RTBU action saves jobs, services in Connex

In December 2001, Connex announced that its revenues from Hillside Trains were below target and there would be losses of A$70 million over four years. In January the company called for 71 job cuts, taking staff off more stations, a freeze on agreed pay rises, and voluntary downgrading of positions and penalty rates.

RTBU Victorian Branch Secretary Trevor Dobbyn called on the State government and the public to support them in resisting this degradation of the public transport system.

When only 23 took voluntary redundancy, Connex wanted to sack 48 station masters, assistants and customer service employees.
On February 7-8, 2002, the RTBU launched flying pickets and bans by signallers, Station Staff and CSEs. As a result, four stations were kept staffed, only voluntary redundancies took place, and there were no wage freezes or downgrading of job classifications or penalty rates.

The RTBU's decisive action exposed the failures of the privatisation policy in Melbourne's public transport system, and helped to unite and mobilise the Connex employees, whom management had claimed would not take any action.
If the cuts went ahead, four more stations - Jolimont, Burnley, Nunawading and Watsonia - would have been unstaffed, adding to the 130 already unmanned in a network of 200 stations.

According to the Melbourne Age newspaper, it is the ticketing that has caused all the problems for Melbourne's privatised train and tram companies. But the disastrous collapse of Britain's Railtrack infrastructure owner, and the scramble by US shareholders to sell off New Zealand's Tranzrail should make the public look more deeply at the Victorian government's massive bailout of the private train and tram operators.

The bailout consists of:

• $36 million to keep the system running - the operators will share $3m per year until the contracts expire between 2011 and 2014;

• $41.6 million to settle disputes and contractual claims stemming from the original privatisation;

• $27.2 million for companies to expand their businesses.

Connex Chief Executive Annels in December 2001 said in an interview about the company's plan to shed jobs: "we have everything from anarchists ...to little old ladies who say they are making a social protest about the removal of tram conductors".
But the companies and the government shy away from mentioning the faulty and inconvenient machines, lack of maintenance staff, removal of station staff and tram conductors, and several years of ticketing problems going back to the scratch ticket fiasco of Jim Kennan in 1990-91.

Public Transport Users representative argued that "people are sabotaging the privatised system they are unhappy with, they feel the system is less safe with the removal of station staff and conductors".

Victorian Government provides $105 million bailout

The Victorian Transport Minister has ruled out renationalising even by default - "it's cheaper to run now, there are savings of $3 billion to $4 billion over the life of the contracts". Annells says, "People are expensive, conductors belong to the horse and buggy days. No one will pay for it". In fact, the Victorian Government is paying for some security and one hundred tram conductors.

The private operators claim their ambitious growth targets are being met and that punctuality is 97%. They argue that revenue allocation is a major problem - four major tram and train companies and 27 bus operators have to share the ticket income.
Defenders of the privatisation claim that the change got rid of industrial problems. There was only one 24 hour strike in the system between December 1992 and December 1999. The Kennett government starved the system of maintenance and new investment.

The Kennett government built big incentives for 3.6% per year growth in patronage into the tender documents, and the winning bidders really took the bait. They under-bid the more realistic tenders. Greed was their motive then, and now that their projections have failed to materialise, they have been able to force the government to pay out.

While ticketing is a problem, it was known at the time, and it is just an excuse for the collapse of Kennett's privatisation.
The bailout has bought time but inevitably, having started down this path, the government will be coerced into further concessions to create a more attractive framework for the loss-making operators. Terminating the ticketing contract in 2006 and awarding it to another company is hardly likely to solve the crisis.
The GST had a significant negative impact on Melbourne's public transport patronage, while making private car operation on the Transurban tollway system more attractive.

Treasurer John Brumby told Parliament yesterday the failed cost of privatisation which included seizing control of a private prison, a hospital , an emergency dispatch service and an electricity subsidy.

According to The Age (December 5, 2001), confidential documents reveal a shortfall in earnings of $250 million on the original tender bids. For Connex there is a $70 million shortfall over next three years. For National Express it's $160 million, and Yarra Trams $20 million.

The RTBU remains concerned that its members would become scapegoats for the losses, with more people off the system as it becomes more unreliable and unsafe.

The International Transport Workers Federation (ITF) has bought into the Melbourne debate. It reported in February a number of disputes over last six months involving ITF affiliated union and Connex companies in Helsinki, Finland, and Dusseldorf, Germany.

Kennett's public transport franchises

(Source: Victorian Auditor-General's Report, June 2000)