Charities are critical to Australia's future prosperity

This week a new report and a respected senior public servant have both highlighted that social inclusion is a key to future growth in prosperity in Australia. Social inclusion is not just part of the work of charities, it is the reason many charities exist. It is time charities get a seat at the table, writes CCA CEO David Crosbie in Pro Bono News, 28 August 2019.

Charities are critical to Australia’s future prosperity, Pro Bono News, 29 August 2019

The assumption that “what is good for business is good for the country” underpins a lot of public policy discussion. It is an assumption that is limiting Australia’s capacity to achieve both economic and social wellbeing. Unless we can build increased hope, engagement and opportunity, our future prosperity will be significantly limited.

I am often introduced in public forums as coming from the “not-for-profit” sector or the “third” sector (presumably third behind business and public servants). There is an implication that the work I am involved in is somehow less important than the work done by successful business people, those who have been effective in making profits. Occasionally I wonder how business leaders would feel if we introduced them as coming from the “not-for-purpose” or “not-for-public-good” sector? 

This is not a big issue, but it is significant when thinking about where the charities sector currently sits in terms of its importance in discussions about the future prosperity and wellbeing of Australia.

This week an important report was released from Deloitte Access Economics and a very experienced and respected senior public servant gave a farewell lecture highlighting the need to increase productivity in Australia by looking beyond the usual focus on markets and business activity. I will quote extensively from both because I think they give us pause to reflect.

Martin Parkinson – the man who as treasury secretary ensured the wellbeing framework was part of the Treasury Corporate Plan (it has since been removed) and is now the retiring secretary of the Department of Prime Minister and Cabinet – said in his farewell speech on Monday:

“Economics is based on the idea that social value is built on the wellbeing of individuals, all of whom are of equal value… Economists hate waste, but again if you really unpick that, it means making sure all your resources are fully employed – in short, we want to see people who want to work able to do so, to create opportunities for everyone to contribute to society in some way, and to lead lives they have reason to value, to use Amartya Sen’s memorable phrase. We don’t like unearned privilege because it creates barriers that exclude people from being the best they can be… 

“If values and philosophy don’t capture you, maybe numbers will. A rather ingenious recent paper found that roughly 40 per cent of US GDP growth per person between 1960 and 2010 can be explained by improved allocation of talent from removing discrimination… There are really only two choices for this country: We can take pride in our diversity and use it as an advantage when interacting with the world, or we can hunker down behind borders and slowly gnaw at each other.”

The new report from Deloitte Access Economics was released yesterday identifying five key dimensions through which improved social inclusion in Australia could yield over $12 billion per annum in increased productivity as well as other benefits. These five areas are:

  • “Increased productivity in the workplace: diversity can be a source of creativity and innovation, lifting productivity; social inclusion can also lift profitability and help target market segments. 
  • Improved employment outcomes: Greater social inclusion means people are less likely to experience discrimination-based adversity.
  • Improvement in mental and physical health: Social inclusion can counteract isolation and increase community participation, which helps to alleviate health problems, especially mental health issues such as anxiety and depression. 
  • Reduced cost of social services: Social inclusion reduces the cost of social services by easing pressure on the public health system and reducing the need for income and housing support payments.
  • Inclusive growth: By lifting wages and workforce participation in geographical areas of socioeconomic disadvantage, the benefits of economic growth can be shared more evenly across all Australian communities.”

The lead author of the report, John O’Mahony, partner at Deloitte Access Economics, said: “Lifting productivity will be central to improving future living standards and ensuring all Australians benefit from our prosperity. Policies to drive economic growth often focus on financial and quantifiable aspects of markets and regulation, but there are also important social drivers. Improving social inclusion is a source of economic strength and higher living standards for all Australians. Having an inclusive society not only avoids the costs incurred when people are excluded, but harnesses our diversity, providing fuel for creativity and innovation in our economy.”

Martin Parkinson and John O’Mahony are both leading economists concerned about Australia’s future prosperity. Both are now publicly arguing that social inclusion is a key to future growth in prosperity in Australia.

Social inclusion is about hope, engagement, and opportunity. It is about belonging, being valued. Social inclusion is not just part of the work of charities, it is the reason many charities exist. I cannot think of a charity that does not contribute to achieving these values. They are at the heart of much of our work.

Few charities market themselves as promoting inclusion and economic prosperity, but that is exactly what many are doing. By creating hope, engagement and opportunity, they are enabling people in communities across Australia to contribute to a more productive Australia.

When national policy makers are next considering Australia’s economic future, discussing the opportunities to grow productivity, thinking about how to build a more inclusive and creative workforce, it might be a good idea to invite a few charities to sit at the big table along with the successful “not-for-purpose” leaders? 

Charities know what works. Celebrating and encouraging diversity, investing in education and opportunity for the disadvantaged and the marginalised, providing charities with the resources they need to build hope and engagement, these are the measures that will ensure Australia can achieve a more prosperous future as well build flourishing communities. 

As Martin Parkinson and John O’Mahony have so clearly highlighted, Australia can no longer afford to ignore the economic and social benefits of genuinely investing in social inclusion.

Read on Pro Bono News: charities-are-critical-to-australias-future-prosperity