Spring 2017

Marketisation and competition policy

Challenges and opportunities for the faith-based social services sector


Competition and efficiently working markets have their role to play, but collaboration, not competition, and mission, not markets, should be the drivers of social service delivery in the 21st century. These are central issues for faithbased service providers. Related to this, these bodies can only achieve their potential in service and advocacy and be true to their prophetic calling if they also develop and advance a new vision of a society informed by the needs of all. Formation for leaders and broadranging collaboration and dialogue are necessary if they are to rise to this pressing challenge.

In March the news media was full of accounts of the failure of energy markets in Australia—state-wide blackouts, galloping rises in gas and power prices, fears of gas shortages in a country soon to be the world’s largest producer, and the much higher profits of retail suppliers in Victoria compared with other states. This was not always the narrative. In Victoria, the disaggregation of the power industry—separating out generation, reticulation and retail—and its subsequent privatisation were promoted as the high point of microeconomic reform in the 1990s and beyond. Greater efficiency and lower prices through market competition and consumer protection through a strong regulatory framework were promoted as key benefits from these reforms.

Many human services operate in markets that are shaped by government: general practitioners, private schools, universities, private hospitals, aged care and, increasingly, disability services and support. Vocational education too was catapulted into a market environment over the past decade in what is generally considered to have been a disaster for students and for existing government providers, as some private sector participants exploited the sector in ways that had not been envisaged by the policy makers.

The 2015 Competition Policy Review, chaired by Ian Harper, recommended further examination of human services. An ongoing review by the Productivity Commission ‘into the increased application of competition, contestability and informed user choice to human services’ is part of a response to that recommendation. The experience of the electricity sector and beyond indicates that we should proceed with great caution in further marketising human services.

Competitive markets and social wellbeing

Competition policy analysis tends to assume that competitive markets, in which the private sector can participate, can provide services that are both cheaper and of better quality, and more responsive to the needs of ‘consumers’. Related to this, informed consumer choice underpins new models of funding for service delivery, as illustrated by government-funded employment services, aged care and the National Disability Insurance Scheme model. Competition between service providers is an essential feature of these markets.

Increases in consumer choice, efficiency and innovation can indeed be associated with competitive markets. And, in some influential circles, moving health, education and social services into a market-driven environment, with the inevitable entrance into service delivery in these areas of the private sector, is considered to be an important way to improve consumer access and outcomes.

But there are many reasons to question this idealised position and to proceed slowly and with care. The lessons from recent history make clear that there are significant risks in dramatic changes to the ways that governments control or influence the various aspects of markets. If they get things wrong, citizens and the community can be worse off. Changes need to be introduced with caution, and, in this context, the Productivity Commission Inquiry is a welcome step. Market rules and behaviours should only be considered if they can be shown to enhance the outcomes of social service delivery.

The reason for this caution is not that the private sector is not capable of delivering any high quality human services—see, for example, the work of general practitioners—but that a system built around a private sector paradigm can have adverse consequences for society.

While competition policy may have important insights for the community sector, hasty implementation has in the past damaged the delivery of services and affected clients and institutions alike. Competition policy should complement, not replace, the way in which the sector works.

To touch on just some of the risks to the community:

  • In the world of ‘marketisation’, viability for not-for-profit social service agencies becomes a real and, indeed, an urgent issue. This is important because it is only mission-driven agencies that care for those people who are at the margins—those who don’t have the wherewithal to participate in markets and who will never be attractive customers to a profit focussed service. Nor are for-profit bodies able to mobilise volunteers in the numbers that are attracted to faith-based and other community sector organisations.
  • Advances in the community sector in Australia have been built upon a rich tradition of cooperation between willing volunteers and trained specialists. Experience has shown that, in a financially competitive sector, cost-conscious organisations may limit services, use volunteers sparingly and cherry-pick clients. Cooperation is an early casualty.
  • The benefits delivered by the sector to the most vulnerable in our community are outcomes of relationships between service providers and the people they serve. At their best, relationships over time and ‘wrap-around’ services that faith-based and other not-for-profit social services provide complement and enrich the basic services, and add value to the recipient beyond the basic service provided. This is not common among for-profit providers.
  • Many disadvantaged people are unable to equip themselves with the knowledge or financial means to make optimal market choices. Moreover, some of the most disadvantaged people in our communities survive and thrive only because of long-term relationships with dedicated and expert service providers, often particular individuals. The rapid introduction of commissioning in recent times has caused needless destruction of many such relationships. When people have no capacity-to-pay or experience severe disadvantage, choice is limited and a different paradigm is required.

