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The privatisation of human services



The Federal Government's recent announcement that Serco will be delivering some of the income support system, Centrelink, is another blow to core public services that serve some of the most disadvantaged Australians.

Centrelink officeAlan Tudge, the Minister for Human Services, said that this move is to deal with the long waiting times many people are subjected to when trying to get in touch with Centrelink, despite denying they are an issue at all. Myriad inquiries have found that getting through to Centrelink is difficult and that existing problems worsened after the robo-debt debacle.

The Community and Public Sector Union's National Secretary Nadine Flood is, unsurprisingly, not impressed. 'The Turnbull Government has cut and cut and cut at Centrelink, and is now trying to use the appalling service standards it has caused as justification for privatising a critical public service,' she said in a statement.

How adding a private company to human services delivery will solve some of the considerable problems with the current Centrelink system seems hard to understand. Long call waiting times are, in part, caused by a reduction in staff and a reliance on inexperienced, casual staff to fill short term demand. The CPSU says that over 5000 staff have been cut from the Department of Human Services over the last few years, despite an increase in the number of people receiving income support.

People contact Centrelink when something has gone wrong, or when there has been a big change in their lives; they lose their job, get sick or injured, have a baby or end a relationship. Encounters with Centrelink come with big feelings and lots of vulnerability.

Australia's highly targeted income support system means that eligibility is mostly for people at the bottom of the economic pile. Being poor is often hard, terrifying and demoralising. Finding ways to survive, keep a roof over your head and to get medication can be a daily struggle. The social security system is meant to be a safety net; instead payments are so low, and the compliance regime so harsh that it is becoming a barrier for people to get work at all.

The ACOSS Poverty in Australia 2016 report says that 'those doing it the toughest are overwhelmingly people living on the $38 a day Newstart payment, 55 per cent of whom are in poverty. This is followed by families on Parenting Payment (51.5 per cent), the majority of whom are lone parents with children.'


"The social safety net is not some kind of shopping centre, where everyone has the ability and capacity to go and select the right widget for their individual needs. Applying these kinds of market ideologies to a core public service is a laughable absurdity."


Injecting a for-profit company, such as Serco, into this stressed and stressful environment seems a strange move, until the Harper Review is taken into account. The Harper Review, released in 2015, was a review of existing competition policy with the goal of extending competition to what are euphemistically called 'human services' — the ones that deal with people. Some of the recommendations said that 'user choice should be placed at the heart of service delivery' and that 'governments should retain a stewardship function, separating the interests of policy (including funding), regulation and service delivery.'

Introducing competition to human services is supposed to improve efficiency and give people greater choice. How either of those could apply to Centrelink is baffling, given that the agency has a natural monopoly on managing the income support system. Welfare recipients are now 'consumers', just out shopping for their Newstart Allowance, I guess. Who delivers government functions is now irrelevant, as long as users exercise their magic choices.

But the social safety net is not some kind of shopping centre, where everyone has the ability and capacity to go and select the right widget for their individual needs. Applying these kinds of market ideologies to a core public service is a laughable absurdity, if it were not actually happening.

The Harper Review says 'designing markets for government services may be a necessary first step as governments contract out or commission new forms of service delivery, drawing on public funds.' Serco has been awarded $51.7m of public funds to manage part of a service that has no competitors. The Review goes on to say that these kinds of contracts will 'both empower consumers and improve productivity'. Right.

These kinds of ideologically blinkered approaches to marketisation should not be applied to core public services, such as the social safety net. The very accountability mechanisms that have led to such widespread reporting on the robo-debt disaster may end up shrouded in commercial in confidence agreements in the future. Will people have to go the Serco AGM to find out what has happened to the public monies that the company administers? And what kind of choice does this offer people who need Centrelink services, or is it more about making sure that a private company can profit off other people's misfortune?

No one should make a profit out of people being poor.



