Social Democracy in Focus, Issue 10

19 August 2016

Through our Social Democracy in Focus series, we try to go beyond the theory of public policy, and look at real life outcomes of government decisions. We want to take a closer look at the real world consequences when specific policies, concepts and ideas are implemented.

It’s been a while since our last edition, but given the debacle over #CensusFail last week, we thought it’s a good time to have a look at a specific concept that we’re hearing a lot “efficiency” and the influence this is having on democratic institutions.

TheEfficiency Dividend”

Governments invoking efficiency as an intrinsic good is nothing new. The Commonwealth “efficiency dividend” was introduced by the Hawke government in 1987, and was supposed to reap the benefits of technological advances. It is an annual reduction in funding for the running costs of an agency, and is not supposed to compromise output.

The problem with this very blunt instrument is that it works on the assumption that the only way to measure efficiency is to put a dollar value on it. Reducing funding does not necessarily deliver efficiency.

Moreover, it indicates a misunderstanding of the relationship people have with government agencies. What do people want from their public institutions? Do people really value some technocratic vision of “efficiency” above all else? Do they want minimum level services followed by tax cuts, or do they want to see their public services maintained, or even improved? Our Annual Tax Survey shows that a majority of us want good quality public services and are willing to pay for it. A focus on efficiency for efficiency’s sake does not reflect this.

Democratic Institutions

Several decades of ascendancy of neoliberal principles has given governments a very instrumental view of public institutions. The efficiency of an institution or its work is only measured through market principles. The intrinsic public good and the benefits that flow from institutions is sidelined.

This is where we get back to the ABS and #CensusFail. Moving the census online compromised the success of the census in order to save money. This is on top of other cuts from the last few governments that have left the ABS struggling to maintain standards. How much of the expected savings will now be spent just trying to finish the census?   It’s a classic case of false economies. Decisions about how to fund such an institution and its functions should have at least some passing regard for its essential purpose. But it appears that the focus was on saving money.

Let’s remember what the census is actually for. The information gathered forms much of the foundation for decisions governments make to spend our money. It is directly linked to the public services we rely on and pay for. It tells us where hospitals need improving, where schools need to be built, where transport needs upgrading. What gets lost in debates around efficiency and cost cutting is that the census is actually about people, and about fairly distributing public money in the ways that best serve the community. No one is saying that government agencies shouldn’t be cost conscious, but for this to be the overriding consideration forgets their very purpose and their importance to the functioning of our democracy.

Institutions exist to enact the will of the people, with our elected representatives having oversight of their activities. But if those representing us don’t have adequate information, or are only thinking about how to bluntly cut back our institutions, it will have direct consequences on how our parliament can adequately enact that will.

Strong and effective institutions are key to the practice of democracy; they are the pragmatic and process side of democracy. Equally, people need to have confidence in those institutions. They must be able to trust that their institutions will effectively execute decisions made by our representatives. When we have debacles like #CensusFail, or the AEC losing the WA Senate ballots in 2013, it does more than just inconvenience people; it undermines our trust in our democratic institutions.

The long-held neoliberal approach to government that describes public goods in the language of economics has promoted cuts for efficiency, outsourcing and privatisation of public assets and services. Elizabeth Farrelly said recently that neoliberalism (and communism) failed through “a reluctance to understand humans. Profit is not our only motive”. It’s time that our elected representatives are reminded that democratic institutions have a purpose and value beyond â”efficiency”.