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Issue #1451      21 April 2010


Capitalism is not concerned with meeting people’s needs

The project is called Building the Education Revolution – BER for short. It was launched as part of the federal government’s $42 billion stimulus package to deal with the impact in Australia of the economic downturn that has engulfed the world economy since late 2008. The plan was to get halls and other structures built as quickly as possible, stem growing unemployment and give schools another building whether that was their major need or not. BER will cost $16.2 billion and still has two years to run. Unfortunately for Rudd and Education Minister Julia Gillard, the funds have been raided by opportunistic operators who have given spectacularly bad value for the community’s money. BER joins a growing list of government schemes undermined by policy makers’ unwarranted faith in private enterprise to deliver cheaply and efficiently to the public.

Gillard has finally given in to pressure for an inquiry. The outcry did not only come from the Opposition. It came from school communities outraged at the money paid for shade structures and “covered outdoor learning areas” (COLAs). Hastings Public School in Port Macquarie now has a COLA that looks for all the world like a humble demountable building. Price tag – $931,000. The deputy PM has appointed Brad Orgill – former chairman of UBS Investment Bank Australasia – to head up a taskforce and look into the running of BER. He will make an interim report in three months and every six months from then on. The government has pledged to make the detail public.

Until recently, Gillard had insisted that the commonwealth funded, state run project was being monitored and audited satisfactorily at various levels. Reports of rorting were taken lightly. “The number of complaints compared with the breadth and depth of the program is still a limited number of complaints,” she said. But the reports that did get out about unusually high costs to the taxpayer got worse and worse. Construction companies are charging fees up to 21 percent to manage projects compared to the usual five percent. The situation appears to be worst in NSW where middlemen have been given freest rein.

Political columnists are saying that by calling the inquiry the government is seeking to take the heat out of the issue by the time the federal election rolls around. Unfortunately for the government, these schemes just keep on delivering embarrassing detail. The home insulation and green loans scandals have not yet run their course. The demise of the $2.47 billion home insulation rebate scheme has sparked a war between the industry groups involved in the installation of the various types of insulation. Contractors have been sent to the wall by the axing of the scheme.

Greg Combet has replaced Peter Garrett as minister in charge of the debacle. He has to grapple with the fact that as many as 16 percent of the 1.1 million installations do not comply with standards. The installations have been associated with 120 house fires and the deaths of four installers. The government is considering the removal of foil insulation from all 50,000 homes it was put into or the offer of the installation electrical safety switches.

The government’s stimulus package has been very revealing about the Rudd government and its backers. As it got underway Australian Industry Group spokesperson Helen Ridout observed that schools became an obvious focus for spending because there had been significant underinvestment in education for decades. Parents and teachers have been saying this for ages and have been ignored. Now that the economy is getting shaky, there are billions upon billions of dollars available for doubtful projects involving rorts and dodgy work practices. Capitalism is not concerned with meeting people’s needs.

Reports are starting to come in about the rorting of a scheme to provide broadband connections to businesses and households in remote communities. Everywhere you look there are private enterprise snouts in the public trough. It is time working people called a halt to all this nonsense and demanded the restoration and extension of public enterprise, public ownership, accountability and control. 

Next article – Firefighters call for one fire service

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