2. What is “New Public Management‟? What are the advantages and disadvantages of this trend for the delivery of human services? What are its implications for non-government welfare organisations?

The early 1980s and 1990s saw the emergence of New Public Management (NPM) theory of running public organizations. This concept originated from the UK and USA during the times of Margaret Thatcher and Ronald Regan. It has since been implemented in other OECD countries like Canada and New Zealand. In Australia NPM was introduced by the Hawke-Keating Governments (1983-96) and extended by the Howard Government (1996-2007). The governments of the time, increasingly under political pressure to cut down expenditure and administration costs turned to the public sector for ideas and hence the birth of the NPM (Gruening, 2001). This paper seeks to define NPM and list its advantages and disadvantages in the delivery of human services. The paper will also explore the implications of NPM for non government welfare organizations.

NPM has been defined by Wolfgang (2005) as the transfer of business, market principles and techniques from the private into the public sector, based on a neo-liberal understanding of state and economy with the aim of creating a trim, reduced, minimal state. The goal of NPM is also to reduce public activity inorder to increase business efficiency, effectiveness and general performance of the public sector, while delivering a quality service for the public. This was achieved by cost cutting and outsourcing public activity to non government welfare organizations (NGOs) through competitive tender processes. In Australia, services like aged care; disability services; child, youth and family support; alcohol and drug services; mental health services among others, were contracted out to NGOs. NPM also focuses on the removal of bureaucracy in favor of ‘loosely couple quasi autonomous units’ (Lynn (2006:107), allowing managers to manage according to private sector practices leading to self regulation and profit maximization.

Advantages of NPM

One advantage of NPM is decentralization that leads to greater flexibility where managers can

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