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The failure of the small government approach

Over the last several decades, the scope and influence of government has dwindled.

Assets have been sold, businesses privatised, services outsourced, public servants retrenched, funding cut, and deregulation pursued.

To what end?

We used to own the Commonwealth Bank and Medibank Private, giving us the ability to help determine interest rates and private health insurance premiums.

We used to own Telstra and the power generation and transmission grids, giving us control over prices and the crucial communication and energy networks.

We used to have a Public Works department to build and maintain the infrastructure we needed.

We used to have a Commonwealth employment service which actually hooked people up with jobs rather than imposing draconian compliance regimes and fines.

We used to run the aged care, disability, and mental health service sectors. Making them for-profit businesses has led to some terrible outcomes for clients.

We used to own our air and seaports and our railways. Now, foreign companies set prices and enjoy the profits.

We used to value the expertise and independent advice from an experienced public service. Now, departmental advice is regularly ignored by Ministers without explanation, and private consultants are engaged to produce reports with a desired outcome – or we just let the lobbyists like the Minerals and Property Councils and the gambling and hotel industry write scripts for the government.

When NSW Premier Gladys Berejiklian said “we allowed the building industry to self-regulate and it hasn’t worked”, she was congratulated for her frankness when she should have been castigated for her naivety and her abrogation of duty.

When you let the market rule, maximising profit becomes the only consideration.

Our regulators have become too timid, lacking the expertise, will, or funding to enforce regulations. Occasionally fines are handed out for transgressions but prosecutions are rare and jail time for company directors basically unheard of.

The government is so keen to attract investment that they are willing to offer tax concessions and royalty holidays and approvals based on promises rather than plans.

It’s all about the jobs, the government says. But what sort of jobs? The government itself could be making investments and providing services, creating secure employment where workers’ entitlements are protected and results are open to scrutiny.

The role of unions in protecting workers’ rights has been deliberately and systematically undermined.

Taxes for wealthy people and businesses have been coming down for years but this has not trickled down to lifting the lower end out of poverty.

Privatisation hasn’t resulted in lower prices. Outsourcing hasn’t resulted in better services.

Deregulation hasn’t shown businesses stepping up to fulfil their part of the social contract in return for making things easier for them. They have done what they can get away with at every turn. Very similar to the politicians’ response when they are caught spending public money on themselves.

Ethical businesses falling over themselves to provide the best product or service for the lowest price with the best interests of their employees, the community, and the environment uppermost in their decisions is a myth that small government proponents wish was true.

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  1. Jack Cade

    And just about all the privatised services are shit.

  2. Phil

    This burst reminds me of when Medibank first came on service. The AMA went ballistic. Socialised medicine it was going to be the end of medical system as we knew it. Oh yes who could forget the Doctors who got prosecuted for fiddling it in the first few months it came on stream, how many more came under the attention of the authorities. Over servicing is still a big problem and eating up the system.

    Privatisation was never about improving the service it was always about letting the friends of the Liberal party and the Liberal party itself make a motza c/o the tax payer. They have their fingers in every corrupt pie being cooked up. There should be a royal commission into the Liberal party going back to Menzies.

  3. Terence Mills

    The other day a nursing home for the elderly at the Gold Coast, Queensland had a walk-out of unpaid staff ; assets and furnishings were stripped ; bank accounts of the residents (inmates ?) were plundered and the Queensland state government had to step in and find alternative accommodation for the (70) residents some of whom were dementia sufferers.

    Evidently, there had been a dispute between the owner of the facility and the contractor over money : this was a for profit business which was also receiving substantial government funding. But the bottom line is that this is a money making enterprise and if they can’t turn a quid, morality goes out the window and the residents end up on the footpath..

    ‘In 2016, Federal Department of Health imposed sanctions on this facility for failure to ensure residents received appropriate clinical care, failure to ensure care recipients’ skin integrity was consistent with their general health, and failure to ensure adequate nutrition and hydration.
    In 2017, the Federal Health Department applied sanctions over management and regulatory compliance concerns at this facility.’

    Is it appropriate that we put private business enterpreneurs in charge of the care of our aged parents or is it a role for the community and our elected governments ?

  4. Kaye Lee

    Governments need to embed “wellbeing” into the heart of the public service, New Zealand Prime Minister Jacinda Ardern has told an audience in Melbourne.

    Ms Ardern provided an overview of sweeping changes to the nation’s public service during a speech titled “Why does good government matter” at a function hosted by Melbourne City Council and the Australia and New Zealand School of Government on Thursday night.

    Ms Ardern said her government this year delivered its first Wellbeing Budget, putting the wellness of New Zealanders front and centre.

