Quarter Time at the Productivity Commission inquiry into social services: who’s winning?

The Productivity Commission’s inquiry into Human Services has released its interim report, and Policy Whisperer Paul Smyth identifies the social services sector as leading the match – but is there scope to carry this important conversation to completion?  Together with Eleanor Malbon and Gemma Carey, Paul led a coordinated response to the Inquiry in the form of the report Social Service Futures and the Productivity Commission. 

At Quarter Time in the Productivity Commission (PC) inquiry into Human Services we have to give the edge to the Community Sector and their public service allies.  There was a marvellous rigour and depth to so many of the sector (and Union) submissions which was absent from the lacklustre PC effort.  Sure, they hung onto the old lines about the people being best served when markets replace state monopolies and non-competitive community sector practices etc. etc.  But somehow the effort lacked the authority of the PC of old.  In their golden age there was such a wonderful arrogance to the PC’s play, an almost irresistible self-belief in the superiority of the Market over any other form of governance; while a faltering community sector struggled to fathom the mysteries of the new Market Science and found their defences easily brushed aside.  Now, however, we see the boot on the other foot.

Contra Hilmer’s Law, the Preliminary Findings Report has quietly accepted many of the reasons raised by the sector as to why market forms of governance should NOT be our default position.  For example, government itself WILL be a legitimate service provider.  Government’s responsibility as steward is NOT simply policing market rules but managing the network in accordance with the public interest.  The community sector itself is recognised as a different type of organisation producing different values to for-profit service providers.  Moreover, when we go from theory to execution and consider the ‘Little List’ of candidates for Marketisation, the discussion of some - remote indigenous communities and grant-based family and community services, for example – appears to recommend a Pardon?   Overall it might be too early in the game to be sure but this uncertainty of theory and practice which pervades the Report does suggest that the public and not for profit sectors may well have seized the intellectual initiative, leaving the way open for them to instigate a new national conversation about the way we govern our Society.

Different sectors, distinctive value-adds

What appears to have broken the back of the old PC paradigm is the overall impression from the community and other submissions that it cannot adequately deal with the distinctive value adds of the three sectors: market, state and civil society (NfPs).  Firstly, the PC’s account of government’s stewardship role says very clearly that it is not some kind of neoliberal guardian of market rules but much more like an interventionist Keynesian macro manager responsible for and assisting a network of players to optimise the public interest.  In this regard the Brotherhood of St. Laurence’s submission calls from the outset for a full consideration of just what is the ‘public value’ we are trying to create through these networks.  As that literature tells us, creating public value requires different structures and relationships between people to that of the higgledy-piggledy of the market place.  What we need to start talking about then is what is that public value we are trying to create and what does this mean for the roles of the different sectors?

Community sector displays vigour, confidence, certainty

Secondly, community sector submissions reveal a notable new vigour, confidence and certainty about their distinctive role in society.  Their sense of mission, their engagement of communities, their strengthening democracy through advocacy and so on suggest a firm unity of view among some very key agencies and ACOSS.  The PC response to this powerful identification of role is really quite feeble.  It does acknowledge what we might call the ‘social value’ add of the sector but doesn’t seem to know quite what to do with it.  Its main concern seems to be to pronounce that for the purposes of marketization they should still be treated simply as service providers and certainly no different to for-profits.   I guess this is understandable if you are economists and working within a paradigm of market-based efficiency and have no expertise in the areas of ‘public’ value and ‘social’ value.  But the submissions suggest that we are now at a place where we cannot simply slip these questions of public and social value to the side and hope they will go away.  There is a new dynamic in this debate and it points to a new social governance model which maximises the different contributions of the market AND the state AND the civil society.

So what might happen in the Second Quarter?  No one can know for sure – after all this is politics!  But going by the first stanza it does seem that the PC bluff has been called and there will be an ever-shrinking boundary around the scope of marketisation in the Social Services.  It is now the community sector’s game to win.  How best might it proceed?

Unpacking "inclusive" and "sustainable" growth - important questions

Having fenced the ideas of ‘public’ and ‘social’ value I believe the key task is to focus on what they mean for Australia today.  As I have long argued the subject of this debate will likely be what we mean by more ‘inclusive’ and ‘sustainable’ growth.  The word inclusive is so nebulous.  We can’t possibly be happy with a public interest expressed in terms of everyone being included in a lopsided global marketplace where the benefits never trickle down.  Even the PC says there ought to be guaranteed minimums – indeed, this later turns out to be ‘high quality’ services for all.  And what can this mean under a government which declared the end of the age of entitlement!   This then is our first topic of conversation: what kind of society do we want? What do we mean by the fair go today?  If this means a society of equals then what do we mean by equality?   In what things should we be equal?  This has huge implications for governance.  Typically education, health and welfare, for examples, tend to be decommodified but not all the other consumer items which are less central to our status as full members of society.  Nor should this be seen as an academic exercise.  The European Commission recently launched its consultation document on a ‘European Pillar of Social Rights’ with 34 social principles and accompanying metrics; while the UK has launched an inequality audit of its public services. 

Social justice and neoliberalism

It is only when we have clarity about these overall social and economic objectives that we can really talk sensibly about the roles of the different sectors.  Before neoliberalism, for example, the Social Justice objective prescribed a foundational role for the public sector in guaranteeing the social rights of citizenship.  Mainstream community sector organisations took their brief as junior partners to the welfare state in the achievement of this objective.  Neoliberals on the other hand rejected the welfare state and the very idea of Social Justice.  In their view the social services were a wasteful sink of economic resources, a public monopoly which had to be drained and remade as a free market in human services.  Here, as the Harper Review suggested, the role of the community agency is essentially that of a rival business. The PC’s allusions to these kinds of issues are currently a muddle: tentative gestures towards state stewardship with government service delivery, towards community sector roles in creating social capital and so forth, co-existing with the now dreary themes of neoliberal evangelisation. 

So, at Quarter Time, the momentum may well be with the Community and public sectors and we can see the Key Issues which will decide the future of social governance agenda in Australia.  However there is a long way to go.  I think it would be nigh impossible for the PC to lead the kinds of discussions we have to have; they simply do not have the research expertise (look through the references in the Report and note the absence of the key political and social science text you would expect in a university student essay). On the other hand it will be a real challenge for the sector to seize the opportunity and exert its dominance in the remainder of the match.  I know that many were frustrated by the kind of passive, tick a box, formulae through which the PC sought to contain the Inquiry within the discourse of marketisation.  Indeed many do want the kind of wider public dialogue to which I have referred.  But can they find the vehicle?