Australia sits on the cusp of sweeping reforms that would radically change the nature of public services and, through them, our society.
After several months of consultation, the Competition Policy Review, chaired by Professor Ian Harper is now preparing a final report that has the potential, over time, to result in significant reform to public services on which Australian governments invest over $184 billion (12.1 per cent of GDP) each year.
These include the education, health and other social services that we all access or rely on at some point in our lives. These social investments build capabilities so that people can realise their hopes and aspirations, they contribute to more cohesive and inclusive communities, and are often there for people during times of crisis.
The Harper Review recognised the vital role these services play in our society. But its Draft Report strongly signalled that reform is needed to better promote competition principles. It argued that a reduced role for government and diversity of public service providers will lead to greater choice, effectiveness, innovation and efficiency. In doing so it seeks to complete the radical alteration of the relationship between state, market and society that has been underway in Australia for the past three decades.
A fundamental problem with the arguments put forward by the Harper Review to date, has been a failure to understand that many public services exist as a response to the failures of the market. Public services also have a wider civic mission that is represented in time-honoured values of citizenship, fairness, justice, representation and participation. These values are threatened when services are seen as products that can be broken up and sold on the market.
Worse still, the promised benefits of government reducing its role in providing services have rarely been realised. What we have seen, in practice, is that this sort of reform provides a quick fix for governments looking to save money. Too often the winners are not service users or taxpayers, but for-profit providers who ‘game’ human services markets to the detriment of those who need services the most.
Experience has shown us the challenges that arise where the role of government is diminished. In the 1990s Victorian prison system radically and rapidly reformed into the type of model that the Harper Review has endorsed. At the time the state’s prison system faced a range of significant challenges and through reform several new prisons were able to be constructed.
However, there were immediately major problems - most notably a series of deaths during the first months of operation of the Port Philip private prison and major safety issues at the Women’s Metropolitan Prison - which resulted in the prison being taken over by the state. An independent review of the system in 2000 noted deficiencies in the Victorian system and called for a ‘renewed focus on collaboration rather than competition, and on promoting the notion of a system rather than an industry’.
More efficient, effective and diverse public services are possible, as are greater levels of choice. But to make this a reality requires more than simple notions of competition. Instead it requires collaboration and partnership between organisations, a strong sense of civic mission, and a genuine commitment to building relationships and networks that empower people and communities.
Government has a vital role to play, and one that is much greater than that of a purchaser of services as envisaged by the Harper Review. Community organisations also have a role to play here. Again this role must be more than simply being government service delivery arms operating in a competitive market. In many circumstances community organisations can further their mission and add value to the delivery of public services, but we must never compromise our sense of mission, independence, collaboration, and relationships of trust with the community.
On one level the Harper Review raises some high level questions about the nature of public services and the role of the market, the state and the community. More importantly, it affects the day-to-day lives and experiences of everyone. It will impact upon the nature and quality of services that we often take for granted, including everything from childcare and schools right through to health services and aged care. We all have an interest in ensuring that these social investments deliver the best possible outcomes not only for individuals, but for communities and our wider society.
Julie Edwards is CEO of Jesuit Social Services.
Comments should be short, respectful and on topic. Email is requested for identification purposes only.
mary margaret flynn
28 November 2014
As a "Yankee" born in the USA 1942 I've seen the dismanteling of our public services in the neo-liberalism agenda leading to more income inequality, mercenary armed forces, public-private "deals", ever rising prison population as the beast of private jails and prison must have their commodity--the prisoners; A much more violent and libertarian society--me not us. I think the democracies are moving right into fascism.
28 November 2014
Thank you Julie. Your prediction of what to expect from the Harper review exemplifies a penetrating observation by Thomas Piketty in his superb "Capitalism in the 21st Century": "the discipline of economics has yet to get over its childish passion for mathematics and for purely theoretical and often highly ideological speculation, at the expense of historical research and collaboration with the other social sciences". Harper's privatisation of public services theories will throw out the cultural baby with the mathematical bathwater.
28 November 2014
It's not the Market that has failed. It is the callous, hard hearts of those who see the market as a living creature dominating events, when it is really the marketeers who apply their ideology.
28 November 2014
I think we should keep an open mind about what to expect from the Harper review. Ian Harper is a highly intelligent person, very professional and a committed Christian. He has a very deep respect for the values citizenship, fairness, justice, representation and participation. He will carry out the task entrusted to him with integrity and will not allow pressure from right wing Ideologues to influence his judgement.