    “We said not only ‘What will be most conducive to economic growth’ but also, more fundamentally: ‘What will do the most to improve the lives of New Zealanders’,” she said.

    That theme is now underpinning what is set to be the biggest shake-up of the nation’s public service in 30 years, Ms Ardern said.

    “We need to embed the idea of wellbeing in the heart of our public service – how it works, what it prioritises, who joins and leads it,” she said. “That is why earlier this year we announced that we would refocus the New Zealand public service to deliver enduring change, more strongly focused on improving the current and future wellbeing of all New Zealanders.”


    Adern for PM of Australasia!

  5. totaram

    Kaye Lee: You need to add that many of the privatised services are owned by foreign governments, who are creaming off the profits that should have gone to Australian federal and state governments and thence to our citizens. Now we are paying for services to citizens in other countries! An unintended form of Foreign Aid.

  6. Ross

    Yes Kaye the days of the far seeing competent politicians of our grandparent’s days are long gone, the public institutions they created to benefit the people are now only a distant memory for us old farts. The clarion call of efficiency and low cost was as you rightly say a myth. It was a crap call then and is crap today.
    But what to do, those of us who have been paying attention know the world is now run in the most part by clueless incompetent fourth rate f-ckwits. Australia being a stand out leader in the field of clueless incompetent fourth rate f-ckwits as a number of royal commissions to date has shown.
    The older generation took our eye off the ball, and now the younger generations will have to fix the total cock up we will leave them. Good luck to them, they will need it.
    To the next generation of young people I for one can only humbly apologise.

  7. pierre wilkinson

    one almost has to ask, just what does government do with our taxes these days?

  8. Terence Mills


    We have cute sounding legislation !

    Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019

  9. Patricia

    “Our regulators have become too timid, lacking the expertise, will, or funding to enforce regulations. ”

    The problem with the regulators is that they are infested with people from the business world, people who have worked with and played with those whom they are supposed to oversee.

    There will never be proper oversight and regulation of places like the banks, insurance and financial services industries when senior management and boards are filled with people who have come from the banking and financial services sector.

    Sort of like putting the foxes in charge of the hen house.

    It is no wonder nothing is ever done, very few fines, no prison time, and in the meantime the people who are hurt the most never get compensation while bankers etc are paid multi millions to continue to rip of the people who provide the wherewithal for their salary.

  10. Spindoctor

    Yes indeed Kaye, agree totally but how do we turn it around for equality, equity and fairness? How many businesses and corporations are sucking billions in taxpayer dollars to rort the system?, the big four money grubbing accountacy firms hired as consultants to supposedly regulate and administer banking and finance. the powerful miners and resources lobby groups that dictate guvmint policy. They all get to do it for another term because morons voted the IPA foxes back into control of the henhouse while the rest of us stay plucked, defanged, declawed, de-unionised, effectively powerless with even now independent and Murdick journalists threatened and silenced for upsetting the RWNJ cult faith fascist LNP. Vested powerful interests control this country and its going to take a massive societal uprising for scandinavian style socialism to reverse the grip, redirect the nation into a more caring, fair society. But the MSM and big money will fight to the death to prevent that happening.. What will it take to turn the nation around? How do we amass people power to force change for good to and by this guvmint, now and from now on, not in three years? Friends of ABC, GetUp? Whom?

  11. Matters Not

    There’s another dimension to this outsourcing that is often overlooked and that is the outsourcing of political responsibility. Take education (broadly defined to include administration) as an example. Once upon a time a shortage of teachers (in various forms) saw the Minister called to account. He/she was asked to explain why class X had one teacher for (let’s say) 35 students. With the rise of self-managed schools (various titles), the political heat transfers from the Minister to the school, usually the Principal. Obviously, when the shit hits the fan it’s the principal’s fault because they can’t manage the budget.

    Result is ministerial responsibility evaporates at the higher level and condenses at the local operation. It’s one of the downsides of a concept called subsidiarity – defined as:

    (in politics) the principle that a central authority should have a subsidiary function, performing only those tasks which cannot be performed at a more local level.

    And while subsidiarity has benefits, it’s the negatives that often bight. With political spin, it’s the politicians that usually win and at the expense of good public administration.

  12. Phil

    one almost has to ask, just what does government do with our taxes these days?

    A good percentage of it is spent on flying politicians all around the country and the world, putting them up in hotels at a couple of grand a night and in the case of some of them, paying for their piss ups at titty bars and other houses of ill repute. I mean we have to pay for their carnal lusts some of them wouldn’t get a root in a wood yard. Skiing holidays and other fact finding tours to exotic places studying the past culture of the South American Incas and sampling bananas in the West Indies is a favourite in the summer months. No doubt the tax payer picks up the tab for the smutter they wear and the strings of pearls that seem so popular on the females out and about representing the country. Of course it would all be funny if it wasn’t all true.