It is an existential imperative for the faith-based and broader community service sector to engage actively with these issues. But this is far from easy. It requires an investment over time in analysis, reflection and dialogue, leading to advocacy and other action. The relatively rapid turnover of staff in the relevant agencies, the distance between issues of completion policy and the day-to-day work of agencies, and the many demands on leaders in the sector make such an investment challenging.

A measure of this challenge is that there were so few community sector submissions in response to the initial issues paper issued by the Harper Review. Another is that the ‘recommissioning’ of community mental health services by the Victorian Government in 2014, which saw a broad loss in funding for community providers of mental health services for people on the margins, had been preceded by a consultation process, but that process did not lay bare many of the potential consequences of the proposed efficiency-driven approach. The focus of the faith-based and community sectors on the current challenges of marketisation has been heightened by these episodes, by the advance of the NDIS and by other indications of the encroaching orthodoxy of the market. Further work is needed to ensure that this encroachment doesn’t undermine the objectives that these sectors are committed to.

Mission, leadership and cooperation

The mission of faith-based social service agencies must surely shape their understanding of the role they play in the marketplace, but consideration at Catholic Social Services and beyond of these issues has also led to a focus on broader but related issues.

An overriding observation is the prophetic role such organisations must adopt, as we consider the fundamental place of mission and identity in shaping the social services that faith-based organisations provide. We are here to serve, not just to provide a service, and this must mean contributing an alternative paradigm of what constitutes a good society. Working towards, and advocating for, such an alternative, founded upon the gospel-inspired principles of Christian social thought, is central to this prophetic role. This very soon raises multiple issues around the formation of those who would lead such a project and those who would contribute to it. A deep understanding of mission is needed, including of the pivotal role of Catholic Social Teaching principles (and their equivalents in Christian thought and social analysis generally), especially the principles of the dignity of the human person and the centrality of the Common Good, in contributing to growing a just, civil society.

For those who would lead such faith-based organisations, there is a need to be both theologically and professionally literate if their work is to find a relevant and appropriate place in our largely secular society. This requires more than a personal faith commitment or strong linkages within a Church structure, although these can be invaluable. It requires a familiarity and a confidence with the fundamentals of mission—including its source, how it can be nurtured and what implications it has for us as individuals and as organisations. And a solid foundation and confidence in our own mission is required to enable fluency in a new language with which to communicate about such matters within our largely pluralist organisations, and with which to enable a new pragmatism around opportunities for collaboration in service and advocacy, while avoiding any diminishing of identity because of enmeshment with policy directions such as competition policy.

Such leaders will be found at all levels within an organisation, but will, one hopes, include a critical mass of people at board and executive level. They all need to be formed for this work. This formation will be complementary to their professional formation and development in the areas where any effective leader today must be competent: management, finance, social analysis, service provision, political nous etc.

Much work is being done to provide such development opportunities. There are various tertiary programs in Christian leadership: Catholic Health Australia has been at the forefront in development of high-level programs in governance and leadership in a Catholic health context; and many larger individual organisations, particularly those auspiced by religious congregations within the Catholic Church, have internal programs for mission awareness and leadership development.

Catholic Social Services Victoria has developed a program of development opportunities designed to help meet the needs of smaller organisations, and of leaders whose time commitment falls short of that required by an accredited tertiary program. An annual series of workshops on mission inspired leadership; introductory programs in Catholic Social Teaching; regular conferences and associated publications to engage with others over the range of mission, service and justice issues that are part of the contemporary agenda: these all play a modest part in filling a gap.

This work also highlights the centrality of cooperation across agencies and across sectors in the broad project of ensuring that our mission does have a positive impact on those we are called to serve. This involves cooperation in those aspects of formation etc. that are explicitly faith-based, but also in reflection and analysis, and in those aspects of our service that are a common objective of the many talented people of goodwill across the community services sector.

Reflection on these issues has intersected with an active dialogue on the essential nature of faith-based social service providers in Australian society today. The Brotherhood of St Laurence, Jesuit Social Services and other agencies have contributed to this contemporary dialogue. Academics working from a faith-based perspective, such as economist Paul Oslington, social worker Beth Crisp, and social policy thinkers Paul Smythe and Doug Hynd, have been strong contributors.

