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SA Water Prices and Regulatory Change

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One of the big announcements in the recent South Australian state election was that the (now re-elected) government would move to de-corporatise the state’s major water utility, SA Water, and establish a new SA Gas and Water Trust. This announcement did not get the attention it deserved, but it could be a significant step away from 30 years of neoliberalism in the governance and regulation of water supply – although whether or not that is a good thing may depend on what replaces this neoliberal corporation.

Background

For much of the last century, water and wastewater in SA was managed by a government department, the Engineering and Water Supply Department. In 1995, the EWS was replaced with a corporatised government business enterprise (SA Water) as neoliberalism swept the world and convinced everybody that government was bad and that a market was the most efficient and beneficial arrangement for the supply of everything, including water.

This corporatised government business was to act like a profit-making corporation in a regulated market where prices are set so the corporation can recover all the costs of service provision. This requires an analysis of the asset base of the corporation and the provision of a guaranteed return on that capital, plus enough revenue to cover operational and other costs. The state government originally set the valuation of the asset base and costs on advice from Treasury, but in 2013 this regulation was taken over by an independent regulator, the Essential Services Commission of SA (ESCOSA).

While neoliberalism sells this model as efficient and the imposition of market discipline, in reality there are inevitable controversies over the subjective pricing of assets and operation costs. As we will see below, these matter to water prices.

This system also puts consumer advocates in an invidious position. Any new consumer protections or environmental initiatives are automatically added to water prices as such operational costs need to be recovered, while consumer advocates need to have a level of technical expertise to assess whether any given capital investment or expenditure is essential or desirable. And if it is, then advocates are trapped into accepting price increases. Alternatively, if limiting price increases is the main goal, they end up having to oppose potentially important capital expenditure or other pro-consumer initiatives.

However, in the context of a proposal to radically change this system, it is worth tracking what happened to water supply and prices under SA Water. This is inevitably a complex and multi-dimensional question, but in this short post I will simply look at what happened to water prices for customers.

Water Prices

Unfortunately, the ABS data for water prices in Adelaide only goes back to 1998, so we don’t have a simple pre-and post- corporatisation comparison. However, as the graph below shows, we can track water and sewerage prices from the infancy of SA Water up to the present, and we can compare this to the general inflation rate. Clearly over the journey, water prices have increased above the general Adelaide CPI, with water price increases 1.3 times higher than the inflation rate.

Line graph comparing Adelaide Water Prices with CPI All groups. https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/sep-quarter-2025#data-downloads
Source: ABS, Consumer Price Index, Sept 2025, Table 11.

Of course, correlation is not causation and this the graph says nothing about changes in size of the water and sewerage network, the quality of water or what would have happened if a different regime was in place. More importantly, the graph shows that there were different price trends in different periods, so even the price picture is much more nuanced than the simple 1.3 times inflation rate headline.

In fact, as can be seen, water prices largely tracked with the general inflation rate for the first ten years, and then sharply increased from 2008. A significant part of this was due to major infrastructure investment, including the desalination plant which probably has fewer critics now after years of drought than it had at the time! There was also a major decrease in water prices in 2019, which resulted from a re-valuation of the asset base after a report found that the previous Labor government had over-valued the assets when it handed price control to ESCOSA in 2013. This was obviously a highly politicised process, which could bring in to question the whole “objective” basis of price setting, but either way, the graph shows that it had a significant impact on price trajectories.

Perhaps more interestingly, the graph shows that since 2013 when ESCOSA took over revenue and price regulation, water prices have increased much more slowly – and well under the inflation rate. The one-off adjustment in 2019 skews this data, but even removing that “anomaly” from the data set, water prices have increased by 28.3% since 2013, while the overall CPI has increased by 42.3%. This should be a significant argument for maintaining independent regulation in the new Trust if something like the full revenue-recovery model is to be maintained (i.e. prices set to cover the full cost of service provision).