    The rest of our taxes are just fritted away on luxuries like hospitals, social welfare, the odd bridge and a few roads. I don’t count policing they have their own methods of extorting money from the tax payer.

  13. Matters Not


    what does government do with our taxes these days

    Leaving aside the fact that taxes once paid are no longer ours, West has a good article that compares the management performance of the LNP and Labor when it comes to government funds.

    Analysis of McKinsey & Co contracts administered by Labor and LNP governments over the last 12 years shows cost blow-outs in eight out of 23 Coalition contracts compared with Labor’s two. The Coalition’s superior economic management narrative is taking quite a battering lately.

    Nevertheless when fake narratives take hold, they are almost impossible to shift.

    McKinsey & Co: Libs trounce Labor in consultant spending blow-outs

    Just imagine we had a Royal Commission into the banking sector and the big 4 accounting firms (which advise government AND the private sector on tax avoidance etc) were not part of the Terms of Reference.

  14. Kaye Lee

    George Christensen made 28 trips, totalling 294 days or 42 weeks, between April 2014 and June last year to the Philippines. In 2016 and 2017, he spent more days in the Philippines than in Parliament.

    Christensen skipped nearly a third of the public hearings for the 2014 parliamentary inquiry into boosting economic and infrastructure development in the Top End while making some of his numerous visits to the south-east Asian nation – he missed eight public hearings – six of which were in Queensland – out of a total of 27 held by the Northern Australia committee, which was set up to look at how to develop the Top End.

    One of Mr Christensen’s political campaign slogans has been “Standing up for the North”.

    He won with a swing towards him.

    I rather like the idea of Jacinda Adern being PM for Southern Australasia – New Zealand, Victoria and NSW. Scott Morrison can be PM for Queensland and WA. Tasmania, SA and the territories can choose which camp they want to join.

  15. andy56

    i have said it before but nobody noticed.
    Capitalism works best with a strong government. Capitalism works best with lots of government assistance, not tax cuts.
    History does have quite a few examples and here are a few in my lifetime. The space race was a direct result of government intervention. Most of what we have now is due to this massive government investment. The rise of china was due to mass government intervention.
    Give me an example where small government has had such a major result.
    But hey, dont let mindless ideology that doesnt work get you elected.

  16. Phil

    ‘ One of Mr Christensen’s political campaign slogans has been “Standing up for the North”. ‘

    Indeed. Something was standing up, it was the point I think you’re making?

    We are mugs and they know it.

    I am in my dotage with to many medical problems, I probably wont see the end result of another three years of the Morrison circus. Their win may yet be a blessing in disguise, the depression coming or God forbid a war, will now be his problem. My fear is now for my own children and grandchildren, this keeps me awake at night. A lot of people are oblivious to the fact we are about to enter a period of uncertainty which will need the wisdom of a Solomon. Not CO-CO the clown.

  17. Matters Not


    He won with a swing towards him.

    Yes! Perhaps it’s because the electors of Dawson thought the alternative would be worse. As did the electors of Dixon, Petrie et al. One side was promising more of the same – the other was advancing a significant downside. But probably not the next time around. An unlosable election that was lost because of political incompetence.


    The space race was a direct result of government intervention.

    Indeed – the advances in so many of the sciences was unprecedented. On a less sanguine note, government spending in the Iraq war also saw tremendous advances in trauma medicine.

  18. wam

    the clp giles sold the port of darwin to the chinese for about $5m a year. They will probable on sel and make a huge profit whilst sitting on the land given for a hotel. In the meanwhile the question has been we know the ex-workers will no longer spend their wages in Australia but wtf has happened to the sale money? It just seems the selling is the point whilst the cost and sale price is irrelevant.
    I have not noticed any benefit from the sales??
    The idea of schooling, health and welfare for profit is sick.
    A public servant explained how the privatisation of electricity was going to work in darwin.
    business A paid a million for power delivered through public lines. The private power company would bu the power for $500k and sold it to company A for $750k delivered through the same public lines.
    Perfect privatisation???

  19. Matters Not

    wam, given your figures, Company A will be over the metaphorical moon – seemingly being better off by $250 000.

    Who says privatisation doesn’t work?

  20. totaram

    andy56: Please read the small book by Ha Joon Chang of Cambridge Uni (I had to put that in or you mightn’t even bother, given his name ) It is freely available as a pdf at:

    Almost every “thing” he tells you (with evidence) will convince you that neoliberalism is a shit-load of lies.

    Start with Thing 1: There is no such thing as a free market.

    and go on from there.

