Pathological Privatisation

John C      19 February 2019

It is nice to know that governments are so concerned that we don’t pay too much for the services that are funded by the taxes that we pay!

 

And pigs might fly. The pigs in government are hard at work ensuring that their mates in the private sector get a slice of the public services which are profitable.

 

The South Australian (SA) government has in its sights SA Pathology Services.

 

SA Pathology provides a comprehensive high-quality medical diagnostic pathology service to medical practitioners and hospitals (public and private). It services both the Adelaide metropolitan and regional areas, and has convenient easily accessible sample collection points for patients. Diagnostic testing is carried out in a timely and high quality manner to meet the needs of those awaiting their pathology results. The service operates 24 hours a day.

 

This service is provided without cost to the patient.

 

Furthermore, it carries out world-class medical research and is staffed by highly qualified and experienced medical and scientific experts who are motivated by the public good.

 

Sounds too good to be true? Sounds like something you would expect in a socialist country?

 

The government thinks so too.

 

It has set up a so-called “SA Pathology sustainability project” to look into factors such as “consolidation of services”, “business delivery model”, “work profile”, “cost consciousness” and more. With all this it is seeking to make cuts of $150million over the next 3 years. We all know that this is code for attrition of service to the point where SA Pathology becomes unviable as a government-funded entity.

 

In order for the capitalist system to continue, it must produce ever-increasing profits. This involves cutting the costs of making this profit as much as possible. For example, by reducing workers’ wages to the minimum allowable.

 

these avenues are exhausted, another strategy is to increase market share of the product or service that the capitalist is involved in. This can be done by swallowing up a competitor (“one capitalist kills many” - Marx).

 

The other is to access previously inaccessible markets, such as profitable government enterprises.

 

This is where SA Pathology comes in. There are a number of private pathology service providers in Australia and the bigger ones are listed on the Australian Stock Exchange. These include companies such as Healius, Sonic Healthcare and Healthscope. Companies such as these must produce more and more profit in the ways indicated above in order to survive.

 

They would love to get their hands on an entity such as SA Pathology or the market it services.

 

It is the job of governments as administrators of capitalism to deliver the means for achieving this, whether or not they are asked directly by a specific industry to do so.

 

The SA government has indicated that outsourcing the work of SA pathology is a “possibility”. This is a segue leading to privatisation and softening up people into accepting it.

 

Services such as SA Pathology are a fine example of the type of guaranteed essential services that would be provided under a socialist system. Certainly every effort would be made to ensure that these operate effectively and efficiently but they would not be allowed to fall into the hands of private ownership where the motive is to make profit rather than to improve the lives of people.

 

This is where the relations of production in society differ between socialism and capitalism, with socialism being the superior model. The capitalists know this, which is why they incessantly drum into people the false notion that socialism is not an alternative system to be considered because it is, according to them, an inherently repressive system.

 

This propaganda is just delaying the inevitable replacement of capitalism by socialism. It must be acknowledged that mistakes were made in the past and are still being made in the implementation of socialism. However, the crucial role of sustained sabotage by the forces of capitalism must also be acknowledged as the real cause for the interruption of people’s first attempts at socialism. As a species, we are now in a far better position to implement a socialist system with the hindsight of previous experience and the organisational tools we now have.

 

People are not idiots. Especially the increasing number of young people who have access to the tools for sifting through information that enables them to seek the truth and who think critically.

 

Hands off SA Pathology!
No more privatisation!
Seek truth from facts!
Towards socialism!

South Australian government workers keep the bastards honest.

Ned K.

Despite privatization and outsourcing over many years now, the South Australian public sector workforce is still over 60,000 people and has the advantage of not being employed under the federal Fair Work Act. The Fair Work Act makes the risks for workers associated with taking industrial action high. The SA Fair Work Act equivalent is not as draconian in its anti-worker provisions and with a Labor Government in office, public sector workers give themselves a reasonable chance of making gains when collective bargaining periods arise.

The latest round of collective bargaining with the SA Government departments has seen the lowest paid 'blue collar'' workers win significant concessions from the Government as their employer.

 

The Government has been trying to hold the line on wage increases of 1.5% in negotiations across the public sector, whether it be negotiations with higher paid doctors or lower paid cleaners and catering workers in the public health system.

