29 April 2016
Media Release - #2016051, 2016

Productivity Commission inquiry into introducing competition and informed user choice into human services

The Turnbull Government has released the terms of reference for the Productivity Commission’s inquiry into introducing competition and informed user choice into human services.

The Australian Government is committed to working in partnership with State and Territory Governments and non-government service providers to ensure that all Australians can access timely, affordable and high quality human services, which are appropriate to their needs, and are delivered in a cost-effective manner. All State and Territory Treasurers were consulted on the terms of reference.

By commissioning this inquiry, the Government is meeting a commitment made in its response to the 2015 Harper Competition Policy Review, released on 24 November 2015. The Harper Review, released on 31 March 2015, recommended that each Australian government should adopt choice and competition principles in the domain of human services.

The human services sector plays a vital role in the wellbeing of the Australian population and covers a diverse range of services, including health, education and community services.  Australia’s human services sector is facing significant challenges, including increasing demand for services due to the ageing population, the effect of technology and cost increases associated with new and more complex service provision demands.

Finding innovative ways to improve the efficiency and cost effectiveness of the human services sector, and to target services to those most in need, will help ensure that high quality service provision is affordable for all Australians and leads to improved outcomes for individuals and the economy.

While governments have made progress in introducing competition, contestability and user choice to human services provision, the efficiency and effectiveness of the delivery of services within the sector varies significantly between jurisdictions. Service delivery frameworks in the human services sector that are inefficient and/or ineffective can result in significant costs to the economy and individuals, including poorer outcomes and reduced productivity.

The Productivity Commission is to undertake the inquiry in two stages. The first stage will deliver an initial study report identifying services within the human services sector that are best suited to the introduction of greater competition, contestability and user choice. In the second stage, the Productivity Commission will undertake a more extensive examination and provide an inquiry report making recommendations on how to introduce greater competition, contestability and user choice to the services identified during the first stage.

The Productivity Commission is due to report to Government within 18 months.

Public consultation will be undertaken as part of the inquiry, more information and the terms of reference are available on the Productivity Commission's website.