Shifting the Dial: From Profits and Process to Community Building

The Productivity Commission report Shifting the Dial released this week challenges national policy makers and undermines the positions of some of the most powerful vested interests in national politics, writes David Crosbie CEO of Community Council for Australia.

Shifting the Dial is premised on some very clear principles about the need for Australia to embrace inclusive growth.  

The report states:

“A key issue will be to ensure that future economic, social and environmental policies sustain inclusive growth – by no means guaranteed given current policy settings, and prospective technological and labour market pressures. Productivity growth provides a capacity for higher incomes and poverty alleviation – either directly through higher wages or indirectly by increasing the capacity for funding transfers to lower-income households. The motivation for limiting inequality extends beyond its intrinsic value to the desirability of avoiding too great a dispersion in incomes, given evidence that this can, in its own right, adversely affect productivity growth. Public support is also more likely for reforms that offer benefits to the bulk of people.”

We have known for years that growing inequality is not good for productivity, but having the Productivity Commission set it out in such unequivocal terms establishes another clear reference point for charities seeking to address issues of inequality.

For those charities and not-for-profit organisations involved in education and health, the Productivity Commission offered strong support for more evidence based policies, based on the understanding that a healthier and better educated population is more productive:

“One of the advantages of better health care, education systems and cities is that they provide strong prospects for improving lifetime outcomes for people from all backgrounds. Indeed, improvements in these areas have the potential to decrease health inequalities, and reduce job insecurity and wage risks for those whose skills are at most risk from technological change.”

As part of the report, the following table was published, not only to represent the issue of inequality, but also to highlight opportunities for productivity gains.

Figure 1.2 Health inequalities and educational underperformance present big opportunities for Australia

a The fifth household income quintile is the richest and the first household income quintile the poorest. Sources: ABS 2016, National Health Survey, First Results, 2014-15 , Cat. no. 4364.0; OECD PISA score results (2017b).

Principles about inequality, evidence based policies, and inclusive growth are reflected in the 28 recommendations. Of particular note are recommendations that challenge the orthodoxy about what can or cannot be done within health, education and other systems. This is a report that confronts the protected heartland of some of the most powerful vested interest lobbies in Australia, including the Pharmacy Guild of Australia and the Winemakers Federation of Australia (which protects bulk wine producers) in recommendations including:

“The Australian government should move away from community pharmacy as the vehicle for dispensing medicines to a model that anticipates automatic dispensing in a majority of locations, supervised by a suitably qualified person…

“The Australian government should move towards an alcohol tax system that removes the current concessional treatment of high-alcohol, low-value products, primarily cheap cask and fortified wines.”

Other health recommendations emphasise the need to put patients at the centre of healthcare, stop funding ineffective treatments / interventions, and increase expenditure on prevention.

The report suggests numerous improvements to education including “disruption of education through independent assessment”, an emphasis on “proficiency not just competency” and measures to “improve educational outcomes of students”.

The proposed disruptions do not end there. The report makes energy policy a priority suggesting: “Stop the piecemeal and stop-start approach to emission reduction, and adopt a proper vehicle for reducing carbon emissions that puts a single effective price on carbon.”

The public service is a major focus of the report with seven recommendations about the need for change in the way governments formulate, implement, and evaluate policies, as well as their reporting on their own performance. Interestingly, there is a level of frustration reflected in the report about how the recommendations of reviews and inquiries into public service practices are often ignored or just not implemented.

It is not often so many fundamentals of national policy are challenged in one report from such an authoritative and reputable source.

The report is not about charities. It does mention the need for more innovation and impact investing, the importance of environmental advocacy in addressing the potential negative impact of mining companies and others gaining greater say over land use, and the role of charities in integrated health care, but generally the focus is on the bigger systemic issues.

What the report does for charities is exactly what the title suggests – shifts the dial away from vested economic interests towards community interest.

For charities and not-for-profits organisations, this is a dial many have been trying to turn for years, against huge resistance from vested interests. Governments will come and go, ministers will be reshuffled, policies will shift and sway in the winds of political opportunism.

Reports like Shifting the Dial represent a solid reference point for reform that charities would do well to read, embrace, reference and support. If even half the recommendations in this report were realised, we would all be so much closer to achieving the Australia we want to live in.

About the author: David Crosbie is CEO of the Community Council for Australia. He has spent more than 20 years as CEO of significant charities including five years in his current role, four years as CEO of the Mental Health Council of Australia, seven years as CEO of the Alcohol and other Drugs Council of Australia, and seven years as CEO of Odyssey House Victoria.

David Crosbie writes exclusively for Pro Bono News on a fortnightly basis, covering issues of importance to the broader not-for-profit sector.