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Calling for volunteers

July 22nd, 2003

In keeping with the idea of slow blogging I mentioned a while ago, I’m going to respond to this two-week old speech by Costello, although other bloggers have already covered at length (From this large set, I’ll link, more or less randomly, to Steve Edwards).

Anyway, Costello is talking about social policy and volunteering and I just wanted to emphasise the point that the application of New Public Management/neoliberalism to the voluntary sector, exemplified by competitive tendering programs like the Jobs Network, makes volunteering utterly pointless. The only effect is to save money for the government while delivering a predefined set of services. In most cases, volunteers would be better off working overtime and sending a cheque to the Treasury.

I developed this point at length last time Costello had a progressive spell and I think the intervening period has only strengthened my case. Here’s the conclusion:

The core of the social contract was that those willing to make contributions of time and money were able, to some extent, to influence the aims and outcomes of public policy, and the way in which public services were delivered. Broadly speaking, government took responsibility for the delivery of basic services, and the efforts of the voluntary sector played a major role in determining what additional services were provided.

As far as monetary contributions to charitable causes are concerned, this is still the case. Although there are plenty of issues regarding the specific design of tax expenditures to promote charitable contributions (why, for example, a deduction rather than a rebate), the basic point that such expenditures are desirable has been accepted even by the dry economists of the Productivity Commission. Moreover it is clear enough that, if governments seek excessively tight control over the direction of subsidies for charitable contributions, the result will be to reduce the amount people are willing to give.

Unfortunately, the same logic has not been applied to voluntary contributions of time and effort. Governments have withdrawn from their role as a provider of core services and have cut back the provision of grants to voluntary groups and non-government organisations. Instead, they have instituted a regime of competitive tendering. In this system, voluntary groups are invited to bid to provide core public services at a lower cost than competitors which may be either for-profit private businesses or commercialised government businesses.

In this competitive environment, the main advantage possessed by non-profit organisation is the availability of volunteers willing to work unpaid, and of idealistic employees willing to accept less-than-market wages. By harnessing this source of unpaid or underpaid labour, governments can reduce the cost of service delivery.

In the long run, however, this is killing the goose that lays the golden egg. As competitive pressures are tightened, the original goals of voluntary organisations are subordinated to the need to meet tender specifications at the lowest possible cost. In the end, it does not really matter whether the tender is won by a voluntary organisation or a profit-oriented firm – the services delivered are those specified in the contract.

All of this is fine from the viewpoint of governments reaping cost savings, but what about the volunteers? Their unpaid labour is being used, not to provide additional services to the community, but to enable the government to provide existing (or, more often, reduced) services more cheaply. The ultimate outcome is to finance tax cuts for those who have chosen, in line with the government’s real beliefs, to maximise their own market incomes.

From the viewpoint of volunteers, this makes no sense. Even supposing they felt impelled to improve the government’s bottom line, they would be better off working overtime in regular jobs and sending the extra pay straight to the Treasury.

In practice, people are not so rational, and the tradition of voluntary effort will be eroded only gradually, but the growth of self-seeking over the past decade or so is plain for all to see. Governments of both political persuasions have promoted self-interest as the engine of progress, and leading political figures on both sides have embodied it in their personal behavior. At this point, calling for volunteers is the last refuge of a scoundrel.

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  1. July 22nd, 2003 at 10:05 | #1

    Whilst calling for public service volunteers to subsidise tax cuts for private enterprisers is morally grotesque I am not sure that it spells the doom of the voluntarist civic tradition.
    THe US has always had the lowest income/expenditure tax rates of a major state in the OECD, yet it also has a thriving voluntary “social capitalist” sector.
    Civil society (church, school and sporting group) provision of community service is, and always has been, very strong in the US (cf de Toqueville).
    As has philanthropic private sector financing of these activities.
    What evidence is there that, over the past generation, the cuts to:
    – state provision of community services
    and the complementary
    – HVI income tax rates
    have caused the demoralisation and disintegration of the civic community sector in the US?
    My anecdotal impression is that it that the US’s local civic tradition is still pretty strong although it may have taken quite a few hits over the past generation, with the complementary ethnic balkanisation and class division of the US.

