The analysis revealed only five documents which mentioned (generally qualified) positive aspects of privatisation. No articles explicitly reflected on the relationship between privatisation and health. However, there were articles that described the impact of privatisations on known social determinants of health. Very few articles reported positive societal impacts and most provided evidence for negative effects on SDoH.

The main themes identified were the (1) public cost of privatisation, (2) loss of government control and expertise, (3) lack of accountability and transparency, (4) constraints to accessing SDoH, and (5) benefits to the private sector (Fig. 1).

Fig. 1The public cost of privatisation

One rationale for privatisation is the presumption of cost savings. However, in their survey of privatisation of Australian government enterprises since the 1980s, Abbott & Cohen [32] stated that few studies have been undertaken on the distribution of costs and benefits of restructuring and privatisation. Although privatisation can lead to increased efficiency, it may be difficult to distinguish between gains from increased competition, regulation, or privatisation. However where such gains are achieved, the costs and benefits are distributed unequally between consumers, employees and shareholders [32].

Loss of government control and expertise

Loss of government control and expertise was highlighted in findings related to outsourcing health and social welfare provision. The impact of changes to service delivery models on the administration of Government programs was the focus of a 2020 Australian Senate Inquiry into the privatisation of state and territory assets and new infrastructure [33]. The committee heard that outsourcing human services has negative outcomes for the most disadvantaged Australians while also undermining the capacity of the public sector to design and deliver effective services [34]. Australia spends hundreds of million of dollars annually on private consultancies to deal with the impact of enforced public service staffing caps which in 2020, was equivalent to 12,346 public service roles [35]. With a reduced public service, COVID-19 management failings occurred in the rollout of vaccines, testing and tracing, and by the use of casualised and under-qualified workforce in aged care. As the policy report by Dyrenfurth [36] argues, this led directly to the COVID-19 crisis and deaths, especially amongst the elderly.

Tilley [37] explored the role of the automation and outsourcing of aspects of social security systems and its impact on recipients. In 2016, the Australian Government introduced a cashless debit card with the stated aim of reducing social exclusion and addressing social harms including gambling and substance abuse. It entered into a PPP arrangement with the private bank Indue Limited which was contracted to administer the automated payment system. During the first year of trialling, the card cost approximately $10,000 per participant to administer, with $128.8 million included in the forward estimates to expand the program [37]. As well as the financial impost, the relinquishing of primary control of the data to a private entity undermined the government’s exclusive powers of surveillance, with potential for further data-sharing. It changed the relationship between the citizen and the state and reproduced the social harms the card was purported to address [37].

Lack of accountability and transparency

Lack of accountability and transparency were common themes in the review, including for privatised infrastructure projects, human service provision for community and corrective services, and for privatised employment and outsourced hospital services. In research into the privatisation of electricity and urban rail, and PPPs for road infrastructure in Victoria, Hodge & Coghill [38] noted negative impacts on democratic accountability to citizens and public institutions. The initial divestiture of electricity involved secrecy, and removal of prior rights to information under administrative law by weakening Freedom of Information laws [38]. Following the privatisation of urban rail, accountability to passengers was dramatically reduced.

Lack of accountability and transparency was also a key feature of human service provision revealed in their report into privatisation of prisons by Andrew, Baker et al. [39]. Australia has the highest rate of private incarceration per capita, with 20 per cent of the prison population held in privately-run facilities [40, 41]. Andrew, Baker et al. concluded that there was no evidence that private prisons are cost effective. There is a lack of state uniformity, evidence of improved performance and efficiency gains are incomplete and lacking transparency, there is poor public reporting, and the true cost of private incarceration remains unknown [39]. While accountability systems and performance management have become more sophisticated, publicly available information allows for little real scrutiny.

Other researchers also note that commercial-in-confidence provisions ‘cast a shroud of secrecy’ over Victoria’s privately operated prisons, undermining the ability to identify contractual violations or potential remedial actions (42 p. 228). A major constraint to accountability is the lack of an independent body responsible for oversight, with Victoria maintaining an ‘in-house’ review and monitoring scheme which lacks public transparency [42].

In their report on the impact of privatisation and outsourcing on community services, Mitchell et al. [43] explain that although outsourcing has been applied to a wide range of public services, public reporting is rare. PPPs involve complex contracts, but the costs to the state are obscured by ‘commercial in confidence’ declarations.

Lack of transparency and accountability were also highlighted in the provision of privatised employment services, with Rogers [44] reporting that it may be difficult to determine to whom not-for-profit organisations are ultimately accountable. Although outsourced employment contracts define obligations to government, organisations may also have obligations to service users, religious entities, or financial backers [44]. Tensions therefore arise between not-for-profit service providers’ values and government employment policies [44].

