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Economy

The social compact between community and government remains strong

The social compact between community and government remains as strong as ever, CEDA Chief Executive, Melinda Cilento has told a CEDA audience.

Speaking in Melbourne, Ms Cilento released the Victorian results of CEDA’s Community pulse poll, including what issues mattered most to respondents in their personal lives.

“Five key things came up: reliable, low-cost basic health services, reliable low-cost essential services, access to stable affordable housing, affordable high quality chronic disease services, and reduced violence in homes and in their communities,” she said.

“People are telling us that high quality human services matter to them and they matter to them regardless of their age, and regardless of their income bracket.

“The community has clear expectations around the important role that government plays in providing the services that are very important to them in the context of their quality of life.

“From a policy perspective, the really big challenge is how do we meet these expectations that the community is telling us matter to them around service delivery, and how we do that in a way that also responds to the future pressures and challenges that we know are going to be facing so many of these services that matter so much to the wider community. 

“That is going to require innovation and it’s going to require considerable engagement with the community. 

“There are also some really important disconnects I have to call out (including the) benefits of growth and how the wider community are perceiving that. 

“Productivity is going to be fundamental to boosting jobs, to boosting wages and to allowing people in certain organisations to deliver services more effectively and more cost effectively.

“There’s another disconnect because whether we like it or not, business is going to have to play a key role in driving productivity. But if you look at our survey all the things that are going to matter most to business to enable them to be productive, in terms of taxation and regulation, none of these things resonate at all as being at all important to the wider community. So how are we going to engage on those debates and conversations? 

“We are going to have to find ways of talking about how the benefits of growth are distributed. 

“I think the work that we did on inequality and the survey results we’re seeing here reminds us that people do focus greatly on the distribution of the benefits of growth and not just growth itself.

“At CEDA as we look to thinking about our own agenda, we’re going to have to focus very carefully on the issues that matter most to the community and how we can make those issues connect and connect in a way that the community believes will deliver benefits to them in the long run but also that will sustain a strong economy.

“If I think about government and public servants, I think the key take out is this: the community cares greatly about what you do and the services you deliver. These are very high on their scale in terms of what’s important to them, in terms of their quality of life and the pressures in delivering in these expectations are only going to grow..

“I think the focus is going to be on how these services are delivered, more effectively overtime and there’s going to have to be a greater focus on outcomes as distinct from what’s going in, and I think governments and the public sector are going to have to think about how they can collaborate and work differently with other sectors to make sure that the expectations of the community are met. 

“The key message for business is a pretty simple one: the role of business in the community, the role of business in the economy, and its importance does not connect to the community at all. 

“The issues that matter most to business do not matter to the community and the community does not think they have benefitted from the growth that has been driven by business over the last two decades.

“Business needs to respond to this and this is not just a PR exercise. Business models, business actions are going to have to change in a way which reflects community expectations.”

Also speaking at the event was CoHealth, Chief Executive Lyn Morgain, Victorian Department of Premier and Cabinet Deputy Secretary, Economic Policy and State Productivity, Simon Phemister and Infrastructure Victoria Chief Economic and Commercial Adviser, Catherine Rooney.

CoHealth, Chief Executive Lyn Morgain said social compact has eroded over time.

“This is a country historically where we have invested very heavily on social transfer of all kinds,” she said.

“Community expectation has been for a long time that there’s a whole range of other supports that are not visible in your income data, like you know, access to speech pathology for your child if they should need it, adequate and affordable housing for low-income families. 

“There’s a whole range of supports which we have ripped out of the system progressively over the last 15 years so when people say, ‘look it’s not easy out here’ in many respects they’re relating to that experience.”

In regard to reliable, low-cost basic health services, Ms Morgain said that health care services need a redesign. 

“The answer is not more hospitals; that is not going to help more families and households feel as if they are benefitting from this collective productivity or growth,” she said.

“What will, is a much better designed and developed primary care social support system that ensures that folks are able to access the additional kind of supports they need to, when they need to, in addition to their ongoing contribution as wage earners.

“I think the compact you spoke about has historically been one of that nature where people feel ‘I make a contribution and in turn, when the need arises there’s a system upon which I can draw’ – that system is in very real trouble.”

Infrastructure Victoria Chief Economic and Commercial Adviser, Catherine Rooney, said there was a challenge in the disconnect between reforms required and community expectation. 

“Infrastructure Victoria has been a fairly loud proponent of transport network pricing as a pretty big and important productivity enhancing reform that we think needs to be a priority for government,” she said.

“That sort of reform requires a burning platform for change, and the survey doesn’t really indicate that that’s there for us yet.

“It makes what is a difficult reform potentially even harder to the community if these issues are not front of mind.

“The focus on services rather than getting more out of what we’ve already got I think is going to be a continuing challenge as Victoria’s population grows over time.

“I felt education ranked pretty low (in the results) …given the role that human capital obviously plays in promoting growth, that is a concern potentially for policy makers and also the immigration story wasn’t a great one given the importance of population in driving growth. 

“There’s obviously not a strong sense in the community that education and immigration are key drivers of our economic prosperity.

“Population growth will drive some reform, some of which are currently unpopular.

“The momentum that growth will create will generate the burning platform hopefully because they’re unpopular reforms and they aren’t things that the community is going to accept easily, but getting some evidence on the table about trade-offs – (for example) time of day pricing for electricity, means cheaper household bills overtime.

“The trade-offs are not talked about but I think as growth and population continues to put pressure on the system now it will become easier to have those conversations.”

Victorian Department of Premier and Cabinet Deputy Secretary, Economic Policy and State Productivity, Simon Phemister also discussed the disconnect in messaging.

“Once upon a time…the policy class, the political class, and the business class would have said ‘look, people don’t really understand this stuff anyway, there are a lot of inherent contradictions in here, just move on, economic growth is going well, those statistics are amazing let’s move on with life’ – now we are seeing real consequences for these kind of responses,” he said.

“Globally we are seeing some things happen that were unthinkable five, six, seven years ago. But even closer to home we’re starting to see a reaction from the political class to these kinds of statistics. 

“We’re starting to see a lot more reregulation of industries. Who would have thought when apparently free trade and high end capitalism was delivering…we would be putting the brakes on and well, we are. 

“Maybe we are measuring the wrong things would be my initial reaction; but my other reaction is…we better listen because who wants to be part of a story of 30 years of sustained growth with this amount of disengagement or community disquiet or distrust.” 

Community pulse 2018: the economic disconnect

The research report featruing the national results of CEDA's poll can be read downloaded here.

Explore report data: Community pulse interactives

Explore our series of interactives released to coincide with the launch of CEDA's report, Community pulse 2018: the economic disconnect. Discover key insights and share your opinion
on Australia's record economic growth and the benefits to everyday Australians. 
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