Call for Submissions for Inquiry into Australia’s Human Services

The Productivity Commission is calling for submissions for its public inquiry into Australia’s human services, to look at reforms around the principles of choice, competition and contestability, including the effect on the Not for Profit sector.

The Commission will examine the current level of and the future trends in the demand for services, the current supply arrangements, including the scope for user choice, diversity in service provision, and contestability in supply by government, Not for Profit and private sector providers as well as the effectiveness of previous reforms intended to introduce greater competition and user choice, both in Australia and internationally.

The inquiry follows the Harper Competition Policy Review recommendation that the human services sector be assessed to see where there would be opportunity to apply competition principles.

According to the Terms of Reference for the inquiry: “Australia’s human services sector is facing significant challenges, including increasing demand for services due to the ageing population, the effect of technology and cost increases associated with new and more complex service provision demands.

“Finding innovative ways to improve the efficiency and cost effectiveness of the human services sector, and to target services to those most in need, will help ensure that high quality service provision is affordable for all Australians and leads to improved outcomes for the economy and individuals.”

The Productivity Commission chairman Peter Harris said the inquiry would be conducted in stages and called for public submissions.

“The first stage will look to identify which human services will respond best to users being offered more choice over the services they need. In the second stage, market design and incentive structures relevant to each prospective service will then be proposed,” Harris said.

“There is no one-size-fits-all solution to improving human services. Solutions will almost certainly differ and for some services competition principles may even prove to be ineffective.

“All this needs to be tested.

“One of the clearest benefits of increasing the choice of service providers vying to attract users is a tendency to focus more on the needs of each individual.”

The first stage of the inquiry will deliver an initial study report identifying services within the human services sector that are best suited to the introduction of greater competition, contestability and user choice. It is expected to be released in October 2016.

Harris said the commission was mindful that human services, like health, education, job services, social housing and aged care, were extremely complex, and the commission was taking a staged approach to finding ways that competition and user choice can improve outcomes, both for users of services and the broader community.

“Reforms will have the greatest benefits where it is possible for users to have genuine choice or where user-oriented information can be drawn on to improve service delivery,” he said.

“Where there are millions of services provided each year, even small improvements can have a profound effect on standard of living and quality of life.”

The Productivity Commission’s issues paper provides guidance about the type of information it is looking for to help it undertake the first stage.

Sector peak body, Community Council for Australia is preparing a submission for the inquiry. See CCA CEO David Crosbie’s opinion article here.

The deadline for submissions is 25 July 2016.