Will the market be our servant or master?

We emerged as an independent nation after the constitutional conventions of the 1890s. The Constitution that emerged gave us a framework in which the market could be made the servant and not master of our national development.

Post-WW2 reconstruction was built off the back of hundreds of "town halls" and consultations. This established the infrastructure for a welfare state, committed to delivering full employment. Central to this was a growth in public services available to all funded from rising tax revenues.

The 1983 an economic summit launched a contradictory legacy. On the one hand it facilitated huge social achievements like Medicare. On the other it fostered the emergence of a market inspired model of governance that has now proved to be so damaging.

How can government and the activities it undertakes be improved following the September 2022 jobs and skills summit?

Already its first achievement has been to make ideas that were previously unspeakable (ie multi-employer bargaining and boosting TAFE) - serious options for public policy.

After the deep depression of the 1890s Australia devised two enduring, highly successful institutional innovations: industrial tribunals whose awards facilitated multi-employer bargaining and publicly funded technical education colleges.

These legacies have been run down over the last 40 years. The jobs and skills summit's proposals for sector-wide bargaining and the revitalisation of TAFE will provide practical ways of lifting skills, productivity and wages. The second big achievement concerns politics. No government can survive without the support of key players in society, especially within business.

The participants list reveals that the new ALP government is building a new social coalition around a notion of inclusive, sustainable growth.

Around half the participants were women. There was strong representation from Indigenous Australians. A host of NGOs were present. Along with unions a broad cross section of business was present. Thankfully, there was only a small presence from finance who have been dominant for too long.

Most promising of all was that the clean energy sector had equal billing with the powerful fossil fuels club. It is a coalition of the future - building on the best of, and not mindlessly clinging to, the past.

The critical issue, however, concerns the machinery of government. Quality public policy requires public servants who have the capacity to develop new practical ideas and the ability to implement them well. Building up public sector capability received little attention.

We need to move beyond the now dated 'new public management' with its mantras concerning 'steering not rowing' and 'contestability'.

It is now clear re-configuring public institutions in the market mould have not solved problems in areas as diverse as employment services, disability support, aged care, child-care, vocational education as well as energy generation and distribution.

Indeed, marketisation in these domains has deepened our problems. Profits are achieved by reducing service quality and skills shortages are endemic as market models are inherently poor generators of skills.

Lessons from the recent COVID crisis provide clear pointers to the way forward. Australia's vaccination rates were only lifted when deep governmental capacity was deployed.

Creating quality jobs and skills will require deepening the capability of public institutions to nurture a dynamic mixed economy.

It is vital the new ALP government builds on the positive legacies of Australia's responses to earlier crisis and learns the negative lessons of marketisation of public services.

If it does not, it risks repeating recent history.