  2. July 22nd, 2003 at 13:11 | #2

    My impression is that Costello’s current obsession (?) with trust and tolerance is more about rebranding himself as a caring sharing alternative to the PM, without having to say anything of substance or, more to the point, challenge any Liberal Party orthodoxies. Notice how coy he was on Dame Thatcher’s “No such thing as society …” statement, remarking only that she was criticised, then finding a much more objectionable “left-wing” use of language (frequent references to this, that or the other community), and marking out a middle position which is indistinguishable from Maggie’s.

    On the whole, it’s a great demonstration of the fine art of saying nothing, while giving the impression of having something of great weight to say. Except perhaps for the remarks on Iraq. This one, in particular, is a classic:

    [Iraq] is a country that has no modern experience of tolerance of Sunni for Shia or Sunni for Kurd, no modern experience of competing political ideas, no modern experience of the ballot box. It is expecting a lot to think that these things will organically emerge with the removal of the Dictator. The fact that the Dictator could emerge in the first place, tells you that these values were not strongly and widely rooted. [Emphasis added]

    There’s a PH D in this somewhere, on the relationship between (for example) the poor performance of voluntary rural fire-brigades in Tsarist Russia and the rise of the Bolsheviks, or the collapse of Rotary Clubs in the Weimar Republic and the rise of the Third Reich.

  3. Homer Paxton
    July 22nd, 2003 at 13:36 | #3

    John,
    How many services contracted out are performed by volunteers.
    I profess I only know of job service activities and they are performed by salaried personnel.

    It seems to me the not for profit sector has become commercialised and have lost sight of their original objectives.
    In this I would include a lot of the ‘christian denominations’ welfare activities.
    Read an annual report these days and there is more management jargon than at a business school lecture!

  4. stephen
    July 22nd, 2003 at 18:15 | #4

    why do people volunteer? economists will contend that it is because they gain psychic income from the volunteer effort; ordinary people (yes, I imply that economists are abnormal, even though I am one) suggest that it is because they wnat to contribute to the welfare of their fellow human beings. Either way, the key point is that volunteers get their rewards from supplying a service that the market does not. In other words, asking volunteers to participate in a market competition for the provision of services for money is self-defeating: it runs counter to what prompts the volunteers to be there in the first place.

    In the short run, not for profits can provide services at a cheaper cost by exploiting their volunteers’ efforts, but the long run is self defeating: John is absolutely right on this.

    An interesting issue for Australia is the makeup of the not for profit sector: some of them have always had an eye to the profit bottom line. There are various religious organisations for example which have made a pretty penny out of land speculation (turning tax free church land into commercial developments), gambling, clubs and so forth. Thus there is no real problem in them employing staff to go after the job network dollar. The area of concern is the not for profits who really are not for profit.

    On the US comparison, really the story is entirely different. 95% of americans claim to be churchgoers; almost every workplace has an active United Way committee and fundraising efforts; philanthrophy is a well established social norm. What works in the USA won’t work in a country with a different culture.

    bottom line? I agree with John.

    stephen

  5. Jill Rush
    July 22nd, 2003 at 23:11 | #5

    I read an article the other day which had the proposition that the key to volunteering is that the volunteer decides where and when to spend their time and effort. (sorry don’t have the reference)

    In Peter Costello’s speech he specifically mentions the concept of Mutual Obligation which cuts across the idea of donation and the core ideas behind volunteering. By extending this principle to sole parents it shows that there is no appreciation of the work that many sole parents have performed in the community for years. Those who haven’t have usually had other issues to deal with (eg domestic violence, custody, somewhere to live etc). The enforcement of the mutual obligation principle also fails to recognise that sole parents are doing something for the community by looking after the next generation.

    In recent times we have seen volunteering affected by the GST which made people wonder why they would bake a cake, donate their time, ingredients and effort to pay tax to the government ie john’s point – just pay tax directly.

    Other volunteers have been turned off by the incredible bureaucracy surrounding government contracts and their inability to promise to deliver a service in the long term. Financial issues for voluntary organisations have become the most important issue rather than the delivery of services. There are all the frustrations many feel at the costs of insurance and the failure of government to find a long term solution.

