Essential Report

Cuts Hurt–Everyone Part II

Aug 31, 2012

Yesterday, Cuts Hurt took its first step publicly to paint the real picture of the devastation underway because of the cuts unleashed on the people by Liberal state premiers. Yesterday, we explained that those cuts hurt everyone. It’s worth another closer look today.

One way of thinking about this is comparing the actual cuts to the what those cuts actually mean in the your daily life and the lives of the hard-working people in the public sector.

First, the cuts, per the Community and Public Sector Union (CPSU) :

Staff reductions or voluntary redundancies have been announced in about 40 agencies
• Department of Human Services (includes Centrelink, Medicare & CSA) = 521
• Department of Health and Ageing = 378
• Department of Education Employment and Workplace Relations = 500
• Department of Foreign Affairs and Trade = 150
• Department of Climate Change and Energy Efficiency = 300
• Australian Bureau of Statistics = 121
• Department of Veterans Affairs = 46
• Attorney Generals Department = 130
• Department of Agriculture, Fisheries and Forestry = 111
• Department of Resources Energy and Tourism = 100
• Treasury = 217
• Fair Work Ombudsman = 70
• Commonwealth Ombudsman = 35
• Regional Australia = 220
• Prime Minister and Cabinet = 40.

And, then, the impact, per the CPSU:

What has been the impact on services so far?
• The number of outstanding DHS debts has blown out to 300,000
• Some DHS customers now wait 26 days for follow up appointments, this used to be 14 days
• Waiting times in DHS office are now very often over one hour
• Cuts in DHS regional office management has resulted in administrative confusion, including
no responsibility for health and safety issues, lack of basic office supplies so that staff hide
stationery for their team, and staff cleaning tea towels for a whole building as there are no
contracted services.
• Some DHS programs have been told to divert all calls to voice mail and only respond to email
queries resulting in frustration for staff committed to helping their communities
• Baby Bonus claims should be processed in 21 days, some now take 70 days
• DHS call centre waiting times have blown out from two minutes to more than 30 minutes
• Student claims processing are regularly exceeding their 21 day target
• Family Payments claim backlog has jumped from 30,000 to 70,000 and it now take 22 days
to process a claim
• Security guards have been put in 70 DHS offices (at a cost of $7 million over 18 months) to
counter a rise in aggression, violence and anger from welfare recipients
• Quarantine cutting sniffer dog screening at airports
• Once staffing numbers drop below a certain level, Customs district offices may not have
enough people to safely perform their duties. Similarly, declining staff numbers will makes
shift-work difficult which means that on some days, vessels may not be boarded after 5pm
• Veterans now have to wait 40 days for pension increases to be processed
• Customs budget was cut by $34 million in 2011. This meant the loss of 77 front line staff
causing a peak wait time of increase of up to 24 minutes at Sydney, Brisbane, Melbourne
and Perth airports. At the same time, passenger arrives are set to increase by 4.5% a year
over the next 10 years
• Fair Work Australia is going to close its call centre with no plan for how these calls will be
handled by the organisation
• The Australian National Maritime Museum sold a number of vessels in its working vessel
fleet as a saving exercise. This included the historic tugboat Bareki. They now hire another
• The Bureau of Meteorology announced it will not back fill positions when people are on
leave. This creates increased workloads for when people return from leave and will
encourage some people to work when on leave
• Cultural Institutions: the ongoing 1.5% efficiency dividend and capital expenditure cuts have
lead to major problems at Screen Australia, the National Museum, the War Memorial, Old
Parliament House; the National Film and Sound Archive, the National Archives, The
Australian Institute of Aboriginal and Torres Strait Islander Studies, the National Library and
the National Maritime Museum. Two major exhibitions planned for the National Gallery
have been postponed, including the internationally significant National Aboriginal triennial.

So, that’s one way of looking at the direct connection between cuts and services.


The Smoke Clears

Aug 29, 2012

Once the smoke of misdirection clears, you can pretty much see the truth. John Howard may have gone off message—or least, Tony Abbott panicked enough about Howard’s call to go back to the pre-Fair Work days that he, Abbott, hurried to say, “oh, no, that was back then, we’re not for that”, even though he refuses to say what exactly he is planning when it comes to workers should he become prime minister. But, we know exactly what is on the mind of Abbott because his ideological sidekicks in state governments offer a pretty good roadmap.

Per the Sydney Morning Herald, we know that Barry O’Farrell is pretty much determined to bludgeon the wages and benefits of tens of thousands of people:

AT LEAST 80,000 NSW public sector workers are set to lose salary benefits and conditions under sweeping cuts to their awards.

The O’Farrell government yesterday confirmed it had applied to the NSW Industrial Commission this week to change 98 awards for public sector workers, including 1000 nurses who assist people with disabilities and those in aged-care facilities.

Clerical staff, librarians, parks and gardens staff, school administration assistants, regulatory inspectors and legal officers are also among those set to lose their entitlement to long-held conditions, including an annual leave loading of 17.5 per cent.

The government also plans to cut penalties for all shift workers and allowances for staff stationed in remote areas.

Some sick leave entitlements, flexible work arrangements and parental leave would also be affected by the changes.

Add to that the drip, drip, drip of job cuts O’Farrell is imposing and the picture is crystal clear. NSW Public Service Association’s General Secretary John Cahill terms O’Farrell’s  plans “a disgraceful further attack on the public sector workers”. What Abbott is trying to avoid are the details of what he will do because it is no coincidence that O’Farrell’s popularity has slid—people don’t like losing their jobs, and, actually, they don’t like hearing that their family members and neighbors are going to be axed, either.


