Working Life
Budget papers 3

Is this really the way to run a government?


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By Ged Kearney

President of the ACTU

Monday, 28 October 2013

IF you wanted to make our government work better and improve services for ordinary Australians, why would you give more power to a group of business people with a stake in contracting out government services?

That’s the question I’m asking after the Government announced its Commission of Audit into government – effectively contracting out policy making to big business.

It has placed one of the most important reviews of our public services in the hands of a committee that is sure to recommend outsourcing, budget cuts and privatisations.

You can only assume that it is this Government’s agenda to drastically reduce the size and scope of our public service  and that this Commission will be the cover that allows them to do it.

Lack of representation

The leader of the Commission of Audit will be Business Council of Australia head Tony Shepherd, assisted by the BCA’s chief economist. Other representatives include former Liberal Minister Amanda Vanstone and Peter Boxall a former bureaucrat and chief-of-staff to Peter Costello. It has subsequently been revealed that Mr Shepherd is chairman of Transfield Services, a company that has won hundreds of millions of dollars in outsourced government contracts.

The overall picture of this review is of a very small pool of people examining institutions that touch the lives of all Australians. There is no representation from workers, not-for-profits or other groups outside a narrow range of business interests. The BCA does not even represent small or medium-sized businesses, it is made up banks and mining companies.

This is a conservative government attempting to put the fig leaf of legitimacy on its desire to shrink government and cut public services. This is the national version of what happened in Queensland under Campbell Newman.

Joe Hockey has repeatedly boasted that he wants to cut 20,000 jobs in the Australian Public Service.  This is the ideological view that government is inefficient, that government is the problem and cutting it is the solution.

The mantra that “government should be run like a business” ignores the fact that government and business perform very different functions. Protecting children, or deciding on environmental approvals, are not activities that could or should be left to the free market.

Public services are things whose existence benefits everyone in the community, or which need to go to people on the basis of need rather than ability to pay.

The mantra that “government should be run like a business” ignores the fact that government and business perform very different functions.

At a federal level organisations like the CSIRO, Customs and the Bureau of Meteorology all provide functions that can’t be done by the market. Centrelink and Medicare serve millions of people each year including the nation’s most vulnerable.

The Commission of Audit has been handed ridiculously broad terms of reference and a ridiculously tight timeline to report – with a preliminary report due in three months. This will not be a measured examination of the state of our public services. It will simply be a cover for the slash and burn agenda of the Abbott Government.

It is founded on the false premise that we have a public sector that is oversized and out-of-control.

As a nation our governments – federal, state and local – spend a lower percentage of GDP than most other developed countries.  The Australian Public Service has grown more slowly than the general population since 2007. It is also subject to an annual “efficiency dividend” (basically a compulsory budget cut) which has seen net job losses in recent years.

No doubt there are efficiencies that can be found, but the fact remains we have a world-class public service.

There is a view that governments are inherently inefficient and that contracting out services to the private sector is a magic pudding that saves money and improves results. But the results of contracting out services are mixed to say the least. There are many cases where contracted workers have failed to meet the required standards, and where governments have been forced to take provision of services back in-house.

The failed ‘Big Society’ experiment

Australians who value public service should be on the alert for any sugar-coated attempts to downsize, privatise or outsource what should be basic functions of government.

Polling shows that Australians value their public services, and don’t want them cut, which makes it harder for conservatives to implement these policies.

In the UK the Conservative Government implemented a policy known as the “Big Society” which was supposed to see community organisations empowered to take over the functions of government. Despite the rhetoric around empowering communities, opening up government and opening up opportunities for volunteers, it soon became clear that this was a cover for an “austerity” program that cut public services.

Social Services Minister Kevin Andrews has publicly expressed his interest in the “Big Society” and how it could be put into action in Australia.

Many Australians rely on public services, our government funded health and education systems and pensions. They are central to our egalitarian tradition.

The shift to a small government, based on privatised and contracted services, may save some money in the short-term but its long-term effects on Australia would be catastrophic.

Working Life is a forum to share ideas and opinions about work and life, both light-hearted and serious. The opinions presented on Working Life are those of the author, and do not necessarily represent policies or views of the ACTU.


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We believe in the free flow of information, and content on Working Life is available to be republished online or in print under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.


  1. Mark Murphy
    Wednesday, 30 October, 2013 at 11:56 am · Reply

    Way to go Abbott & co, just run society into the ground why don’t you as you never intended to support public services or public sector workers.

