Our Opinion

Productivity Commission releases reform report

The Productivity Commission report, Introducing Competition and Informed User Choice into Human Services: Reforms to Human Services, was released on 26th March 2018. Their inquiry looked at the introduction of greater user choice, competition and contestability with a view to improving outcomes for service users in six areas: end-of-life care services; social housing; family and community services; services in remote Indigenous communities; patient choice over referred health services; and public dental services. The report proposes reforms for each of those areas, in acknowledgement that no one-size-fits-all competition solution exists. While some recommendations are welcome, significant risks are involved in introducing further competition in human services provision. Recommendations in three areas are described below.

In relation to family and community services, the Productivity Commission concluded they are not well-suited to the widespread introduction of greater user choice at this time and they are not effective at meeting the needs of people experiencing hardship. Problems include service gaps, duplication, poor coordination between service providers, excessively prescriptive contracts, and short-term funding. Recommendations focus on governments making practical reforms to improve their stewardship of these services – the way they plan the system of services, select providers on behalf of users, and contract services so that users are at the centre of service provision. Default contract terms should be increased to seven years, with enhanced safeguards, to achieve a better balance between funding continuity for service providers and periodic contestability.

The Productivity Commission also concluded that current approaches to commissioning human services in remote Indigenous communities are not working. Recommendations include building capacity of both governments and communities to make services more effective and lay the foundation for more place-based approaches in the future. Governments should improve regional and local capacity and understanding and give local staff more authority over local planning, engagement and service implementation, eg., local commissioning arrangements. Community capacity building is asserted as not existing everywhere and will take time and effort to build. Default 10 year contracts are recommended.

In relation to social housing, the Productivity Commission concluded the system is broken. Recommendations include establishing a single system of financial assistance that is portable across rental markets for private and social housing to provide people with more choice over the home they live in and improve equity. Tenancy support services should also be portable across private and social housing.

Click here to read ACOSS’s media release about more competition bringing significant risks to human services.

Click here to access the Productivity Commission report.

– Tracey Smith

Principal Policy Adviser, PeakCare

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