Welfare system privatisation
The privatisation of social security, which began with the abolition of the CES in May 1998 and the introduction of the Job Network, will continue next year. Earlier this month the Howard Government put to tender $3 billion of employment services contracts, with the great majority going to the private sector and away from the corporatised remainder of the CES, Employment National. As a result, from next February two private charities, Mission Australia and the Salvation Army, will become the system's biggest operators. Employment National will again cut staff after losing around 40 per cent of its biggest contracts, the Government putting half of the three-year deals in this round up for grabs exclusively to the private sector. In the first round it was one third. Following this auction, Employment Services Minister Tony Abbott announced plans for the part or full sale of Employment National in 2000. Privatisation process From the announcement in 1997 of the privatisation process to the beginning of its implementation the following year, Employment National has been undermined, forced to shed staff and strip back services because of ongoing government funding cuts. When employment agency big shot Drake International became the first major private body in the new set up April 1998 they, with the support of Employment National management, wanted to employ former CES staff under reduced conditions. A stoush with the Community and Public Sector Union (CPSU) ensued. The union took the case to the Federal Court arguing that award conditions should automatically apply wherever staff were employed in the system. Employment National's argument against this was that it would "jeopardise the new $1.7 billion private employment service market". Not only did the new service providers want to employ cheaper labour, by June 1998 it was clear that the private system was not going to give the same level of service as the CES, despite the tens of millions of dollars being poured into it by the Government. Although the CES had its problems, it was an integrated whole, from counselling and training to job placement and the compilation of resumes. And its staff had considerable experience. Suddenly employers were being hit with a variety of fees by the hodge-podge of profit-seeking employment agencies. Employers began to by-pass the system altogether, doing their own job advertising and making other arrangements. At the same time the agencies were charging the unemployed $70 per hour to put their resumes together. These were all services provided free of charge in the CES. By the end of June 1998 Centrelink, the system which replaced the Department of Social Security in the processing and distribution of social security payments, was in chaos because of the failure of its new computer system and lack of staff and training in ever-changing regulations. Centrelink operates independently of the public service and is on contract to the Government to 2001 when its work will be put out to tender. Such was the Government's haste to put their privatisation plan into action that they and Centrelink management had rushed the computer system into operation without providing adequate staffing or technological support. The Government had actually cut 1,300 Centrelink staff, including some of its most experienced information technology people. As a result, remaining staff were working 80 hour weeks and weekends and having to deal with the frustration, anger and sometimes violence of those waiting in long queues for their entitlements. Eventually the CPSU used the Occupational Health and Safety Act to protect its members in Centrelink offices. In November 1998, it was revealed that the private job agencies were using most of their government subsidies to pay their own wages and remain afloat. By that time the Government had squeezed more than $1 billion from Centrelink's budget. Soon after it was announced that Centrelink intended cutting its staff by more than in 5,000 in 1999.