State governments may be paid millions from Federal gov to privatise hospitals, public housing 

The Baird government will seek multimillion-dollar reward payments from the Commonwealth for privatising social housing and public hospitals, NSW Treasurer Gladys Berejiklian has indicated.

A Productivity Commission draft report has identified six government services as suitable for national competition reform: social housing, public hospitals, palliative care, public dental services, remote Indigenous services and grant-based family and community services.
A fortnight ago the Baird government announced it would seek private operators to redevelop five regional public hospitals.

Ms Berejiklian this week introduced legislation to establish a $1.1 billion Social and Affordable Housing Fund, to be used to encourage private and not-for-profit organisations to supply 3000 additional social housing dwellings in exchange for a 25-year tenancy management contract with the Baird government.

Federal Treasurer Scott Morrison has flagged that the federal government is likely to make productivity payments to the states for the delivery of competition reforms, in a repeat of John Howard’s National Competition Policy that made incentive payments totalling $5.7 billion between 1998 and 2006 through a National Competition Council. 

The NSW government was paid $1.92 billion during this period. 

“NSW has previously stated that it is supportive of any competition reform that is in the interests of the state and we would welcome the introduction of competition payments,” said Ms Berejiklian. 

“We look forward to further discussion of these matters with the Commonwealth and other states.”

The NSW government’s submission to the Productivity Commission said that although governments may move away from providing services, government needs to retain “stewardship” and hold “ultimate responsibility” to improve outcomes for citizens and protect the vulnerable.

The NSW submission acknowledged Family and Community Services had bungled the major reform of outsourced homelessness services in 2012, which saw a community backlash as small women’s and children’s refuges had funding cut.

Homelessness NSW told the commission the Going Home, Staying Home reform had cut the number of shelter providers, and questioned how this can be seen as improving consumer choice.

 “Homelessness NSW has trouble understanding how consumer choice can operate in homeless services. The vast majority of people experiencing homelessness find it as a crisis in their life. Notions about consumer sovereignty when … a woman is escaping a life-threatening domestic violence situation or a teenager being kicked out of their home by a parent’s new partner could be seen as nonsense on stilts,” the submission said.

The Productivity Commission will release a final report in November.

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