Social policies 'dangerous ideological territory'

The MBIE cannot win — it pays peanuts and gets monkeys, or splashes out and gets lambasted. Photo / Mark Mitchell

Social policies may thrive or bomb — we will find out one way or another.

This Government is heading into interesting new territory in the social area, territory that may well define their third term and whether there is a fourth.

Contracting out social services to the private sector is one idea, social bonds for things like mental health services is another, flicking state houses is a third.

Let's look at the ideas; let's look at the chances of improved services and whether there is political payoff or trouble. The trickiest one is the social bonds. Most people don't have a clue what they are, nor will they ever really be engaged.

In a nutshell someone in the private sector invests in an outcome. The idea is laudable to the extent we can probably all agree there are a number of social services that aren't good, and never have been. Someone sticking their own money into something provides an incentive to tidy things up and if they do, there's a return on their investment.

But what return? It would need to be better than the return the investor is currently getting for their money, and how tangible can you be when it comes to things like mental health?

The current plan is to ready psych patients for work, but what work? How long does that work last? There are a lot of intangibles there, which I suppose is why those who offer the services currently might well be extremely sceptical that someone can instantly come in and turn things around.

That doesn't mean they can't, which makes this probably the most ambitious project in the social area. It's a hard sell and a high hurdle.

Private sector contracts for social services are much easier to work through. Serco runs a prison here. If it meets targets it gets paid; if it doesn't, it gets penalised. It's simple, and when you have financial incentives to do well, you generally find that performance improves.

Which, by the way, I find ironic given the kicking the Ministry of Business, Innovation and Employment has been taking lately. Part of the reason these private operators get the work is because it is argued government departments don't always operate with the right incentives to perform as well as the private operators. But as soon as MBIE offers decent salaries, a fridge, a roof deck and hair straighteners, it gets lined up to be shot.

We either want a competitive, modern public service that can recruit well or we don't, and if we don't, let's keep paying people peanuts and treating them badly and running them down when they inevitably fail, because that's a smart way to do business, isn't it?

But back to Serco, and its ilk. We have been here before. Contracting out to the private sector isn't new. Sometimes it works, sometimes it doesn't.

But Anne Tolley told us all we need to know the other day when she said we spend $330 million a year on these services and we don't know what we get for it and whether it works. Where we have been hung up is on the ideology of it all.

There remain those who foolishly believe the state and only the state can provide anything and everything to do with the social sector.

Which is odd to the extent that it is those very people that find fault in those services and don't appear to be able to connect the dots that maybe, just maybe, there are other ways to skin a cat that don't involve the almost inevitable cry of "give them more money".

Paramount surely in any service, whether it be mental health or housing or incarceration, is the quality of what's provided. The efficiency, the cost, the return and what we get as a result of what we want or need. Who provides that surely doesn't really matter.

If the state house is warm and dry and well suited and located, does it honestly matter who owns it?

Which brings us nicely to our friends from Queensland who might well be buying a chunk of the state housing stock. This is potential trouble, but why?

Well, there are a chunk of us who don't like foreigners coming here and buying our stuff, but more importantly there are a bunch of us who don't like seeing a foreign company come here, and start making money, and then take that money back home.

The politics are tricky.

If the Government thought it had a tough sell just shifting housing out to social services, they've got an even tougher trick to convince a sceptical countryside that Australians rolling into town accepting taxpayers' money, making a profit from that taxpayer and repatriating it to the sunshine is good news.

They do argue that to get into the market the Australians will have to front with millions to buy the houses, but does that amount offset what will start to flow outwards?

It's dangerous territory; it's ideological territory.

It's one thing to use our own money to bank with the Australians as most of us do, but taxpayer money on social services to foreigners is entering a new realm. If it works, the argument will go away. But it's brave stuff from a Government in its third term.

One of the things that'll drag a long-term government down is a sense of stagnation, the idea that the government is coasting and has run out of ideas. There is no chance of that here.

This is a government looking to cash in on six years of economic success. This is a government still willing to chance its arm on ideas. This is a government that still has the backing of a decent economy and as we sit here today, polls show the same level of support they had at polling day.

In many respects then, you have to admire them. They won't die wondering and they might well have history on their side, after all doesn't fortune favour the brave?

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