Young used empirical evidence and theoretical literature to discuss outsourcing of several support services for a large Victorian hospital in 1997. This study found a lack of transparency and minimal financial reporting, with service quality sacrificed to reduce costs. Management by contractual arrangements was deemed problematic [45]. The McKell Institute also investigated the ownership structure of the health system and identified that privatising public assets is a business ‘fraught with risk’, especially in relation to healthcare. Critically, it was argued that a broad consideration of the merits of widespread health privatisation demands that policy makers first determine whether further privatisation risks eroding the concept of universal healthcare and whether it could threaten equity of access [46].

Constraints to accessing social determinants of health

Social factors including employment status, education and income level strongly influence a person’s health [47]. There are wide disparities in the health status of different social groups in all jurisdictions [47], with social and economic inequities leading to health inequities [48]. The review found wide-ranging constraints to accessing the social determinants of health spanning privatised employment services, education, human rights, and infrastructure.

Employment services: job seekers

Employment is a key SDoH [49], with the review highlighting a range of constraints for both unemployed people and service providers. The Commonwealth Employment Service was privatised in 1998 under the Howard Government. Within the outsourced employment services regime which followed, unemployed people aged 18 to 29 years, registered with Job Services Australia (Workforce Australia), were required to undertake a work experience program called ‘Work for the Dole’ [50]. The rationale was to provide job seekers with services needed to acquire new skills and to improve their chances of finding paid employment under Australia’s ‘mutual obligations’ policy framework [51]. In their evaluation of the Work for the Dole scheme between 2014–2015, Kellard et al. [52] noted certain positive and negative aspects of this active labour market program. However, the term ‘work for the dole’ reflected legacy issues that associated the program with undertaking menial tasks such as graffiti removal, and was stigmatising and unhelpful overall for engaging job seekers. Work for the Dole was perceived to be punitive, and a source of free labour, rather than for prioritising provision of relevant work experience for job seekers [52].

A competitive tendering framework encourages service providers to meet the specified goals in the most cost-effective manner [53], but with perverse incentives. These result in activities referred to as ‘creaming’ or ‘cream skimming’ (focusing on more able clients with better employment prospects, and ‘parking’ (under-serving harder to place clients). These are forms of ‘adverse selection’ where clients are chosen for assistance in inverse proportion to need [53, 54]. Service providers are given incentives to seek out those clients whose needs can be more easily met, with other job seekers diverted to ‘providers of last resort’, or receive no service at all [53]. These findings accord with the view that privatised businesses are less sensitive to the situation of poorer ‘customers’ who are not directly profitable to serve [55].

Research by Moore [56] found that young people are another disadvantaged job seeker group who are served inequitably under privatised employment services. They experience vocational barriers including limited opportunities for work experience, difficulties accessing transport, and high incidence of mental health problems and family issues [56]. However, evaluations of Australian employment services have often neglected to consider young job seekers, despite a persistently high youth unemployment rate. Moore [56] also notes that three evaluations of the Job Active program found that although there were some cost savings, not all young job seekers were benefitting equitably. However as also noted, it was people living with disabilities and Indigenous job seekers who were the most negatively affected cohorts.

Other research on employment services by Burgess showed that market-style operations are unhelpful for unemployed people who lack the necessary resources to find a job [57]. Real choice for service users was limited by a lack of information about service providers, and decisions could be over-ridden by Centrelink, the government agency which is responsible for service allocation. As Burgess notes, with publicly-funded provision there is no real market, but a contrived or quasi-market. The participants are the Federal government as the ultimate purchaser of services, agencies which sell services, Centrelink as allocator of services, and Job seekers who are the service users. Within the privatised regime there is thus an inherent tension between price and quality of services [57].

Employment services: employees

Employees are also affected by privatisation, with some service providers facing internalised conflicts over their roles. For over a century in Australia, faith-based organisations have traditionally provided welfare services to disadvantaged populations. However, interviews with faith-based service providers in outsourced agencies [58] revealed the challenge of being unable to fulfil their distinctive holistic core missions and express their values when governments prioritise market-based approaches to contracting out. The challenge for these agencies is deciding whether to accept ‘tied’ government funding, and if they do so, find ways to adapt to protect their values, seek alternative funding sources, or withdraw completely from service delivery [58]. This potentially limits options for citizens in vulnerable circumstances.

Mitchell et al. [43] explain that while transnational corporations (TNCs), or for-profit providers, play a large role in delivering outsourced services in Australia, the not-for-profit (NFP) sector, which operates from a different financial and values base, has also embraced government services provision, but in doing so, lose their capacity to advocate to government on behalf of their traditional clientele. Rogers [44] discusses the need for staff in NFP service provision to increasingly focus on financial aspects of the organisation, whereby workers may become less responsive to job seekers and more rule-bound.