    Peter Costello has no understanding of what creates social capital as if he did he would understand how his government’s policies have done so much damage to this aspect of society.

  6. Ken Parish
    July 23rd, 2003 at 08:08 | #6

    Homer Paxton’s comment identified the fallacy in this post. That is, to the extent that JQ has in mind the outsourcing of employment-finding services (and it’s the major example of shifting functions onto the charitable sector as far as I know), the job centre work is performed by salaried staff not charitable volunteers.

    Accordingly the phenomenon JQ posits (volunteers being discouraged because they’re merely working to save the government money) is unlikely to occur in any direct sense. It would only happen if charitable organisations like Salvation Army etc became so strongly focused on their money-making job centre activities that volunteers felt they were no longer contributing to an organisation whose aims were charitable. I don’t see any real sign of that happening, because I don’t think any of the charities have in fact abandoned or even reduced the emphasis they place on their traditional activities. To the extent that they do actually manage to make a buck out of services to the jobless, it might even enhance their charitable works by making additional money available. Presumably that’s why so many of them chose to tender for employment-finding services in the first place.

  7. James Farrell
    July 23rd, 2003 at 12:41 | #7

    Gummo’s conclusions go without saying, but he formulates them so nicely they are worth reading anyway. I think Ken has overstated his differences with John and I offer the hypothesis that they would both agree on the following.

    A government seeking to reduce its contribution and shift the taxpayer’s sacrifice to volunteers has at least these five options:

    (1) Sack state employees and directly use volunteer labour instead.

    (2) Abdicate responsibility for the services altogether and exhort charities to carry them out with no assistance.

    (3) As above, but give grants to some organisations, presumably those who appear most effective.

    (4) Retain responsibility for the services but contract them out to non-profit organisations to cut costs. This arrangement is similar to (3) except that the government has more influence over the nature of the services.

    (5) As above, except that the organisations are profit making.

    Option (1) doesn’t seem to be used in any overt way. Where the government uses volunteers directly, to fight bushfires or help run the Olympics, there is usually a popular consensus.

    Option (2) is bad because it involves a reduction in state provision of a public good, namely a decent society. Volunteers and donors will alleviate the problem, but free riding will dominate.

    Given the state’s decision to reduce its contribution, there is nothing prima facie sinister about options (3) and (4). It makes sense for government money to go to the most efficiently run organisations or those that attract the most volunteers (perhaps because the volunteers judge them effective). Such arrangements might also give the charities incentive to operate efficiently, but if the setup it too competitive it could induce them to waste resources and fudge figures in pursuit of dubious indicators. Volunteers would be discouraged by such a trend. But on the whole, what’s bad about (3) and (4) is what they have in common with (2).

    Course (5) is a self-evidently a way to kill volunteer spirit. People are much less likely volunteer when part of their effort merely serves to line a capitalist’s pocket.

  8. John
    July 23rd, 2003 at 22:08 | #8

    Ken’s comment relies on factual assumptions that are either questionable or mistaken
    (1) The Salvation Army’s employment service, Mission Employment is either a standalone operation or a profit centre for the Salvos. In fact, it’s part of Mission Australia, which states on its website “The backbone of many Mission Australia services and programs is an army of almost 1000 selfless volunteers. Volunteering opportunities come in many varied shapes and sizes.”.

    (2) Staff are getting market wages. Historically, paid staff have got less than market wages, effectively volunteering part of their time

    (3) Voluntary organisations are keen to tender for Job Network contracts. The Salvos are a notable exception, but most groups have been very reluctant about this, even though the Job Network replaced programs under which they had previously received funding.

    I don’t know how much contact you have with these groups, Ken, but Jill Rush’s comments reflect the kind of feedback I’m getting. There’s a very good book edited by Jeni Warburton, which I’ll try to give a proper citation for when I get back home.

  9. July 24th, 2003 at 09:18 | #9

    No one seems to have heeded my call for empirical evidence on the issue of the scale and scope of the civic voluntary sector, relative to alternative modes of community service provision.

    So I heeded it myself, as the blog geist popped up in aid of my point.

