Industrial News 2006

December 2006

Acting globally to defend public sector

In October this year, the ANF joined union delegations from Japan, Mexico, Canada and the United States in Tokyo to discuss the impact and expansion of privatisation and the outsourcing of public sector services.

In Australia the involvement of the private sector in the provision of public services is commonly referred to as public, private partnerships or PPPs. PPPs have been developed as a way of reducing government debt but the evidence so far points to a huge waste of public money. Under PPPs rather than the government borrowing money to directly provide public services they contract to lease or buy services from the private sector over a long period of time. Primarily, this has occurred in Australia in the areas of health services, education, communications and transport. All state and federal governments have enthusiastically embraced this approach with a growing number of public sector projects and services being developed this way.

Australia has experienced some horrendous examples of private sector involvement in the provision of health services.

In 1995, the Victorian Government invited the private sector to build and manage a new hospital for the residents of the Latrobe Valley and Gippsland. The new facility would include a competitive range of general, specialty and surgical care, as well as a 24hour emergency service. In 1996 a contract was signed for the provision of a 260-bed public hospital. The venture failed in a very short period of time, both in terms of providing quality health care and financially. In order to realise its profit forecasts, the private operator reduced and cut services including ear, nose and throat services, ophthalmology and paediatric services. The venture ended in court action and the government ultimately assumed ownership and responsibility for the facility at a considerably higher cost than the initial proposal.

A similar disaster occurred in NSW with Port Macquarie Base Hospital. When the contract was signed the NSW government expected to save $46 million over 20 years by allowing the private sector to build and run the hospital. After a short period the deal collapsed, the NSW

Government was obliged to resume responsibility for the facility and rather than saving $46 million the cost to the state’s taxpayers exceeded $93 million.

When these examples were reported to the conference a vigorous nodding of heads suggested a shared experience. The conference delegates resolved that it was the responsibility of labour movements internationally to highlight the financial and service delivery problems related to private sector provision of public services.

The conference also resolved that labour movements should act globally by campaigning to ensure that public sector services continue to meet the needs of communities at a reasonable cost to taxpayers.

Nick Blake
ANF Federal Industrial Officer