National Water Price Increases

This conclusion may be reinforced by the national data which shows that since 2013, the rate of Adelaide water and sewerage price increase is one of the lowest of all the Australian capital cities (even without the 2020 revaluation). Indeed, the two cities with the highest rate of price increases (Brisbane and Perth) both have prices set by the state government rather than an independent regulator.

(Adelaide prices adjusted to remove impact of 2020 revaluation). Source ABS, CPI, Sept 2025.

Note though, these comparative figures are only tentative as more research is required on local factors impacting price increases and any changes in the regulatory regimes in what, for other jurisdictions, may be an arbitrary time period. However, the figures certainly make a prima facie case for independent regulation, although again, price in only metric in this issue.

Conclusion

Given all the caveats above, the data and conclusions in this post are not definitive, but the issues raised by the data should be important considerations in structuring water regulation under the proposed new SA Water and Gas Trust. We don’t yet know the details of what is proposed, and given the state government is wanting the Trust to open up development of new housing, we may see a departure from the corporate logic of full cost-recovery. We may also see a limiting of the role of the independent regulator if this regulation is seen as a block to development. However, the price data above suggests some caution would be needed if we have the second without the first, because it was the combination of full cost recovery without independent regulation that saw rapid price increases.

Personally, given my previous critique of neoliberal essential service models, I am open to alternative structures to deliver water. But in considering this, I would want a much better understanding of where the burden of infrastructure and service costs fall under the various alternatives (e.g. on taxpayers or water customers) and what the equity impacts of that would be. And I would expect that data on the track record of SA Water on price, water quality and network provision would also form part of the consideration.

In that context, this post is just a small, initial contribution to that consideration.

The Political Economy of Lucy Jordan

After hearing the sad news of the death of singer Marianne Faithfull on 30 January, I turned back to listen to some old music, and of course the classic The Ballad of Lucy Jordan. But amid this search, I came across this curious review of the song – Bad Poem, Great Song. I confess, the fact that the song was written by a man (Shel Silverstein) was a surprise, but what was curious was the link made to feminist anti-housewife rhetoric of the 1970s.

“The song opens with a brief, dismissive limning of the housewife’s life … then slides into the kind of snide anti-housewife sentiment that seemed to come so easy in the 1970s. Feminism—the notion that as a woman, you could shape your own destiny—and the male embrace of the new sexual ethos combined to create a social order where freethinkers and liberated ladies were at the top, and women burdened by kids and chores were at the very, very bottom.”

I was struck by both the bitterness of the commentary (“I can’t tell you how angry I get when I think about Silverstein writing this song, with his beard and his sandals and his Playboy contract”), and also by how much that debate is the stuff of history with barely an echo in current culture.

Ok, I live in a middle-class political ghetto, but I don’t think I know any women who aspire to be a housewife or expect to be simply a housewife– indeed, quite the contrary, those who have kids turn themselves inside out to maintain employment outside the home. Further, any critique of housewives I recall of late come less from feminism than from business and a neoliberal-informed government which seeks to make everyone a productive worker (and consumer) [and which refuses to recognise housework, care work or raising children as either productive or as work – PhD-land again!]. Indeed, even advances like paid maternity leave are premised on the child-based absence from paid work being a temporary interruption to “normal” working life.

So, has the consigning of Lucy Jordan “housewife” to history been a triumph of feminism in putting women into the public sphere? Or even a truce built on recognising that women should be able to do what they chose? Or something else?

I wish I could say it was a clear triumph and pay tribute to the often-maligned generation of second-wave feminists who did so much to change work and family relations. I was lucky politically in that when I was first learning politics, some of the experienced activists who mentored younger activists were agitators of that second wave – and many of the women I have been lucky enough to know with were a product of that feminism, albeit changing over time.

