Public service mutuals off the agenda

By Stephen Easton

Thursday March 24, 2016

The idea of public service mutuals looked to be ascendant in Canberra following a moment in the sun in 2014, but now appears to have fallen completely off the agenda.

A push to consider mutual organisations as potential providers of government funded services has failed to gain much momentum after government support quickly petered out, and the idea failed to make the cut for the final report of a recent Senate inquiry which considered it.

The co-ops sector is celebrating the findings of the extremely wide-ranging inquiry — its remit was to look at “the role, importance, and overall performance of cooperative, mutual and member-owned firms in the Australian economy” — but its members who wish to advocate public service mutuals will have to bide their time.

The inquiry originally intended to explore “comparisons between mutual ownership and private sale of publicly held assets and services” but the committee decided witnesses provided insufficient evidence in its hearings for it to report against this term of reference.

Riding the wave from the International Year of Co-operatives in 2012, the sector’s biggest players had formed a new peak body, the Business Council of Co-operatives and Mutuals. It launched a glossy white paper in 2014 focused specifically on the potential for mutually owned organisations — which involve elements of employee or consumer ownership — to take on public service delivery roles.

With its biggest players like NRMA and Australian Unity behind the push and support from then social services minister, Kevin Andrews, who launched the paper, it seemed that public service mutuals might become a new feature of the public sector in Australia. But then a reshuffle sent Andrews to the backbench and his successor, Scott Morrison, was less interested in PSMs.

PSMs did feature in the inquiry, with public service unions putting up strong resistance to the concept, at least in the way the term “public service mutual” has been applied in the United Kingdom, especially under recent coalition and Conservative Party governments.

The unions argued the term was misused in the UK and resulted in poor outcomes for employees and the public, claiming that some of the most widely promoted success stories were, in fact, political propaganda.

The BCCM agreed with much of what the unions argued and said it was unfortunate that some organisations were incorrectly described as PSMs by the UK government, damaging the sector’s “brand”. In line with its calls for “a level playing field” with other businesses, it maintains that governments should consider co-ops and mutuals alongside other organisations as potential service providers.

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