Why Public Service Models Outperform Private Providers

By Denis Hay

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Discover why public service models outperform private providers in equity, efficiency, and long-term outcomes – and how we can reclaim them.

Introduction – A Tale of Two Systems

Location: Brisbane, 2023.

Susan, a 67-year-old pensioner, waits eight hours in a private emergency room. When she’s finally seen, she’s told her care isn’t covered. She remembers a different time – a time when public hospitals were reliable, education was free, and services were designed for people, not profits.

Public service models, once the bedrock of Australian life, have been eroded by decades of privatisation. This shift – fuelled by neoliberal ideology – promised efficiency but delivered cost blowouts, service cuts, and inequality.

How did we get here? And more importantly, how do we get back?

Problem: Privatisation’s Broken Promises

The privatisation push in Australia began in earnest in the 1980s, undermining many successful public service models that once set global standards. Utilities, transport, health, and aged care – core services – were sold off or contracted to the private sector under the promise of “efficiency” and “cost savings.”

But the results tell a different story:

• Healthcare: Private hospitals now dominate, but access is unequal. According to the Grattan Institute, public hospitals are more efficient on a per-service basis.

• Aged Care: The Royal Commission into Aged Care Quality and Safety found that for-profit aged care homes often delivered lower-quality care.

• Public Transport: Melbourne’s privatised rail system suffers regular delays and fare increases, while regional public services face cuts.

• Utilities: Electricity prices soared after network privatisations, with households now paying 70% more on average.

Quote:

“Privatisation has been a disaster for essential services. The market has failed to protect the public interest.” – Professor John Quiggin, University of Queensland

The Real Human Cost

Imagine a mother skipping meals to pay school fees at a semi-private institution.

Picture an aged pensioner left in soiled sheets because the for-profit aged care home has one nurse for every 60 residents.

Think of a university student saddled with $60,000 in debt for a degree that once would have been free.

These aren’t just statistics – they’re lived experiences. Australians are paying more, getting less, and being told to expect even further cuts in the name of “budget responsibility.”

This is a political choice, not a fiscal necessity, to withhold investment in public service models.

Internal Reflection:

“We pay taxes… shouldn’t that mean we get services in return?”

But here’s the truth:

• Australia is a sovereign currency issuer. It doesn’t need to “find” money. It creates it.

• Public service models aren’t a cost – they’re an investment in human dignity and national well-being.

Why Public Services Deliver Better Outcomes

1. Equity and Access

Public services ensure everyone, regardless of income, has access to education, healthcare, transport, and more. This isn’t possible when profit dictates policy.

2. Efficiency Without Profit Extraction

Unlike private providers, public service models reinvest all funding into the service itself, not shareholders.

3. Workforce Stability

Public institutions often offer better training, compensation, and working conditions, resulting in lower turnover and higher-quality outcomes.

4. Long-Term Planning

Private companies focus on quarterly profits. Public services can plan for decades, building infrastructure and systems that endure.

5. Transparency and Accountability

Public services must answer to citizens. Private providers often hide behind the concept of “commercial confidentiality.”

Real-World Examples: Public Models That Work

Health: The Medicare Advantage

Australia’s universal health system is a clear example of how public service models can remain both cost-effective and equitable. Studies show public hospitals outperform private hospitals in emergency care outcomes.

Education: TAFE vs. Private Colleges

Public TAFE delivers higher quality vocational training with better employment outcomes than many for-profit providers.

Energy: Re-nationalisation in Europe

Germany and parts of the UK are buying back privatised power grids to combat price gouging and ensure reliability.

Transport: Public Rail in Japan

Japan’s public rail networks are a global benchmark – affordable, punctual, and safe. The Shinkansen, or “bullet train,” has a near-perfect on-time record and zero fatalities since its inception in 1964. It remains under public oversight and is regarded as a model of transport excellence worldwide.

Transport: Public Rail in China

China has built the world’s largest high-speed rail network – over 40,000 kilometres – as a public investment. Operated and funded by the state, it connects major cities with speeds exceeding 300 km/h. It’s widely accessible, heavily subsidised for affordability, and a central part of China’s strategy to reduce emissions and boost domestic mobility.

These systems have significantly reduced travel times, fostered regional economic development, and provided a clear example of how well-funded public infrastructure can transform a nation’s connectivity. Japan’s and China’s public rail networks are a global benchmark – affordable, punctual, and safe.

Australia’s Dollar Sovereignty: The Missing Piece

Australia is a monetary sovereign. That means:

• It issues its own currency (AUD)

• It can never run out of money

• It doesn’t need to tax or borrow to spend

What does this mean?

We can fully fund public services without relying on private investment or budget surpluses. There’s no excuse – only political will to reinvest in robust public service models that serve all Australians.

Quote:

“What limits government spending is real resources, not money.” – Dr. Steven Hail, Modern Monetary Economist.

Reclaiming the Public Good

Public service models outperform private providers in efficiency, access, outcomes, and social cohesion. The failures of privatisation are not just financial – they are human, moral, and social.

Australia has the capacity, through its monetary sovereignty, to fully fund and expand public services. The question is no longer “Can we afford it?” but “Can we afford not to?”

Q&A: Common Reader Concerns

Q1: Aren’t public services inefficient by nature?

No. Studies consistently show that public models, particularly in health and education, are more efficient when profit isn’t a factor.

Q2: Isn’t the private sector more innovative?

Only when competition exists. In monopolistic industries, such as aged care or utilities, innovation often declines while prices rise.

Q3: What can I do to support public services?

Vote for candidates who support public investment, speak out on local issues, and reject austerity rhetoric.

Question for Readers

Have you experienced the difference between public and private services? Which gave you better outcomes? Share your experience in the comments.

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This article was originally published on Social Justice Australia

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