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Australia Institute report critical about the impact of competition policy
Freya Lucas
Jun 05, 2024
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New analysis from the Australia Institute shows that the privatisation, deregulation, and outsourcing of public services has “failed to provide economic or social returns to Australians.”
The Institute has undertaken the report in light of rumours that the Victorian Government is considering privatising the Registry of Births, Deaths and Marriages, which prompted the authors to make a submission to the Productivity Commission’s National Competition Policy Analysis inquiry, recommending an urgent review of outsourced ‘critical services’ such as electricity, aged, disability and childcare (sic.).The analysis makes specific mention of the privatisation of ‘the caring economy’ encompassing aged care, early childhood education and care (ECEC), the disability support sector, and allied professions saying “the belief that ‘markets are more efficient’ has led to the creation of private markets for once public services where differences in quality, or perceived differences in quality, play a major role in the decision making of consumers and producers.”
“This has been especially wasteful where advertising claims are inaccurate, for example it is rare to see an advertisement admitting that quality is low but the product is cheap in health, education, aged care, childcare or NDIS services.”
Despite the establishment of the Productivity Commission and National Competition Policy in the 1990s, growth of GDP per hour worked has declined over the past three decades, authors argue, adding that “neoliberal economic theory does not support the general conclusion that private ownership delivers lower costs, higher quality, or greater productivity than the public sector.”
Authors instead advocate for “a comprehensive inquiry into the performance of privatised and outsourced public services,” which, if conducted, they believe would “likely involve bringing many services back into public control.”
“The privatisation and outsourcing experiment of the past three decades has clearly failed,” said Richard Denniss, Executive Director of the Australia Institute.
“This failure is obvious to any Australian family paying for critical services like electricity, disability care, aged care or childcare.”
“National Competition Policy promised Australians greater choice, better quality and lower prices for a wide range of essential services, but in reality it delivered lower quality, longer queues, and higher prices.”
At the same time, he continued, competition policy has failed to improve public services, and is now failing “to stop our private industries from becoming increasingly monopolised, profitable, and hard to deal with.”
Download the Australia Institute submission here.
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