Academic Warns of Australia’s Disappearing NFP Sector

Australia’s Not for Profit sector risks disappearing and becoming just another rival business in a privatised service market under the current Federal and State Government reform approaches, a Melbourne academic has warned.

Paul Smyth, a Professor of Social Policy at the University of Melbourne, has told a Forum at the Brotherhood of St Laurence today that the trajectory the community welfare sector has been put on in recent years is a radical departure from its historical path under both Labor and Coalition Governments.

Prof Smyth warned that the new public management theory (within the Shergold Review in Victoria) and the current review of National Competition Policy, have risks that would lead to  the extinction of the sector, “only to become just another rival business in a privatised service market”.

The lecture titled “The Lady Vanishes: Australia’s Disappearing Voluntary Sector” was delivered to an audience of Not for Profit sector leaders and advocates.

“If you look at Peter Shergold’s definition of the community sector it embraces a ‘diversity’ including ‘charities’ and ‘social enterprises’, with the ‘private sector’ also playing a role. In this governance regime your sector of origin is more or less irrelevant as you sign up as a business rival in the service market,” Prof Smyth said.

“Not only is your mission as a community sector organisation irrelevant but your practice risks ending up indistinguishable from private sector providers.

“We know now from the Federal Budget that the national Government does have a ‘small government’ agenda quite unlike both its Labor and Conservative predecessors. Treasurer Hockey has said bluntly that ‘commercial’ not social or political considerations need to be at the heart of the service system.

“The (National Competition Policy) Issues Paper devotes a chapter to potential reforms of social services where reform simply means marketisation.

“It suggests that an already growing marketisation of social services might well be accelerated through expanding the roles of Not for Profits and for-profits.

“As the market economy is extended into the social sphere, voluntary agencies will reconstruct themselves into what the paper calls ‘rival businesses’.

“I consider that the potential dangers need to be heeded by all those in the sector with a concern for the future of voluntaryism in Australia.

“It is a drama being played out internationally and the sector needs to be fully aware that it is not operating in a state of business as usual. The UK offers an extreme example of the impacts on the community sector of attempts to bust big government permanently and marketise the social sphere.

“What our Australian history shows is that the voluntary sector has always been a vital third party in the makeup of our economy and society.

“We have to be realistic and recognise that if the new Federal Government continues to act as though our key policy problem is not too much neoliberalism but not enough, then indeed the pressure will be on for the market economy to organise a private world of stratified ‘human services’.

“In this world each class of customer will get only what they can pay for and no more, with a small, residual role assigned to the voluntaries of picking up the pieces—that is, the deserving individuals who have fallen out of the system.

“The voluntary sector simply cannot afford to allow this process to continue to be overseen by economic agencies.”

Prof Smyth said the sector should be outraged by the seemingly wilful ignorance of history and social sciences which allowed the authors of the current welfare reform review “to dream up their childlike constructions of society and polity in terms of a market”.

“The sector must initiate a process which it oversees itself and which it ensures is informed by appropriate multidisciplinary expertise (not excluding economists, of course) as well as the voices and experience of voluntary sector members,” he said.

Paul Smyth is Professor of Social Policy at the University of Melbourne and from 2004 to 2013 was also General Manager of the Research & Policy Centre at the Brotherhood of St Laurence. A full trasncript of his lecture can be downloaded at http://www.bsl.org.au/pdfs/Smyth_The_lady_vanishes_Australias_disappearing_voluntary_sector_paper_14Aug2014.pdf