In a recent address to Victorian Local Government managers, former Prime Minister Bob Hawke spoke about the need for Australia to be a competitive economy but, at the same time, a fair society. He said that, with the Asia Pacific region increasing its share of world GDP from 5% in 1960 to 25% by the 1990s, this was a race with no slow horses, every nation was going flat out and, if Australia was to prosper, there could be no room for complacency.
To make the most of this growth, Australia had to be more competitive both in terms of price and quality. Bob Hawke said this called for integrated action both on the domestic and international front. Removing national tariff barriers, deregulating the banks and freeing up intra regional trade through Asia Pacific Economic Cooperation (APEC) were just some of the reforms. Closely aligned with this was the introduction of National Competition Policy (NCP).
On the issue of economic rationalism, he said that if all decisions are made on the basis of the dollar being the bottom line then there is no doubt this will lead to social malaise. Yet, Bob Hawke rightly points out ‘at the same time, we do not want to be economic irrationalists, what we need is balance’.
He said it is the responsibility of governments to recognise that, through any change process, some groups may miss out and become alienated. As a nation, provision must be made for people who are adversely affected.
Competition, he asserts, is only in the best interests of the community if the benefits outweigh the costs. If a change is justified on the grounds of public good then there is a moral and social obligation for governments to look after those disadvantaged.
This need to balance economic and social implications has been found to be wanting on many fronts. Downsizing by both the public and private sector has seen services disappear along with many jobs. As governments pull out of areas the multiplier factor kicks in, particularly in regional areas, with services, businesses, jobs and people relocating.
The Australian Services Union (ASU) claims that, since 1993 under the Kennett Government, 40% of Local Government jobs in Victoria have been abolished. The ASU states that, as Councils are often the largest employers in regional areas, this outsourcing of employment has produced a rippling effect, seriously damaging local economies.
Even when Council inhouse teams have won tenders and kept their jobs this has, on occasion, come at the price of reduced working conditions and cuts to services.
However, following a recent Federal Court decision on the outsourcing of State Government health services, a case involving Local Government outsourcing has now been settled out of court resulting in the contractor agreeing to pay 40 former Local Government home care workers their previous wages and conditions (refer page 2). This means companies that have taken over Council operations may be forced to pay millions of dollars in back pay if a planned series of class actions by ASU is successful.
At Strathbogie Shire in North Central Victoria, population 9,400, Council took a different path. Instead of downsizing, it has increased its staff and local services (refer page 3). Rather than being a Budgetary burden, unlike other areas its rate base has not been greatly diminished by businesses, jobs and people leaving the area.
Providing more local services has created local jobs. This in turn has attracted additional services, brought greater stability and flow of income, thereby boosting economic development in the area.
On many fronts, Councils are taking a stand on behalf of their communities. In addition to sending a clear message to the other spheres of government about the excesses of hardline economic rationalism, Local Government needs to continue to be proactive, working with its community to ensure that there is always a balance between economic and social wellbeing.
