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Monday, 26 June 1995
Page: 1778


Senator WOODLEY (6.38 p.m.) —The Competition Policy Reform Bill 1995 represents one of the greatest triumphs of economic rationalism over the basic needs of everyday people. It is a bill that the Australian Democrats oppose. The Democrats have continually spoken in the Senate about the dangers of trying to impose an economic model of competition on social and welfare services. This has been graphically illustrated by one of the ideas put forward to date by the Industry Commission. These ideas include the tendering and contracting out of welfare services and the introduction of benchmark measures across different welfare services.

  The Industry Commission's inquiry and draft report into welfare services has been widely criticised by many different service providers—groups that are at the forefront of trying to address the many real, everyday needs of people in the community. Similar criticisms can be applied to this legislation. The Democrats' concern with this bill is reflected across the wide range of community organisations, including the same groups that have expressed concern at the Industry Commission's approach.

  The Australian Council of Social Service, representing a wide range of service groups, has called for any reform of regulatory processes to enhance existing social and environmental protections. There is a real danger that this legislation will have the opposite effect. As ACOSS has said, there is still no clear statement of commitment to the principle of universal access at reasonable cost to all essential public utilities and social services. This means that it will be virtually impossible to address any reductions in community and social services which occur as a result of this legislation.

  Let me put on the record some comments which the Sydney City Mission has included in its submission in response to the Industry Commission's draft report on its inquiry into charities. The words that are written here apply very clearly not only to the report of the Industry Commission but also to competition policy in whatever guise it comes in terms of social and welfare services. The Sydney City Mission's response to the draft recommendations from the Industry Commission inquiry into charities was as follows:

Commonwealth and state/territory governments should develop a set of principles for the selection of service providers.

Applications should be called by open tender.

The Sydney City Mission comments:

The finding of the Draft Report that an open tender process is the best method by which to achieve efficiency and increased client outcomes needs to be questioned.

The tendering process leads to direct competition between agencies which may have adverse effects on the wider social/community services sector, acting against co-operation and integration. There is scant attention to a community planning process and no opportunity for input by consumers of the proposed services.

The opening up of all services to for-profit delivery (presuming "open tender" means open to all organisations including for profit organisations) could lead to a two-tiered system with those least able to pay relying on a residual welfare system. Whilst those who can afford to pay for services without hardship should do so, most community service users cannot pay market prices but should still have access to quality service provision as a matter of right.

The apparent assumption by the Commission that for-profit delivery of services is superior, lacks any basis in fact. It is likely rather to limit choices, reduce access and disadvantage clients. For-profit deliverers expect a return on capital. The motivation of the not-for-profits is the satisfaction of the customer and the provision of quality services that meet a community need.

Tendering agreements are generally for fixed periods. There is therefore the need at some point, to re-tender. The issues of the importance of continuity of relationships, the need for stability and the avoidance of unnecessary disruption have not been addressed. It is difficult enough now for a person in need to find their way through to the appropriate community service without increasing the difficulty of access through constant change.

Another concern which the Democrats have with the competition policy is its potential impact on rural Australia and rural industry. People in rural Australia have been bearing the burden of reduction in services and economic restructuring for many years.

  Let me tell honourable senators a story. In the 1970s there was on most road maps in Queensland a dot with the title of Roxborough Downs. It was a very large cattle station in western Queensland. As a Methodist minister in Cloncurry, I visited this cattle station on one occasion and it was a most eerie experience. I drove into the small community which consisted of a main homestead, a number of quarters for stockmen, a couple of cottages for married couples, a machinery shed, et cetera. In all, there were about a dozen substantial buildings.

  I found it eerie to wander into stockmen's quarters and see magazines on beds, to find in the main homestead dishes in the sink, account books strewed on a desk and even knives and forks in a bureau. As I wandered around I saw absolutely no people and no sign of any activity. What had happened was that some months before, Roxborough Downs had been bought by one of the large pastoral companies which, out of concern for economic efficiency, had removed all of the staff—a permanent community of some 20 or 30 people. For the sake of economic efficiency, the company totally replaced that permanent community with an occasional mustering of cattle for market and an even more occasional and casual care of that very large property.

   Are there not other values besides economic efficiency? Now that economic efficiency had removed that community, who would maintain the fencing? Who would eradicate the weeds and feral animals? Who was going to care properly for the stock? Who would be there to repair damage to degraded land? Who was going to maintain communities and people in rural areas when economic efficiency was ruling and overcoming all of these other values? Instead, in rural communities in Australia during the last 20 or 30 years we have seen a total exodus of people, resources and hope from the bush. I confidently predict that this bill, if passed, will accelerate that process. Whilst this story comes from 20 years ago, it is an indication of the possible outcomes when the doctrine of competition and economic efficiency is applied without concern for the social, environmental and cultural impacts.

   I have one other example of the potential impact on a specific rural industry. Mr Harry Bonanno from the Queensland Cane Growers Council said in a media statement that the national competition policy poses a serious threat to the continued export earning ability of the Queensland sugar industry. Mr Bonanno summed up the basic issue clearly when he said, `Despite the non-competitive nature of many industry functions, such as milling and marketing, it is not difficult to justify these arrangements on the basis of public benefit.' He warned that the national competition policy had the potential to cause severe disruption to Australia's sugar production, processing and marketing arrangements. He gave the worse case scenario in which the sugar industry would be divided and warned of the damage to its capacity to operate competitively on the corrupted world market.

  I do not need to remind the Senate that, despite the `level playing field' ideal promoted by the government and consistently supported by the coalition parties, the sugar industry is certainly not the only commodity where the world market is highly corrupt. Only market fundamentalists whose minds are made up and who do not want to be disturbed by what has happened in other countries which have gone down this road would espouse this madness. The Democrats will not support legislation that ignores the effects on people and the community, in pursuit of a mythical economic ideology .