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AUSTRALIA

Harper Review's new world of public service for profit

  • 28 November 2014

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
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