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Issue #1555      11 July 2012

O’Farrell’s open season on job cuts

Last year the O’Farrell government said it would cut 5,000 NSW public service positions. The recent state budget nominated another 10,000 job cuts, making 15,000 altogether. However, according to a leaked internal Treasury memo, the government has set no limits to its proposed cuts.

Workers facing redundancies include teachers’ aides, school counsellors, TAFE teachers and paramedics, speech pathologists, radiographers, cleaners, caterers, hospital porters, fire fighters and child protection, disability support and national parks employees. School teachers, nurses and police have been quarantined from the cuts, but they would be under pressure to do the work of those who lose their jobs.

The memo says: “There is no floor or cap on redundancies”, but tries to shift the blame onto the heads of government departments, saying 10,000 is only an “indicative figure” which “shows the extent of the cuts should every Director General choose only the redundancy option.”

The government also wants to privatise major elements of public infrastructure, including bus services, Sydney Ferries, sections of the rail system, and child protection and disability support services.

The government has already announced it wants to split up Railcorp, the state’s rail system, so that the country rail services operate as a separate organisation. The country, Illawarra and Eastern Suburbs services all operate on rail systems that are relatively independent of the main Sydney service, and are sitting ducks for privatisation.

The government says it is seeking greater efficiency, but the new privately run north-west rail line will utilise single-decker carriages, which will have completely different engineering and maintenance requirements from the current double deckers. The tunnels being built for this line will only be big enough to accommodate the single-decker trains.

The government’s claim that single-deckers achieve faster passenger discharge rates has been challenged by the Greens. The governments of several European countries are currently changing major city rail services from single-decker to double-decker systems.

Public losses ...

Under the government’s plans the Health Department would lose 300 staff over four years. This financial year it would lose $88.8 million in funding, representing a loss of 906 jobs, or six percent of its non-nursing staff. The Department of Family and Community Services would lose 800 staff, including 242 (seven percent of the total staff numbers) this financial year.

According to the Treasury document, the Department of Education will be forced to shed 2,400 jobs over four years. This financial year it will lose $40.8 million in funding, equivalent to 408 full-time jobs and 200 part-time positions. However, according to the Sydney Morning Herald unions have now been told the losses could be even greater, with the loss of 600 full or part time non-teacher positions.

The job losses would inevitably involve cuts in the provision of public services. Steve Turner, assistant general secretary of the Public Service Association, commented: “... frontline services ... delivered by front-line staff that will be cut (include) the provision of disability services, homecare for the elderly, child protection services, (consulting) farming communities about their land, looking after marine parks, fisheries and waterways”.

According to the Treasury document the Department of Education would be forced to lose more than half its language and literacy programs for disadvantaged people. Funding for education of migrants and disadvantaged people would be cut by $27.1 million to $12.4 million. Demountable school building funding would drop from $23 million to $11.9 million, and for printing from $19.6 million to $13.8 million.

... and private gains

The government says it must cut the state’s expenditure by 1.2 percent per annum, and achieving that goal may necessitate privatising some service areas. However, privatisation will not cut costs. Charges for most government services are non-profit, i.e. they are merely intended to generate enough income to cover these cost. In contrast, private firms also need to make profits, and as big as possible, for the new owners.

The government is the servant of capital. Its real objective is to transfer as many government service organisations as possible to the private sector, preferably setting them up to be highly profitable before doing so.

To ensure the sale of some assets they intend to enter into franchise contracts with private firms in which the infrastructure would be retained by the government, which would also bear the long term costs of upgrading it. The firms would merely pay the workers and charge the customers.

That’s the idea for the Sydney ferry services. They were once privately run, but the firms made insufficient profit, largely because of high infrastructure costs, and the government was forced to take them over in order to continue providing the service.

Later the Iemma Labor government tried but failed to sell them off. The new franchise arrangement is intended to provide an irresistible temptation for private transport corporations.

The government also intends to ensure the privatisation of assets by cutting wage costs and increasing work time, prior to the sale. One example involves the State Transit Authority, which runs public bus services in Sydney and Newcastle. State Transport Minister Gladys Berejiklian recently commented “Privatisation of STA is not currently government policy, but I expect State Transit to become more efficient and deliver improved services to customers”.

Despite her denials, the government is definitely interested in selling off the STA. During recent discussions with transport unions the government confirmed this by indicating that privatisation of State Transit might be avoided if employees accept the loss of penalty rates, shorter breaks between trips and a casual labour regime.

However, a surrender by transport staff and unions on these issues would actually increase the likelihood of privatisation, because the new owner’s anticipated wage bill would be lower and profits higher.

Conversely, prospective buyers would be more wary of taking over an organisation with a militant workforce. And that’s the point. The only reason the government has exempted teachers, nurses and police from the proposed cuts is because they have very strong union representation, and widespread community support. The unions and the community are gearing up to defeat this savage onslaught on the NSW public service. It can and must be done.  

Next article – Perth workers rally

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