Federal Administrative Services Minister David Jull has asserted that if you can find it in the Yellow Pages, then government should not be doing it. It appears that the ACT Government has taken the advice. It is to fillet the Department of Urban Services, sending 600 staff to Totalcare, a corporatised government-owned enterprise.
Maintenance, engineering, architectural, survey and car-fleet staff will more to the corporatised entity. Inexplicably, forests, landscape and publishing staff are to stay with the department.
The Government says that competition policy obliges it to open the provision of utility and municipal type services to competition and that if existing government employees are to have any chance of retaining their jobs they must move to a more flexible corporate arrangement where they can compete.
The Government has promised that no employee will lose terms and conditions of employment. That may be true in the sense of things like pay and leave allowances, but ultimately working conditions must change, or there would be no point in making the change. The change in conditions, of course, might be for the better. In a competitive environment with employees working more effectively and efficiently, there might be room for higher pay and some employees might feel better for working in a more productive environment. The change must mean fewer jobs in the corporatised areas because the whole aim of searching of the savings brought by corporatisation or privatisation is to have fewer people doing the same work. But that is not necessarily a bad thing if those displaced get productive work elsewhere. It is better than having people in an unnecessary or unproductive, make-work job
The question to be asked is why can’t the greater efficiency be achieved within the public sector. Does efficiency and value for money require that people work for an organisation that has a bottom-line profit and loss account? The answer to that may be yes for a range of yellow-pages type services, and a clear no in policy and some other areas. It is essential, for example, for government to retain a significant body of skill in monitoring contracts, financially and for effectiveness and appropriateness. A simple recent example was the squiggly lines fiasco with road maintenance, which has long been contracted out. There may well be benefits to contracting out great swathes of Yellow-Pages type services and more, but it will be counter-productive if the Government does not retain the skill to prevent the privateers becoming buccaneers.
The Government’s move has set the cat among the pigeons in the union movement. A group of unions on the right think it is a worthwhile move, recognising the writing is on the wall and that it is better to have a corporatised or privatised job than no job at all. Unions on the left are opposed, preferring to think in terms of absolute numbers now, rather than conditions in the future.
The experience at the corporatised Actew has been a valuable lesson. That organisation has been far more innovative, productive and flexible since it was corporatised. And it has delivered higher benefits to employees than in the ACT service generally.
From the rate-payers point of view, the important thing is value for money. That is more likely to be achieved in a competitive environment, provided someone is doing some intelligent supervising of the performance of the service-provision contracts.