From Competition Policy to Inclusive Growth: Renewing the Community

Sector and Social Citizenship

Paul Smyth

DANA Advocacy Summit 2016

Background materials

• The lady vanishes: Australia’s disappearing voluntary sector (Brotherhood of St Laurence)

• Phoenix rising – renewing the voluntary sector in Australia (Dunstan Foundation)

• Power to Persuade (Social Service Futures Dialogue)

Beveridge (1948) Voluntary Actionthe ‘moving frontier’.

• Fyfe (2005) ‘the voluntary sector lies within a triangular tension field, the cornerstones of which are the state, the market and the informal sector with the role of the voluntary sector being constantly shaped and reshaped by the influences emanating from the other sectors’.

Australian way

• welfare society – colonial \ federation

• welfare state - World War 2

• ‘human service markets’ - 1990s

• Inclusive growth – 2010s

Ideology of marketisation

• Welfare state based on rights – not ‘user pay’

• But WS also had to ensure economic growth

• Economic rationalists thought welfare stopped growth

• wanted ‘to turn back the clock … to reprivatize services or at least create a public goods market so that the rules of production and allocation…may eventually be like the economic market place (Offe 1983)

‘The reform that never ends’ 1990s

• A new idea in mid 1990s: National Competition Policy

• Industry Commission and the Charities Inquiry

• Productivity Commission 1996

• Economic rationalism: ‘no such thing as society’

• So Treat society same as a market

• competitive tendering\ Joint ventures and prime\sub-contracting like other sectors of the economy

• need competition to find those ‘capable of achieving best practice and that poorer perfomers ‘vacate the field in favour of more effective’

From NCP to social inclusion 2000s

• Wheels came off : One Nation

• social inclusion agenda (states and fed)

• Networks and collaboration

• state-market-civil society relations not radically disturbed under Keating- Howard-Rudd\Gillard.

• Quasi markets presented as a way of beefing up community sector to balance more bureaucratic public services.

Radical Liberalism 2014-

• ‘the default position of government should be that services are likely to be most effectively implemented by non- government providers’ (Shergold Vic)

• Abbott: “government services, wherever possible, should be delivered by non-government agencies”

• And Treat Voluntary same as for-profit (‘contestability’) in ‘human service markets’

• Big business to take over (more efficient)

• All about consumer choice

• End of ‘entitlement’ (Hockey)

Harper: education, health and welfare the unfinished business of Hilmer 1

• ‘new pro-competitive reforms in sectors with significant government participation such as education, health and aged care

• Opportunities for businesses or organisations to compete in these areas

• Government regulation that can foster competitive markets…’

Marketising the social services

‘Competition is the process by which rival businesses strive to maximise their profits by developing and offering desirable goods and services to consumers on the most favourable terms’

• ‘’seek to increase sales by offering low prices’\innovation\ and deploying new technology

In a human services market

• ‘ gain advantage over rivals’ by offering more attractive services and choice

• Use the ‘discipline’ of the market to keep costs down

• Accept that ‘vigorous competition can be tough’ but if they do ‘lose market share’ they are actually ‘freeing up labour, land and capital for the expansion of other businesses better able to meet the needs of consumers’

The moving frontier

• All about the Market.

• Minimal State

• Community Sector has no distinctive value add.

• Services best organised like markets

• Voluntaries becomes just another rival ‘business’ in a privatised service market.

• Indeed the Lady vanishes

Is ‘the reform’ ending?

• Towards Inclusive Growth

Economists blowing the whistle - Ross Gittins

• ‘The economists' neo-classical model has an anti-government ideology hidden within it, which leads economists working in the public sector to idealise business people.

• This kind of money-madness seems to happen every time the other-worldly econocrats persuade the government to "contract out" the provision of some government service and invite private businesses in on the act.

• The latest is for-profit providers of vocational education exploiting the government's HECS loan scheme by offering students a free laptop if they sign up for dubious courses.

• By now, such an outcome was eminently predictable. Government incentives often induce people, whether punters or profit-seekers, to do greedy, dishonest and even self-destructive things.

‘No brainer economics’

• Quite frankly, when Treasury and Finance put on their expenditure review committee hats their contribution to the decision-making process is more likely to be welfare-diminishing than welfare-enhancing

• Don't bother learning about the specifics of the field you're dealing with – just wade in with your pocket-rocket model of all markets and propose "getting the [exclusively monetary] incentives right" and "introducing competition" from for-profit providers (such as shonky vocational "colleges").

• Is this the best economists can do? If so, they're part of the problem and need reforming.

