Social Service Futures: Competition Reform of Human Services from a regional perspective.

David Tennant, CEO Family Care

The Competition Policy Review, chaired by Professor Ian Harper recommended that each Australian Government should adopt choice and competition principles in the domain of human services.[1] In its response the Australian Government agreed and committed to a Productivity Commission review into human services, focusing on the guiding principles of choice, competition and contestability.[2]

There will most likely be an election before any review commences – but in a real sense, significant changes are already occurring. At least two of the big ‘C’ guiding principles are having an impact on how community not-for-profit and welfare providers are behaving. Competition and contestability are not benign motivators. In fact they push against the traditional starting positions of ‘for good’, rather than ‘for profit’ services, where sharing and collaboration are counted amongst key performance indicators.

There have been calls from sector leaders for agencies to merge or close.[3] Deciding that approach is helpful without asking what the consequences might be, is a bit odd. It has made some people angry and many fearful, not only because there might be job losses but because the provision of not-for-profit and welfare services usually involves a commitment to address vulnerability and disadvantage.

In regional areas, community service providers take their connection to community seriously. That is not to suggest indifference on the part of metropolitan not-for-profits but in a rural or regional context the implications of removing local options, delivered by local people are different. Geography does matter. Just ask a single mum with a sick baby living in a caravan park in a small regional town with no reliable public transport.

Which brings us to the other and arguably most important ‘C’, choice. After twenty years in the community sector, I have not met many people who enjoy asking for help to keep their families housed, clothed, fed and well. That is not to say there are not very powerful and positive interactions that can follow – but it is light years away from a shopping trip to the mall.

Many of the people community providers work with do not have choices to exercise. Where choices exist, often the ‘market’ options available specifically target and sometimes aim to exploit the vulnerability or disadvantage that is driving need. It is entirely unclear what additional competitive reform will deliver in this space.

There are some things we know already. Business will not automatically view an opening of human services as an attractive growth strategy. Why not? For the same reasons markets do not always  provide safe, fair choices currently. It is hardly a compelling business case to say you are targeting low income people, who have low net wealth, in places and circumstances where they are hard to reach and retain. If that is not off-putting enough, success may include its own disincentive. Being really good might mean your target demographic no longer needs assistance. With not-for-profit providers under increasing pressure to think and behave more like commercial operations, they may be less rather than more likely to respond to their clients.

Government is keen to promote choice as a priority but promotion and actions are not always the same. The leading edge of welfare reform in Australia is taking choice away. Programs of this ilk include the requirement for parents to become job ready whilst still caring for very young children, or risk benefit suspensions; compulsory income management regardless of personal financial habits or needs; [4] and the compulsory cashless welfare card trials in targeted communities. If choice is such a powerful tool in delivering benefits, why is it so absent in tackling the most difficult problems?

People in regional communities are acutely aware of the push to marketise human services. Not many I have spoken to seem to think it is a good idea. Many, particularly people who work for, volunteer with, or donate to community based not-for-profits are deeply concerned about the potential to do irreparable damage to concepts that the Harper Competition Review acknowledged but did not spend a lot of time on. Those concepts go by a number of names – social capital, goodwill, the fabric of community, or the glue that binds people together. These concepts are important all of the time in communities lacking the scale of population, infrastructure and income of major cities. When additional challenges occur, for example natural disasters, extreme weather conditions, crop failure, disease outbreaks and so the long list goes on, it is the human connections, not motivated by market share or profit margins, that kick in. They can be and often are vital to safety and survival.

Perhaps it is time to add a fourth ‘C’ to the guiding principles for any review. Care.

This piece has been written as part of the Power to Persuade Social Service Futures Dialogue 

[1] Harper, Ian; Anderson, Peter; McCluskey, Su; O’Bryan; Michael; Competition Policy Review Final Report; The Treasury, Canberra, March 2015, page 254.

[2] Australian Government Response to the Competition Policy Review; The Treasury, Canberra, 24 November 2015, page 4.

[3] A series of Articles appeared in the on-line news service of Pro Bono Australia in early November 2015. The ‘merge or close’ quote was attributed to David Crosbie, CEO of the Community Council for Australia in an article by Xavier Smerdon on 11 November 2015 which can be accessed at: http://probonoaustralia.com.au/news/2015/11/merge-or-shut-down-australian-charities-told/

[4] Shepparton was selected as one of ten communities to trial a series of welfare reform measures in May 2011, including a trial of place-based Income Management which was applied in five of the ten sites. The latest welfare reform measure is ParentsNext which was due to commence on 4 April 2016.