Social Capital Returns with the Labor Government and Assistant Charities Minister Dr Andrew Leigh

In the following article, CCA’s CEO, Dr Don Perlgut writes that the concept of increasing social capital and tackling inequality has returned to Australian public conversation and political life with the arrival of the new Labor government in Canberra, articulated by Dr Andrew Leigh, new Assistant Minister for Competition, Charities and Treasury.

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Social capital has returned to the Australian economic and political conversation. While not a new concept to Australia, it has been out of favour in Canberra during the Coalition’s nine years in government. The return can have many positive impacts for Australia’s not-for-profit (NFP) adult and community education (ACE) sector, and the charities sector more broadly.

New Assistant Minister for Competition, Charities and Treasury, Dr Andrew Leigh (pictured), has not wasted time in articulating his and Federal Labor’s views. We should “care about community and social capital,” Dr Leigh says, because “it goes to who we are as a society. Just as inequality is a choice between a society of ‘we’ and a society of ‘me’, so too civic community is a choice between a society of ‘we’ and the society of ‘me’. Inequality and community are two sides of the same coin.”

Dr Leigh welcomed the news that the Commissioner of the Australian Charities and Not‑for‑profits Commission (ACNC), Gary Johns, has tendered his resignation. His replacement will “work constructively with charities and non‑profits to not only uphold the laws and regulations, but to strengthen the social fabric. The election ended the Liberals’ nine‑year war on charities.”

By using the words “strengthen the social fabric”, Dr Leigh emphasised the activities of NFPs that go beyond just supporting vulnerable people, as a role within communities and Australian social life. He recognised that the NFP sector “accounts for 10% of employment and a significant amount of GDP, and that charitable advocacy plays a vital role in our democracy.”

Does that figure of 10% sound familiar? It’s pretty much the same percentage that NFP community (ACE) providers undertake in the national vocational education and training (VET) sector: 386,400 students of a total 3.9 million Australian students in the sector in 2020.

Not-for-profit organisations in Australia may never have an advocate like Dr Leigh again:

“I’m absolutely delighted to be the Assistant Minister for Charities. I don’t think anyone has ever wanted the charities portfolio as much as I do. I’ve had that shadow portfolio throughout our nine years in opposition. I’ve had the joy of working with charities right across the country through our reconnected forums and getting your ideas about how to rebuild civic community. We’ve set an ambitious goal to double philanthropy by 2030. We want to celebrate the role of charitable advocacy, recognising that our democracy is stronger when the voices of charities are heard in the public square.”

Dr Leigh finished his recent talk to the Australian Progress conference thus: “We know the end goal – it is a more united society that speaks to our civic values, in which we have more friends and are more likely to know our neighbours, in which we’re giving back to the community.”

In a meeting with ACOSS CEOs I attended, Assistant Minister Leigh directly referenced the work of Harvard professor Robert Putnam, with whom Leigh studied and worked and who has influenced Leigh’s own work on social capital (Reconnected: A Community Builder’s Handbook) and inequality (Battlers and Billionaires: The Story of Inequality in Australia). Leigh recommended Putnam’s latest, The Upswing: How America Came Together a Century Ago and How We Can Do It Again (2021).

It’s not just Dr Leigh. On his first day on the job, the new Treasurer, Dr Jim Chalmers, reiterated of the need for better ways to measure progress: “It is really important that we measure what matters in our economy in addition to all of the traditional measures. Not instead of, but in addition to. I do want to have better ways to measure progress, and to measure the intergenerational consequences of our policies.”

Both the new Treasurer and the new Assistant Minister will find a long history of support for their ideas within government research. A 2012 Commonwealth Treasury “Wellbeing Framework” states that while “social capital is often a by-product of factors that lie outside the direct control of government such as religion, cultural traditions, and shared historical experiences … many existing policies aim to build up or support social capital — education, family support, funding for sports and cultural and national events.” Earlier work by the (usually economically dry) Australian Government Productivity Commission examined social capital in detail and concluded that “high levels of trust and social engagement can generate wide ranging benefits,” and that “governments should consider ways of harnessing and enhancing social capital to deliver programs more effectively.”

As a long follower of Dr Leigh’s work and a great fan of Professor Putnam, it is thrilling to know that we now have a significant member of national government who lives by the words “social capital” and “reduction of inequality”.

One of the first places to start is to update and reissue the 2008 Ministerial Statement on Adult and Community Education. The last national Statement confirmed the “value of adult and community education in developing social capital, building community capacity … and enhancing social cohesion.”

The next stage is up to us.

– Dr Don Perlgut, 28 June 2022

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