Australian Conference of Economists: Transitioning the Australian Welfare State: The Unnatural Fit of Quasi Markets in Australian Human Services Delivery

The publishing of the Beverage Report in 1942 was in many respects the apogee of the movement for the scientific resolution of “wicked” social problems such as poverty and was the framework for the subsequent establishment of the Welfare State in the United Kingdom. It was the formalisation of the policy framework away from unstructured, unpredictable and inequitable private philanthropy toward the socialisation of the problems via the development of predictable, equitable solutions essentially paid for by the tax payer. The term “Welfare State” is ubiquitous in its use in the Anglophone world, including in Australia, as a descriptor of government programs designed to alleviate “wicked” social problems. Arguably, the term has also become pejorative in meaning, being seen as synonymous with public sector inefficiency and ineffectiveness and, in the extreme, it is argued that the Welfare State distributes resources to those unworthy of largesse. As time has elapsed, this framing of the Welfare State has also impacted the relationship between government procurers of human services and the Australian charities and Not-for-profit organisations delivering social supports and services. As a result, the funding of Australian social and community services has been transitioned from grant funding mechanisms to the introduction of Quasi Market mechanisms, essentially because policy thinking suggests that more efficient and effective outcomes will be achieved as a result of the implementation of market pressures. Arguably, these mechanisms have failed in the execution and the current state of the National Disability Insurance Scheme is a prime example. In this paper, I will discuss this phenomenon and identify that, in fact, the failure of these market mechanisms has its origins in a number of phenomena including in the development of the Australian polity in colonial times rather than being a result of incapacity within either or both the public and human services sectors in Australia. Indeed, Quasi Market mechanisms are an unnatural imposition on a more mature structural response to wicked social problems that require focused collaboration and co-operation.