Taking Back Control: a community response to privatisation

State governments all around the country are privatising public services. Privatisation includes not just selling off or leasing assets, but also outsourcing to for-profit and not-for-profits organisations, public-private partnerships (PPPs), social impact bonds.

The word ‘privatisation’ itself has been made unpopular, thanks to years of union and community campaigning against privatisation, so now politicians talk about ‘asset recycling’, ‘commissioning’, or ‘partnering’ with the business and community sector to deliver services. But these are all different words to simply mean the shifting of our common wealth into public hands; giving control of our public services to private interests.

Whichever way governments choose to privatise, whatever their political persuasion, the result is the same: job losses for public sector workers, diminishing wages and conditions, less transparency and accountability for how public money is spent and how services are run, and poorer quality services for the community, and people who are left behind because they can’t access the services they rely on.  

Privatisation is clearly on the march – state governments are selling off Land Titles registries, privatising disability services under the guise of the NDIS (National Disability Insurance Scheme), and starving services of funding to bolster their argument that the only choice they have is to privatise. At the national level, the Productivity Commission has been directed by the Turnbull government to conduct an inquiry into extending ‘competition’ and ‘choice’ (two more privatisation buzzwords) into human services.

The privateers have a coordinated, ideological agenda for attacking public services – and so we need a coordinated fight-back. This is why our federal union initiated the People’s Inquiry into Privatisation.  Rather than the Productivity Commission’s sham inquiry which is seeking the input of business and those with vested interests about the future of public services, we wanted to talk to the people who actually rely on public services – the people who use services, and our members who work to serve the community each day.

Working with other public sector unions in Australia under the banner of our global union federation, Public Services International (PSI), we appointed an independent panel to lead the People’s inquiry: Chair David Hetherington from progressive think-tank Per Capita; Archie Law, former CEO of human rights organisation Action Aid Australia; and Yvonne Henderson, former WA Equal Opportunity Commissioner.

Over the last year, the People’s Inquiry panel travelled around the country to speak to hundreds of people about the impact of privatisation on their communities. The panellists collected evidence in the form of dozens of written submissions and many hours of oral testimony to produce the written report, released on 23 October 2017.

 A number of prominent themes came out of the submissions and the stories the panel heard:

  • Privatisation is not an abstract policy issue – it is deeply personal to the families and communities that face the consequences. The evidence the panel received showed that privatisation has overall had a damaging effect on services and that these effects make a real difference to people’s lives. When privatisation goes wrong, it is not a matter of mere inconvenience – it hurts people in very specific ways.
  • The inquiry also found that the people who rely most on public services include women, Aboriginal and Torres Strait Islander peoples, low income households, and households with long-term health problems and disabilities. Privatisation, therefore, impacts these groups the most and further withdrawal by governments from service delivery will further restrict access to and participation in public services, and further embed the gap for those who are facing poverty, deprivation or social exclusion. So privatisation contributes to rising inequality.
  • Despite the direct impact of privatisation on people’s lives, decisions about privatisation have been taken out of the democratic realm, and are inaccessible and opaque. Technocratic language is used obfuscate the real meaning of privatisation, there is a lack of meaningful consultation with stakeholders, and vital information is withheld from the public due to ‘commercial in confidence’ provisions and other mechanisms which prevent scrutiny.
  • This dwindling of democracy means that it is increasingly difficult for communities to hold someone accountable for the inadequate delivery of services. There is a very basic need for people to know who to call when things go wrong, to get answers from someone in authority, to know what level of service they can expect and who to blame if services fail. All these things are harder when services are at arms’ length from government, when corporations are not held to the same standards of transparency as government bodies, and when government is vacating the regulatory and oversight space.
  • When decision-makers do try to explain why they are privatising something, they typically talk about ‘choice’, but it is clear from the evidence presented to the inquiry that choice is a myth. In theory, the withdrawal of government from service provision is meant to create space for the private sector to flourish through competition. In reality, the field of providers often narrows to a small number of large organisations, and in some cases what is being privatised is a natural monopoly where competition is practically impossible and inadvisable. Often the withdrawal of government services actually reduces the choice available to people – the privatisation of disability services being a good example.
  • The financial benefits that supposedly automatically flow from privatisation are often mythical. Demonstrably, once privatisation occurs, the purported saving often fail to materialise, with the private sector often failing to deliver services more cheaply than governments. Many times, it is more expensive as well as being of poorer quality and often governments need to spend even more money to fix the resulting problems.
  • The withdrawal of government from various areas of life is not what people want. In fact, there is more, not less, demand for government services than in the past. Yet there is reluctance for politicians to provide them. Communities did not agree to accept less coverage or less quality from government, but that is what they are being given.
  • There is, therefore, a clear demand to reverse or somehow address failed privatisations – to improve oversight, to restore services to public hands, to right the wrongs that these policies have inflicted. But more than that, there is a clear demand for governments to build capacity in new areas. We should be building as well as rebuilding.
  • We cannot face profound challenges that we already know are in our future – such as climate change, digitisation and automation – unless governments have the confidence to intervene decisively and competently in the interests of justice, fairness, and equality. This is why we need to be bolder about our expectations of government as a place where people come together to solve problems, and to articulate a positive role for government that offers our community the confidence to face the future.  

