New Public Management and Information Asymmetries: An Australian employment services case study

The employment services sector in Australia has undergone four waves of radical changes since the 1990s: Working Nation (1994-1996), Job Network (JN) (1996-2009), Job Services Australia (JSA) (2009-2015) and Jobactive (July... [ view full abstract ]

The employment services sector in Australia has undergone four waves of radical changes since the 1990s: Working Nation (1994-1996), Job Network (JN) (1996-2009), Job Services Australia (JSA) (2009-2015) and Jobactive (July 2015-present). Key to the reform is the transformation of the purchasing framework, i.e. the governments’ approach to sourcing, procuring and managing the provision of employment services. From a starting point where employment services were solely provided by a public agency, the government started contracting out service delivery to numerous private providers, and by 2003, the market was fully privatized when the only public agency was finally abolished. Contractors, either for profits (FPs) or not-for-profit (NFPs), have to compete for the right to provide service.
The reform of the Australian employment services purchasing framework was informed by changes in public management thinking, commonly grouped under the rubric of New Public Management (NPM). NPM are a series of government policies designed to reform the public sector, in particular to render it more effective at lower cost. However, operationalizing the NPM principles to achieve the expected outcomes has proved challenging. Investigating the NPM tenets and their associated information claims, we argue that underlying such operational challenges is the problem of information asymmetry which is present at different levels of the existing commissioning framework. Our arguments are further nuanced by the data we collected about the reforms for nearly two decades. We suggest greater emphasis by the government on measures to minimize information asymmetry among multiple parties within the commissioning framework for improved performance.