20 Years of State-Owned Enterprises - Corporatisation was a Crime Against the People
Twenty years ago today it was showery in Wellington. I remember because three members of the Newtown Socialist Group, Carolyn Pritchett, Chris Ellis and I, laid a posy of flowers on the grave of the first leader of the New Zealand Labour Party, Harry Holland. We did so because we knew that what the fourth Labour Government had brought into effect that day would be an attack on the very workers whose interests the Labour Party was established to protect and advance.
Today is the 20th anniversary of the formation of the first State-Owned Enterprises in New Zealand. Whereas government departments with tradng functions could have both commercial and social objectives, State-Owned Enterprises were set up with the prime objective of making a profit. This resulted in the closure of hundresds of Post Offices, rises in the price of electricity and thousands of redundancies.
I could see what was going to happen because my union, the PSA, had predicted it. I had been a member of the Labour Party since 1977 and some of us within the Labour Party tried to fight the Government's proposal to convert public service departments into profit-making companies. When we failed to change the Government's and even the Party's mind I decided to resign from the Labour Party.
The first wave of corporatisation, as this process is called, consisted of setting up Landcorp (property and farming arm of the former Department of Land and Survey), Airways Corporation (air traffic control part of the Ministry of Transport), Coalcorp (now Solid Energy, the Mines Division of the Ministry of Energy), Electricorp (the Electricity Division of the old Ministry of Energy), NZ Post (the postal division of the old Post Office), Post Bank (the banking arm ofthe old Post Office), Telecom (telecommunications arm of the old Post Office) and Government Property Services (from the Government Office Accommodation Board).
About three months after this happened I visited relatives in Opoutere, at the bottom of the Coromandel Peninsula. My uncle and cousin were the only two left working for the new Forestry Corporation not far from Whangamata. In the days of the Forest Service there were over 60 people working there.
A year later there was a second wave of corporatisation that included the abolition of the Ministry of Works and Development and the conversion of the Computer Services Division of the State Services Commission into Government Computing Services.
Whereas you could withdraw money and buy stamps and pick up many government forms in the one place in over 1200 locations in early 1987, after coproratisation you had to deal with three different organisations to deal with your postage, your phone and your banking. Bank charges for ordinary people became the norm. Within three years over 800 Post Offices had closed. Even in the Island Bay Electorate (the western part of what is now Rongotai plus Mt Cook and part of Te Aro and the Aro Valley), Post Offices were closed in Kingston, Brooklyn, Aro Valley, Adelaide Road, Wellington Hospital, Berhampore and Island Bay. In a period of less than ten years Telecom shed 10,000 staff.
Then there was electricity. Sure the Electricity Division of the Ministry of Energy made a profit but reliability of supply and conservation were also important. Electricorp had to make a profit, and profit it made, about $500 million in its first year of operation if my memory serves me correctly.
Many of these organisations have undergone further changes since. Forestry Corporation was privatised by asset stripping as the cutting rights to forests were sold to various companies and the Waipa and Conical Hill sawmills were sold separately. These mills have both laid off many workers recently.
Postbank was sold to the ANZ. Telecom was sold for $2billion in 1990. Within the last month the Yellow Pages division of Telecom alone was sold for more than this.
The electricity sector is a real mess. Even since the reforms of 1999, the price of electricity has increased by 40% above the rate of inflation. Electricorp was broken up into Transpower (the national grid State-Owned Enterprise), Genesis, Mighty River Power, Meridian Energy and Contact. Contact was sold in 1999 but the Government still makes good profits out of the remaining three generation companies and Transpower. It would be interesting to see what effect corporatisation had on the price of electricity.
Government Property Services was floated on the sharemarket in the 1990's and was renamed Capital Properties.
Many people complain about privatisation of Government assets but I would claim that the real damage is done by turning public service departments into companies. There is little doubt in my mind that corporatisation of large parts of the public service, by the fourth Labour Government, was a crime against the people.
Today is the 20th anniversary of the formation of the first State-Owned Enterprises in New Zealand. Whereas government departments with tradng functions could have both commercial and social objectives, State-Owned Enterprises were set up with the prime objective of making a profit. This resulted in the closure of hundresds of Post Offices, rises in the price of electricity and thousands of redundancies.
I could see what was going to happen because my union, the PSA, had predicted it. I had been a member of the Labour Party since 1977 and some of us within the Labour Party tried to fight the Government's proposal to convert public service departments into profit-making companies. When we failed to change the Government's and even the Party's mind I decided to resign from the Labour Party.
