From Kennett To Abbott: Long March Of Small Government Radicals



Egged on by shadowy think tanks advocating ‘freedom’, the government’s first move is to commission a blueprint for change, drawn up by handpicked cronies. A brutal budget follows with election promises cast aside for deep cuts to services and the public sector.

For Karen Batt, Federal Secretary of the CPSU State Government Division, 2014 is so like 1992.

Twenty-two years ago it was Jeff Kennett playing Tony Abbott. The then Liberal Premier had his own Commission of Audit, chaired by Bob Officer, a strident ideologue who later played a similar role for John Howard.

The Victorian Commission of Audit was preceded by ‘Project Victoria’, a collaboration between the now defunct Tasman Institute, the Institute of Public Affairs (IPA) and 13 employer groups that laid the ideological and policy foundations for the Kennett onslaught.

Months before the September 2013 federal election, Karen Batt recalled the challenges she faced 22 years ago as a young official Victorian public sector workers.

She also surveyed the contemporary political landscape and the damage wrought to the public sector across Liberal- governed states, with NSW, Queensland and WA all conducting ‘audits’ soon after elections.

Steven Amendola, a lawyer and IR consultant close to Kennett, re-emerged in 2009 as a key player in the WA Barnett Government’s ‘Economic Audit’ and subsequent public sector reforms that unleashed waves of privatisations, outsourcing and cuts. 

Karen Batt accurately predicted that an Abbott Government would chart an identical course to declare war on vulnerable citizens and the services that sustain them. And like their state colleagues, Abbott and Treasurer Hockey would wax lyrical on the themes of ‘efficiency’ and ‘productivity’.

Hockey’s first Budget slashed the federal public service by 16,500 jobs over three years, but CPSU National Secretary Nadine Flood believes up to 25,000 positions will go as services are handed to the private sector through processes of ‘contestability’, privatisation and outsourcing.

‘It’s a con job,’ said Nadine. ‘Step one they pretend the public service is bigger than it is. Step two they run it down through cuts, step three they sell it off to their big business mates.’

Even before the 2014 Budget, cuts had impacted key services like the Tax Office, said Nadine, while claims for psychological injuries soared among frontline workers subjected to increased stress, bullying and harassment.

Hockey claimed that ‘a smaller, less interfering government won’t need as many public servants’. But there is no people’s movement for smaller government – user-pays policies, cuts to services and privatisation are wildly unpopular, as the deep anger provoked by the Budget demonstrates.

The same forces that backed Kennett’s rampage in the 1990s have continued their long march against the public sector. Prominent is the IPA, which last year celebrated the 70th anniversary of its founding at a dinner where Tony Abbott’s speech was applauded by apowerfulaudiencethatincluded Rupert Murdoch, Gina Rinehart andGeorgePell.

The IPA helped found the Liberal Party in the 1940s. Today its influence remains far-reaching. But the think-tank has always been reluctant to reveal the donors bankrolling the drive for smaller government and deregulation. The Saturday Paper reported in May that past donors include big tobacco, big mining, big banks and big oil.

Then there are veteran ideological warriors like Gary Sturgess, who steered three conservative state governments through public sector ‘reform’, destroying 50,000 public sector jobs in NSW alone, under the Greiner and Fahey Governments 1988-1995. 

Sturgess moved to London in 2000 to work for SERCO, a giant multinational services company and one of the main beneficiaries of global public service outsourcing. Until 2011 he was Executive Director of inhouse think-tank The Serco Institute.

While holding that position, Sturgess advised the NSW Liberal Party, then in opposition, on outsourcing, private sector contracting, and ‘an awful lot of interesting things happening’ in Britain.

After winning the 2011 NSW election, the NSW Government brought Sturgess back to fill a ‘research position’. In 2012 that Government’s Commission of Audit recommended major windbacks of the public sector, including asset sales and contestability of services.

Peter Shergold, former Howard Government Secretary of Prime Minister and Cabinet and current UWS Chancellor, has long provided intellectual ballast for radical reductions in the public sector.

In 2013 Shergold said ‘citizens’ need ‘greater choice’ in ‘service delivery’ and ‘this requires ... that public services ... will no longer attempt to exert a monopoly over the delivery of public services’ through ‘asymmetrical power’. In the same year Shergold was paid by the Liberal Party to ‘cost’ the Party’s promises prior to the federal election, sidestepping the supposedly bipartisan Charter of Budget Honesty.

At the heart of the small government campaign is the claim that the private sector will always do it better when it comes to delivering public services. Progressives have led the fight to defend public services, but contested terms like ‘productivity’ and ‘efficiency’ have been trademarked by small government radicals.

But – despite the vast resources poured into neoliberal ideas factories, and the constant accusations of poor productivity leveled at the public sector – no system exists to measure the productivity of longitudinal work performed by the public sector. The Abbott Government rejected a CPSU proposal to develop such benchmarks.

The ‘efficiency dividend’ is another symptom of the Liberals’ desire to shut down debate on the assumptions behind the small government agenda. Accelerated under the current Government, the dividend mandates a cut in general funding of 2.5 percent to all federal departments from 2014/15 onwards.

Christopher Stone, Public Service Research Director at the Centre for Policy Development, argues that the dividend is ‘a bad idea because it is a blunt instrument that cuts both good and bad programs’.

He said the dividend avoided a necessary debate that should focus on the services and value provided by the public sector and not solely on expenditure.

‘There needs to be a lot more clarity about the goals of the public sector and better metrics to measure outcomes and productivity from the sector,’ said Christopher Stone, who also disputes the superiority of private sector service delivery. ‘A common misconception is that private sector primacy is supported by economic findings that markets always drive efficiency. But abstract economic models based on well- functioning markets do not always apply in the fields for which public services have been built,’ he said.

One example is the Victorian vocational training sector from 2011, where funding cuts, deregulation and ‘full contestability’ saw the market flooded with private providers. But while the new market saw a sharp increase in popular courses for personal trainers, which were already over-supplied, fewer courses were offered in areas of genuine skill shortage.

Perhaps the most important voice – although far from the loudest – in the debate belongs to those who depend most on public services: the poor, the marginalised and the disadvantaged.

John Falzon, CEO of the St Vincent de Paul Society, says the starting point should not be a reflex belief in either ‘small’ or ‘big’ government, but a genuine search for ‘good government’.

‘We must make decisions on what sort of society we want to be. What levels of inequality are we prepared to tolerate,’ he said.

‘Markets are good at providing choices and innovation, but markets are lousy at guaranteeing equitable access to housing, education and health, and these are the basics of life and the entry points to quality of life.’

He said that that ‘choice’ – defined as the individual purchase of services – ‘never has the power of government, which as an aggregate purchaser can best provide these goods and services to the people who need them’.

‘Small government means there are very few winners. The vast majority will lose because they cannot afford to buy the top product. If we want very good services provided with compassion and care, the buck stops with the government,’ said John Falzon. 

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