Anaemia ^[1]: Lacking enough healthy red blood cells to carry adequate oxygen to the body, making the patient tired and weak. Anaemia can be temporary or long term and can range from mild to severe.

For a bureaucracy, money is oxygen and people are blood cells.

And anaemia has been a recurring affliction for Australia’s Foreign Affairs Department since it was born in November 1970 ^[2], casting off its old moniker, External Affairs.

The Department of Foreign Affairs and Trade has grown into a great department of state ^[3], yet warnings about the impact of anaemia on its work and effectiveness are a persistent motif over 50 years.

The template for the dire diagnosis was set by the 1986 review of Australia’s overseas representation ^[4], authored by the department’s secretary, Stuart Harris.

As a medium-sized country with limited economic and military power, Australia must rely heavily on persuasion to achieve its vital overseas objectives, Harris wrote, yet the ‘capacity to do this is thin and becoming thinner’. Australia accepted the need ‘to spend substantially to maintain an orthodox defence capacity’ yet wouldn’t do the same for diplomacy. The pressure on most areas of overseas representation led to Australia’s ‘falling short of our capacity to achieve some of our international objectives’.

When the Lowy Institute reported on Australia’s ‘diplomatic deficit’ ^[5] in 2009, it found that DFAT’s overseas missions were ‘overstretched and hollowed out’. Years of underfunding had diminished the department’s ‘policy capacity and rendered many overseas missions critically overstretched’. The ever-rising consular workload had displaced ‘our diplomats’ capacity to contribute to wider national objectives’. By international standards, Australia operated a disproportionately small diplomatic network. And ‘language skills of DFAT staff have been in decline over the last two decades’.

Returning to the ‘diplomatic disrepair’ ^[6] case in 2011, Lowy found that Australia’s traditional diplomatic footprint was outdated and inadequate: ‘Both political parties are to blame. Unless these deficiencies are remedied, our economic, political and security interests could be seriously jeopardised.’

The Lowy disrepair report revealed that DFAT’s overseas network had shrunk by 37% over two decades ago, despite ‘massive growth in the Australian public service (60% in 15 years)’. The government should reduce staff numbers in Canberra to get more of our diplomats overseas, the report said, and prevent further erosion of DFAT’s policy and diplomatic capacity by reviewing the way consular services are delivered and funded.

Parliament’s joint foreign affairs committee concluded in 2012 that DFAT had suffered ‘chronic underfunding’ ^[7] for the previous three decades. The diplomatic network was ‘seriously deficient’ because of cuts imposed by successive governments: ‘Australia has the smallest diplomatic network of the G20 countries and sits at 25th in comparison to the 34 nations of the OECD. Australia clearly is punching below its weight.’

When the Public Service Commission did a capability review ^[8] in 2013, it described DFAT as a ‘strong and agile’ organisation with ‘great potential to deliver more to the government and to the Australian community’. So the great department wasn’t quite delivering. ‘In the view of its own staff and others’, the review reported, ‘DFAT is more effective at advocacy and delivery than at strategic thinking.’

The capability review set out the anaemia problem by listing the department’s challenges, expressing them as the obverse of its strengths. The commission’s strengths-versus-challenges list is a description of a department needing to get more oxygen to its blood cells:

• loyalty of staff to department versus ‘institutional insularity’
• flexibility of workforce versus ‘churn and poor workforce planning’
• talented generalists versus ‘strains on specialisation’
• excellence of overseas networks versus a department that’s ‘less effective in Canberra’
• excellent delivery in a crisis and a ‘can-do’ approach versus suspicion of prioritisation and strategic planning
• high responsiveness to ministers versus ‘less clearly articulated departmental views’
• effective advocacy of existing policy versus ‘less good at policy development’.

The federal budget maps the trend. In 1949, the combined budget for diplomacy, trade and aid was almost 9% of the federal budget, reducing to 3.2% by 1969, 1.9% by 1989, 1.5% by 2009, and then down to the current 1.3%. The figures are from Melissa Conley Tyler’s ^[9] report for Australian Foreign Affairs ^[10] on systematic underfunding. As she comments:

Since 2013, Australia’s total diplomatic, trade and aid budgets have fallen from 1.5% of the federal budget to 1.3%. In pure dollar terms, this is a fall from A$8.3 billion to A$6.7 billion ^[11]. At the same time, the budgets for defence, intelligence and security have ballooned. In the almost two decades since the September 11 terror attacks, the Department of Defence budget has increased by 291%, while the allocation for the Australian Security Intelligence Organisation has grown by 528% and the Australian Secret Intelligence Service by 578%.

Busy doing urgent business, DFAT rightly worries that it’s letting important business slide. Busy is understandable when there’s a diverse range of responsibilities: bilateral and multilateral, high and low policy, plus all the functions of a service department.

This conglomerate bureaucracy does high policy (diplomacy, strategy and security interests); low policy (trade and economic interests); a $4 billion aid ^[12] program that proves the old high–low policy distinction is pretty meaningless; issues 1.7 million passports ^[13] annually, with 1,400 active consular cases ^[14] on any one day; and at its embassies and missions, manages security, estates, information and communication, including hosting 30 Commonwealth departments, agencies or entities that have staff in Oz overseas posts ^[15]. The conglomerate has four agencies that do trade and investment ^[16], international agricultural research ^[17], spying ^[18] and tourism ^[19].

The Public Service Commission review said DFAT knew it had a ‘serious problem’ ^[8] sharing its knowledge with other departments and was too detached from the rest of the public service. DFAT ‘should play more of a central agency-type role’ in shaping international political, economic or strategic policies:

DFAT is not seen by other government agencies, or by some of its own people, as performing as well in Canberra as it does overseas. It is perceived as being distant from policy processes outside traditional national security and trade areas, even on issues like the global economy or energy where it has something to bring to the table.

To extend the anaemia metaphor, the heart of DFAT’s problem is in the rest of Canberra that surrounds its R.G. Casey Building headquarters.