El GibbsEl Gibbs is a freelance writer specialising in the area of disability and social services and has over 15 years experience in the community and NFP sector, as well as politics. Find her on Twitter @bluntshovels

Topic tags: El Gibbs, Centrelink, Newstart, poverty, Serco



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Existing comments

If the govt doesn't manage social services like this then what the hell do they actually do for their wages??? This is our contract with our government, that they care for us.

cat | 22 October 2017  

We could add that no one should profit from imprisioned, ill or aged people, young people seeking an education or a home to raise a family and much more. You know that our society has really plumbed the depths when the costs of giving birth to a child are paid with a credit card. Is this simony by another name?

Paul | 22 October 2017  

Another reason why Australians should vote in a government interested in a Universal Basic Income. The ideology of welfare and safety nets needs to be replaced with the concept of we are all in this together and basic living standards for all. This is especially so when work is already a privilege of the minority and will continue to decline due to technology. We produce more wealth per person than ever. How about sharing it a little better. History has proven time and again that governments providing work is the best way to achieve this.

Bruce | 22 October 2017  

I don't understand why the government needs to spend on private profit. That money could be spent on the needy.

Min | 23 October 2017  

Capitalism is today's religion. As it was in the 18th century, the poor are poor because they are "sinners" and deserve not to be supported by "good" rich people. The dogma is that public service cannot get it right: only profit making enterprises are of any value. Things before people. May things continue to grow to bigger things! All things bright and beautiful do not include those who are reduced to penury. The new religion is not my faith.

Jim | 23 October 2017  

Thank you El for this article. I agree the social security system is meant to be a safety net. People accessing this system deserve to be treated with respect and care, not in punitive ways as happens now. New start payments have been shown to be so low as to be a barrier for people looking for work. I too am astounded that Serco has been asked to assist Centrelink. Governments thru our public services are responsible for delivering these very important human services. When will our govt see this ?

Monica Phelan | 23 October 2017  

When Governments abandon their responsibilities towards their citizenry, then the only solution is to resign from office. Privatization and contracting out of government services is something which I abhor and the biggest con job perpetrated on society. This LNP administration is simply disgusting....

Terry Stavridis | 23 October 2017  

Thanks for this insightful article. In years to come, we’ll be asking ourselves why we acquiesced in the privatisation of human services as we are with energy services. It’s disastrous to allow for-profit agents to make money from the poor.

Frank Golding | 23 October 2017  

Well, the entry of Serco into welfare provision is a sign of where things are going. I often wonder why we don't look right outside the box and consider the approach to education and welfare of the Scandinavian countries like Denmark. We need a coherent, long term national vision, not a diminution and gradual dismantling of what, for all its faults, was a very good welfare system.

Edward Fido | 23 October 2017  

Thank you El. Privateisation helps no one except the shareholders. Please pester our government.

Mahdi | 23 October 2017  

Thank you El Gibbs for this important article. Can Alan Tudge, the Minister for Human Services, really be taken seriously when he said that this move to have Serco take over some of the functions of Centrelink that it will solve the problem of long waiting times its clients face when they contact the agency? Those of us who have been around longer than most have experienced many privatisations of public services and utilities. The fact is that in most cases, services are not made more efficient and there will always be far greater costs as private corporations seek to make massive profits from the services they carry out. Most Australians will be concerned at the minister's choice of organisation to carry out this work. For some time, human rights organisations have protested at the abuses that have occurred in Serco operated prisons and detention centres. The clients of Centrelink are the most vulnerable members of our community. They deserve efficient, compassionate and caring services. The Turnbull Government should be increasing Centrelink staff to cut back on waiting times, However, it continues to cut back on the budgets of government agencies while it squanders billions on getting involved in US wars and giving huge sums away to the large corporations and wealthy Australians who pay little or no tax.

