Government, the Third Sector and the Rise of Social Capital

John Butcher, from the Centre for Research in Public Sector Management asks whether social capital is set to emerge as a major theme in public policy at the national level and the implications for third sector (non-Government) organisations participating in newly contestable markets for health, labour market and community services.

Will social capital emerge as a major theme in Australian public policy and how will this will impact on the NGO sector, which is often seen by policy makers as a principal vehicle for the formation of social capital?

Since the mid 1980s both Federal and State governments have been introducing a variety of microeconomic reforms aimed at creating contestable markets in the human services sector. These reforms have directly resulted in increased competition between smaller community-based NGOs, larger, better-resourced charities and commercial for-profit organisations, particularly in markets such as childcare, labour market programs and health-related services.

Changes to charities legislation will also impact NGOs, particularly some peak organisations which can be    disqualified for certain tax concessions if they engage in certain forms of advocacy and lobbying.

John Butcher also looks at overseas models, particularly the UK and Canada where formal compacts or accords have been developed governing relationships between governments and NGOs. In these countries, dedicated agencies have been established for the purpose of developing policy and providing practical assistance to NGOs, resulting in a range of resources being available on strengthening the capacity of NGOs, including their capacity to contribute to the policy process.

He concludes by stating that the relationship between the Commonwealth government and the NGO sector appears to be declining in importance in Australia’s policy landscape, and that it is likely that the Commonwealth will continue to hand-pick those organisations with which it is prepared to deal while erecting barriers to those whose views it does not agree with.

On an optimistic note, John Butcher states that the States and Territories will continue to chart new policy territory through their respective agreements with volunteering organisations and the NGO sector in general, and that there is opportunity for further research in area.

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