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For future generations the deal changes

By Kellie Tranter - posted Thursday, 19 March 2015

Scott Morrison was an interesting choice for Minister of Social Services. Immigration tested his fortitude under fire supporting hard line policies and he passed with flying colours. Now he'll revolutionize our social security system with the new user friendly persona he's already adopted, but by what means and to what ends? Given the Liberal Government's stated privatisation agenda and the working relationships Morrison had with multinational service giants like Serco and G4S as Minister for Border Protection & Immigration, is it only a matter of time before we see the same multinationals being contracted as service providers to implement the changes and profiting handsomely in the process?

It has been reported that 'Federal cabinet is considering a $1 billion plan to replace the 1980s-era Centrelink computer system amid warnings it has ­become an impediment to the sweeping welfare overhaul designed to ease pressure on the fastest-growing area of government spending.'

Coincidentally Ministers in the United Kingdom are looking at privatising the state pension as part of a drive to reduce costs. Capita, Serco and G4S are likely contenders to administer public money for millions of pensioners. The State for Work and Pensions department have been told they could save significant sums by contracting a private firm to issue 4.5million pension statements every year in the UK and abroad.


Is this something that is being considered here? One billion dollars is an astronomical price tag for a computer system. How has that figure been arrived at? Have tenders been called and quotes given, or is this another "competitive evaluation process"? Who will operate the new computer system or own the software, and what will that cost us?

Scott Morrison says he's looking after existing beneficiaries but has already flagged that "for future generations the deal changes". Does that involve accepting that resources will no longer be allocated or distributed according to social or moral objectives?

Certainly that appears to be the case in the United Kingdom which is rapidly dismantling social support systems of all kinds and heading back towards a pre-welfare state. And it's paying the privateers to do the ground work and the dirty work and diluting governmental responsibility.

In 2012-13, central and local government in the United Kingdom 'spent more than £4.3 billion and the Department for Work and Pensions (DWP) spent more than £467 million buying goods and services from Serco, G4S, Capita and Atos. These four major contractors provide a range of goods and services that procedurally and/or substantively affect the right to social security.'

It doesn't auger well for benefit recipients. Stopping people's benefits for between one week and six months after a perceived infringement has been eagerly suggested, or 'referred', to the Department of Work and Pensions by private companies to which the government sub-contracted running many of its welfare schemes. Those companies include Serco and G4S.

Late last year the UK Public Accounts Committee's report on the contracting out of public services found that 'the legitimate pursuit of profit does not justify the illegitimate failure to conduct the business in an ethical manner. A culture of revenue and profit driven performance incentives has too often been misaligned with the needs of the public who fund and depend on these services.' Furthermore that 'departments have taken their eye off the ball and placed too much trust in contractors and relied too much on the information contractors supply', and that 'Government must guard against quasi-monopoly suppliers becoming too important to fail...and open book accounting and published contracts should be the norm.'


In Daniel Edmiston's 2014 paper 'Social Security Privatisation in the UK: a means to whose end?' he observes:

'Whilst the privatisation of provision may be problematic for the right to social security, the ideological position that informs such a process may also be. By contracting out employment assistance and entitlement administration services, the state devolves part of their bureaucratic and political responsibility to contractors. To some extent, once a service is contracted out, the state is granted a level of democratic immunity from service failures. Contracting out then has the potential to procedurally affect the right to social security and limit the capacity for mechanistic and judicial redress.'

Setting the scene politically for social security cuts - as our government is doing now - also has a common foundation historically and internationally. In February Eric Kingson, a US co-author of Social Security Works! Why Social Security Isn't Going Broke and How Expanding It Will Help Us All', pointed out that it has been a "Republican strategy for decades to divide young from old with the express goal of weakening Social Security while claiming that by the time young folks are old enough to draw from the fund that they have paid into, the money will have run out because today's elderly are simply living too long and drawing too much money." He said that in the 1980s, "we were told that people like me, baby boomers, were being cheated by the old of the day. Today, we're told that younger people are being cheated by baby boomers."

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About the Author

Kellie Tranter is a lawyer and human rights activist. You can follow her on Twitter @KellieTranter

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