Bill Shorten in front of Save Medicare banner

After what many commentators have described as one of the longest and most boring election campaigns in recent memory, Labor’s “Medicare privatisation” scare campaign of the last two weeks has suddenly been fixed upon as the key element in the outcome.

The Liberals have declared the campaign a lie, because there were no actual plans to privatise Medicare.

But other commentators have pointed out that reference to “privatisation” was a clever kind of dog-whistle by Labor, reminding voters of the Liberal’s historic antipathy to Medicare and record of subjecting it, over decades, to death by a thousand cuts.

Voters would also have had the news of the ACCC’s unconscionable and misleading conduct charges against the recently privatised Medibank Private as an example of how things could change for the worse.

But in fact, the “Medicare privatisation” campaign may have tapped into an even more potent vote-mover and one that will be a major challenge for whoever forms government.

[How to create your own ‘Mediscare’ text message]

This is the same sentiment that has contributed to the rise of Trump, Brexit and “ultra” parties of varies hues in many countries.

It is the breakdown of public confidence in the capacity of governments to deliver many basic services taken for granted over generations. Regardless of economic arguments, it shows a different but significant failure in policies variously described as privatisation, rationalisation, corporatisation or simply increased efficiency.

That failure, in essence, is a loss of public trust.

In Australia, the “trust” argument is usually made in terms of broken promises; but both state and federal governments are keenly aware that voters generally are suspicious of privatisation per se, no matter how compelling the economic arguments.

Australian citizens watched uneasily as the delivery of material services like transport, power, banking and communications were privatised, but then with even more growing discomfort as private providers moved to take over the delivery of human services.

So it is that Labor’s Medicare privatisation match also fell on flammable concerns around education, with mooted $100,000 degrees and massive and unchecked rorting and undermining of standards in vocational education and training, where it is now acknowledged more than $5.4 billion was wasted since 2013.

For older Australians, it fell on an additional $1.2 billion cut from aged care in the May budget, where the main concern expressed by the growing proportion of private providers in aged care was on the impact to share prices and capital raising capacity. Cuts to services to residents and to staff were the proposed natural redress. Those receiving community care are increasingly dealing with new faceless entities, often based in other towns or even states.

For anyone dependent on a government pension or payment, it fell on a promise of yet another crackdown on “welfare cheats”.

It also fell on a background of constantly reported malfeasance and betrayal of trust by bankers, financial advisers and corporate entities of every sort, feeding a growing suspicion of unchecked swindling.

Much public perception of private provision is that you pay more for a poorer standard of service, a perception that also carries a whiff of being ripped off, either directly or through a siphoning-away of taxpayers’ money in more deregulated systems.

This view is reflected in the strong support for Labor’s proposed royal commission into the banks and reports from focus groups and other forums of support for a proposal both parties avoided: the establishment of an independent federal commission to investigate corruption, waste and mismanagement.

While the Medicare privatisation scare campaign may have served as a lightning rod for these wider concerns, the challenge for whoever forms government once the dust settles will be finding a formula that can manage the privatisation genie without actually putting it back in the bottle.

Both sides of politics have, to a large extent and for many years in government, drunk the economic rationalist Kool-Aid, supporting the rundown of public provision and the public services that supported that provision. The belief peddled was that these were no longer needed as the “market” will be its own regulator, enabling informed buyers to avoid and weed out the shonks.

[Turnbull won’t ‘privatise’ Medicare, but he will destroy it]

As critics of this approach have pointed out, the “market” for health and education services does not consist of informed buyers. People want to be able to trust the base level quality of what is on offer and they rely on a higher level authority — the government — to provide that assurance.

A critical task for all governments will be to re-empower public services with the policies, capacities — and basic nous — to manage the multitude of privatised and outsourced services in a way that restores public trust in their provision. This will require regulators with teeth, legislation with outcome expectations and penalties for failure and a public service sufficiently skilled and in sufficient numbers to undertake the task.

Peter Fray

Get your first 12 weeks of Crikey for $12.

Without subscribers, Crikey can’t do what it does. Fortunately, our support base is growing.

Every day, Crikey aims to bring new and challenging insights into politics, business, national affairs, media and society. We lift up the rocks that other news media largely ignore. Without your support, more of those rocks – and the secrets beneath them — will remain lodged in the dirt.

Join today and get your first 12 weeks of Crikey for just $12.


Peter Fray
Editor-in-chief of Crikey