Some NFP service providers claim that they are conflicted by the need to impose demerits and financial penalties for non-compliance by disadvantaged and vulnerable people. Some organisations also choose not to challenge aspects of government policy for fear that their employment network may be negatively affected [44]. Staff report unhappiness also with the high administrative load and general systems operations. The NFP sector relies heavily on volunteers but there is limited information on any implications for workers, volunteers and organisations [44].

The review of the literature highlighted employment constraints in other human service sectors and employment cohorts, including employees. In their research on austerity, staffing inadequacy, and contracting-out in aged care, Farr-Wharton et al. [59] found that employees who work in a facility that has inadequate staffing and offers low peer-support often seek alternative employment. This leads to increased workers compensation claims and retention costs that are externalised to the taxpayer.

Negative outcomes for employment also occur under the correctional services regime. This has resulted in poor outcomes for prison workers in most states from staff cuts as part of the privatisation process [39]. In Western Australia, the Economic Regulation Authority (ERA) argued that a benefit of introducing private providers was a reduction in the costs of workers’ entitlements, with prisoners viewed as ‘stakeholders’, but prison officers as ‘a cost to that system’ (39 p. 5).

Education

Education providers identified in the review include Technical and Further Education (TAFE) and early childhood education and care (ECEC). Rodd researched the experiences of TAFE workers from the transformation of the vocational and training sector (VET) between 2012 and 2017 [60]. Under these changes students became ‘customers’, and VET service providers were forced to compete for market share. The research revealed significant economic cost for taxpayers, with students left heavily indebted and bearing the major cost of privatisation [60].

Once largely managed by the community sector, ECEC services have also shifted to for-profit providers. This has driven down operational standards, reduced access to care, and imposed a cost to taxpayers [61]. The Australian Council of Trade Unions (ACTU) notes that these workers are often early victims of cost-cutting and profit seeking which leads to underpayment, overwork, and insufficient support.

Unions

Unions are arguably an unappreciated SDoH [62]. They help to raise wages, decrease inequality, decrease discrimination, improve workplace safety and affect other health determinants [62]. The review identified research revealing the impact of privatisation on union membership. Oliver [63] examined two Western Australian unions and found that privatisation was a key factor in declining union membership and union power. A ‘clearing out’ of ageing workers occurred in some industries under both major political parties in preparation for privatisation, leading to large job losses and a loss of union culture [63]. This specific case supports the more general correlation between unions and access to SDoH in the form of higher wages, lower income inequality and other factors [62]. Research by Young found that while privatisation resulted in some cost savings it also led to a reduction in union power, the nature of the relationship between contract and internal staff, and service quality [45].

Human rights

Human rights are key to addressing inequities in SDoH [64]. The review identified constraints to human rights due to the privatisation of Australian immigration detention facilities, and from workers’ rights to compensation. The management of Australian immigration detention facilities was outsourced from 1998 under a range of successive contractual regimes. In researching the opportunities and challenges for implementing human rights within Australian privatised detention centres, Penovic [65] notes that even though the Federal Government cannot outsource its common law duties or international human rights obligations, the removal of direct ministerial responsibility can obscure government responsibility for human rights abuses when it is distanced from its own policies. Australia’s detention regime is deemed to be abusive and inconsistent with human rights, and Penovic notes these features are exacerbated by the privatisation of management [65].

Crowley-Cyr [66] notes that although the state’s duty of care for those under its control and supervision cannot be delegated, contemporary contractualism legitimates social exclusion by focusing only on the purchase of outputs, rather than the delivery of outcomes. This focus limits the extent of an individual’s contract with the state and has led to violations of immigration detention standards and operating procedures of a contractor (GSL). This was in respect of receiving appropriate medical assessments and treatment for injuries, being denied basic amenities, and that detainees were ‘humiliated and treated in an inhumane, unsafe and undignified manner’, and with the application of undue force during transportation (67p. 95).

In 1999, the Western Australian Parliament passed the Court Security and Custodial Services Act which allowed for outsourcing prisoner transportation, with prison management transferred in 2007 to GSL Custodial Services Pty Ltd (GSL) (now known as G4S) which provides privatised services to the Australian justice system including correctional facilities, courts, police custody, electronic monitoring, prisoner transport and offender rehabilitation [67] A Coroner’s Inquiry followed the death of an Indigenous Elder by heat exhaustion in 2008 during a prison transfer by G4S. The coronial findings noted a lack of policies and procedures, inexperienced staff, and a lack of oversight from the Western Australian Department of Corrective Services [68].

The 1966 human rights Covenants, the right to work and rights in work, are addressed in the International Covenant on Economic, Social and Cultural Rights [69]. Workers’ compensation in event of workplace injury, disease or death is a critical determinant of health for workers and their families, with many employers acknowledging financial wellbeing as a SDoH for workers [70]. A case study of outsourcing claims administration for the South Australian workers’ compensation scheme, conducted by Purse [71], found that outsourcing failed to meet its objectives, that employees’ interests and rights were often subordinated to those of employers, and that the system lacked accountability.

