Liberals plan cuts, corporatisation in ACT


By James Basle

CANBERRA — Immediately following the election of the Liberals' Kate Carnell as chief minister of the ACT in March, she announced that a newly discovered hole in the ACT budget meant that she would not be able to keep all her election promises.

Soon after Carnell's election was confirmed, two advisers from the Kennett administration arrived in Canberra to work out where to make cuts to the ACT budget, which will be delivered in September.

The ACT relies on the federal government for some 50% of its revenue. The Commonwealth cut $164 million over four years from its contribution. This will add even more pressure to cut services.

Already Carnell has made clear what is destined for privatisation or cuts. They include:

  • the corporatisation of ACT Electricity and Water (ACTEW) by July 1, 1995;

  • cuts of $27 million from the ACTION buses and corporatising of ACTION by July 1, 1996;

  • cuts of $30 million to the health system;

  • possible contracting out of all information technology work in the ACT Government Service;

  • changes to workers compensation agreements;

  • possible cuts to ACT Council of Social Services (ACTCOSS).

Already the head of Woden Valley Hospital has resigned in protest; the new manager will reportedly receive an annual wages package of $150,000-200,000. The former director of ACTCOSS, Allan Anforth, resigned after Carnell stated that she would not work with an "activist", a reference to Anforth's membership of the ALP.

The Legislative Assembly comprises seven Liberals, six Labor, two Greens and independents Michael Moore and ex-Canberra Raider Rugby League player Paul Osborne. Assuming that the ALP vote against and Osborne votes with it, the Liberal minority government has to rely on either Moore or the Greens in order to implement its program. Both the Greens and Moore voted for Carnell to be chief minister.

One of the first tests for the Carnell administration will be the corporatisation of ACTEW. Corporatisation normally means introducing the user-pays principle and cutting jobs. Big business benefits by getting services at a cheaper rate. Depending on the profitability of the nominally public enterprise, corporatisation can proceed to a full privatisation.

The privatisation of water in Britain has meant that 10 companies now provide water. However, in the first four years, water charges rose three times as fast as inflation, 21,286 households stopped receiving water, and there was an increase of dysentery, cholera and hepatitis. When British gas was privatised in 1986 householders paid 50% more per unit of gas than industry; by 1992 this had jumped to 120%.

The May 20 Canberra Times quoted Labor MLA Andrew Whitecross opposing the corporatisation of ACTEW on the grounds that the government had failed to explain how this would benefit the community.

On the corporatisation of ACTION, Whitecross said he was neutral, but that Carnell had not made a good enough case as to why this form of cost cutting was better than that carried out by the ALP in government when it cut $13 million.

Unions are split on the corporatisation of ACTEW. The Communication, Electrical and Plumbers Union (CEPU) and the engineers union both support corporatisation, whereas the Community and Public Service Union opposes it. (There are rumours that an official of the CEPU is trying to get appointed to the board of the corporatised ACTEW, in return for supporting its corporatisation.) Estimates of the salary for a part-time board member of ACTEW reach as high as $100,000 per annum.

The Trades and Labor Council had planned a rally to fight the corporatisation of ACTEW, but this has been postponed.

Sue Bull, ACT secretary of the Democratic Socialist Party, told Green Left Weekly, "We need a united fight against the corporatisation of ACTEW which involves community groups, unions and political parties. Corporatisation means job cuts and price rises. It is a democratic right for everyone to have access to cheap or free electricity and water."

The Democratic Socialists are planning a public meeting on June 20 to discuss the Liberals' attacks and what can be done to fight them. According to Bull, "We can not leave this fight to the ALP and its union fellow travellers. If we do, it will be doomed to fail, as the experience of the anti-Kennett campaign 'led' by Trades Hall in Victoria showed."