28 November 2014
An important article that has introduced us to Professor Ian Harper's imortant review of the public service which has under the present and past governments become a milking cow for profit greed that has corrupted the purpose for the very for what it was introduced. This was potently expressed by Joe Hockey's 'The Age of Entitlement has Ended' delivered and welcomed by the rightwing think tanks. The poor, the infirm and the aged are sacrificed for the economic doctrine that worhips the market.
It is doctrine that is gutting the public service public. Julie Edwards has alerted to us to a review that if implemented will lead to restoring a 'public service'.
John W H Smith
28 November 2014
Thank you for this timely article. Already this process is occurring as many "Not for Profit" organisations at the insistence of the governments, both state and federal that support them are removing service delivery professionals from their boards of governance. They are replacing them with finance and marketing specialist with little or no knowledge of the expertise required in human service delivery.
Which means that the bottom line becomes financial accountability rather than service accountability.
29 November 2014
1. This article cites one incident in the history of private prisons in order to illustrate that for-profit companies running prisons is an example of Market Failure. Well by the same standard, state-run prisons are manifest catastrophic “Government Failures”, since down the centuries there are countless incidents of negligently run state prisons leading to the death or injury of inmates. (Google Michael Stutchbury: “Private Prisons are Best”)
2. The article also states that “Many public services exist as a response to the failures of the market.” As a matter of history, this is demonstrably untrue. In fact it’s difficult to explain almost any “public service” arising because of demonstrated market failure. The state as a matter of course never even permitted “private”* prisons at all till recently, so prison administration cannot be an example of the author’s thesis. [*Fundamentally, “private” prisons are in fact another species of state prison, since their revenue comes via the coercive state – ie, tax – not from purely voluntary market transactions.] Education? Children were being successfully educated privately before the state began to run schools, and private schools and homeschooling consistently outperform state-run schools today. In fact, it’s notorious that education in the fundamentals is deteriorating in many government school systems despite decades of heavily increased government funding per capita, and to cope with this Government Failure, desperate parents are resorting in droves to the market (after-school tutoring) and other private remedies (eg homeschooling). It’s well known that, with no state support whatsoever and indeed active discouragement in many places, the literacy rate of African Americans (AAs) in the 19th century was far higher that it is amongst AAs today despite today’s vastly greater resourcing. In Boston in 1860, fewer than 8% of AAs were illiterate. Yet literacy rates among 4th grade school AA children today is around 50% and, thanks to Government Failure, it actually DECLINES so that by the 9th grade it is only 44% (US Dept of Education figures, 2009). Health? Where is there peer-reviewed evidence that fully free market health systems have failed – or that public health systems deliver better health outcomes? (Cuba? UK? Please!) Privately run health systems were successfully and efficiently looking after even poor people before the state, accompanied and encouraged by rent-seeking monopolists, arrived to drive them out of business (again, I cite the case of AAs with their mutual aid societies in the 19th and early 20th centuries.) Likewise, the private sector has in history proven capable delivering all manner of supposedly public goods – roads and railways, canals, police and security, dispute resolution, lifting the poor out of poverty, and so on, with far greater effectiveness than the state. Sadly, for the most vulnerable in our society, I fear the Harper Review won’t go nearly far enough in recognising this liberating fact. It will merely tinker at the edges.
29 November 2014
Interesting article, Julie. Comments from Rob S about Ian Harper are correct, though Prof Harper brings the same enthusiastic commitment to dogma and evangelisation to his economics as I suspect he might to his Christianity. We should wait and see before judgement is passed. Nevertheless, most of the comments in response to your article have their own dogmatic quality - a deep abiding faith in the evil of the marketplace and its inappropriate application to social services. Here the contribution of HH is a useful corrective - his or her contribution is at least replete with evidence to support their contentions, and a clear understanding of the difference between causation and correlation that is not immediately evident in some other contributions. We should also note that moves away from simply "block funding" non-government service providers towards models that give more power to those who use their services is something that should in principle be supported, and if it has the added benefit of ensuring tax-payers' money is more likely to deliver outcomes for them more efficiently, then we should have an open mind about that. I assume Jesuit Social Services has been successful in bidding for public funding on that basis, and this doesn't prevent from offering a good service, collaborating with other providers in developing a better system, and having a voice with government on how services should evolve.