  2. katrina michel
    Wednesday, 30 October, 2013 at 1:35 pm · Reply

    why the ‘are you human question’? what is that about? as an employee of queensland health I am very concerned about the changes in government on a state and national level. My greatest concern is that in the long term, citizens that need health services the most will be the ones that miss out, the disadvantaged, isolated, elderly and youth. I am also concerned with the recent legislation that makes it more difficult for union activity. Only yesterday we had a visit from a union rep, who was quickly told to leave the premises because she didn’t bring the particular signed paper of approval to visit with her, and without it we cannot meet with her, except for outside the facility. very worrying indeed.

  3. Cassandra
    Wednesday, 30 October, 2013 at 5:58 pm · Reply

    With the election won Australians are slowly beginning to realise that the “how” that was deliberately missed out of the Liberals “Real Solutions” election booklet is now being filled in.

    Abbott & Co’s actions are no surprise to trade unionist or those proudly on the ‘left’ of politics but they may come as a severe shock to Australians lulled by the media into a false sense that the Liberals can be trusted to maintain and improve Australian workers living standards and their well being.

    Such is the Liberals smugness now that Education Minister Pyne is already crowing that after July next year the balance of power in the Senate will transfer from the Greens to the bunch of disaffected Liberals and right wing “independents” and the Palmer puppies so there will be no impediment to the Liberal Party ‘reforms’.

    For those who want to see the real path being charted by these business and profit obsessed pirates read “The Shock Doctrine – The Rise of Disaster Capitalism” by Naomi Klein. You will, or should be, horrified at the way western democracy is being turned into a military and disaster led assault on unions, free speech and the rights of individuals and organisations deemed to be an impediment to the ‘free enterprise’ of international capital.

    Already here we are hearing that all government and local council services are to be ‘reviewed’ to see what can be out sourced to the private sector. Government services are to be compared to what is offered by the private sector and if the private sector comes out cheaper then they get the work. Of course the private sector doesn’t have to abide by current awards and conditions in its quotes just the ‘minimum wage’ so guess who is going to be cheaper?

    “Empowering” local governments, schools and health services etc is just a euphemism for shifting responsibility from the Federal or State Governments who will decide the lump sum to be allocated without much reference to its adequacy and then leaving it up to the now ’empowered entity’ to slash and burn to meet the imposed budget and to wear the community wrath when things inevitably go ‘belly up’.

    Work may be allocated without a public tender and will almost certainly be “commercial in confidence” so we will never know just how much of our taxes are really being siphoned into private pockets in the long run. If we follow the overseas practice “Performance Standards”” real or promised in these private contracts will never be enforced or they will be relaxed on later appeal or more money allocated above the original winning ‘bid’.

    Apart from the selloff of lucrative public services there is also a pot of gold to be had for the private developers from the sale of government and council land and property deemed by the audit committees to be either ‘idle’, unprofitable, underutilised or otherwise ‘not core business’. Watch out for a glut of ‘sale and lease back’ of property that gives a short term budget lift but a long tern bonanza to the private purchaser.

    We have already seen that what most would consider ‘core government business’ such as the Post Office and CentreLink is now considered ripe for the plucking and Health, Schools (Charter and Vouchers), Fire & Rescue, Ambulance and Even most Police services are all in the grab basket of the Liberal Party backers.

    Then take away the nasty “Red & Green tape” that maintains our community welfare and standards and weaken OH&S laws toughened under Labor and then hog tie the unions with all the red tape taken off the business community and the future is not looking at all like the nirvana that the Liberal promised unless of course you are a property developer, mining company, or major donator to the Liberal Party about to get your reward.

    Finally – we have the crack down on “Law & Order” . Motor cycle gangs that have been allowed to cock a snook at the community for years by State and Federal Police services with the obvious consent of politicians of all persuasions have suddenly been declared “public enemy number one” and to be eliminated at all cost as quickly as possible. Fair enough one might say but in the media and pollie driven hysteria no one is asking why these ‘gangs’ were allowed to grow and prosper for so long and who is really behind them and any alleged criminal activities. But in the world of the Liberals there is nothing like a crisis -real or manufactured- as an excuse for an attack on civil liberties, draconian laws and the application of mandatory detention without formal charges and sentencing and jail terms taken out of the hands of the courts and made ‘mandatory’ by politicians -‘for our own good because the courts are ‘soft on crime’.

