Chapter 23 from: J.J. Ray (Ed.) "Conservatism as Heresy". Sydney: A.N.Z. Book Co., 1974


The Traps of The 'Needs' Concept



By: PETER SAMUEL

One of the most intriguing aspects of the 1972 election campaign was the extent to which the Australian Labor Party exploited the word 'needs'. A great portion of their more subtle campaign appeal was based on the use of that word to project a non-ideological, pragmatic, let's-get-the-experts-in approach to the business of government. In the huge areas of education and health there is an explicit commitment to establish independent commissions of recommenders, who would look at the total national picture and pronounce upon the 'needs'.

It is probably a brilliant political campaign technique to make -- a proposal for this kind of decision-making. The people are probably fed up with buckpassing between the various levels of government and receptive to the idea of a government which will take national responsibility. They are also deeply suspicious about politicians making the decisions. They are probably equally suspicious of organisations called departments because these are familiar bureaucratic institutions, remote from their real needs and slow to move. So, the idea of something new called a commission sounds good. But what does it all mean really?

A little understanding of economics informs one that there is hardly ever such a thing as an absolute, clearly definable 'need'. In certain dire circumstances individuals do have critical needs which must be satisfied regardless of cost -- people dying of thirst in a desert will pay absolutely anything for water, to quote the classic case of an absolute need. But most of the time need is a highly relative and conditional reality, and it is misleading to speak of it as if it is a simple concept.

There are in the real world usually only such things as 'need-ifs'. There is a need for $A million for education if we want to educate B million people, if we want to provide a C/D student staff ratio, if we allocate E square metres of science laboratories per student, if we provide F language modules, G class rooms, and so on indefinitely, defining the way in which education will be organised and provided for.

Even that leaves aside the matter of resources available, and the question of choice, as to how far resources will be deployed in the direction of education as against other community uses. 'Needs' start off as sounding like a simple, pragmatically determined thing but end up in reality being the product of a highly complex set of equations into which have to be fed a whole series of sensitive and debatable judgments about which people will disagree.

To give to any one institution, whatever you call it, the right to determine 'needs' is to give it very great power. The present government has had its flirtations with the 'needs' method of decision making. It has established a universities commission, and talking to state universities' administrators one gets the impression that virtually all decisions about the future of university education are now made in the offices above the Reserve Bank building near the Canberra law courts.

The commission must start each so-called needs estimation by an exercise in wheeling and dealing with the Treasury and various ministers to determine, first of all, what will be a realistic kind of budgetary increase in total governmental expenditure on universities. It will only recommend what it knows beforehand is a politically acceptable call on the Commonwealth budget.

Then, with some overall expenditure ceiling in mind, it assesses the submissions of the various universities bidding for money for the next three year term. It is rarely a matter of the commission simply dictating what each shall do. There is a certain amount of give and take between the Universities Commission and each of the university administrations (if only for the sake of the quieter life), but in the end the commission determines most of the details of development in each university. It lays down target figures for staff-student ratios, which new teaching courses and research departments shall be established, and whether car parking structures or student residences will be financed.

Outside finance can occasionally be mobilised but that becomes a very delicate matter, for the grand commission in Canberra is always liable to say: 'well, if you can yourselves raise money for those car-parking structures, why cannot you raise that money yourself for the landscaping you are asking for.' Or: 'if you can finance those student flats from bank loans, why cannot you use that money for college accommodation instead of expecting us to finance it?' Any show of independence whatever is liable to invoke the penalty of withdrawal of financial support elsewhere, so open is the concept of need.

The ALP has said it wants to apply the university commission model in the areas of health and pre-tertiary education, which will mean that its commissions in these fields will deal with the fates of more than 10,000 schools and the several thousand hospitals, nursing homes and other health institutions. A number of questions are left quite unanswered: (1) what role, if any, remains for the state education and health departments, (2) what independence will remain for supposedly independent schools and hospitals.

It is perhaps not very fashionable (though there are some signs it is becoming more so) to say that this is entirely the wrong direction in which to move. We should be moving to diffuse power and let much more of it rest in the hands of the customers and clients of education and health services.

The way to this ideally would be to let the providers of services offer all the varieties of health and education service they can with the appropriate price tags, and to let people make their choices. This way the providers of services --they could be government outfits, teachers' co-operatives, church organisations, businesses, or whatever --would be innovative and flexibly responsive to the sensitivity and infinite variety of different needs which people have. By placing a price tag directly on the education or health service being offered, people's ideal-world 'needs' would automatically be reconciled with realities of scarce resources.

But the prevailing community philosophy towards such things as health and education is profoundly paternalistic, and for the moment it is prepared to leave most of the decisions to politicians and bureaucrats. It will be interesting to see whether the community is prepared to leave all the decisions to needs-assessing commissions in Canberra.



This chapter originally appeared as an article in "The Bulletin", 2 December 1972, p. 56.