Poor track record: No more ‘Grand Alibis’

• Centre for Policy Development (employment services; NDIS; prisons)

• Role of government compromised

• No hands on experience

• Policy capacity hollowed out (thru contracting)

• Cant manage the ‘Public Good’

• Service compromised thru low skilled labour

• ‘Justice’ sidelined as the more disadvantaged groups left behind

Inclusive Growth

• See IMF, OECD, World Bank, Pope Francis, Janet Yellen, Thomas Picketty etc etc

• benefits don’t trickle down

• Equal opportunity needs universal services across education, health and welfare.

• Progressive universalism plus effective community sector to engage the excluded

OECD 2015

• “In the last three decades, efficiency became one of the most important guiding principles of how governments operate and how services are delivered…often putting equity or fairness considerations on the back burner”. Indeed fairness and efficiency were seen to be exclusive. Now they are thought to go together so that “promoting inclusive growth requires strong, inclusive processes and institutions to counteract the forces that produce inequality”.

Triadic model

• democracy,• mixed economy• civil society.

‘the sectors need a measure of autonomy derived from their axial principles....Each can invoke an authority independent of, and

arguably equal in status to, those invoked for the other two’. The tie is unbreakable except by the destruction or degradation of one of the partners...’

Marshall

• The different principles require different modes of organisation to achieve their respective goals (cf market, bureaucracy, voluntary sector)

• and with different kinds of personnell (cfbusiness types, community volunteer, bureaucrat etc).

Renewing society : Community as second Pillar

see Jesse Norman (Cons)\ Maurice Glasman(Lab)

• Individual self (lift their horizon thru voice when no choice)

• Social self (through investing in their community)

• Strengthen democratic self ‘active citizenship’

The social self

• Neoliberalism assumes atomised individuals in state of nature (‘contracting’ not ‘covenanting’)

• A la Aristotle, for Burke, man is a social animal (‘politikon zoon’) an animal whose nature is to be in society.

• Atomised individuals cut off from society makes no sense

Such a thing as society

• They grow up in an ever-shifting web of institutions, customs, traditions, habits and expectations created over generations

• Not just the ‘big’ institutions but family, church, taverns, theatres, arts culture, the press and patterns of education and social mobility

• They diffuse power across society as a social challenge to state power

‘The little platoon’

• They give shape and meaning to lives in work and play creating identities and loyalties

• ‘to be attached to the subdivision, to love the little platoon we belong to in society is.. The first link in the series by which we proceed towards a love to our country and to mankind

• The market operates within, draws from and contributes to a broader moral community

• Rights, duties, ‘manners’… ‘virtue’

Way forward

• Psychology and sociology (Durkheim etc) evidence of importance of community\ social capital

• 3 types of moral community: ethic of autonomy, of community, of divinity

• not any old ‘social capital’ but members of a moral community, living in a world not of anomie but of value and meaning

An unfolding energy

• “Aristotle believed that the story of the cosmos is one of an unfolding energy by which what is potential becomes actual…for humans that unfolding potential expresses itself in the capacity to deliberate publicly about the terms and purpose of their own self-governance… The exercise of such capacity is what gives definition to a society. It is what politics is.”

Citizenship: 3rd Pillar

• In 1980s a well developed Social Justice Framework for social policy

• Social rights of citizenship (TH Marshall):

the whole range from the right to a modicum of economic welfare and security to the right to share to the full in the social heritage and to live the life of a civilised being according to the standards prevailing in the society (education and social services) 20th century

Inclusive Growth model

• Brings back the logic of community

• Brings back the logic of citizenship\ social justice

• Productivity Commission hopeless on both

• IG will build on Rawls \ Amartya Sen tradition to shape a new social justice framework for social services in australia

The three logics need Different types of organisation

• market’s legitimacy from the price mechanism\operating norms of self-interest.

• state’s legitimacy from democratic participation\operates bureaucratically with citizenship as norms

• community sector’s legitimacy based on trust and reciprocity\; community values as its source of authority with group membership or solidarity as norm.

• Meagher and Goodwin (2015) Markets Rights and Power in Australian Social Policy

Reform in the twilight of the market model

• Today we have two reform paths not one

• Its not about economics

• Its about politics and the kind of society we want

• Cf Turnbull fairness agenda with Abbott radical liberalism

• Next week ALP launches ‘Agenda for Tackling Inequality’

Speeding the transition

• a triadic reform model cant be managed by economists. Need reform institution which can fully represent public and community sectors along with economists.

• More contests like the NDIS governance debate today ie run by big business for market efficiency or by broad representative agencies backed by robust advocacy agencies who know how to progress the social rights of citizenship

• Will be contests between genuine civil society agencies ( e.g. in the spirit of the London Citizens group) and the mega for profits and other quasi government agencies

• As Inclusive Growth becomes a political imperative expect Australian governments to establish Social Policy Commissions with equal and commensurate authority to those responsible for the economy.