But while I recognise the ground-breaking work of that (and other) generations of feminists, I am not sure the changing fate of a Lucy Jordan can be simply put down to either a victory of feminism or a truce and re-valuation of household labour. I suspect it has as much to do with changes in the economic base:

  • the influx of capital into the housing market and the asset price inflation which now requires two wages (or more) to pay a deposit and mortgage (and live the dream),
  • the relentless market drive to consume more (and in more areas of life),
  • a shift of the minimum wage from a family wage to singe person’s minimum, and
  • a neoliberal positioning of people as first and foremost economic rather than social agents.

In our modern economy, for most women there is little choice but to be workers rather than “simply” / “only” housewives.

I know that sounds like an economic determinism that robs people of agency (and generations of feminism of their victory), but I suspect the old man of political economy might see it as an example of a dialetic relationship between the economic base and the political/cultural superstructure. Or perhaps, in a less structural framing, a suggestion that the outcome of all political action is mediated by a range of economic and social forces. Without feminism Lucy Jordan may still be trapped, but without broader changes in economic forces, the outcome of that feminism would have been different.

It is perhaps not only men who “make history, but not as they please” – but the broader socio-economic forces mean that most people still don’t get to ride through Paris in a sports car with the warm wind in their hair.

The Vegemite Curve: A curve becomes an index becomes a policy

As a contribution to Anti-Poverty Week this year, I have invented a new economic concept: the Vegemite Curve.

Economists like curves. There is:

  • The Phillips Curve to tell us about the relationship between inflation and unemployment, except when it didn’t – e.g. 1970s;
  • The Laffer Curve to tell us how lowering taxes can raise revenue – except when it doesn’t;
  • The IS-LM curve to tell us about key macroeconomic relationships, except when it is applied to the real world;
  • Piketty’s elephant curve to tell us by how much the rich have been getting richer; and most obviously,
  • there are the ubiquitous supply and demand curves of neoclassical mircoeconomics which tell us the outcomes of the actions of utility-maximising automatons.

My curve will never be as famous as any of these curves, but it is based on the real-life economics of people in poverty in Australia. It is a graphic representation of a poverty premium – an extra cost that accrues to people in poverty precisely because they are in poverty. If money makes money, then it is equally true that being poor costs more.

The Vegemite Curve

While there are a range of different types of poverty premiums, the Vegemite Curve illustrates the costs of not being able to afford the initial outlay to buy commodities in bulk. It is constructed simply by plotting the unit cost (per 100g) of different size jars of vegemite, and it clearly shows how the unit cost increases with smaller jar sizes. Here it is:

The Vegemite Curve graph shows an upward sloping line of unit price per 100g, with unit costs increasing as jar size decreases.

The Vegemite Curve is not exactly revolutionary – it is standard business economics based on economies of scale, but it does mean that if you can only afford the smallest size jar in your weekly shop, you end up paying 59% more per unit than if you could buy the biggest size.

And as with any economic analysis, it is easy to combine hard data with a few assumptions and calculate a bottom line: in this case, if you are limited to buying the small jar, over a year your total expenditure on Vegemite would be $38.50 more than if you had the money to buy the bigger size. Perhaps not a lot of money, but when the principle of Vegemite Curve is applied to most items in a weekly shop, the impact on those in poverty is significant.

The Vegemite Index

When the Vegemite Curve went through SACOSS’ internal processes, it became an index! This transition was simple in mathematical terms and produced the same shape curve (below), but it was mildly disappointing for me. In economics, curves are causal while indexes are incidental. For example, if you move a supply curve you change the price and demand, while an index like the CPI simply registers the price change after the fact. However, the Index label is probably fair enough given that we were not claiming that Vegemite causes poverty!

The Vegemite Curve turned into an Index of unit prices per 100g, with unit costs increasing as jar size decreases.
Source: SACOSS 2024 Anti-Poverty Week Statement

Implications

The Vegemite Index could have significant ramifications for economics and social policy. It could challenge the costings of Henderson style poverty lines or minimum budget standards, because the average costs of items may be higher for those on low incomes. Similarly it could challenge the appropriateness of the 50% of median income poverty line because the relationship between income and living costs is different for those on different incomes. And perhaps it changes the income elasticities in the demand for impacted items, and creates a different demand curve for poor people.

