
Issue No 119		16 November 2001

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News

Anger at Sartor's Power Grab

Plans to extend the boundaries of the City of Sydney have been slammed by the Municipal Employees Union, currently in a bitter fight with Lord Mayor Frank Sartor over competitive tendering.

The MEU's Ben Kruse told Labor Council delegates last night that the Carr Government's decision to hand over sections of Leichhardt and South Sydney to the City of Sydney would impact poorly on workers.

Kruse says there have already been 200 jobs lost within the City of Sydney and that workers transferred into the City would soon be forced to bid for their jobs.

The MEU has renewed its call for a moratorium on competitive tendering within local government - the practise where council workers have to bid for work against private contractors, often employing their workers on inferior wages and conditions.

The Problem With Competitive Tendering

The Municipal Employers Union has made a commitment to oppose Competitive Tendering of Council jobs. The Sydney City Council is currently trying to lure workers into signing an agreement which includes Competitive Tendering provisions. Members have rejected this proposal in favour of an MEU negotiated Award.

Local Government has significant physical, economic and social responsibilities in Australia. The decision of some councils to tender and contract out services is often done without adequate consideration of the social impact on local communities or the Australian economy. Some of these issues are briefly discussed below with particular reference to Sydney City Council.

Employment Impact: Mounting evidence indicates that tendering and contracting-out leads to significant decreases in employment. This has a disproportionate impact on particular groups of employees. For example, workers over 45 years of age are most vulnerable to the impact of tendering and contracting out. Various studies have shown that contractors are more inclined to employ younger, fitter workers. An increasing pool of older workers bear the brunt of tendering and contracting processes as they have difficulty finding alternative employment. This has many social consequences as contractors turn their back on the employment of older workers who have families to support - many of whom have to resort to obtaining support from the wider community and from social security payments.

The process outlined in the Sydney City Council Corporate Plan of using "competitive tendering as a means of regularly testing our services" is destructive of workplace harmony and perpetuates a mood of distrust and uncertainty which can undermine worker commitment and increase staff turnover with consequent inefficiency from the loss of skilled staff. This environment therefore has the opposite effect of "getting the highest quality services at the best value".

Large corporations have high capital turnover rates which dwarf the revenue base of local authorities. Some councils have experienced 'low balling' tactics of large contractors who bid low so they can secure the market and recover cost and profits later. This makes a mockery of council practices of testing the market through competitive tendering.

Reduced Pay and Conditions: Some contract firms reduce costs through payment of below-award wages and conditions, often preferring non-unionised workers. Such cost reductions are not efficiency gains but a redistribution of wealth from the workforce to profits (which may go overseas). Reduced pay for workers will reduce their spending power and can impact negatively on the wider community.

Dumping of social commitments: There are a range of policy commitments of the public sector such as EEO and multicultural policies. As part of its EEO objectives the Sydney City notes it aims to "seek to employ a range of staff at all levels which reflects the social composition and diversity of the community." As such, Council promotes itself as a socially responsible employer and service provider however, competitive tendering and contracting out enables the council to wash its hands of these and other social obligations as these commitments have meaning to a shrinking workforce.

The Rise of the Contract Industry: Throughout the last few decades the scope and magnitude of contract work has dramatically increased. A large number of firms contracting for local government services are multinational companies who take profits overseas - reducing Australia's economic development opportunities. This hardly fits with the council's challenge of "creation and sharing of economic wealth with the local community" as set out in their Corporate Plan.

Ongoing job losses at Sydney City Council In March 1996 there were 945 employees in Sydney City Council, since that time it has reduced to 731 according to the Australian Local Government Guide - though the LGSA figure of 723 is probably more accurate. This means that there have already been 222 jobs lost in this one Council.

Competitive tendering will reduce this number even further. Such reductions can come without increasing efficiency but at a social cost to the community.

The MEU believes there should be a morotorium on all contracting out of jobs at Sydney City council until all inner city local government boundary changes are complete. With expansion of the Sydney City Council to take in workers from South Sydney, Leichhardt, Marrickville and Randwick all CT decisions must wait.

The MEU has lodged an Award log of claims with the City of Sydney Council and has called on the Sydney City Council to hold a full impact study into the social implications of further competitive tendering of local government jobs.

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  Issue 119 contents

Interview: Out of the Rubble
Michael Costa argues that Saturday's election result could have been much, much worse.

Unions: Sixty-Forty Are Good Odds!
John Robertson argues that while there may be many problems with the ALP, union power is not one of them.

Politics: Wrong Way, Go Back
Labor's failure in the federal election is the result of more than bad luck. It is the result of a shift to populism that has left the Party bereft of core principles.

Campaign Diary: Week Five: All Washed Up
If you can stand it, relive the fatefull final week of a most remarkable election campaign.

International: Trade Piracy Unmasked
As the trade barons met in Qatar to chart out their agenda, George Monbiot looks at the machinations behind the scenes.

Factions: The Party's Over
Chris Christodoulou renews his call for a breakdown of the factional system to bring new life into the ALP

History: The Fall-Out
Neale Towart looks back to Labor's reaction to its loss in the 1954 'Petrov election' and finds warnings for today's post mortem.

Media: Elite Defeat
Rowan Cahill looks at the intellectual paucity in the PM's ongoing attacks on 'elite opinion'.

Satire: Crean 'Listens To Australian People': Will Sink Refugee Boats
Simon Crean, the most likely candidate to replace Kim Beazley as Labor's leader, says he will take heed of the message sent to the ALP by Australian voters at the Federal Election.

» Unions Call for Border Review

» Compo Fire Reignites as Bill Hits Deck

» Workers Unite Over Corporate Power

» Day Three: Telstra Privatisation Begins

» Primus Deal Marks New Era in Telcos

» Qantas Staff Cuts Condemned

» Bank Workers Seek Proxies for AGMs

» Blokes Stand Up For The Ladies

» Landmark Community Services Win

» Anger at Sartor's Power Grab

» Consumer Boycott Call for Sugar Co-op

» Apprentices Win Parity with Uni Students

» Competition for Nurses Hots Up

» CFMEU Launches Bunny Club

» ICFTU Reveals 250 Companies in Burma

» Activists Notebook

» STOP PRESS: No Democracy at Telstra AGM