    While the police are now pulling over anyone on a motorbike as a suspected member of a ‘criminal motor cycle gang’ our governments are happily encouraging the building of more Casino’s where foreign and local ‘Hi Rollers’ can gamble and launder their and their companies money with the full approval of the State and ‘no questions asked’ as to how the money was obtained and if it is all fully ‘after tax’ income!

    If you want to invest in a growth industry buy some shares in American Private Jail providers because they have plenty of experience and ‘know how’ in providing their ‘expert’ services to American Republican States and Governments around the world that have blazed the Liberal Party policy trail. Jails in Australia are already bulging at the seams with the unhappy victims of a society that already views poverty as a self imposed affliction rather than a community consented state. Unemployment, lack of affordable housing, not even subsistence unemployment payments and a basic wage that after tax is below the accepted poverty line and an affluent community that increasingly is self centred cannot really be surprised that those marginalised are turning to crime or joining local gangs which give them the sense of security and belonging that greater society denies them.

    With Abbott now strutting the world decrying the nasty socialist Labor Government that almost uniquely kept Australia out of the unrestrained capitalised inspired GFC and announcing that Australia is “Now Open for Business” we are about to be boarded by the pirates of international trade and like all pirates they are ruthless and care not a jot for the people they are pillaging. The tragedy the boarding party is being led by a onetime Australian citizen now an American and our ships’ captain and officers have lowered the ratlines and pushed out the gang planks to make our ship of states surrender easier.

  4. Ian MacDonald
    Wednesday, 30 October, 2013 at 8:43 pm · Reply

    We need a double dissolution so that we can get rid of the Liberals and get Labor back in power. I believe the country has learned over the last few years of debacle and are ready to move forward, but we need a government that looks after bot6h sides, business to promote growth but with the need of the ordinary worker (who after all gives the business’s their profit margins) not the white collars sitting in their offices’.

  5. Cassandra
    Thursday, 31 October, 2013 at 2:00 pm · Reply

    Re my comment above about the police pulling over anyone on a motor bike suspected of being a member of a criminal gang Campbell Newman made a big point of telling us that only criminals were being targeted by his legislation and that other motor cyclist had nothing to fear about being subject to his legislation or police harassment ……..

    Guess what? Yesterday armed police stormed the club house of the Vietnam Veterans’ Motorcycle club! Yes those who served our country and who seek solace for the mental and social anguish suffered in that war by riding motorcycles along with their mates are now considered fair game for Newman’s ‘law and order’ enforcers.

    Motor cycle riding construction workers beware with Newman’s and Abbotts new laws I hope pink is your favourite colour cos your chances of being caught up in their legislation is looking pretty good!

  6. Ross
    Friday, 1 November, 2013 at 10:18 am · Reply

    Yes, Cassandra, Queensland, beautiful one day, police state the next.

  7. Ross
    Friday, 1 November, 2013 at 10:26 am · Reply

    Why is it that all parties, when in opposition, lambast the government of the day for privatising services and government enterprises, yet upon election, race like mad things to privatise something else? I feel a lot of it is, apart from lining the pockets of a few crony mates, an abdication of responsibility. Privatise it off and then when it no longer works, or is much more expensive, well “it ain’t my fault, blame the company that we gave it to,” is the get out of jail excuse for the minister and senior bureaucrat.
    As for the Business Council of Australia, what a dangerous and greedy organisation, whose sole agenda is massive pay rises for themselves, while squeezing workers by squawking that wages are too high. The people involved her are devoid of a social conscience and are a serious threat to the very little amount of democracy we have left.

  8. Michael Vallis
    Friday, 1 November, 2013 at 11:32 am · Reply

    Why has the conservative side of politics forgotten about people? The Public Service be it local, state or federal are in place to serve their respective citizens without fear or favour. Big Business only exploits people.

  9. Michael Vallis
    Friday, 1 November, 2013 at 11:35 am · Reply

    This comment and/or arguement is considered reasonable and does not need moderation. Truth can hurt

  10. Paul B
    Friday, 1 November, 2013 at 11:37 pm · Reply

    The monkeys are running the zoo ,the business council LOL a bunch of facsists

  11. George Naumovski
    Saturday, 2 November, 2013 at 12:51 pm · Reply

    This is what the Liberals do and this is what the Australian people voted for and now have to live with the consequences because it won’t stop at just government services as it will continue to all types of jobs. The Liberals will give to their “mates” which is just to make as much profit as they can out of tax payers and jobs and who loses out, we do the vast majority!

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