Taking competitive neutrality seriously: my challenge to the Productivity Commission

Since the Harper Review into competition policy we've been seeking to maximise competition and contracting out in government-funded human services delivery as if it was an end in itself. As I've argued elsewhere, contracting out should rather be one amongst many instruments for optimising the outcomes that governments must vouchsafe - in social policy, health, mental health, employment services, education and family support to name a few areas.

New principles of competitive neutrality

In short, what is being proposed here would:

• Use already existing institutions and infrastructure in such a way as to wrest greater productivity from them and efficiency for the economy.
• Achieve its objective simply by enabling government agencies to compete in the marketplace on their merits rather than by preventing or impeding competing private service providers.
• Involve no subsidies - though through the growth dividend it generated it could be expected to improve government budgets.
• Respect the important principle that government agencies' commercial dealings should be at arm's length from the government of the day.

Seeking to learn from the mistakes of the past - of the pre-reform and reform periods alike - policy-making 'on the merits' can begin, though it should not end with the presumption that, in the absence of compelling reasons to the contrary, competitive neutrality should be pursued not just as a shield but also as a sword.