The Institution of Engineers has pointed to the dangers of de-skilling the public-sector in a study issued last week. The institution is a professional body and not exactly a hot-bed of big-government thought.
It suggests that down-sizing and out-sourcing in the public sector might have led to such disasters as the fire on HMAS Westralia, the explosion at the Esso Longford gas plant and the Royal Canberra Hospital implosion.
The report could not have been more timely. Presumably while it was being printed another catastrophe unfolds with the Mobil aviation fuel contamination. It has been suggested that regulators had stopped fuel inspections several years ago. They might have avoided the problem.
Each of these cases has resulted much human misery and the loss of millions of dollars in costs to industry and costs of inquiries and compensation.
The institution noted that inquiries in each of the ship fire, gas and hospital cases found a critical shortage of the necessary engineering skills that might have prevented the incidents. No-one in the Navy or Australian Defence Industries had the skill to critically examine the decision to use flexible fuel pipes instead of rigid ones.
At Longford, the number of supervising engineers was cut back.
And people appointed to supervise the hospital implosion contract were out of their depth.
In the case of Mobil, there has not been an inquiry, but the state of the aviation industry in Australia suggests that out-sourcing and deregulation might well have contributed.
Two other cases fall out of the engineering sphere, but they are related to the trend of de-skilling the public sector. In Victoria there is now an inquiry the privatisation of the ambulance dispatch system and nationally the transfer of the public employment service largely to religious organisations is under question.
The trend to out-sourcing, down-sizing and deregulating was well-intentioned and to a certain extent had merit. The private sector could do many things more efficiently than the public sector. But the test must be long-term efficiency, not short-term cost. It is obvious that an unregulated system will cost less because you don’t have to pay for the regulators, but that only holds for a very short time. Self-regulation only works if there is a solid audit system, otherwise cowboys will get away with safety breaches.
The aim of out-sourcing, down-sizing and deregulating was the reasonable one of saving taxpayers’ and industry’s money. But that aim is defeated if it ends in the sort of catastrophe exemplified in the institution’s report. The sort of costs involved in Longford and Mobil, for example, would have paid for armies of public-sector regulators. Ideologically driven out-sourcing, down-sizing and deregulation is counter-productive.
Privatisation was a sensible trend. There is no need for government own businesses. But there is a need for government to regulate business and government itself for safety, efficiency and to ensure competition. Market forces simply cannot do that.
But for government to regulate safety it needs skilled people, just as it needs and has skilled people to ensure competition.
There have now been enough large-scale catastrophes that can be laid at the door of deregulation gone to far that it is time for a rethink. The costs of deregulation look like outstripping the costs of regulation. And the former carries the additional burdens of human suffering and inequality of loss.