Prime Minister John Howard takes office in 1996, it initiates a whirlwind of government "reinventions". Among these is a dramatic change in the nation''s Department of Social Security (DSS), the agency long-responsible for the great range of public welfare programs that touched the lives of Australians virtually from cradle to grave. In its new formulation, DSS would no longer deliver those benefits. Instead, under the terms of a "purchaser-provider split", it would be among a number of federal agencies which would be confined to shaping policy, and would turn to a new, service-delivery entity to determine eligibility and actually issue the checks. Thus is born Centrelinkùmeant both to improve service and reduce costùand one of the largest public organizations in Australia. This innovation and organizational change case describes the management challenge faced by Centrelink''s first generation of leadership and the decisions they make as to how to both motivate a difficult workforce and to improve service. At the same time, it offers the chance to discuss whether CEO Sue Vardon and her team have made the right choices, a question whose drama is heightened by the impending possibility they face of "contestability", the mandate that Centrelink prepare to compete for the federal contracts which sustain it and its large workforce. The case also provides those with an interest in contracting issues to discuss the structure of Centrelink, as well as for those with an interest in public sector marketing to discuss the way it handles a series of crises which mark its first year in existence. This is a major new case about a dramatic experiment in public management.

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Abstract

When the reform-minded government of Australian Prime Minister John Howard takes office in 1996, it initiates a whirlwind of government "reinventions". Among these is a dramatic change in the nation''s Department of Social Security (DSS), the agency long-responsible for the great range of public welfare programs that touched the lives of Australians virtually from cradle to grave. In its new formulation, DSS would no longer deliver those benefits. Instead, under the terms of a "purchaser-provider split", it would be among a number of federal agencies which would be confined to shaping policy, and would turn to a new, service-delivery entity to determine eligibility and actually issue the checks. Thus is born Centrelinkùmeant both to improve service and reduce costùand one of the largest public organizations in Australia. This innovation and organizational change case describes the management challenge faced by Centrelink''s first generation of leadership and the decisions they make as to how to both motivate a difficult workforce and to improve service. At the same time, it offers the chance to discuss whether CEO Sue Vardon and her team have made the right choices, a question whose drama is heightened by the impending possibility they face of "contestability", the mandate that Centrelink prepare to compete for the federal contracts which sustain it and its large workforce. The case also provides those with an interest in contracting issues to discuss the structure of Centrelink, as well as for those with an interest in public sector marketing to discuss the way it handles a series of crises which mark its first year in existence. This is a major new case about a dramatic experiment in public management.

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