 

The latter lower paid workers took industrial action in the form of work bans and stoppages at some hospitals, with the threat of sector wide stoppages on their agenda if needed. The workers skilfully used the threat of industrial action coming in to the "vote for me" period before the parliamentary election in March 2018 to move the government wage offer from its miserly 1.5% to nearer 3% per year. These workers also succeeded in winning a no further outsourcing or privatization and for wage parity for workers in the public sector who in previous years had their jobs contracted out to the private corporations like Spotless.

 

The unions representing these workers are affiliated to the ALP and the ALP state leadership desperately need their support leading up to the next election in March where the ALP attempts to hold the spoils of office for what will be for the ALP a record 5 terms, from 2002 out to 2022.

 

Having agreed to wage outcomes above their previously stated 1.5% not negotiable "line in the sand" to the blue collar public sector, the Government now has to resolve its collective bargaining wage outcome with the white collar salaried public sector workers who in terms of number run in to the 40,000 plus numbers. The salaried public sector unions are not affiliated to the ALP but they include many workers who may be classed as "swinging voters" when it comes to state elections.

 

These workers have also taken some industrial action and are in the mood for more if necessary.

So the ALP state government has to weigh up whether it lifts its wage offer to these workers as well or battles it out and risks a major disruption to its pre-March election build up. The fact that the Government is under a lot of pressure on the TAFE front may work in the salaried workers favour.

Change in State government will make a difference

                                                   
The SA Labor Government has done some good things during its terms of office in South Australia since 2002. Looking back to this period in 50 years’ time, the Labor Government will be remembered for taking important steps to move away from fossil fuels and to increase renewable energy sources of electricity. It will be remembered for opposing the greed of the rich cotton industry corporations in the eastern states regarding allocation of water resources from the Darling Murray River scheme. It will be remembered favorably for the building of the new Royal Adelaide Hospital but perhaps not for surrendering the building and running of it to the private sector through a public private partnership.

 

If the Government changes to a Liberal Government, many things will remain the same as both parties are parties of capitalism. However, one reason alone to urge voters not to vote Liberal is that they will without a doubt accelerate the neo-liberal policies of outsourcing and privatization of water utilities, health and education to name a few.

This will lead to an accelerated transfer of wealth from workers to the big multinational corporations who will be queuing up to take over what is left of a steadily declining but still significant public sector. This will weaken organised labour as it is a fact that private sector unionism continues to decline and organised labour needs the public sector organised sector as a base from which to re-build in the private sector industries decimated by policies of both major parties over the last 50 years.

Snippets from the West

Robin H.

Jobs, services and the environment are all under attack in Western Australia.

Health worker jobs

As part of the latest round of budget cuts, 1100 jobs are being axed from WA Health. The losses are mainly from the Southern section, including Royal Perth Hospital, Freemantle Hospital, Charles Gardener and the new flagship Fiona Stanley. It has yet to be announced which services will be affected but workers have been asked to apply for redundancies.

Rail service cuts

Canadian multinational Brookfield was given a 50 year contract to run the Western Australia country rail network. No sooner than the ink had dried, Brookfield closed down large sections of the network claiming it was unprofitable. Co-operative Bulk Handling (CBH) stepped in with an offer to maintain the lines, but Brookfield said “No” forcing farmers to truck thousands of tonnes of grain to silos at huge cost.

It’s probably just coincidence that WA Premier Colin Barnett has a close relative who runs a trucking business in the wheatbelt?

GM canola contamination

A WA canola farmer has recently lost a court case for compensation over crop contamination by a neighbouring property that used Monsanto’s genetically modified seed. The protracted dispute calls into question the status of WA canola as being free from cross contamination by GM seeds.

The case is now headed for the High Court. Questions are being asked as to the funding of the pro-GM team legal costs.

A stink within a stink  

UK multinational SITA is trying to establish a major rubbish dump on the outskirts of the historic town of York. Local residents have been fighting against the proposed dump that would take almost all the rubbish of Perth. It is being opposed on environmental grounds as it would certainly pollute the prime farming land and ground water.

WA wheatbelt roads are the most dangerous in the state with fatalities seven times more likely due to their winding nature and heavy usage. It is likely that more accidents will occur with loaded semi-trailers operating every six minutes on the 100 kilometre journey from Perth.

So far the planning authorities have rejected SITA’s application, and the York town council is also opposed. However, the WA government has accused the council of being corrupt and threatened to sack it and bring local administration under direct government control. 

Who will be listened to then, the working people of York or the big multinational?

