Carmody's choice

The silly season is over and a new year brings a new boss for Australian Customs - along with new challenges.

The appointment of Michael Carmody, as Customs Chief Executive Officer rose more than a few eyebrows among insiders in industry circles - because Mr Carmody is expected to bring more than just a whiff of change.

Minister Chris Ellison’s tired and plodding administration of the portfolio has so far left the agency adrift. Mr Carmody is this year faced with a choice between more of the status quo or undertaking significant corrective action and genuine reform.

There is no better example of the need for corrective action than the botched implementation of the Customs Cargo Management Re-engineering Project - a $250 million computer program, delivered years overdue. Only recently the system collapsed in a heap for several hours, sending both the importing and exporting industries into near panic.

Handwritten paper forms and the trusty facsimile machine replaced computers and the Internet. Not only did the primary system fail, but the back-up system also fell over.

But that’s not his only trouble. In 2003-04 the ACS managed to get itself in such a state of financial distress that it required an extraordinary cash injection, which proved to be the first of many additional funding props. As a result, the Department of Finance was called in to plumb the depth of the problem.

Its report can’t have been good, because not only has the Federal Government refused to table the Review of Customs Financial Health in the Parliament, but also denied Labor’s freedom of information requests to access it.

These are the two immediate tasks for the new Customs CEO - to fix the computer chaos and to bring the finance fiasco under control.

But Mr Carmody must also be prepared to significantly restructure. Customs suffers a general institutional malaise with the accompanying loss of staff confidence. The core business must be identified and pursued with renewed vigour.

The core business for Customs is the twin of trade facilitation and border protection, but too often the organisation treats these as competing priorities.

Trade is essential to our island nation. Successful trade can’t occur without a secure supply chain and trading environment. The flipside is that the expensive task of protecting the border cannot be done without a large measure of self-compliance from traders and business.

Rather than treating industry as the whipping boy, Customs must refocus its efforts from simply trying to control trade to facilitating secure trade.

Mr Carmody should also look at some Customs non-core hang-ons from days gone by. For example, the anti-dumping section surely belongs somewhere else - perhaps with the ACCC.

It may also be time for Customs to bow out of its role as a tax gatherer. Collecting revenue is not about protecting the border or facilitating trade and besides the ATO does it better.

If he’s after some bedtime reading on the topic of restructure, Mr Carmody could do no better than to dig up the Sturgess Report of 1998: it is said to recommend the creation of a single border agency. That is a valuable idea and on such a matter of public importance it would be useful to have the key document available for public debate. Unfortunately, this report too is a national secret.

The excessive secrecy has not stopped Labor from leading the way on policy. Labor has already endorsed a single Department of Homeland Security for protection of the border, and did so some years ago.

A single border management agency, including an Australian Coastguard is not a pipe dream. It’s a must. Yet the Justice Minister Chris Ellison has not lifted a finger to bring it about.

Where the minister has failed, Mr Carmody must pick up the mantle of reform. Let’s see what choice Mr Carmody makes in 2006.