From the personal stories they heard, the panel formulated six essential principles and 12 recommendations on privatisation:

Principles

  1. Citizens have a right to well-resourced and capable governments delivering quality public services paid for through a just tax system.
    • All citizens should have access to these services, irrespective of ability to pay
    • Particularly around privatisation decisions, democracy requires transparency, openness, participation and accountability between government and its citizens
  2. Quality, rather than cost, is the best measure to judge who has the capacity to deliver services.
  3. Privatisation should not be presented as providing greater choice to citizens when it removes the choice to continue using existing government services, as has occurred in some provisions of disability services.
  4. Privatisation should not be seen as a means of making savings by lowering the quality of services provided or by reducing the wages and employment conditions of workers.
  5. Whether government-funded services are provided in the public or private sphere, the community must be able to hold governments accountable for those services.
  6. All privatised services should be completely transparent to the public. Citizens have the right to know where and how public funds are being spent and the detail of services provided.

Recommendations

  1. We call for a moratorium on privatisation until greater regulatory mechanisms and proper policy frameworks are implemented around the delivery of public services.
  2. Prior to any new privatisation, governments should:
    • Provide details of all the proposed benefits, sources of savings and evaluation of costs
    • Assess the benefit to the public, including a comparison of service provision and access to prove why delivery of services cannot be maintained by the government
    • Define minimum qualifications for new employees prior to privatising
    • Prohibit any company that has evaded taxes or broken the law from taking over public services
  3. Where there is a privatised service, governments must take back the regulatory space and set the rules. An independent regulatory body should oversee privatised assets and services to ensure accountability.
  4. Governments must continue to employ sufficient, qualified staff to evaluate the quality and competence of service providers, and to provide a continued role in strategic advice. Departments of government should not be tendering policy decisions out to consulting or accountancy firms.
  5. There must be NO commercial-in-confidence provisions when taking public money.
  6. If a service is to be privatised, governments must set a fixed tender price that ensure cost is removed from the decision process and tenderers are competing on the basis of quality only. This prevents it being a race to the bottom.
  7. Where privatisation occurs, the new provider must, as a minimum, maintain the same employment conditions and standards as the government service it replaced in regards to:

• wages and conditions of employment

• health and safety

• equal opportunity employment

• codes of ethics and other codes of practice.

  1. Governments should take back control of failed privatisations rather than give contracts to new private providers.
  2. All privatised services that receive government funding to provide a public service should report annually to ensure services and infrastructure that use public money are open, transparent and delivered to the highest quality. Such reports must contain:

• a log of all complaints

• a comprehensive and detailed, up-to-date cost of services, detailing government funds received and where the money has been spent

• measurable key performance indicators (KPIs)

• feedback from service users on quality

• changes to workloads and employment conditions over the short and long term

• evidence that minimum staffing numbers and standards, including conditions for staff, are met and that accredited qualifications are recognised.

  1. Australia should rebuild public assets and public sector capability in new areas. These could include:

• clean energy

• new energy generation, storage and distribution solutions

• a publicly owned and run transactions bank

• government-based shared equity funding for low income earners, in areas such as affordable housing and solar power

• digital government

• infrastructure and assets (such as the East Coast Very Fast Train line).

  1. Governments must legislate to ensure funding for services is not linked to the ability of the provider to comment on government policy or dependent on its capacity to grow the organisation.
  2. There is an urgent need to restore confidence in the provision of specific failed privatisations:

• TAFE – there is a strong case for re-building the public sector role by resourcing TAFE and removing public funding from private vocational colleges. This should involve stronger regulation of private providers and re-investment in public institutions.

• Disability services – governments must immediately act to ensure the retention of existing or the creation or recreation of government facilities and staffing for those with complex needs.

The report, principles, and recommendations point to a clear way forward for politicians to act on the will of the community and restore public services. We need to take back control of our communities from the politicians and the corporations. We need to restore democracy. We need a government that responds to our needs, that delivers quality, accessible public services and policy solutions for the problems we face. That is why our union is joining with the other PSI unions in launching our Agenda for Taking Back Control. Based on the report recommendations – what workers, service-users, and communities have told us they want for their public services – this is our policy agenda for governments. We are asking other unions and civil society groups to join with us and endorse this Agenda, and to join with us in campaigning for politicians to commit to implementing the agenda.

So join us in our movement to fight back against privatisation, and Take Back Control of our public services and communities.

DOWNLOAD THE PEOPLE'S INQUIRY REPORT: OUR AGENDA FOR TAKING BACK CONTROL

 

 

 

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