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November 2006   
F E A T U R E S

Interview: Common Ground
Nature Conservation Council director Cate Faehrmann on the fight against global warming and how unions and greens can learn from each other.

Industrial: A Low Act
The Low Paid. The Fair Pay Commission knows who pays them. We can do something about it as they will not.

Unions: The Number of the Least
Forget 666 - 457 is looming as the scariest number for Aussie workers and their families, Jim Marr writes.

Politics: The Smoking Gun
Hayek's henchman, Raplph Harris, goes to free market heaven, writes Evan Jones

Economics: Microcredit, Compulsory Superannuation and Inequality
They are supposed to ensure the wealth of well-being of individuals. Whats wrong with that? asks Neale Towart

Environment: Low Voltage
Nuclear Power and Prime Ministerial pronouncements are seriously short of a few volts, wrties Neal Towart

History: The Art of Social Justice
Tom Martin was a terrific cartoonist and part of a great tradition in labour movement history and culture, swrties Neale Towart.

Review: Work’s Unhealthy Appetite
It pays the bills – usually – but going to work should come with a warning, wrties Jackie Woods.

Culture: A Forgotten Poet
There is little information on the public record about the radical working class poet Ernest Antony, writes Rowan Cahill.

C O L U M N S

The Soapbox
Robbo Goes Green
John Robertson's speech to the Walk Against Warming

Parliament
The Westie Wing
Ian West takes a look at a former public institution and its contribution to NSW.

E D I T O R I A L

From Green House to Glass House
History tells us that towards the end of most reigns of power the regime stops listening to the people, stops talking to them and reverts to crushes dissent. Events this week suggest this is where the Howard Government is now.

N E W S

 Godfrey Hirst Carpets Workers

 Lies, Damned Lies and the Shirkin' Gherkin

 Guests Share Backpay Bonanza

 Win, Win for Filipinos

 Honey, They Shrunk Our Pay

 No Sex Thanks, We're Asian

 Green Jobs to Beat Climate Change

 They're Going Out The Door

 Medibank Staff Go Under Knife

 Thompson Slams Door on Delo

 Merchant Bankers Pull Entitlements Stroke

 Green the New Black

 Councils Fight Off Shoring

 Acitivists Notebook

L E T T E R S
WHAT YOU CAN DO
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Parliament

The Westie Wing


Ian West takes a look at a former public institution and its contribution to NSW.

****

This year marks 80 years since the NSW Lang Government created the Government Insurance Office.

It also marks 15 years since the Greiner Government, under the guise of a need to turn around the poor state of NSW's finances, secured the legislation to enable its sale.

As a public institution, the GIO played a double role.

Firstly, it provided a service to the public; it charged reasonable premiums, took on risks no other insurance company would touch and put profits back into projects for the public benefit.

Secondly, the GIO was able to act as a weighty influence on the gluttonous insurance industry.

The GIO was born in 1926, when the Lang Labor Government had brought in the Workers Compensation Act.

The Act compelled employers to take out insurance against workplace illness, injury or death.

Lang's Minister for Labour and Industry, John Baddeley, spoke of the Parliament's "duty to legislate" to bring NSW into line with conditions in other states and countries.

"Not only has Great Britain made considerable advances in recent years in conferring additional benefits on her disabled workers," Baddeley told Parliament, "but in almost all progressive communities of the world there has been a steady growth of legislation of this character, which is designed to tide the victims of industry over the period of financial stress which accompanies the occurrence of occupational industries."

The press, fuelled by the vitriol of insurance companies and employer groups, went bananas over the reforms.

The Accident Underwriters Association of NSW, representing 71 insurance companies, unsuccessfully called for the laws to be postponed, just days before they were enacted.

Many companies flatly refused to take workers compensation insurance or charged excessive premiums.

Faced with the situation, Lang announced the Government would enter into direct competition with insurance companies through the Government Insurance Office.

Introducing retrospective laws to give authorising the office to carry out its work, Assistant Treasurer Bill McKell said: "Having made insurance compulsory it was our obvious duty to the public and to the employers to see that they could take out insurance covers.

"Under these circumstances the Government entered into the business of workers' compensation insurance and it entered into it pretty successfully.

"In the first place, we fixed very much lower rates than those which were fixed by the private insurance companies."

In reducing its premiums, the GIO forced private insurance companies to lower their rates as well.

Obviously, these companies were not thrilled and the conservative side of politics unsuccessfully tried to diminish the GIO's role while in Government in 1933.

The United Australia Party Cabinet attempted to limit the GIO's coverage to only insurance when the crown was the direct owner or employer.

This did not stick, however, as it was illegal for the GIO to refuse business under the Workers Compensation Act.

Nevertheless, the Government slashed the staff numbers from 74 to 40 and reduced the office space.

In response to the conservative attacks, McKell, after he was elected premier in 1941, brought in a bill to incorporate the GIO, freeing it from influence of the cabinet.

The bill also allowed the office to compete in all types of insurance, including life.

For the next 50 years, up until its privatisation, the GIO would act both as a service provider and as a counterbalance on the rest of the industry.

The GIO provided insurance when private companies refused to take the risk, administered the affairs of collapsed companies and lobbied for the improvement of safety laws.

Profits from the GIO contributed to the building of hospitals and supply of medical equipment.

Through its market share the GIO was able to influence the rest of the industry to stop premiums from getting out of control.

But the party did not to go on forever.

In 1991, the Greiner Government, faced with a $1.1 billion budget deficit, decided to sell the GIO.

In a mind-boggling piece of spin the Libs called it not a privatisation, but a "publicisation".

"The Government is looking to the mums and dads of New South Wales being the vast majority of shareholders," Kerry Chikarovski said.

It took just seven years after the float for AMP to acquire a majority shareholding 57.47 per cent in GIO.

Now it is a wholly owned subsidiary of Australia's sixth largest bank Suncorp-Metway.

When AMP took over the GIO, the outgoing chief executive, Bill Jocelyn, who had previously been an advocate for privatisation, revised his position.

Jocelyn spoke of the senior management-shareholder relationship not being in the interests of policyholders.

"There's the unholy alliance between shareholders and senior management to ... in a sense, take advantage of those who deal with it," Jocelyn said.

"We've now moved away from customers to shareholders and senior management. And I think there's something unfortunate about all that."

Ironically, Jocelyn's comments harked back to the reasons the Lang Government created the GIO.

"I think a government organisation that actually works as a mutual, that looks after the people who are doing business with it, is probably the best approach of the lot," Jocelyn said.

"I think a government monopoly is no use at all but there's a big argument for a government-owned organisation that ploughs the benefits back to the people who use it. It's got a lot going for it to keep the private sector honest."

There is wisdom in hindsight.

If you require assistance accessing information from a NSW Government Department or a Minister, or have feedback and ideas for speeches, or if you believe you know an issue that should be looked at by one of the Parliamentary committees, contact me at Parliament House on (02) 9230 2052 or email [email protected]


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