In a Melbourne School of Government Seminar last week, Helen Dickinson (@drhdickinson) commented on the growth of economic rationalism in Australian policy, and how economic reasoning seems to be expanding into other areas of public and social policy at a much quicker rate than in other countries. In this fortnight's piece, Prof Paul Smyth draws attention to the ways in which economic reasoning is creeping into social policy and social services reform.
Many of us in the social service sectors understandably flick the page when we come across government inquiries into ways to improve the national economy. I did this with the Federal Government’s ‘Competition Policy review’ headed by Professor Ian Harper launched last December. I only recently discovered that its Issues Paper - published in April with submissions closed June 10th - has a whole chapter devoted to thinking about ways to marketise social services such as education, health and welfare. I felt less negligent when I found that few if any of the published submissions have come from education, health or welfare agencies. Should I\we be concerned?
We should. I well recall being a part of a group at an ACOSS conference in the mid 1990s that received an ambassador from the original National Competition Policy Review led by Fred Hilmer. He was grimly intent on our getting the message that the economic lords in Canberra had their eye on the resources deployed in our sector which they were going to remake along the lines of a quasi market in order to drive greater efficiency and productivity. At the time we thought his thinking rather odd and out of place with little inkling of real world social issues, but we completely underestimated the determination of the economic agencies in Canberra to remake the world of welfare upon the entirely abstract model of economic efficiency which economic rationalism had become.
While some spectacular examples of achieved marketization of social welfare eg employment services resulted, the Deloites review of the COAG reform agenda in December 2013 concluded that on the whole, the marketization of the social sector begun with Hilmer remained largely unfinished business. Given that the new federal government is showing every sign of reverting to the economic rationalism of the 1990s, rather than transcending it in the inclusive growth models of contemporary economics, we should indeed watch the Harper review with care.
The Review is billed as ‘Hilmer Mark 2’. So long as the Issues Paper is talking about ‘the economy’ e.g. the world of building, transport, food production, retail etcthere is little to engage those in social policy. The calls to ‘remove obstacles to competition’ among ‘rival businesses’ and to‘spur productivity’ through implementing the ‘competition laws’ are no doubt well grounded in the economic policy success stories of the nineties and point to significant unfinished business.
It is when we come to the Chapter, ‘Potential Reforms in Other Sectors’, that the alarm bells ring. The whole paper simply assumes that what is an appropriate policy framework for an economic market will be exactly the same for the social domain. Without any argument or evidence it sets out what is nothing more than an ideological base line that services are better delivered through private markets than through a public system of democratic governance. In a fanciful historical context it refers to a past when social services developed because ‘competitive markets were not seen as feasible’ evolving into a future where ‘much of what has been provided by (government) will be able to be provided by ’individuals, NFPs and the private sector’.
The big worry about this paper is not that we are having a competition policy review but that when it comes to the social services, our economists in the central agencies (who have largely penned the Paper) appear to have learnt nothing since ‘Hilmer Mark 1’. Leaving aside their nonsensical ‘historical’ analysis there is no hint of the mountain of learnings about the ambiguous outcomes from the policy exercises which were undertaken, like the Job Network; let alone any account of the new imperative to shift more resources not less through the social services if we are to move towards the Inclusive Growth models being recommended by international policy agencies.
In short we should be very concerned about Hilmer Mark 2. Its Issues Paper shows no ability to engage with the kinds of social challenges of economic reform which emerged out of the period of economic rationalism. It is high time that policy makers recognised that trying to understand the great social issues of the day through the narrow lens of market economics is a hopelessly flawed exercise. We should advocate strongly that when it comes to the social services a parallel inquiry is necessary – one that has a broader, more interdisciplinary base as well as informed by providers and recipients of our great social services.
Posted by Gemma Carey