But in reality, it probably does none of those things!

A bit like some of the curves I mentioned at the top, its explanatory claims are exaggerated. However, what the Vegemite Index does do is to highlight a real and important poverty premium for people living in poverty. They not only have less money than other people, they also have relatively higher living costs – and this can be illustrated in the consumption of an iconic everyday product. Giving it the pretence of an economic “curve” or index is just fun to help get some attention to the issue – and it worked in getting some TV and radio coverage, even getting Allan Kohler’s attention on ABS News’ Finance Report.

But beyond grabbing some media attention, the real point of the Vegemite Index is to use the media attention to argue for government policy responses to address poverty premiums. The SACOSS Anti-Poverty Week Statement highlights a range of ways governments and institutions can address different poverty premiums, but in relation to buying in small quantities, it is hard to directly reduce the poverty premiums because they reflect standard economies of scale. Accordingly, the response needs to be on the income side – which in effect means that the Vegemite Index is yet another reason why we need to raise the rate of the hopelessly inadequate social security payments like JobSeeker and Youth Allowance.

Simple!

Finally, BTW, alongside the Vegemite Curve, I also invented a litter line graph and uncovered some invisibility cloaks hiding the impacts of ambulance charges. But that is a story for another day!

State Tax Reform: A South Australian Perspective

In 2014, I was part of an unusual campaign – to call for increases in state taxes. The SACOSS “Without Taxes, Vital Services Disappear” campaign was a response to the social service sector constantly being told that there was no money to fund the various services and policies to address poverty and disadvantage. This was true in that budgets were in deficit, so the state government was already spending more money than it was getting in through taxes, grants and other income.

Ten years on, the situation has changed. The last state budget brought in an operating surplus for 2023-24 and forecast surpluses across the forward estimates. In this sense, there is money to expand expenditure on addressing poverty and disadvantage, so the issue would seem to be political priority rather than needing to raise taxes and revenue. However, the tax questions remain crucial because, despite the budget surpluses, state debt is increasing and the interest payments on that debt are undermining the state budget.

Opportunity Cost

As SACOSS noted in its analysis of the last state budget, the South Australian government will spend more on interest payments on debt than it will on the Department of Human Services – the department responsible for supporting the most disadvantaged South Australians. The graph below shows the increase interest payments, both in absolute terms and as a proportion of state expenditure.

Graph showing state budget interest expenses going from under 2.25% of state expenditure in 2021-22 to a projected 6.7% in 2027-28.
Source: SA State Budget Papers

The interest payments are growing because of a combination of higher interest rates, and increasing state debt driven by infrastructure spending. Conventional economics would suggest that going in to debt to fund infrastructure is not a problem, and the government argues that the debt is not a problem as the debt-revenue ratio is under control. However, this has always struck me as an apples and oranges comparison. It says little about the capacity to repay the debt or the impact of the debt on the government.

The more important ratio is the cost of debt servicing to total revenue. The red line in the graph above shows that this is increasing as interest rates account for more of the state budget. This inevitably has an opportunity cost as that money is not available to be spent on government services.

This is why the level of debt and deficit matters – not because it shows mismanagement or over-spending, or a need for austerity, but because it constrains the operations of government and their ability to support citizens.

And underlying this is a concern about equality. As I have noted previously, governments have a choice in financing their activity as they can tax or to borrow from those with surplus cash. Taxation represents a flow from those with resources to the common good, whereas borrowing creates a flow from the common treasury to those with capital resources to loan money.

This is not to say that there should never be state debt, but simply to recognise that it comes at a cost – an opportunity cost and a cost to equality. But in light of the rapidly increasing impact on the state budget, there is a fair argument now that we need to raise more state revenue.

