Competition policy must support community needs and outcomes: ACOSS

31 March 2015

Responding to the release of the Government’s Competition Policy Review today, the Australian Council of Social Service said competition policy doesn’t exist in isolation but needs to suit the social, economic and environmental environments to which it applies.

ACOSS CEO Dr Cassandra Goldie said: “We welcome the Report’s recognition of the importance of collaboration in human services for the community and its focus on consumer choice, which as we know is a key element of community control.”

“However, we are concerned about the recommendation of deepening and extending competition policy in human services as a ‘priority reform’. We’re not ideologically opposed to competition in social services, but we are saying let’s get it right. You can’t just roll it out the same way in communities with diverse populations and needs.

“To date, the community sector’s experiences of privatisation in health, childcare and employment services point to price inflation, higher costs to government, less collaboration and questionable outcomes for the community.

“The lessons from a lot of the best outcomes in communities is that you can’t always scale approaches nationally. Communities identify and meet their own needs in various ways and funding options, including from governments, need to reflect this.

In a reflection that competition policy is front and centre for community organisations struggling to attract the resources they need to meet community needs, the network of Councils of Social Service across Australia provided a submission to the Review.

Dr Goldie said, “We are in the midst of three pretty spectacular disasters that have come about from competitive processes assuming it is the same context as a tender for a bridge or a construction process.”

“We support the principle that individuals, particularly those who are disadvantaged, should be empowered to make choices about which services best meet their needs. But reforms need to build on evidence of the Australian experience to date.

“We should not assume that greater market competition will produce better options for people. Recent competitive tender processes have in fact resulted in less diversity and undermined existing collaborative relationships. They have also seen the loss of smaller, specialist and local providers who are uniquely placed to understand the needs of their community and client groups.

“Competition can also result in a race to the bottom on price, with the result being either that organisations are forced to deliver a poor quality service or to deliver services at a loss. Larger organisations may be able to cross-subsidise poorly funded programs but this option is not available for smaller providers.

“On the evidence of how it’s currently being operated, competitive tendering is not working in the community sector. We’ve seen that across different portfolios and under successive governments. Competitive tendering is not supporting communities and is diverting vital social service resources to funding processes that they would have been better off ignoring.

“For example in the latest round with Department of Social Services, many organisations invested time and resources applying for funding that was subsequently discontinued as a Budget savings measure; while others only found out they had lost funding when the tender documentation indicated they were ineligible,” Dr Goldie concluded.

Media Contact: Fernando de Freitas 0419 626 155

DOWNLOAD Joint Submission by the network of Councils of Social Services in the states, territories and nationally.