Bracks fails to overturn Kennett legacy

November 10, 2006

Only a foolish punter looking to lose their hard-earned cash would back an upset at the state elections on November 25. Although polls indicate a narrowing of Premier Steve Bracks' lead, the state Labor government is likely to be returned with a comfortable margin.

When Bracks was elected in 1999, booting out "axe man" Jeff Kennett, Victorians breathed a collective sigh of relief. They hoped that Kennett's aggressive privatisation policies would be overturned, but this has not happened.

In the first three and a half years, Kennett brought down seven "crisis" budgets. A year into his first term, he closed 300 schools and got rid of 37,000 public service positions and 8000 teachers' jobs (about 20% of state government workers). Some $1.2 billion was cut from social spending, while $1 billion was raised in new taxes and charges, much of which was spent on dubious "infrastructure" projects such as toll roads. One example of the hand-outs to big business was the sell-off of the Northcote bus depot for $2.7 million just five years after it had cost $13.5 million to build.

After seven years of Bracks Labor, it's clear that what Kennett did with the iron fist, Bracks has continued with the velvet glove. Only a handful of schools have been re-opened: many others left standing are in gross disrepair. The privatisation of public assets, including transport and roads, has not been reversed. Community services are struggling to survive.

Bracks has continued to run large budget surpluses that, when spent, end up being pocketed by big business. As the Victorian Employer's Chamber of Commerce and Industry boasted, "VECCI secured significant [tax] wins for business in the 2006/07 State Budget". VECCI estimates that businesses with more than 500 staff will save more than $80,000 per year on cuts to payroll tax and Workcover premiums alone.

A large part of the budget surplus comes from gambling revenue, including $911 million from poker machines. The plague of poker machines and corresponding "problem gambling" in working class areas has become an epidemic. The negative impact on families and communities is immeasurable.

A major feature of Bracks' term has been Public Private Partnerships (PPPs): projects involving schools, courts, hospitals, roads, railways stations and public transport are either underway or being discussed. These total billions of dollars and are justified by the government as a mechanism for "externalising risk". Despite this, the government has been the bearer of risks, bailing out many private companies. Because the private sector expect to profit from PPPs, they cost more than well-administered government projects. And because the private sector cannot borrow at the lower interest rates that governments can, the costs are further blown out and passed on to the taxpayer.

A recent report by the Public Accounts and Estimates Committee (PAEC) noted that the government's use of "commercial in confidence" contracts for PPPs had diminished its accountability to parliament.

Kenneth Davidson in the November 3 Age revealed that a section of the PAEC report, "excised" before publication, showed how Victorian taxpayers have been "dudded". "To summarise, the excised section said (with explanations in brackets to provide context): In the case of the Country Court, the Government's decision to enter into a contract with the Packer family's Challenger group to lease the Latrobe Street site for a peppercorn rental of a dollar a year for 99 years to build, own and operate a courthouse costing $140 million to build and leased back to the Government for 20 years for $533 million, has provided a net present value windfall of $300 million to the Packer family (and no courthouse for the Government at the end of the lease period)."

On the industrial front, the state ALP has had a less than friendly record. In 2002, it enacted the Electricity Supply Industry Act to force Yallourn Energy workers back to work and assist the company in seeking writs of $38 million against the union and 15 workers. The same year, the government complained to the Australian Manufacturing Workers Union national secretary Doug Cameron that the AMWU's Victorian leadership was having a negative impact on companies' investment decisions. Also that year, the government responded to requests from BHP Steel to send in police to attack a picket line.

In February 2004, the government threatened electricity workers with the Electricity Supply Industry Act unless they lifted bans. Bracks has also refused to reverse Kennett's legislative provisions making employers exempt from charges under criminal manslaughter laws.

Bracks has largely avoided campaigning on industrial relations. The new Victorian Work Place Rights Advocate, to provide advice on workers' rights under the new IR laws, is a token measure. Some legislative protection exists for public sector employees, but the remaining 2 million private sector employees remain exposed to the federal Work Choices laws. No state government can completely protect workers from Work Choices. However, if Bracks had refused contracts with employers using Work Choices and AWAs, this would have been a major blow to the Howard Coalition.

Victoria now has a growing under class, highlighted by the recent deaths of two young people in a rooming house fire in Brunswick. Dignity Homes, operators of the unsafe rooming house, and others like it, have based their income on state government funds. In the absence of crisis accommodation, homelessness services knowingly fund these unsafe options, including for families with children.

On any given night, 23,000 Victorians are homeless. Housing minister Candy Broad answers critics by pointing to a 14% reduction in the public housing waiting list. But this has largely been achieved by removing people from the list after they fail to respond to requests for information. While the Bracks government has not significantly expanded low-cost housing, it has introduced laws allowing for public housing to be dismantled.

While major social problems have to be tackled at state and federal levels, state governments can have an impact if they prioritise social and environmentally sustainable spending over corporate welfare.

Bracks' TV advertising campaign aims to remind us of the bad old days of Kennett. But, as in Queensland, the return of a Labor state government will not mean a vote for PPPs, poker machines and inadequate public transport. It will be a rejection of the legacy of Kennett and the reality of Howard.

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