Tax Reform Opportunity?

Unfortunately, the record for tax reform in South Australia, at least in terms of increasing taxes or introducing new taxes, is not promising.

The last time there was a broad public review of SA state taxes was in 2015, when the then Labor government released a discussion paper canvassing a range of reform options. The highest profile reform, a proposal to replace conveyance duties with a broad-based property tax – including on owner-occupied housing, was met with a media outcry about a “tax on the family home” (which ignored the fact that conveyance duties are also a tax on the family home). The proposal was ruled out in a matter of days – even before the formal consultation process closed.

Overall, despite the Treasurer publicly welcoming the SACOSS submission (which proposed raising revenue), the 2015 review resulted in the abolition of a range of taxes and decreases in other taxes totalling some $670m in lost revenue over four years to 2018-19 – all in the name of improving the business environment.

Outside of the 2015 review, the record is no more encouraging:

Panel of 8 men speaking at a forum organised by SA Best to oppose tax reform to closing avoidance loophole in land tax aggregation.
Adelaide’s “men of property” at a forum opposing
closing loopholes in land tax aggregation, August 2019.

Of course, over the years there have been changes to rates and thresholds of existing taxes, but these are generally in the direction of tax “relief” rather than revenue raising.

There are two notable exceptions where new revenue-raising taxes have been introduced over the last 20 years. There was the 2017 introduction of the Foreign Ownership Surcharge – a 7% extra stamp duty for foreign owners purchasing real estate, and the point of consumption wagering tax introduced in the 2016-17 state budget. The former had been explicitly rejected in the government’s response to the State Tax Review a year earlier, while the later was flagged but not immediately implemented.

These two examples are telling – not so much because they show that new revenue measures are possible, but because they show the importance of the politics. By definition, the Foreign Ownership Surcharge had no resident vested interests opposed (because they were overseas), while the point-of-consumption wagering tax came at a time when the sports betting industry’s peak body and political lobby was in disarray (and the big companies did not want to risk their own brands in defending registration in tax havens).

Not exactly repeatable examples as a basis for a campaign strategy or a hope of reform.

A similar story could probably be told at the federal level from the experience of mining super-profits taxes, Labor’s 2019 mild capital gains and negative gearing reforms, and more generally in relation to the Henry Tax Review – comprehensive and steeped in Treasury’s market logic and legitimacy, but still largely gathering dust.

Conclusion

The reality is that it is always much easier to oppose a new tax than to pass one. A new or increased tax creates a vested interest in opposition, and they can always find or invent a deserving case study for whom the tax is unfair, or tell us how the tax will cripple the economy. By contrast, the vested interests who will benefit from the tax (the general public who will benefit from government revenue and spending) are too amorphous or too far removed from the specific proposal too mobilise in support.

I think the point of the story above is not to abandon all hope of tax reform and of raising sufficient revenue to fund vital services, but rather to see it as a political exercise rather than a policy one. It will require a long-term shift in public thinking and a mobilisation of political power, not simply a well-researched policy or a polite proposal. It will require political resources to oppose the vested interests, and an appropriate vehicle to drive the change.

In that sense, tax reform is both a part of a bigger project of social democratic renewal and dependent on that project.

If Culture Is Not An Industry, What About Social Service?

Justin O’Connor’s book, Culture is not an Industry, critiques the arts sector embrace of the description of itself as a “creative industry”. The idea and initial adoption was a pragmatic attempt to gain political legitimacy and funding, but it came at a time (in England under Tony Blair, and rolling out from there) when neoliberalism had undone all the structures and legitimacy of industry planning. Accordingly, the creative industry approach commodified culture and functionalised it without arresting any of the impoverishment of art/culture (both in public standing and artists’ livelihood).

I know very little about art and culture, so I do not want to review O’Connor’s book here. Rather, I want to reflect on the relevance of the issues raised to the social service sector where I work.

