Cost-shifting via mutuals?

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The Public Service Mutuals White Paper: Is this all there is for the cooperative movement?

Len Puglisi.

public service mutualsThe Business Council of Cooperatives & Mutuals (BCCM) issued a White Paper in August 2014, Public Service Mutuals: A third way for delivering public services in Australia.

The Paper came with a ringing endorsement from Kevin Andrews MP, Minister for Social Services:

‘This White Paper calls for Australia now to create an expanded role for the cooperatives and mutuals in delivering our public services. Through this White Paper, the …(BCCM) is bringing the term Public Service Mutual into the Australian lexicon. It’s a change in language and a development approach that this Government applauds. Rather than a cumbersome ‘top-down’ Government-knows-best approach, this government believes in ‘bottom-up’ grass-roots enterprise. We believe in adroit for-purpose organisations and social enterprises that can adapt to changing circumstances and evolving needs. No group of Australian organisations better embodies these principles than the co-operative and mutual sector.’

The areas for public service delivery to which the Minister refers – nominating the UK Government’s list of policy concerns – are ‘the broad range of public needs in the areas of health, human services, housing, disability, justice, and emergency services.’

He notes that ‘This same “bottom-up” principle is also the motivating force behind our decision to set up a National Centre for Excellence for Civil Society. The Centre will support the wide range of organisations that make up civil society – regardless of size, type, or mission.’

In several places throughout the White Paper, the writers make reference to broader financial considerations in the Australian economy:

The context for delivering public services in Australia is fundamentally changing, and radical reform will be required to address the immediate and emerging challenges. Budget and wider fiscal challenges mean the role of government in funding and delivering public services is no longer a given. The outsourcing of public services… (9)

The Minister’s comments might seem to make room for a wide scope of activities for co-operatives and mutuals, including room to carry on what would normally be called ‘business’ and that, of course, means competitive activities.

But do his comments envisage such activities? Isn’t all we can expect for an enhanced mutuals and co-operatives presence from the Minister’s endorsement of the White Paper that they be substitutes for public service delivery?

It seems fairly clear that the public services the Minister has in mind in his Foreword are those normally considered the province of governments, and that he would limit the community’s role (rather than government budgets) to being the principal source of funding and personnel for the delivery of those services. So this would be a win-win for Government in not having to deliver a range of services, and not having to finance them, except perhaps in some supplementary ways. The Prime Minister and the Treasurer will be pleased!

Looking a bit deeper into the ideology of all this: The pre-election 2013 pronouncement of Rupert Murdoch, on whom the then Opposition and business leaders heaped great praise, was to the effect that the market is not only the most efficient but the most moral of systems.

This too does seem to be the ruling inspiration for the current Coalition Government as it daily works out its own ideology of the public sector. Am I wrong? I doubt it. In October, the Treasurer asked Murdoch to address a private dinner of the G20 annual meeting of finance ministers in Washington.

In detail, what might the Government’s ideology of the public sector be? Naomi Klein has presented her view on the global impetus of contemporary capitalism as having three policy pillars. In her most recent book, This Changes Everything: Capitalism vs the Climate, Klein describes those three pillars as privatisation of the public sphere, deregulation of the corporate sector, and reduced corporate taxes, funded by cuts to public spending.

The rhetoric and actions of our Government today are pretty clear. Egged on principally and with great persistence by News Corp media, it does seem that Klein’s three pillars correctly describe the Government’s ruling ideology. She also associates this ideology with ‘various forms of magical thinking’, comprised of the market, philanthropic billionaires, and technological wizards. Sound familiar here in Australia?

Just in one area of policy, for example, it’s no secret that the current Government has muted its interest in the area of climate change – and encompassed its excuse for playing-down global warming issues by referring to its overriding economic agenda adopting all three pillars and making very clear its disdain for climate activists who raise their concerns about the business of coal sales above fears for the planet. Many Government leaders have expressed deep-seated scepticism towards global warming science.

Supposing, then, that the co-operatives and mutuals were to incorporate their local community ethos within what is commonly referred to as ‘The New Economy Movement’. This usually starts with the notion that there are ecological limits to endless economic growth. In the words of Eric Zencey in his article The New Economy versus today’s Flat Earthers in The Daly [sic] News of 18 October 2014, ‘a relocalisation and reduction in the scale of economic activity that will bring production into better relation with workers, customers, neighbours, and the planet.’

What sort of endorsement from the Minister would co-operatives and mutuals receive were they to follow this broad ethos? A specific question: In the face of the White Paper’s thrust, and what Minister Andrews has been prepared to support, what of other bottom-up initiatives, those outside the normal range of the so-called ‘public service’ listed above from the UK?

Say, for example, communities wanted to set up cooperative renewable energy schemes to challenge the big coal agenda of the Government and seek to establish a local or regional electricity grid service?

Again, as local communities organise around efforts to deal with and plan for serious disaster scenarios – for example, flooding, fire, drying out of food-productive lands – will the Government be just as happy to sing the praises of local community cooperatives and mutuals, providing them with financial and administrative help as necessary for action to prepare early mitigation work?

Or will the Government draw away from offering any support on the basis of ‘that’s not what we had in mind for ‘public service mutuals’, and hardly fits within the broader Government’s hands-off rhetoric on facing up to global warming?

Finally, what reaction would be expressed by the Government to the strongly social, often religious, inspired initiatives to organise and carry on local business activities, operating clearly in opposition to consumer and producer services of the market?

The literature is large, and I would refer anyone interested to one among many texts, Donal Dorr’s scholarly Option for the Poor, And for the Earth – Catholic Social Teaching (2012), which gives a full and not uncritical description of Church teaching, and includes some perceptive analyses of practical issues for today’s global economy.

Len Puglisi is an urban environmental writer and former planner with State and local government bodies. His article, ‘10 checkpoints for urban planning in an age of disruption’ appeared on the SPC website in May 2014.

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