  21. Florence Howarth

    Howard, now this mob make much of mutual obligation but it is a one-way obligation between those who are unlucky to need government assistance such a pensioner or the dole to survive.

    Why isn’t a mutual obligation between workers & employers, industry & the community, buyers & sellers just as important.

    We hear nothing of the most important mutual obligation of all. That between the voters & those they elected.

    Morrison is very clear that he doesn’t mean the wealthy have any obligations to the poor when he said he doesn’t believe the wealthy should pay more so others have a better life. No mutual obligation there.

  22. Carol Taylor

    That is an astute observation, and one that I’ve not seen expressed before – that in privatising and outsourcing that a government disempowers itself in the process. I suspect that this is where we are now, that no one actually knows who ‘owns’ Australia…and it’s feeling less and less as if it’s us.

  23. Lambert Simnel

    The last forty years have only eve been about the dismantling of a civil society, driven by the neoliberal fear of displacement.

    All the vandalism and looting, from the same peasant mentality that killed the goose that laid the golden egg, in effect sawing off the branch whilst sitting on the far side to the tree.

  24. andy56

    totaram, i dont need to read to understand the ideological fallacies at the heart of capitalism. But as with all isms, assumptions are made of human behaviour that seem fine on their own but prove worthless when in a crowd. (yes i did read it but its just a grab bag of statements)

    It just seems so friggin obvious that a strong government driving innovation and working for the people makes capitalism work. Small government and balancing ” the books” just doesnt cut it. Even the Romans learned that 1500yrs ago. It just makes capitalism a self eating cannibal. Unaffordable housing and wages stagnation are symptoms of a sick system. The rich will keep getting richer till we off their heads.

    Now this is where my statement falls short, we have shit government. and while the australian electorate keeps voting for corrupt simpletons , we will go nowhere. The brain surgeons Abbott and Turnbull gave us fraudband remember.
    When australia is finally recognised as a banana republic, the story will be..” could have, should have, but didnt”

    Carol Taylor, where you been? Myself and others have been warning for the last 40yrs. People were too shit stupid trying to make money to even notice?

    Lambert, thats exactly how i would describe the situation.

    So much for history and science at school, what a waste that was on a large proportion of the population. Australia’s number will be up soon, but will it be too late to turn the ship around?

  25. Keitha Granville

    Why do we still have a Public Service? Governments have been using consultant for so long now for everything, the PS is obsolete.

    I reckon Ministers should have to pay for any consultants they use when there is a perfectly well educated and clever department who can do the same work.

    Relief teaching is another rort. SO many retired teachers I know get re-employed at a cost of more than $400 per day to fill in for teachers on leave for one reason or another. How about employing a whole bunch of teachers who aren’t retired but who don’t have full time positions ?

    The system is all biased towards those who HAVE, they GET everything.

  26. Winston

    Modern Capitalism is owned and run by a rich mans mafia.

  27. John L

    Kaye Lee……Morrison PM of Queensland and WA? When did WA get included in this nightmare? I thought we didn’t actually exist – especially in respect to national politics. We are never mentioned, or, only as an after thought….but please…..don’t bundle us in with Queensland……even we don’t deserve that…..

  28. Zathras

    It seems that many politicians are only there to help their financial sponsors continue to plunder the public asset vault and continue the transfer of public wealth into private hands, and as quickly as possible.

    With the sale of many assets now the only source of revenue available to the government is taxation and the burden is not fairly or equally shared. When private businesses fail they often turn to the taxpayer to be bailed out – privatise profits and socialise losses.

    Some of use are old enough to remember the days and the inherent value of of public ownership and what has been stolen from the current generation but soon it will be assumed by all that it was always like this and they will continue to vote against their own best interests.

    All politicians need to do is to know what buttons to press to get the voters to fight amongst themselves rather than challenge the government.There’s a cartoon that shows a castle under seige by disgruntled peasants carrying flaming torches or pitchforks. The frightened King asked his advisor for a solution and it was to “tell the people with torches that the pitchfork carriers wanted to take their torches away”. Works every time.

  29. Kaye Lee

    I apologise John L. Lumbering anyone with Morrison as a leader is cruel and unfair. It’s just that Queensland and WA are the ONLY two states that voted in more Coalition members than Labor.

  30. Arthur Tarry

    Kaye Lee says – ‘George Christensen made 28 trips, totalling 294 days or 42 weeks, between April 2014 and June last year to the Philippines. In 2016 and 2017, he spent more days in the Philippines than in Parliament…’

    Yet he won his seat at the last election with a vastly increased majority.

    He comes back, occasionally, says something outrageous to get attention, then buzzes off again. A strategy that obviously works.

    Says it all about some Qld. voters and, indeed, about many Australian voters. They are either unaware or just don’t care, take your pick.

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