Social Policy as ‘Cobwebs’: The Productivity Commission’s Shifting the Dial

The PC’s newly released five-year outlook on productivity in Australia, Shifting the Dial, has provoked a very mixed reaction.  Gittins hailed a ‘completely different’ model focused on ‘inclusive growth’; while Quiggin saw only ‘the leftovers of a twentieth-century reform agenda’.  Having published (with Buchanan) the book Inclusive Growth in Australia way back in 2013, my hopes were high that the neoliberal leopard – after the example of the IMF, World Bank, OECD etc – had indeed changed its spots.  Sadly, I found Quiggin was right.  History suggests we should be planning right now for a new agency if not a radically reconstituted Commission to resource the transition to the new social and economic model.

Your Whisperer’s keen disappointment was sharpened by the imminent release of his new book (co-edited with Chris Deeming) entitled Reframing Global Social Policy, Social Investment for Sustainable and Inclusive Growth.  Written in the wake of the new sustainable development agenda at the UN, it was an exhilarating process involving leading international scholars seeking to outline the conceptual architecture and policy applications of the new paradigm. Hence the shock of the banal on reading ‘Shifting the Dial’.

True there are a couple of strategically placed paras up front mentioning ‘inclusive growth’ but these are politically neutralised by the adjacent, unsourced claims that income inequality hasn’t changed in Australia this century; so why worry?  But even more disappointing was the failure to engage with the global research and policy literatures surrounding the shift to inclusive growth.  Indeed, the PC has been left behind. 

But you might say, ‘hang on Paul!’, what has all this got to do with social policy?  After all this is an economists’ report on productivity.  But here lies the rub.  About six years ago the Grattan Institute held an economists’ workshop on the then hot topic of the ‘productivity challenge’.  As something of an afterthought, I was invited to participate on the hunch that the answers might have something to do with social policy.  Then it seemed a rather daring innovation!  Now the PC finds social policies are THE key to productivity reform!

What this should tell us most of all is that when it comes to productivity, the neoliberal economic policy cupboard is bare!  The Report reflects an almost maudlin nostalgia for the good old days when there were lots of low hanging fruit - privatisations, deregulations etc.  Then, as the Report says, neoliberals had been ‘great in their ambition’.  But now with no big economic levers to pull it says we must be reconciled to a more modest agenda, wherein the biggest gains ‘will come from cleaning the cobwebs’.  And Behold the COBWEBS: the ‘non-market economy’ of health, education and better towns and cities.

Oh no!  Surely not another Harper Competition style push to quasi-marketise society?  Quiggin thinks not; pointing to the acknowledgement of the egregious failure of the VET ‘reform’.  And here we can see the basis of Gittins’ more favourable review.  There is at last an acknowledgement of the importance of social policy for production; as investment not just, consumption.  This is indeed a breakthrough especially after the obscure, actuarial nonsense of the McClure Report’s imported ‘New Zealand model’ which has shaped federal policy in recent times. There the positive economic goals of social services were distorted into the negativity of budget savings through ‘getting people off welfare’. 

Is Shifting the Dial a ‘breakthrough’?  A focus on education and skills as an economic investment is a step in the right direction but in the wider scheme of things its more case of ‘ho hum’. This human capital emphasis is not revolutionary. Internationally, it has been the basis of the ‘social investment state’ which emerged at the end of the twentieth century (see Hemerijck 2017, The Uses of Social Investment, OUP).  We witnessed this in Australia over a decade ago with the National Reform Agenda which became a huge part of the Gillard \ Rudd social inclusion agenda. 

This lack of engagement with the social investment literature extends to the central motif of inclusive growth itself.  This is especially problematic because the latter is squarely premised on the fact that a ‘social investment’ - supply side - approach is not enough.  All-inclusive growth modelling emphasises the need for active government intervention across the full gamut of economic as well as social policy if a pattern of inclusive development is to be achieved. 

Because it doesn’t address and locate its view of social investment in these larger global conversations, claims of a ‘breakthrough’ cannot be sustained.  It could be just a reheated national reform agenda.  Any such confidence must surely be deflated when we arrive at the Report’s statement of how it chose to prioritise social policy. The answer is shamelessly pragmatic: we made ‘a long list’ …talked to a lot of people…’and we have dived into three areas’. Imagine reading that in a student essay!

‘Diving in’ to unknown waters can be dangerous. The Report neglects the dual social and economic functions of social policies.  They are not only important for production, but they also embody different social ideals.  Here the Reports statement that its easier to press for social reforms because ‘most people’ benefit and ‘distributional effects of reform are not central’ suggests an agency simply incapable of grasping the social policy challenges of inclusive growth.

It would be nice to think that history could see Shifting the Dial as the leopard changing its spots; but, on my reading, I see more an economic hand about to be bitten by a social policy spider.


About the Author

Professor Paul Smyth is a Professor of Social Policy and Honorary with Social and Political Studies at The University of Melbourne. Professor Smyth’s interests lie in contemporary Australian social policy; social policy and the economy; social policy and development; and welfare non-government organisations.



J Buchanan and P Smyth (eds) (2013) Inclusive Growth in Australia, Allen & Unwin , Sydney.

Chris Deeming and Paul Smyth (2017) Reframing Global Social Policy, Social Investment for Sustainable and Inclusive Growth, Policy Press, Bristol.

Anton Hemerijck (2017), The Uses of Social Investment, OUP, Oxford.

John Quiggin, ‘The Productivity Commission’s multifactor problem’, The Inside Story, 31st October, 2017.

Productivity Commission, Shifting the Dial: 5 year Productivity Review, Report No 84, Canberra

Ross Gittins, ‘Healthcare, education, cities: Now for something completely different’, SMH, 1st November, 2017


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