Australian Politics and Policy - Senior, 2019a

The public sector
The contemporary relevance of Wilson’s comments suggests that nothing about
‘the public sector’ is ever settled for very long. There are no issues regarding its
scope, size, reasons for being, ways of working, norms, values and practices that
cannot be and have not been contested and debated since the emergence of the
modern state.
Accordingly, rather than summarising a number of static terms and technical definitions
that can be found in any standard textbook on the subject, which we would
then have to qualify with caveats, this chapter considers the most important questions
about the public sector and why these keep coming up. It then shows how the answers
to these questions have changed over time, and how they will continue to do so.
What is the public sector?
The question of what differentiates the public sector from the private and community,
or not-for-profit, sectors lies at the heart of perennial debate around the
world about what governments should be doing and, consequently, how big their
publicsectorsshouldbe.
The easiest way to start is simply to define the public sector as the outcome of a
set of choices citizens and governments make about two questions:
1. What do citizens and communities want and need in terms of public provision?
2. How should governments respond to these expectations?
The public sector’s role and shape can be seen as a collective approach to the things
governments want to provide or impose, including the allocation of resources,
production of goods, delivery of services and regulation of activity in society.
More specifically, we can view these functions of government in terms of the
economic, political and/or legal purposes they fulfil:
• Economic purposes are achieved by governments performing a rebalancing
function in society by reallocating resources through taxes and charges (e.g.
redistributing from the rich to the poor or aged through social welfare and the
age pension).
• Governments are often required to provide goods and services that the market
has failed to produce or cannot easily produce. Street lights, public roads,
utilities, telecommunication, navigation across air and sea and, historically,
broadcasting and postal services are all delivered by public provision because
private markets will not generally supply goods or services that benefit people
regardless of whether they have paid for them.
• Governments sometimes produce monopolistic goods and services (e.g. water,
electricity and sewerage) because the private sector may not provide them at
a price or at a level of efficiency that is in the public interest. Another reason
for this provision is the long-term investment required and the extensiveness of
the costs associated with supply.
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