Public Views on Privatising Social Policy

Louise Humpage

There has been increasing privatisation of New Zealand’s social policy sector since the National government was elected in 2008. Social bonds will see private investors fund not-for-profit organisations to deliver services, with bonuses paid to investors if agreed outcome results are achieved. Social housing reforms encourage community housing providers to own and administer housing for the poor and vulnerable. Prisons are run by multinational conglomerates and charter schools are administered by private companies.

There is little evidence, however, that the New Zealand public supports this radical reorientation of social policy. In my recently published book, Policy change, public attitude and social citizenship: Does neoliberalism matter? (Policy Press, 2015) I provide evidence that New Zealand attitudes towards the role of government have not changed as much as we might expect, given the significant policy changes the country has witnessed since the 1980s. Using both New Zealand Election Study data (a large-N survey conducted each election cycle since 1990) and qualitative interview and focus group data, I found that although there have been some shifts as to what ‘social contract’ exists between the state and its citizens, New Zealand views still reflected “a contract that is quite full and substantive, not rather empty and minimalist” (Dean and Melrose, 1999: 129), with strong expectations of the state remaining.

In particular, a clear majority of New Zealanders still supported government taking responsibility for ensuring access and affordability in health and education and they wanted more spending in these areas. They also saw a strong role for government in ensuring decent employment and wages, although they were less certain in the globalised 21st century as to how this might be achieved. Importantly, qualitative participants who expressed high levels of distrust in government were usually more likely to support the idea that government should take responsibility to ensure that everyone is provided for, confirming international evidence discussed that disenchantment with government services as a result of cutbacks, privatisation and user-pays increases, rather than diminishes, the expectations citizens have of government agencies and political representatives.

This is not to say that New Zealanders don’t believe in individual responsibility; they just think that individuals are responsibility for different kinds of activities (for example, caring for family was an individual role, while ensuring those in need have a financial safety net was the responsibility of government). They also discussed community and corporate responsibility, arguing there needed to be a balance between these for a society to function well. But they spoke of services being culturally-specific and of employers maintaining jobs in New Zealand; none of the research data suggest that New Zealanders support the radical privatisation in social policy being implemented by the National government. Nor was this privatisation part of an election mandate sought by National in other key areas, such as welfare reform.

The government might argue that privatisation was a critical election issue of 2011, when it made clear that it planned to partially-privatise key state-owned assets, like the Meridian, Genesis and Mighty River Power energy companies. But election study data over two decades indicate that support for government ownership of key public assets was at an all-time high in 2011. National may have convinced some voters by indicating it would fence-off funds gained from privatisation for future infrastructure investments, including hospitals and schools, although there was no clear indication to the public of the forms of privatisation now being trialled in social policy areas such as housing or mental health services. Yet political science research over many decades highlights that electoral decisions are complex and often shaped by external factors, such as the economy. Analysis thus far suggests many people voted for National while still opposing partial-privatisation, no matter what the government likes to think.

Indeed, although citizens appear to have internalised and come to support many of the neoliberal values that have dominated government policy since the 1980s, my findings suggest that New Zealanders are no dupes. Nor are young people to be blamed, for although their support for the idea of social citizenship (a basic level of economic and social security, as institutionalised through government policies relating to employment, health, education and pensions) was weaker overall than that reported by young people in the 1990s, their support was still significant when it comes to fundamentals like health and education.

National knows this, which is why it ring-fenced some of the proceeds of partial-privatisation for social spending and made sure recessionary cuts did not adversely affect health, education and pensions. But it is now feeling confident enough to experiment with policies like social bonds that are largely untested internationally and will make it increasingly difficult to hold government accountable for both deliverables and outcomes. This creates a democratic deficit, because we don’t have elections every three years to vote for non-profit organisations or private companies.

Some may argue that ideas like ‘government responsibility’ are old-fashioned and no longer relevant given the significant social and economic changes we have seen over the past three decades. Some might even argue that such a concept is dangerous, potentially impinging upon individual freedom and choice. Yet Organisation of Economic Cooperation and Development (OECD) evidence repeatedly suggests that social wellbeing (as measured by inequality and poverty indicators, for instance) is far greater in countries like Sweden and Norway, where government still takes a strong lead and where government remains responsible for providing services and thus accountable for outcomes, than in New Zealand. Even of the three ‘liberal’ countries (New Zealand, the United Kingdom, Australia) I analysed in my book, it was clear that strong government responsibility (for instance, the commitment to reducing child poverty made in the United Kingdom, with increased spending on all children) in key policy areas was associated with better social outcomes. In contrast, in countries where greater privatisation is evident, outcomes are poorer. The United States is the favourite exemplar; not only is it well-known as ‘the land of the free’ but it routinely ranks poorly on international social indicators.

I challenge all New Zealanders to take responsibility for ensuring that government knows our views about these radical new experiments. If we as a collective support them, then let’s proceed (with caution and with well-designed evaluations in place to monitor outcomes). If we are worried – or perhaps just simply don’t understand – how contracting non-government organisations (many of whom were established to make a profit) can provide better outcomes for New Zealand, let’s tell the government exactly that – before it is too late.

Louise Humpage
About the author

Louise Humpage

Senior Lecturer - University of Auckland
Dr Louise Humpage is a Senior Lecturer in Sociology at the University of Auckland. She has written widely in the areas of public attitudes towards social citizenship, welfare reform, indigenous affairs policy and refugee policy and settlement. Her book Policy change, public attitude and social citizenship: Does neoliberalism matter? is available in hardcopy from Policy Press and is available as an e-book.