Queensland public health workers in fightback

Vanguard May 2014 p. 6
Ross G

Organisers estimate about 2,000 doctors and supporters attended a meeting in Brisbane on 19th March, and voted overwhelmingly to reject Government contracts (ABC News photo)

The ongoing crisis for capital in most of the capitalist world, including Australia, is leading to greater pressure from governments and business leaders to wind back state financing of public utilities as an "unproductive investment".

The Queensland LNP government elected last year is going about this process in a methodical and politically strategic manner.  They have learnt from the heavy handed approach which the Howard government applied that led to its downfall.

Currently they have set one of their sights on the public health system, which currently accounts for 27% of Queensland government expenditure.  In the context of a government campaign aimed at building public support for transferring Qld State assets into private hands, we should question whether the privatisation of public health assets and hospitals is being seriously considered.

The Qld Government has used the widely known Qld Health payroll disaster as a pretext for a sustained assault on nurses in public hospitals. 

Secretary of the Nurses Union in Qld, Beth Mohle, said last year that "nurses and midwives are facing privatisations, out-sourcing, cutting of positions, attacks on the Union...Not only have we lost 1100 jobs in 12 months but there’s demotions going on everywhere. In Metro North they wrote to 3,000 experienced Grades 5 and 6, (that’s the base grade registered Nurse and clinical Nurse) to take redundancies so that they could be replaced by part-time, temporary new graduates [with a lower pay rate]. So they’ll save millions of dollars each year, and have a more contingent workforce....they are also rolling back many of the advances that were made for women in the previous two decades, for example power has been more equally distributed within the Health system with nursing and midwifery, and allied health and other groups getting more power. Now the tables have been turned around, and they’re trying to get some of that power back “(Qld Journal of Labour History, Sept, 2013).

Nurses are using their organisation to fight back.  At the Mater Hospital in Brisbane, nurses face severe restrictions on working conditions such as continuing professional development allowance, long service leave, and maternity leave. The hospital bosses also want the ability to force them into redundancy or redeployment elsewhere.  They have not received a pay rise in the past three years. They are now campaigning to gain public support to restrict these attacks and put in place an agreement that will restore pay rates.

Doctors in public hospitals are also facing a determined attack on their conditions.  They work for wages significantly lower than they could gain in private practice, in order to work in "public service".  They are committed to ensuring that patients in public hospitals receive health treatment that is consistent with best practice, not second grade treatment.

Last year, the State Government announced it was breaking an enterprise agreement with public hospital doctors and would introduce statutory individual contracts.  The three unions covering these doctors attempted to negotiate a good outcome for their members, but in January this year the State government announced it had finalised the contracts to be offered.  The contracts would strip away vital working conditions, for example significant provisions relating to fatigue management, and allow doctors to be dismissed at any time for no reason.

The response from the AMA to these contracts has been a strong rejection, saying:

·         - Specialist contracts give Government unilateral power to vary hours and pay

·         - There are no requirement to notify or consult on roster changes, no mechanism for accrued days off

·         - There are no guarantees rostering will be fair and equitable

·         - Senior medical officers (SMOs) can be arbitrarily dismissed with no unfair dismissal provisions

·         - SMOs will no longer have access to the Qld Industrial Relations Commission

·         - There will be no incentive for junior doctors to train in Qld

 Senior Medical Officers (SMOs) and Visiting Medical Officers (VMOs) across Queensland have overwhelmingly rejected these contracts. On 19th March, 2,000 doctors and supporters attended a meeting in Brisbane and voted to reject the contracts and proceed with plans for mass resignations.

The Queensland Government response to this show of solidarity and strength from doctors has not been to sit down and discuss the extraordinary passion and commitment shown by a traditionally very conservative section of the community.  Rather, the response has been to threaten them with strike breakers, and attack their organisations.

"If we have to recruit people from interstate or overseas, Madam Speaker, we shall do that," Premier Campbell Newman told Queensland Parliament.  "...people like ASMOFQ [Australian Salaried Medical Officers' Federation Queensland] ... they are simply a bunch of people who want a war, not a solution."

The ferocity of the Qld Government attack on doctors and nurses indicates an agenda not based on ideology, but rather on underlying economic and political strategies essential to the major sections of capital in Queensland.

To every action, a reaction.  This attack has united all health workers in Queensland around their ongoing struggle.  It has also led to a widespread support for these workers from workers around Queensland.  A poll conducted by the "Keep our Doctors" campaign group (see their website) in four Queensland electorates found 68% of people support the doctors.  However, they are still pushing ahead with individual contracts for these doctors, as they are for all higher paid public servants – as a means of removing them from union organisation and coverage.

