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PRIVATISATION ... IN NO ONE'S INTEREST
PSA Assistant General Secretary, Natasha Brown.
A message from PSA Assistant General Secretary, Natasha Brown ...
The PSA recently partnered with the Hawke Centre to present a public forum: Privatisation… in whose interest?
The purpose of this forum was to challenge the all-too-familiar claim that the public sector does not provide value for money; that private operators can successfully deliver better services at a lower cost and that this means it is in the public interest to sell them off.
Backed by a wealth of evidence we know this is not true.
False promises
The public knows from experience that the big promises of, for example, better quality electricity and water at cheaper prices were a con. Prices have increased; access, quality and reliability have declined, and costs to government have increased over the long term.
These perceptions are reinforced by several decades of accumulating evidence on the inherent flaws in the nature of privatised for-profit services and the ongoing erosion of the public good and significant damages to workers, communities and the public as a whole.
Nevertheless governments continue to pitch privatisation of public services as the solution to problems with costs and service delivery at the local level, maintaining the illusion of ‘balancing budgets’ in times when the need for ‘fiscal restraint’ is imperative.
‘local’ problem. It is a central component of several decades of neoliberalism and its influence on political, policy and funding environments across the globe. The arguments for privatisation are now as discredited as other aspects of neoliberalism like ‘trickle-down’ economics.
Mega-corporations benefit, not communities
Privatisation has spawned the rise and rise of the giant global corporations with enormous lobbying capacity and political influence which now deliver a multiplicity of public services through their taxpayer-funded contracts with governments. It’s no secret that many of them structure their Australian corporate interests in such a way that they pay no tax in Australia.
Alongside this are the vast powerful global consultancy firms who advise governments through their public sector consultancies and undertake endless reviews which almost inevitably recommend cutting and privatising public services and public sector jobs. Recent CPSU research shows how the big four consultancy firms have nearly tripled their income from federal government contracts since 2013, all while becoming among the nation’s most generous political donors.
This is the context within which in just three decades from the establishment of Australia’s first private prison in 1990, the proportion of prisoners held in private facilities has grown from just under 2% to nearly 20% – the highest proportion per capita in the world – and the management and operation of private prisons is dominated by global corporations headquartered in Europe and the US.
Similarly, the opening up of Australia’s public health system to private operators has seen the rapid rise of large corporate and private providers across key areas of public health – pathology, medical imaging and hospital-based care.
We know that large foreign-owned corporations are growing enormously wealthy and powerful through provision of public services substantially funded by us – the Australian taxpayers – and that their corporate interests have been key drivers of rising living costs.
No accountability or transparency
And we know that for too long, public accountability and transparency have been undermined by confidentiality and commercial-in-confidence arrangements between governments and private
CEPU and PSA members protest the privatisation of public transport support services
contractors, with limited public reporting. But you have to question, if privatisation is supposedly so good, why do governments and the private companies they enter into contracts with go to such great lengths to try and obscure the truth about their operations?
What credible analysis of their operations shows, is that the obsession with benchmarking, performance targets and the imperative to cut costs is a primary means by which governments force private sector staffing levels and working conditions on the public sector – including saving money by employing less experienced and trained staff – in the name of providing better “value” to taxpayers.
The primary accountability of private corporations is not to the public, it is to deliver profit and returns to their shareholders. The end-logic of this commercial imperative is practices which make for maximum profit. To be competitive and maximise shareholder returns the business model involves: lower staffing levels than the public system, lower wages, providing less job security and employing higher levels of inexperienced/untrained/casual staff.
There is hope
Northern Health, a major public teaching hospital in Melbourne, has recently taken back control of its pathology lab after a seven-year experiment with privatisation. After being contracted to Australian Clinical Labs (ACL), serious concerns arose with the negative impacts of ACL’s business model and its pursuit of profit on the quality of its services. These concerns included major staffing issues such as reducing staff numbers through cutbacks and redundancies; an overall decline in experience and expertise of staff; underpayment of staff; and short-staffing. Turnaround times suffered, and the overall decline in the quality of pathology services and standards negatively impacted on patient care. Concerns grew to such an extent that Northern Health decided not to renew the contract with ACL and brought pathology back in-house by establishing a new public pathology laboratory service in order to “create capacity and selfsufficiency”. The new public service at the Northern opened in January 2019.
Likewise, the Queensland Government has also recently taken the decision to return its two private prisons run by Serco and GEO to public operation and control, due to serious concerns with the private operating model. At the time of the announcement, Corrective Services Minister Mark Ryan said
“State-run facilities have more staff, and more staff means more safety… So the public operating model delivers on more staff safety and that is one of the considerations that has led to this decision. This will cost extra money but we think that this is justified and it is in the public interest.”
Our campaign continues
During the forum “Privatisation… in whose interest?”, we also heard other examples of privatisations interstate and overseas which have been successfully reversed through union campaigning and community action. This is why keeping up the momentum in our SA Not For Sale campaign is so important.
Our campaign is firmly on the side of jobs and workers, the needs of the community, the public interest over both the short and long term, and what genuinely represents ‘best value’ for South Australians in the expenditure of public funding. It is driven by our evidence-backed belief that the fairest and most equitable way to deliver high quality public services accessible to all South Australians is through properly resourced and supported public systems with respected public sector workers – you – as their backbone.
CEPU and PSA members protest the privatisation of public transport support services