    The evidence confirms Pr Q’s point about the miserable nature of the Australian ruling class,
    whose econmic efforts are mainly land-based extractive and whose social efforts are paltry.

    It also confirms my point that the low taxed, free enterprise US has a relatively thriving voluntary civic sector – it’s richest man is, in absolute terms, the most altruistic philanthropist in History.

    Society will pay a heavy price unless the stingy nation heeds a call to alms

    Australians just won’t give. For a country that must come close to being a middle-class paradise those who have done well are notoriously parsimonious.

    …Fundraising makes up a mere 0.5 per cent of our national economy. In the United States it is well over 2 per cent. In Britain, 1 per cent…

    …as government moved from its regulatory role the private sector has not responded by taking on some of the social obligations being abrogated. It was happy to make the money, but shunned responsibility.

    …in the US 50 per cent of funds flowing into non-profit cultural and recreation organisations come from philanthropy. In Australia it is 4 per cent. The equivalent comparison in education and research is 15 per cent and 6 per cent respectively. Australian non-profit volunteer levels are barely half of the norm in other developed nations.

    The conclusion is the the degree of volition versus compulsion in the provision of community services is a function of culture (US protestantism, Aust Anglo-Catholicsm).

    Another implication is that a further cut in top marginal income tax rates, as proposed by COstello, is not indicated.
    His call for a revival of voluntarism is bogus and represents special pleading on behalf of privileged economic interests.

  10. Homer Paxton
    July 24th, 2003 at 10:35 | #10

    John,
    I would beg to differ with you.

    The main activities volunteers do is the work that supplements Previous Government activities.
    To take some examples Vinnies or Anglicare ( and I am sure this is the case with Mission Australia) have volunteers that help out with clothing ,food etc.
    They have nothing to do with activities that have been contracted out.
    My research has shown that salaries are at market rates not below indeed in some areas they are above.
    If one is a tenured University Professor one would take a paycut but then that is unusual.

  11. July 24th, 2003 at 11:28 | #11

    A bit of clarificationânâcorrection about ãthe Salvation Army’s employment service, Mission Employmentä. Until a year ago, I also thought that there was such an organisation.

    As I then found out, the Salvation Army, which owns and operates ãEmployment Plusä, is completely separate from Mission Australia, which is mutatis mutandis with Mission Employment. While the Salvosâ general history and ethos is well-enough known, a useful insight into Mission Oz is found in this speech by PM John Howard: http://www.pm.gov.au/news/speeches/2001/speech1160.htm
    Unsurprisingly, both organisations would seem to have John Howard on their respective speed-dials and ideological* pin-up boards, and vice versa.

    John Quigginâs confusion is thus understandable, as here are two unrelated organisations operating in the same, highly-specialised market, but with zero effective differentiation between their products and services. Please explain this, all you right wing economists out there.

    My knowledge of the consumer-level similarity of Employment Plus and Mission Employment (plus my impetus to research the matter last year) comes from direct experience. Not, I hasten to add, as an employee, or still less as a volunteer, but as a conscript.

    How ever many volunteers the two organisations may have, these numbers are certainly dwarfed by their numbers of conscripts doing Work for the Dole programs (both would be approaching 100,000 pax, in my guess). The Salvos (Iâm not sure about Mission Oz) also supervise a lower-level form of conscription: the provision of (the recently-notorious) Job Network services.

    As to the broader volunteerism thread, Iâm probably too biased to make a rational contribution. I simply say that if anyone knows an industry than is less exploitative of human labour than the farming of people in pointless Work for the Dole projects (other than the sex work industry), Iâd be interested to know.

    * Then again, this article: http://www.smh.com.au/articles/2003/05/26/1053801337917.html
    suggests that there might be something of a ãChinese wallä between Mission Australia, and Mission Employment. The former may thus be allowed to formulate policies that have a semblance of humanity, while the latter remains oblivious-as-usual, as it goes about filling its daily quota of cattle-cars.

  12. July 24th, 2003 at 11:34 | #12

    Oops, I meant “MORE exploitative”, in the above comment. (Sometimes my capacity for irony of Freudian-slip dimensions overwhelms me).

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