Realigning social and economic policy: Productivity Commission or Social Policy research Centre?

In the wake of the Productivity Commission research paper Rising inequality? A stocktake of the evidence released on 28 August 2018, Paul Smyth considers the future of social policy research in Australia as understanding of the interdependence of social and economic policies continues to grow and change.

A fascinating scenario is unfolding around the future of social policy research in Australia.  Strengthening post-neoliberal policy currents in Canberra are laying bare the poverty of governmental social policy research capacity. No less than PM&C Secretary Martin Parkinson has called for a pattern of economic development in which a rising tide lifts all boats and strengthens society rather than fomenting inequity and division. Meantime the Productivity Commission is trying to ‘shift the dial’ to take greater account of the social policy dimensions of productivity. As Deeming and Smyth’s (2018) Reframing Global Social Policy indicates these developments can be viewed as part of a global paradigm shift in which equality moves from the margins to the centre of economic policy. But how do we bring the social back in? Clearly we need a new alignment of social and economic policy research. Where should government begin?

In this context, Productivity Commission Chair Peter Harris’ introductory remarks launching the report Rising Inequality? are notable. Coyly he observes that a PC concern with inequality would not fit a popular perception of that agency - isn’t ‘the economy’ its core business? On the contrary he points out that governments have been referring a number of social issues to the PC over the years.  And indeed he has a five year plan for their expansion. Could this be the beginning of a new chapter for the PC?  Might it not become the research engine for an inclusive growth policy agenda?

Overall, Harris’ commentary suggests that the fundamentals are not yet in place. Thus he remains quite defensive about the existing economic model.  The absence of ‘low hanging fruit’ once available to productivity reformers (no tariffs to demolish, not much left to privatise or deregulate etc), he says, simply means reformers need to move higher up the tree.  He is also bemused by the 44% of Australians dissatisfied with the current distribution.  For Harris it seems they are living in a state of false consciousness: the PC should avoid ‘handwringing… self-criticism’ and re-educate the public to appreciate the benefits with which they have been bestowed.  No fundamental reappraisal of role here.  But then only a few years ago we said the same of the OECD, World Bank and IMF.          

We should not underestimate the challenge.  Decades of social policy neglect will take decades to repair.   Former Secretary of PM&C Terry Moran was telling it like it is, when he remarked recently that over the last thirty years people with substantive knowledge in social policy areas had gone missing - replaced by ‘microeconomists and generalists’.  ‘The answer to almost any problem’ had become ‘create a market’ with the result today a Commonwealth which is ‘all thumbs’ in social policy and not even to be trusted ‘with organising a collection of funds to build the local church.’  Parkinson he thinks is a bright light but lacking breadth of advice from beyond economists.

But where to begin? In its far reaching social policy review, Growing Together tackling inequality in Australia (2016), the ALP has a seven point social reform agenda embracing but reaching far beyond the PC’s limited concern with economic productivity. Importantly it declares that modernising social policy governance will require a new dedicated social policy agency along the lines of Infrastructure Australia.  Its research approach would be both interdisciplinary and draw upon the experience of practitioners. But do we need a stand alone body?  Why not simply refer the inequality agenda to the PC?

The history of the Social Policy Research Centre, UNSW is instructive.  Its origin lay in the rise of social policy as a separate discipline to economics in the postwar period.  By the 1970s, the dominant ‘trickle down’ economics was in disarray.  The SPRC emerged as a national focal point for researchers and practitioners engaged with the emergent Australian welfare state.  This agenda was essentially ethical and institutional and so outside of the provenance of postwar economics.  Accordingly its knowledge base was interdisciplinary – though not excluding economics.  Social policy was thought distinct from but complementary to the then Keynesian economic mainstream.  But this happy division of labour collapsed with the rise of neoliberal economics in the 1990s.  The SPRC’s core work was defunded. Over time much of the running on national social policy research became assigned to more economic research based agencies such as the Melbourne Institute and the PC itself.  And as Terry Moran’s comments indicate, market economics assumed such a dominant position in government that the  need for a an agency like the SPRC was no longer apparent.  [See moderator's note below.] 

How then should we address today’s social policy research vacuum?  Assign the task to the PC?  Or, re-establish a distinct social policy agency?   The history of the SPRC reminds us how the core business of social policy requires a very different knowledge base to economics.  We still live very much with a disciplinary specialisation that dates back to the mid twentieth century when matters ethical and institutional were extruded from mainstream economics.  They remain very much the interdisciplinary work of social philosophers, sociologists, political scientists, social workers and others whose modes of inquiry are quite foreign to mainstream economic science.  All of this argues for a distinct agency much as the ALP has proposed.  But if we have distinct agencies, the history also shows we need a complementary division of labour.  Today we see a new understanding of the interdependence of social and economic policies emerging.  Economic policy agencies are discovering the importance of the social foundations of the economy, while social policy research has learned the hard way the need for an explicit understanding of its links to of the economic dimension of society.  The emerging policy framework of inclusive and sustainable development offers the opportunity to develop an explicit collaboration between distinct economic and social policy agencies of a kind we have not yet seen in Australia. 


ALP, Growing Together Tackling Labor’s Agenda for tackling inequality in Australia

Bourke L 'This challenge is different': Top bureaucrat's warning to London audience, SMH, 19/7/2018

Deeming C and Smyth P (2018) Reframing Global Social Policy, Policy Press, Bristol.

Donaldson, D ‘The commonwealth all thumbs on social policy says former top public servant’, The Mandarin, 17/7/2018

Harris P and Coppel, J ‘Seven stories from Rising inequality? A stocktake of the evidence’, National Press Club Address, Canberra, Tuesday 28 August 2018


Moderator's note: The Social Policy Research Centre at UNSW, a multidisciplinary centre of more than 40 researchers including economists, sociologists, political scientists, statisticians, experts in law, social work, child development, care, education, demography, psychology, econometrics, history, political economy, public health and disability, has weathered funding changes since 1980 and continues as a centre for applied research related to social policies.

Power to Persuade