The first wave of corporatisation, as this process is called, consisted of setting up Landcorp (property and farming arm of the former Department of Land and Survey), Airways Corporation (air traffic control part of the Ministry of Transport), Coalcorp (now Solid Energy, the Mines Division of the Ministry of Energy), Electricorp (the Electricity Division of the old Ministry of Energy), NZ Post (the postal division of the old Post Office), Post Bank (the banking arm ofthe old Post Office), Telecom (telecommunications arm of the old Post Office) and Government Property Services (from the Government Office Accommodation Board).
About three months after this happened I visited relatives in Opoutere, at the bottom of the Coromandel Peninsula. My uncle and cousin were the only two left working for the new Forestry Corporation not far from Whangamata. In the days of the Forest Service there were over 60 people working there.
A year later there was a second wave of corporatisation that included the abolition of the Ministry of Works and Development and the conversion of the Computer Services Division of the State Services Commission into Government Computing Services.
Whereas you could withdraw money and buy stamps and pick up many government forms in the one place in over 1200 locations in early 1987, after coproratisation you had to deal with three different organisations to deal with your postage, your phone and your banking. Bank charges for ordinary people became the norm. Within three years over 800 Post Offices had closed. Even in the Island Bay Electorate (the western part of what is now Rongotai plus Mt Cook and part of Te Aro and the Aro Valley), Post Offices were closed in Kingston, Brooklyn, Aro Valley, Adelaide Road, Wellington Hospital, Berhampore and Island Bay. In a period of less than ten years Telecom shed 10,000 staff.
Then there was electricity. Sure the Electricity Division of the Ministry of Energy made a profit but reliability of supply and conservation were also important. Electricorp had to make a profit, and profit it made, about $500 million in its first year of operation if my memory serves me correctly.
Many of these organisations have undergone further changes since. Forestry Corporation was privatised by asset stripping as the cutting rights to forests were sold to various companies and the Waipa and Conical Hill sawmills were sold separately. These mills have both laid off many workers recently.
Postbank was sold to the ANZ. Telecom was sold for $2billion in 1990. Within the last month the Yellow Pages division of Telecom alone was sold for more than this.
The electricity sector is a real mess. Even since the reforms of 1999, the price of electricity has increased by 40% above the rate of inflation. Electricorp was broken up into Transpower (the national grid State-Owned Enterprise), Genesis, Mighty River Power, Meridian Energy and Contact. Contact was sold in 1999 but the Government still makes good profits out of the remaining three generation companies and Transpower. It would be interesting to see what effect corporatisation had on the price of electricity.
Government Property Services was floated on the sharemarket in the 1990's and was renamed Capital Properties.
Many people complain about privatisation of Government assets but I would claim that the real damage is done by turning public service departments into companies. There is little doubt in my mind that corporatisation of large parts of the public service, by the fourth Labour Government, was a crime against the people.
Labels: corporatisation, public service, SOE's
posted by Warwick Taylor @ 4:07 am
3 Comments:
Do you see this attack on workers jobs as being the ongoing upkeep of the unemployed jobless? The reserve bank states that 5% is their desired level of unemployment, so as to keep wages down.
I read an interesting comment along the lines that the state cannot allow full employment as that weakens the power of the boss.
You could be right. The mid-seventies saw the end of a "long boom" in Western capitalism. Muldoon attacked the workers with a wage freeze (called the "wage-price" freeze) but Labour was more cunning. Now, there is a mini-boom in the economy and unemployment has gone down. I would not call it low because it is at least in the tens of thousands but it is much lower than say ten years ago. It does not matter to the capitalist class though for three reasons:
1. there is so much money in the economy that in those sections where real wages have gone up, profits are still high;
2. in some sections of the economy real wages have increased little if at all; and
3. although wages may have gone up, during the late 1980's and the 1990's I suspect that there were many more people effectively working for a "salary", ie., not receiving more pay for working extra hours. This is another way of increasing the rate of profit - lengthen the working hours without increasing the pay.
I must say that I have no qualifications in economics nor can I quote any statistics to back my arguments. Can someone please help?! :)
You work for one hour a week and you're not counted as unemployed... As well as that housewives/husbands etc. don't count. Unemployment figures are manipulated beyond recognition.
There is definitely money going around, but it is being kept within a smaller and smaller circle. The median income for families has decreased in real terms by 20% since the 80's. While the value of the richlist has increased by 300% just within the time of the Labour government, income inequality has increased wider than under the previous National government.
The problem is nominal incomes have increased i.e. they have increased in face value. However when tracked for inflation you don't have these increases at all. It's stagnating.
You raise a good point about unworked hours. the number of people working more than 50 hours is something like one in four... Favourite method of increasing surplus value in NZ for quite a while now, make em work harder/longer...
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