Encourage innovation and value for money by facilitating greater competition in government-funded education, health and aged care services

We know that competition is great for consumers by putting downward pressure on costs and encouraging innovation among suppliers.

But for too long many important government services, including education, health and aged care, have been shielded from competition. This means that they are less responsive to the needs of consumers and often cost taxpayers more than they should.

Government services in education, health and aged care can be provided more efficiently and effectively by giving consumers more choice in how they are delivered. Outcomes are often better when human services are delivered by a quality mix of providers, whether they are private sector, not-for-profits or government business enterprises.

For that competition to best benefit consumers, there must be minimum standards of delivery, good regulation and compliance, and information delivered by experts that are incentivised to focus on consumer needs. Governments can also ensure that access is equitable, universally available and of adequate quality.

Human services are the fastest growing areas of public and private spending so it is vital that government gets the delivery right. Recommendation 2 of the Harper Review into competition is a good place to start as it states that each Australian government should adopt choice and competition principles in the domain of human services, and sets out important guiding principles for implementation.

“Much of the discourse over public services focuses on inputs rather than outputs. Cost reductions in the order of 20% to 25% are not unusual when services are first opened up to competition
Source: 2012 Sturgess, G, Diversity and Contestability in the Public Service Economy

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