In recent years, Catholic Social Services Victoria has worked with these organisations and people, as well as the Victorian Council of Churches, Catholic Social Services Australia and many others, through seminars, workshops, submissions and the like. We have also brought these issues to the forefront in conferences in 2013 and 2016, exploring the impact and implications of mission for our member organisations working to build a more just and compassionate society.

Peak bodies at national and state level can play an effective role in facilitating such networking and collaboration, especially around leadership formation and advocacy. In addition, agencies themselves need to be sensitive to the urgency of working and reflecting together; and close relations across Churches and with the community sector generally are important, so that opportunities to articulate and advocate for alternative social and economic models are fostered and not missed.

Seizing the day: advancing a vision of a better society

It has been said that we live not so much in an era of change but rather a change of era—in the language of the New Testament, a kairos, an opportune time for bringing about God’s purpose. There is evidence that many of the concepts that have governed the way we think about our world, our environment, our economies and our social structures are in decline and that the time is ripe to begin a new conversation with a new language of justice, equality and the priority of those who are on the margins. If this is so, we must be prepared to intervene and influence this time of change.

Within the Catholic Church, Pope Francis has been a catalyst for such conversion. As one example, the 2015 Encyclical Letter Laudato Si’ (On the care of our common home) had at its heart a call for ecological conversion, which required a re-appraisal of so much of our faith and life.

And international political developments have reminded us of the urgency of the project. The Brexit vote and the election of President Trump, linked as they are to growing inequality within many advanced capitalist societies and disenchantment with politics-as-usual, highlight the need for all people of good will to play their part in re-building a shared vision of society with which the whole community can identify. Such awareness is a first step; credible work for moving towards that vision is equally important.

If the mission and identity of faithbased organisations is to mean anything in practical terms, it surely must mean that we be proactive in advancing this dialogue about a new kind of economy with moral purpose, and a new kind of service system that invests in justice, compassion and equality.

Social service organisations deal every day with the most vulnerable members of society. They are therefore in a prime position to shift the economic debate from a language of individualism and consumerism to a language of communities and of the connectedness of communities to each other. A new conversation is called for that does not exclude moral purpose from economic goals or discard the necessity of investing in prevention and early intervention, giving priority to the poor and the most vulnerable. This conversation does not limit the definitions of service efficiency and improvement of outcomes to marketdriven criteria but finds its roots in justice, participation and equity, all of which are foundational to the society we are called to envision and build.

If indeed this is a Kairos moment, then seizing this moment is an imperative for the sector, for much is at stake —including the integrity of the faith-based social services sector itself. Why is this so? Neo-liberal ideology, including competition policy and the marketisation of social services, threatens to marginalise such organisations as organs of the community and builders of a civil society, whose social capital is built upon the gospel-inspired principles of Christian social thought. They are not arms of government, simply state-contracted entities, working in an often uneasy alliance with government to deliver services to those in need.

In recent years, faith-based organisations have had their credibility impaired by the revelation of child sexual abuse within Churches and other institutions. Their authenticity requires that they ensure that they and the religious bodies with which they are affiliated are safe places for all who are vulnerable, and do their very best to respond to the needs of those who have been abused.

Nevertheless, the not-for-profit social services sector generally, and organisations that have their origins in the Churches, still possess considerable leverage to engage with governments and society in an attempt to shift the debate. Their highly regarded work, along with their professionalism and expertise in service delivery and advocacy, gives them a credibility and authenticity from which to engage in a dialogue that promotes the principles of the common good and refuses to marginalise the role of spirituality or a theological narrative in adding value to the services of faith-based organisations.

To be true to its calling, the faithbased social services sector must rise to these challenges, even as it engages intensively with the issues and challenges of greater competition and marketisation.

Denis Fitzgerald is the Executive Director of Catholic Social Services Victoria. In that role he has led a focus on the implications of mission for the work of Catholic social service providers, and the development of formation opportunities for contributors in the sector. This article was first published in Zadok Perspectives winter 2017 by Ethos, the Evangelical Alliance Centre for Christianity and Society. For more information visit www.ethos.org.au.

Show More

Related Articles

Back to top button