Book Cover: Justin O'Connor, Culture is not an Industry: Reclaiming art and culture for the common good

Issues in Common

The creative industries frame sees art and cultural work as just one form of “creativity” alongside commercial knowledge creation areas. As O’Connor notes, the creative industry workforce figures drop by more than half when software and industrial design are excluded, and the mantra of creative industries has done little to protect or promote actual cultural industries (live and recorded music, films, games, books, TV and radio, newspapers, theatre, etc). There was never more than token recognition of the unique contribution of art and culture to place, community and the economy, there was no increase in public funding, and art and cultural production became increasingly dominated by the global monopolies of platform capitalism. The result has been a diminishing of creative autonomy, remuneration and security of actual cultural workers.

For its part, the boundaries of the not-for-profit social service sector are similarly hard to define, and the sector often sacrifices the uniqueness of its community base for incorporation into categories which seem to have greater economic importance. For instance, one peak body adopts the ABS-defined “health and social assistance” industry data (which includes public hospitals and health system), while another uses ACNC charities data (which includes universities, environmental charities and cultural institutions). This is misleading, and the claims of economic importance get little political traction anyway.

The parallels in the positioning of the arts and social service sectors can be seen clearly in the following from O’Connor. I have simply inserted alternative text in brackets.

“Anyone familiar with the arts and cultural [social service] sector will know its hand-to-mouth, cunning pragmatism, where one renders to Caesar whatever Caesar wants if it means getting that grant. The grant you need to survive. Given the antipathy to cultural [welfare] funding by many governments, many are content to huddle under the protective umbrella of the creative economy [health and social assistance industry classification], with all those jobs and wealth and innovation metrics, simply in order to keep their heads above water.” [p. 200]

The problem is not simply the need to render to Caesar endless and largely meaningless quantitative data on social and economic impact, it is that this approach fundamentally misunderstands and perverts the mission of the sectors. For O’Connor this means seeing and valuing arts and culture primarily as a contributor to economic growth, rather than as an essential expression of the human experience and a facilitator of a shared cultural citizenship. For the social service sector, it facilitates a model of top-down service provision, rather than a broader agenda of community development and advocacy for structural change.

For both culture and for social service, the embrace of an economic model comes at a cost.

Neoliberalism and Differences in Sector Experiences

For all the commonality above, the arts and social service sector have had a very different experience of neoliberalism’s hollowing-out of the state and abandonment of the public provision of goods and services. These processes impoverished arts and culture, and left cultural workers more precarious, but the not-for-profit social services sector massively increased with the outsourcing of government services (although arguably the demand for and complexity of service provision also increased with the withdrawal of public housing, cuts to public services and the impoverishment of social security payments).

But the differences between the sectors are not just about size.

Another key strand of O’Connor’s book is the analysis of neoliberalism’s privatisation and individualisation of culture. The marketisation of culture along with the growth of platform capitalism leaves us now with mass consumption of cultural product via Netflix, Disney etc. The household, rather than public spaces, become the primary place of cultural consumption as part of a broader neoliberal shift from mass consumption (public goods) to personalised choice (private goods). This shift is based on a false premiss (as even private consumption is socially constructed) and it is damaging to the community as a whole.

This shift is also evident in social services, although the issues and experience may be very different. The much-heralded NDIS is exactly that sort of shift, from the provision of public and institutionalised disability services to a model of service provision as a private good “purchased” by the recipient (or their advisors). The same could be said of the move from institutional aged care to the increased provision of services at home. These systems may not be perfect, but were a necessary departure from their oppressive predecessors.

Of course one should not push this analysis too far. These aged and disability services remain publicly funded welfare supports, and in both culture and social service sectors there has been a common shift from an intrinsic value to a transactional one. Further, as with creative industries, the shift to the consumer model of social service has enabled private profit making and the construction of NFPs as pseudo-corporations – with similar precarious results for workers.

