Wednesday, 28 March 2018

The Productivity Commission’s Human Services Reform agenda in remote communities



The Productivity Commission recently released its report ‘introducing Competition and Informed User Choice into Human services: Reforms to Human Services (link here). The Final Report was presented to the Treasurer in October 2017, and was published on 26 March 2018.

The report includes two areas of particular relevance to Indigenous policy. The first relates to social housing, where the Commission recommends, inter alia, extending Commonwealth  Rent Assistance to social housing tenants, a move which if implemented would go a long way to eliminating the structural inequities between remote social housing and the treatment of non-remote housing assistance to low income citizens.

This post focusses on the second issue on the provision of human services in remote Indigenous communities, dealt with in chapter nine of the report. In December 2016 I commented briefly on an earlier study paper released by the Commission as part of its review (link here). The study paper appears to have been more adventurous and incisive than the Final report.

In the Final Report, the Commission argues at page 265, inter alia, that
·         Despite goodwill and significant resources, current approaches to commissioning human services in remote Indigenous communities are not delivering the benefits of contestability and are exacerbating its potential weaknesses.
·         Policy instability has created uncertainty and confusion for communities and service providers, and has undermined the effectiveness of service provision.
In relation to an earlier disposition to recommend more vigorous use of place based approaches:
·         there is merit to place-based approaches, but that a large-scale systematic rollout of place-based approaches across remote Indigenous communities is not feasible.
·         Government and community capacity for place-based reforms does not exist everywhere and would take time and effort to build. Expanding too far, too fast is a significant risk.
Moreover,
·         Governments should shift the balance away from centralised decision making in government toward greater regional capacity and authority to improve responsiveness to local needs.

These are all sensible and considered judgments which deserve serious consideration, but which governments, based on their record over the past few decades, are unlikely to address enthusiastically.

Nevertheless, the Commission’s chapter on remote communities deserves to be read by anyone interested in remote policymaking, not least because it represents the ‘standard view’ on what is the appropriate policy approach to addressing indigenous disadvantage, and improving Indigenous engagement. Moreover, the specific recommendations on human service are well argued and deserve serious consideration. The Commission recommends that contract lengths for commissioned service delivery be set at ten years by default, that governments publish a rolling schedule of upcoming tenders, that tenders include a focus on skill transfer and capacity building, that provider attributes (for example culturally appropriate service provision) be taken into account, that outcome measures and establishing evaluation and feedback systems be implemented, and that agencies adopt less centralised decision making systems which involve greater local engagement.

So what’s missing from the Commission’s analysis? I would point to three key issues.

First, the Commission appears to have dropped all references to greater transparency in program delivery from its analysis and recommendations. The Commission’s focus on policy instability and churn (which is largely driven by ministers and political factors) is absolutely correct, but it appears to have failed to make the link between greater transparency and reduced incentives on governments to countenance policy churn. Similarly, a focus on program and policy evaluation will be facilitated and indeed strengthened by a greater focus on transparency in relation to government policymaking. The Commission’s earlier study paper, mentioned above, was quite explicit in calling for greater transparency, so the decision to drop any mention of the value of greater transparency is difficult to understand.

Second, the Commission’s revised and more modulated support for place based approaches would be significantly strengthened if governments were to simultaneously establish an overarching policy framework so that while the scope for regional and place based differences was maintained, there was also a greater degree of certainty around expectations on both sides of the ledger: from providers, and form communities. Such an overarching policy framework would assist governments to articulate exactly what they are trying to achieve, deliver greater stability in coordination and cooperation between jurisdictions, and assist in managing community expectations. Furthermore, while Indigenous communities are diverse and heterogeneous, there is a risk that without an overarching policy framework to underpin place based approaches, communities who are outside the ambit of the place-based arrangements will be neglected and services will be under-supplied.

Third, and perhaps my most fundamental critique of this chapter of the report, the Commission’s approach ignores the reality, and indeed the centrality, of politics both within Indigenous domains, and within the public sector. This is clearly a deliberate decision of the Commission to make the report appear ‘policy focussed’ and to maximise the likelihood that its recommendations will be accepted, if not by this government, then by the next. However it has the effect of making the analysis extremely artificial and anodyne and somehow lifeless.  I am not advocating that the Commission takes sides in political debates, but to effectively ignore the existence of politics both as a driver of policy problems and challenges, and as a driver of potential solutions, seems somewhat otherworldly. The reality is that politics are ubiquitous in relation to these issues, and to blithely recommend policy ‘reforms’ as if politics don’t exist appears short-sighted at best, and potentially destructive at worst. One of the reasons that governments are so averse to transparency on any kind is that it increases the likelihood that blatantly political tactics will be seen for what they are.

Thus at present, we have a Federal Government with a substantial policy and program footprint in remote Australia, but without an overarching remote policy framework, and with both of the two largest Commonwealth programs in remote Australia, the Community Development Program and the Remote Housing Strategy subject to deep-seated uncertainty. In place of any policy framework, the Commonwealth appears to have decided that addressing remote challenges is just too hard, and instead, that it is easier to adopt a political strategy of blaming the states and territory for any issues which have emerged, ignoring the Commonwealth’s overarching stewardship responsibilities in Indigenous affairs and the fact that as the major funder in remote Australia, the Commonwealth has a responsibility to work with jurisdictions to develop coordinated and coherent policy frameworks.

Notwithstanding my criticisms of the Commission’s approach, there is much in the Commission’s report worth considering and pursuing. The report is an excellent example of open and transparent processes delivering better outcomes, and as a result, there is a clear ‘audit trail’ of the development of the Commissions thinking in relation to the conceptually challenging issues involved such as place based program delivery.

If this report goes un-noticed and un-addressed, remote Indigenous communities will be worse off. Unfortunately, because the Commonwealth does not have a comprehensive remote policy framework in place, it seems unlikely that we will see a serious and sophisticated response to these findings and recommendations. Nor does the present Minister see that he has a responsibility to respond formally to reviews and inquiries such as this; he has been quite open in stating that he does not intend to respond to the recommendations of the review into remote housing which he commissioned and which was delivered to him in 2017. Hopefully the Opposition and the Greens will take up the issue of a formal response to this Inquiry Report and ensure that the Government at least responds to the Commission’s recommendations and findings in a timely manner.


The Prime Minister announced over a year ago that the Productivity Commission would be supplemented with an Indigenous Commissioner. Legislation is currently before the Parliament. The omens will not look particularly positive in terms of the capacity for such an appointment to make a real difference to policy outcomes if the Government is not serious about dealing with the recommendations of worthwhile inquiries such as this.