Drip, Drip, Drip

Aug 27, 2012

Sometimes, the forest is hard to see when you get confused by the trees. And speaking of forests and trees: with the slashing of 120 Rural Fire Service jobs, the public sector has now taken a hit of more than 1200 regional workers—people who won’t have a decent paycheck or benefits or security.

As NSW Public Service Association General Secretary John Cahill points out, in a statement released by the union:

The NSW Government’s agenda of quick and deep public sector job cuts is tearing apart the fabric of our regional communities.Not even vital regional services like the Rural Fire Services, Office of Water and Crown Lands can escape the budget razor.

And here is something worth taking a peek at. The drip, drip, drip of job cuts imposed by Barry O’Farrell is, perhaps intentionally, not being rolled out at once. Rather, it’s a cut here, a cut there—not big enough for the public to see the big picture. And if you look even further down the list, you can see what still is yet to come: thousands more jobs on the chopping block.

Region Department or Service Number of job losses announced
Grafton Grafton jail 108
Gosford Workcover and NSW Industrial Relations office 101*[100 Workcover jobs
re-located from regional NSW to Sydney]
Newcastle NSW Industrial Relations office 6
Illawarra, Wollongong NSW Industrial Relations office 7
Illawarra Illawarra TAFE Up to 250
Coffs Harbour NSW Industrial Relations office 3
Orange NSW Industrial Relations office 1
Wagga NSW Industrial Relations office 2
Regional NSW
[location unknown]
67 [17 March, 50 June] Office of Water; 175 Crown Lands and up to 350 Office of Environment and Heritage; 26 Forests NSW 618

Projected public sector job losses in regional NSW over the next four years [location unspecified]
Source: confidential Treasury documents covered in media reports


Region Department or Service Number of jobs
Roads and Maritime Services Up to 400 total
Education Up to 2400
Dept of Family and Community Services 900
Health Department 3600
Jails and corrective services 881
Centre for Road Safety 400

Garbage In, Garbage Out

Aug 10, 2012

Today’s installment of reality versus fantasy is brought to us courtesy of Barry O’Farrell’s flogging of that tired-old, and entirely false, presumption that the magic of privatization and outsourcing and will cure all ills. It reminds us that the Coalition’s entire economic philosophy is anchored by false, phony and economically bankrupt ideas.

Here is the news, though, it’s not really news since it simply puts a rubber stamp on the Coalition’s ideologically, non-economically sound, plans. From the Fantasy Review (known to bankers as the Financial Review), another so-called journalist, Michaela Whitbourn, shows the basic flaws in what passes for journalism:

The NSW public service would be forced to compete with the private sector under the recommendations of a review chaired by businessman David Gonski which pushes for major changes to how the state provides health, transport and other important services.

The government supported most of the 132 recommendations and said it would use competition to ensure the public sector’s performance kept pace with the private sector.

“We have to change the way we manage and deliver, and we have to change fast,” NSW Premier Barry O’Farrell said.

“When suppliers compete to provide a service or a good, they’re forced to improve their efficiency, their quality, their pricing, and customers . . . take back control through the exercise of choice.

Mr O’Farrell and Treasurer Mike Baird yesterday released the final report of the state’s Commission of Audit, chaired by Mr Gonski and conducted by former Sydney Water managing director Kerry Schott. [emphasis added]

So, to clear up one obvious point: is it surprising that the “audit” conducted by a former Sydney Water managing director — an organization that is panting to privatize — would advocate for privatization? This is classic “garbage in, garbage out”: you get results based on the bias you go into any project with.

One of the reasons that these theories aren’t laughed at is simply that the traditional press is lazy and does not understand basic economics. Reporters are not doing their research and so they simply show up, regurgitate press releases or reports, without doing any independent research — not to mention independent thinking. You don’t need to be a deep thinker though. You can rely on that very secret, obscure tool called “Google”. It takes any average person like yours truly about 30 seconds to find evidence from across the planet that privatization does not work. Repeat: it does not work.

To wit. In the US, just to take one example, the government paid billions of dollars more for privatized services in 33 of 35 occupations. Conclusion, from People for the American Way:

Some privatization efforts are windfalls that enrich major corporations or politically connected local businesses at the expense of taxpayers. Sometimes the cause is simply a mismatch between the resources and expertise of a public official and a major Wall Street firm.
“There’s a reason that there’s been so much enthusiasm in the finance community for privatization deals. You are dealing with a less savvy partner,” said David Johnson, a partner in a firm that advises struggling municipalities. “The bigger sucker is always the government.” Privatization can be good business, whether successful or not. When privatization plans fail and government steps back in, politically connected financiers brokers, and law firms can still walk away with millions of taxpayer dollars.

There is a long history of the push for privatization which has no sound basis in economics but a very solid history in anti-union, pro-business sentiment:

In recent years, dozens of privatization initiatives have been proposed, passed, or implemented. They are aimed at water treatment, transportation infrastructure, education, prisons and prison services, health care and other human services, government buildings, municipal maintenance, emergency services, and more. Those efforts are frequently promoted by the same Wall Street firms that helped create the recession and financial crisis; by right-wing foundations, think tanks and political donors who are eager to exploit the budget-balancing desperation of public officials; and, of course, corporations eager to tap public coffers and take over assets built with taxpayer funds.
 We could go on and on.

What’s pretty clear is this: O’Farrell, The Coalition and their other privatization groupies can’t have an actual serious debate about the economics of privatization — because they can’t win on the numbers. So, they make it all up to hide a far more serious agenda: the undermining of wages for public workers, and for society as a whole, in favor of siphoning off more wealth to big business and the elite.



Read Essential's ongoing research on the public response to Covid-19.

Sign up for updates

Receive the Essential Report in your inbox.
  • This field is for validation purposes and should be left unchanged.