The collective response of these medical workers is an inspiration to all other workers around Australia.

Social Investment Bonds - a new way to privatise public services

Vanguard November 2013 p. 3
Nick G.

One of the features of modern neoliberal capitalism is the handing over to private capital of more and more of the functions of government.

We have seen this with Public Private Partnerships through which private investors take from government the task of building public infrastructure (eg roads, schools, hospitals) and managing them on a long term basis with the guarantee of handsome returns from the public purse.

What can be done with capital works can also be done with service delivery.  In place of a build-and-operate arrangement for infrastructure comes the social investment (or “impact”) bond, or SIB.

Investors from the private sector place their funds into a “bond” managed by a private agency.   Investors from the private sector are guaranteed a return on their investment (typically between 10-15%) provided goals established for the program are met.

SIBs enable governments to:

• Develop business-friendly credentials with the big end of town by creating new opportunities for profitable investment
• Claim that “risk” is transferred to the private sector: if policy goals are not met, the investors lose their money. Government funds are not vulnerable.
• Shift costs off their balance sheets and conceal them as recurrent expenditure.
• Cut back on staff in real terms or at least to avoid having to take on more staff.

Not surprisingly, there are many problems with SIBs:

• The inevitable conflict between quality of public service and maximising return on private investment
• Expansion of insecure working conditions outside of the public sector workforce but in the area of public sector service delivery
• Cost – significant budget savings to the government are claimed but costs are simply shifted to governments and taxpayers of the future.  This helps to create the illusion that public sector debt levels are declining, when in fact the rate of return on a social bond, spread over a number of years, may be much higher than if the government provided the service itself.
• Measurement of outcomes on which returns to investors are based are contestable, an “insurmountable problem” and a “litigation nightmare” according to one financial analyst (http://www.thirdsector.co.uk ).
• Unproven -  there are very few social bond programs and the results are mixed. 

Several examples can serve to illustrate the latter point.

(1)A July 2013 report on the British “Future for Children Bond” by its designer Allia (The Social Profit Company) referred to a “limited pool of capital”, and that “engaging with retail investors while at the same time protecting them from making inappropriate investments is extremely difficult”. “Our experience suggests a note of caution to policy makers and developers of social investment structures.”  Because of all these and other problems “Allia decided not to go ahead with issuing the bond”. 

(2) A program to reduce recidivism (prisoners reoffending and going back to jail) in Maryland, USA, was investigated by the State Department of Legislative Services which observed that “Given the difficulty of linking the evaluation of a social program to a highly complex contract centered on an outcome payment, the government may actually increase its operational risks in operating an SIB.”  It therefore recommended that the Department of Public Safety and Correctional Services “continue to directly finance and operate reentry programs while pursuing other organisational and policy changes likely to have greater impact while posing less risk than a SIB financed program”. 

(3) A report by the British Social Market Foundation titled “Risky Business” listed a number of problems deterring private investors from SIBs and stated that “significant subsidy” will be needed from the government to entice mainstream investors into the market.

Despite these problems, governments continue to wave their policy responsibilities under the noses of the capitalist class.

On October 1, 2013, SA Premier Weatherill announced that a committee had been set up to bring SIBs to SA.  This is despite a June 25 letter to the Public Service Association in which he stated that he was “yet to be persuaded that they are beneficial”. 

No doubt internal polling showing that Labor is poised to lose the 2014 March state election has hastened his overtures to the big end of town.

One of the local bodies pushing SIBs in SA is the philanthropic Wyatt Trust.  It was featured on the front page of the Advertiser on October 15 2013 with a photo of an 18-year old mother of an 11-month old child who has been assisted by a grant from the Trust to study Year 12 at Para West Adult Campus.  This is quite commendable.  However, Wyatt Trust has run two seminars this year on SIBs and identifies “retention and re-engagement in education to Year 12 or its vocational equivalent” as one of its four focus areas.  One can only assume that it sees a role for itself in the creation of an SIB in this area.

Weatherill has identified two target groups for social bond investment: children at risk, and elderly people who want to stay out of hospital.  There may be more targets groups yet to be publicly identified.

SA Unions executive recently voted to reject the privatisation of government service delivery through SIBs.  Opposition to SIBs is strong within both the public service and education unions.

Weatherill will find growing opposition to SIBs as community organisations and unions combine to defend and expand the public sector and prevent its cannibalisation by capitalist adventurers.