Private provision is a public menace

Ben Spies-Butcher presents a persuasive case that the increased weight of private provision of “superior goods” of health, education and retirement incomes, along with housing, is overall costly and damaging. More public provision in these areas is socially beneficial, and less costly as well as being better for low income people. His critique describes the government decisions that have driven this shift, and their effects, without looking at the reasons why governments have pursued a set of policies which can only be considered irrational on the basis of the evidence in the article. Ben S-B does however point out that this policy approach invariably favours the most well-off, both as consumers of the services in question, and in making profits out of their provision.

The issues that Ben S-B leaves me pondering are:
1. Since this policy shift has been so detrimental and irrational considering the interests of the majority in a democracy, why is there not a more coherent and vocal challenge to this policy?
2. Funding public provision – most of the revenue is raised federally, as are most of the tax rules, policies etc which favour private provision. Most of the responsibility for public provision (except for retirement incomes) is state. So even IF a state government wanted to return to favouring public provision over private, it could not reallocate the funding to enable this to happen. Just read the public hearing into NSW Education and Training estimates, and the savings that the NSW Government is demanding from teachers to get an idea of the budget challenges to public education.
3. How can the advocates of public provision come together with people who would most benefit from an increase in the weight of public provision, to develop demands to achieve it?
4. What are the reservations people have about public provision, and how can they be addressed? I think that one legitimate reservation is the difficulty of having complaints addressed and problems solved in a bureaucratic public system. Accountability is as important an issue as funding.
Now the “market” is clearly failing as a system for managing production, maybe now is a good time to get people thinking more about the ideas raised in Ben Spies Butcher’s article – “restocking the economic toolkit”.


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