More than 25 years ago, the report on National Competition Policy, otherwise known as the Hilmer report, kicked off a wave of productivity reform. It was centred on government-owned monopolies in key infrastructure industries, including telecommunications, transportation and energy. The report recognised that:
In the case of many public monopolies … protection from market forces through government regulation or other government policies has often allowed enterprises to develop structures unlikely to be found under normal market conditions.
This is a polite way of saying that these sclerotic government monopolies had high costs, low innovation and were a drag on Australia’s productivity. Reforms flowing from the Hilmer report transformed these key infrastructure industries and helped underpin almost three decades of economic growth in Australia.
In my opinion, we are at the beginning of a similar wave of productivity reform in human services. Like the public monopolies considered by the Hilmer report, human services operate in markets that are anything but normal. They are dominated by government expenditure, regulation and, for some services, government provision. For many human services, consumers are disempowered, competition—if it exists—is managed, and incentives are distorted. In some areas, markets have been designed for the benefit of providers rather than consumers, and innovation is discouraged. Funding is often based on inputs or block grants rather than outcomes and where markets involve multiple levels of government, services either overlap or are missing.
In this talk, I will briefly outline why productivity reform to human services is important, why it is needed, some lessons for system wide reform and the potential benefits that can be gained from reform.
SOURCE: Stephen King. “Human Services: The next wave of productivity reform.” Productivity Commission, 08 November 2019.
The Brotherhood of St Laurence acknowledges and recognises the Traditional Owners of the land upon which we live and work, and we pay our respects to their Elders both past and present.
Produced by the librarians at the Brotherhood of St Laurence in Melbourne, Australia