In short, neoliberalism’s reshaping of the cultural sector provides a useful window into what is happening in social services, but the impacts can’t simply be cut-and-pasted from O’Connor’s analysis.

Universality and Social Service Sector Advocacy

The final point I want to consider arises from the above discussion and O’Connor’s passionate advocacy for the provision of social infrastructure and universal basic services (housing, health, education, welfare and transport). This draws on Foundational Economy scholarship that argues that people’s lives and household liveability is not simply based on the market or cash incomes. Rather it is underpinned by three pillars: household income, essential services, and social and cultural infrastructure.

Foundational Economy Diagram of the three pillars of household liveability: essential services, social infrastructure and disposable income.
(Diagram from the FE Collective, not from O’Connor’s book)

Given this, and his concern about the privatisation and the neoliberal fracturing of culture, O’Connor argues that increasing services or supports in a way that further privileges household consumption at the expense of any wider social connection or solidarity is not an unproblematic advance. Indeed, O’Connor is suspicious of calls for a Universal Basic Income, for a variety of reasons, but including because it replaces social activity (work) with atomised individual activity (consumption).

While decent wages and income supports are obviously important, O’Connor’s argument provides a significant challenge for social service advocacy, which over the last decade or more has been very focused on raising the rate of income support payments like Newstart/Jobseeker.

In a world of limited resources (and even more limited advocacy power), there are real policy choices between income supports, essential services and social and cultural infrastructure. Should we be advocating for more public libraries and public wifi, or simply higher incomes so people can better afford to purchase data and devices? Is government housing support better delivered as direct rent assistance payments or by increasing the provision of public housing? Should we be investing in the “communal luxuries” of theatres and galleries, sports fields, public institutions and public spaces, or simply increasing incomes so people can support their own culture and leisure choices?

I saw some of this tension play out in a recent ACOSS Post-Budget Event. Federal Treasurer Jim Chalmers tried to deflect criticism of the failure to increase JobSeeker by pointing to a range of other budgets measures which would support people on very low incomes. The audience did not buy it and remained focused on income-support payment levels.

Of course, when pressed, our sector would go for the “all of the above” choice avoidance, but in reality, social sector advocacy tends towards income-based solutions to poverty and disadvantage (or small-scale, after-the-fact services) rather than public infrastructure and universal public services. This is not just in what we advocate for, but also how we understand the problem. Our preferred descriptor of “income support” reflects a more individualised focus than the older term of “social security”, while our basic measures of poverty and inequality relate to only to income (e.g. a poverty line of $x per week). This is despite the fact that:

  • the limited data available suggests the inclusion of a range of universal public services as “social transfers in kind” in the income data radically reduces measured inequality, and
  • old ABS data shows that accounting for these service (along with inputed rent) decreases the poverty rate by about two-thirds (from 12% to 3.9% in 2013-14).

This is surely an argument to focus more on collective solutions through universal basic services, rather than only on payments. Yet despite this, and the strength of O’Connor’s arguments, I was surprised that I was still uncomfortable about the universalism and subsequent cost of such service provision. I kept going to the need to provide for the poorest first and to target funding. For instance, free public transport would be a subsidy to middle class office workers, managers and city professionals who can afford weekly tickets. Surely concessions for those on low-incomes would be cheaper and better targeted?

Given that I have just spent three years campaigning for better state government concessions, my head is very much in that income-support space. But O’Connor’s and the foundational economy approach is a useful reminder that a tactical win is not systemic change or the end goal. Some of the best supports we can provide to those with limited income or resources may not be directed to those people at all, but may be about creating better services for all.

Conclusion

I have some quibbles about some of the theoretical propositions in O’Connor’s book, and more questions about the Foundational Economics approach. I may return to these at a later date, but overall I found Culture is not a Creative Industry both readable and challenging. I will be interested to see its reception among arts and cultural practitioners, but for me it was well worth the read for its insights and applicability beyond that space.