Andrew (Andy) Alcock | 23 October 2017  

``At this festive season of the year, Mr Tudge,'' said the gentleman, taking up a pen, ``it is more than usually desirable that we should make some slight provision for the Poor and destitute, who suffer greatly at the present time. Many thousands are in want of common necessaries; hundreds of thousands are in want of common comforts, sir.'' ``Are there no prisons?'' asked Tudge. ``Plenty of prisons,'' said the gentleman, laying down the pen again. ``And the Union workhouses?'' demanded Tudge. ``Are they still in operation?'' ``They are. Still,'' returned the gentleman, `` I wish I could say they were not.'' ``The Treadmill and the Poor Law are in full vigour, then?'' said Tudge. ``Both very busy, sir.'' ``….I help to support the establishments I have mentioned: they cost enough: and those who are badly off must go there.'' ``Many can't go there; and many would rather die.'' ``If they would rather die,'' said Tudge, ``they had better do it, and decrease the surplus population. With sincere apologies to Charles Dickens

PaulM | 23 October 2017  

Important article thank you. When one thinks there is little more the federal government can do in its war on the poor, then another tactic is devised and implemented. El reveals the source. No chance of it wanting to see the damage; following on from the for- profit company Indue operating the Cashless Card the federal government is continuing to work out of its ideology. No matter what the cost to its citizens.

Michele Madigan | 23 October 2017  

The U.K. Have outsourced their welfare system. The LNP and particularly Mr Tudge, would do well to view the result of the ensuing fiascos by viewing a movie titled 'I Daniel Blake', which once seen will never be forgotten.

Rhonda Sutherland | 24 October 2017  

Of course these and a whole lot more are all I have come to expect from Liberal governments. Marx said religion is the opium of the people: I disagree, I say profit is the opium, and that's why people, even those on Cenrelink sometimes, still vote them in. Isn't that strange?

Anthony Grimes | 24 October 2017  

A great comment El, I totally agree with your remarks. Having seen my youngest daughter caught up in the Robo disaster, I really wonder what next this idiotic and dysfunctional government will do. The sooner we turf these fools out of office the better!

Gavin | 24 October 2017  

Thank you you for this long overdue article. Privatisation of essential services, especially to vulnerable and needy people in our society has been a trend for far too long and it is appalling that a business can profit from the provision of what is basically a redistribution. Of taxpayer monies. The question for me is how can we stop this and send companies like Serco back to where they belong - oblivion?

Ann | 24 October 2017  

Theoretically, a government only has to employ public servants in a function that is an inalienable natural monopoly of government which cannot be sliced into service tranches. Soldiering in its land, air and water components can’t be sliced into service tranches for effective control and discipline reasons but providing services to them can. The military doesn’t sew its uniforms and the cook in the mess can be a civilian. It’s a question of cost: because the federal government charges the residents of its jurisdiction for services rendered, it’s in the interests of the residents that the federal government is efficient with the taxes it receives. Call centre services to the recipients of Centrelink benefits is only a service tranche of a monopoly. If Serco isn’t cost or knowledge effective, the Red Cross or a Tasmanian government entity with excess capacity might do the job. Unlike the selling of poles and wires in which the government cashes out of a monopoly profit (nobody else gets the money except you), private sector Centrelink call centres are a way for a government to reduce a monopoly drain (nobody else pays except you), public servants being costlier at work that isn’t essentially public service.

Roy Chen Yee | 24 October 2017  

This type of government services being contracted out is almost ubiquitous. The old image of public service jobs with cushy conditions is almost obsolete. You'll find that even services like the ATO are carried out by private, for-profit companies. Call the ATO to do your tax and you're likely to be talking to an employee of one of these firms who is just out of high school, paid $20 an hour and is under pressure to get you off the phone as quickly as possible - even if they didn't help you with what request.

Aurelius | 25 October 2017  

I worked for Centrelink some years back. All through my six month contract, I was used to seeing Centrelink's noble, if wordy, Mission Statement in a prominent position. I just don't know how this Mission Statement can be reconciled with the Mission Statement of any for-profit organization, which is always to maximise the financial bottom line. Deliver services, of course, but do it as cheaply as possible, so that the shareholders get a bigger cut. How can the vulnerable people of Australia possibly benefit? There'll be no more people employed, and those who are currently employed will become fewer, with the experienced and knowledgeable ones too few and too exhausted to find their way through the impenetrable forest of the computer system to solutions for the many very complex problems of the clients. But then, it isn't about the clients, is it?

Joan Seymour | 26 October 2017  

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