Infrastructure

Wide-ranging privatisation of infrastructure has occurred in Australia with this review noting telecommunications and banking services, ports and airports. Privatised markets require regulations to protect people’s interests. Despite the ideological similarity of the goals of privatisation and de-regulation, Stretton [72] noted that privatisation has generally led to increased regulation. Webster [73] conducted research into the performance of regulation in the Australian Telecommunications industry during a period of privatisation (six months between 1999 and 2000), finding that rural customers were disadvantaged in receiving services. The regulatory focus was on performance; doing mainly what is measured in order to meet compliance, while neglecting other important areas of customer service [73]. Regulations thereby failed to ensure a universal standard of service.

The National Partnerships Agreement on asset recycling initiative (ARI) provides incentives to State and Territory Governments to sell government-owned assets to reinvest in economic infrastructure [74]. In their 2014 submission to a Senate Standing Committee on the privatisation of state and territory assets and new infrastructure, the Australia Institute [75] argued that the ARI is built on a presumption, without empirical basis, that privatisation is always preferable, and highlighted that many of its advocates have vested interests. They note that since the Commonwealth Bank was privatised, many retail bank branches in regional areas have closed because they did not deliver the very high rates of returns required of the privatised bank, and this has led to poor service outcomes [75].

Privatisation of infrastructure including Australian ports has also adversely affected local employment [76]. Prior to privatisation, port users including union members were board directors. However, the boards are now skewed towards business representatives such as from investment funds [76]. Although private port companies often offer a guarantee of no job cuts within a specified timeframe, evidence shows a reduction in the workforce at privatised ports once this time elapsed. Research shows a 31 per cent decrease in the number of employees at the Port of Brisbane due to job losses from workers who left the operations not being replaced, and through contracting out of maintenance work [76].

Job losses were also identified in research by O’Donnell et al. [77] on the privatisation of Sydney Airport. The Federal Labor Government led the privatisation process for federal airports, negotiating with five unions in 1995 so that successful bidders maintained existing airport staff and their wages, employment conditions, and entitlements for a period of 12 months. However, one year after the sale, 40 per cent of the workforce (160 employees) were made redundant in order to reduce costs [77] This underscores the negative impacts on unions reported earlier in this review.

Benefits to the private sector

A key theme emerging from the review was the many ways by which privatisation benefits the private over the public sector. These benefits accrue from hospital and wide-ranging infrastructure privatisation and the scope of outsourcing services to large transnational corporations (TNCs). These entities also benefit from engaging in tax minimisation strategies in undertaking their roles. As uncovered in their report on hospital privatisation, the McKell Institute showed that private operators may choose to only manage the most profitable services, leaving the public sector to undertake the more difficult and costly work. The ultimate responsibility for failures associated with social infrastructure projects is borne by governments when a private partner is either unable or chooses not to uphold its contractual obligations [46].

Case studies of contracting out undertaken by Quiggin [53] covered the scope of road contracting, school cleaning services, water and employment services, Commonwealth information technology services, and the Commonwealth Serum Laboratories (CSL). Quiggin found that presumed public benefits of contracting out have been overestimated. There may be benefits in cases where peripheral government risks can be successfully transferred to a contractor who is able to manage those risks, but badly designed contracts can result in governments, and hence the community, bearing high risks while gaining no return. Such policies may therefore reduce rather than enhance public welfare and so impact adversely on health and health equity [53]. Quiggin argued for consideration of a return to public ownership in some instances [78].

The privatisation of electricity networks also benefits the private sector due to the operations of ‘gentailers’. These are companies which are both retailers and generators which allows them to take advantage of both wholesale and retail markets, with governments assuming responsibility for maintaining costly and unprofitable aspects of operations, including poles and wires [79]. The benefit of privatisation to the private sector from the privatisation of electricity is also noted in research by Cahill and Beder [80]. Large corporate electricity consumers in Australia received the greatest gains during the 1990s, having successfully lobbied government for guaranteed fixed prices which were effectively subsidies by the broader population.

Some large corporations also gain significant financial benefit from being contracted to provide multiple public sector roles. In a commentary about the growing power and influence of one large TNC, O’Keefe [81] notes that Serco, [revenue £4.425 billion 2021] is contracted by governments for roles in hospitals, prisons and prisoner transport, immigration detention centres, military logistics, military health support, traffic management, health, justice, and other arenas. The only common theme across this wide portfolio is that these roles were all previously undertaken by governments [81].

Privatisation has also created benefits for investment banks which can impose multiple charges for the one transaction. This includes setting up, then managing funds and individual assets [79]. Other financial benefits accrue to the private sector when companies that adopt aggressive tax avoidance strategies are still rewarded with lucrative government contracts [