As our voluntary sector vanishes, we mustn’t just wave it goodbye

The ideology of the market struggles with the society-focused work of community volunteers. AAP/Julian Smith

Some community welfare sector commentators point to a new order for welfare where the private sector practises social responsibility, states seek to be more entrepreneurial and voluntary community organisations become more business-like.

In this new world, it is said, it makes no sense to single out one sector as the “community” sector. Rather we should look for a “community” distributed across ensembles of hybrid agencies.

Two decades of government inquiry, from Fred Hilmer’s 1993 National Competition Policy Review to Peter Shergold’s 2013 Service Sector Reform “roadmap” for the Victorian government, has encouraged this kind of thinking. Such inquiries have focused on the efficiency of community organisations as economic agents in a quasi-market economy.

In this regime not only is your mission as a voluntary sector organisation irrelevant but, as Brotherhood of St Laurence executive director Tony Nicholson noted recently, your practice risks ending up indistinguishable from private sector providers.

In this environment the overarching challenge for the voluntary sector is to reclaim its “reason for being” and, with that, what ought to be its distinctive welfare value-add. This essential starting point of sector renewal will not happen if discussion of the role of the sector continues to be delegated to commissions of economists in the Hilmer-Shergold mould who have no capacity to address these fundamental social and political questions.

What kind of society do we want?

The process must begin with voluntary organisations articulating their aspirations for the kind of society they want and their distinctive role within it.

It is possible to observe an Australian approach to the voluntary sector. This has embraced both conservative faith-based traditions and secular social movements. Most organisations today are rooted in this history.

Since the 19th century, Australia has evolved a distinctive pattern of state-led development. Government took the major role in building infrastructure, fostering industry and job creation. After the Second World War, the welfare state prescribed a new partnership between the voluntary sector and the state.

This led to a massive increase in government-supported organisations: 84% of Australian community sector organisations operating in 1990 were formed after 1960. By the end of the 1980s the sector was thought of as “an industry” increasingly involved in delivering services for government.

In the latter 1980s and 1990s, the adoption of economic rationalism led to the end of the full employment regime and a radical curtailment of the positive role of the state in the economy. The implications for social policy and the voluntary sector of this switch from a managed to a free-market economy are still being worked out.

At first it looked like business as usual for the voluntary sector. While Labor governments of the period embraced market-oriented economic reforms, they also maintained a commitment to “social justice” and the apparatus of the welfare state/voluntary sector.

The Howard government’s “social conservatism” also proved more pro-welfare state than the strict tenets of economic rationalism would have allowed, while the subsequent Labor governments showed serious intent to re-invent a positive role for government within a “social investment” rather than a “welfare” state.

Falling captive to commerce

Treasurer Joe Hockey sees community services as a commercial proposition. AAP/Nikki Short

The Abbott government’s first budget reveals a “small government” agenda quite unlike its Labor and conservative predecessors. Treasurer Joe Hockey has said bluntly that “commercial” not social or political considerations need to be at the heart of the service system.

Shergold’s roadmap for the Victorian government can be seen as emblematic of the dangers confronting the voluntary sector. In his view, the “community sector” should be more businesslike and entrepreneurial. “For profits” are included alongside “not for profits” in a sector he calls a “public economy”, which seems little more than a market in contracted government service provision.

Nationally, the Competition Policy Review Issues Paper (2014), “Hilmer Mark 2”, declares its intent to look at the “unfinished business” of competition policy reform. It suggests that a growing marketisation of social services might be accelerated through expanding the roles of not-for-profit and for-profit providers.

Voluntary agencies will reconstruct themselves into “rival businesses”:

Competition is the process by which rival businesses strive to maximise their profits by developing and offering desirable goods and services to consumers on the most favourable terms.

This framework seeks to dispense as far as possible with the role of government as provider of social services on the basis of citizenship entitlements. Promoted in its place are privatised services in a market economy on the basis of “user pays”.

The latter regime does not recognise a 200-year tradition of government and community sector acting either to tackle market failures or reduce the excessive inequality generated by the market. The voluntary sector becomes just another rival “business”.

The potential dangers of this approach need to be heeded by all those in the sector with a concern for the future of volunteerism in Australia.

Our history shows that the voluntary sector has always been a vital third party in the make-up of our economy and society. It also shows the role has never been static: volunteerism in church communities before the Second World War was very different to that of the 1970s. Today, if it is neither a quasi-government agency managed by contract nor a “rival business” ruled by laws of competition, then what is it?

Here our history shows how much the role of the sector is bound up with dreams of a better world, be it overcoming the acquisitive society in a life of Christian fellowship or the more secular pursuit of equality for all citizens. Sector renewal must begin with revisiting the dream.

The alternative vision, a private world of “human services” in which each customer will get only what they can pay for and no more, rests on rebalancing the roles of the government, not-for-profit and private sectors.

Here the historical contrast between the welfare state and market economy scenarios is striking. In the former, the sector operates from a mission of social reform: it advocates for change through research and community education; it enlists volunteers in the building of a better society; it is especially concerned for groups at the margins of the market. In the latter, the “mission” is subordinate to the imperatives of competition shaping “rival business” practice.

Let evidence of history shape the future

As well as the substance of sector renewal, it is equally important to put in place an appropriate process of deliberation. The voluntary sector cannot afford to allow this process to continue to be overseen by economic agencies.

We should be outraged by the seemingly wilful ignorance of history and social sciences that allowed the Treasury authors of Hilmer Mark II to dream up their child-like constructions of society and polity in terms of a market. I say wilful because a huge literature already exists on the failures of competitive tendering to live up to the promises of Hilmer Mark I.

More generally, where would you find experts in health and education – outside a few ideologically driven minorities – arguing for the superiority of marketised education and health? The sheer ignorance of the classic accounts of the roles of government and voluntary sectors in the 19th and 20th centuries underlines the incapacity of economic agencies to undertake the review needed at this time of great threat to the voluntary sector.

The sector must initiate a process overseen by itself and informed by appropriate multidisciplinary expertise – not excluding economists, of course – as well as the voices and experience of voluntary sector members.


This article is based on a paper delivered by Professor Smyth at the Brotherhood of St Laurence in Melbourne on August 14.

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