Privatisation by stealth: the carving up of Queensland Rail

By Andrew Martin

The biggest losers from the restructuring of Queensland Rail being pushed through by the state Labor government will be QR’s employees — followed closely by commuters. The restructure will prepare QR for sell-off or closure and enable the splitting up of collective union agreements. The restructure is supposedly in response to a review of capacity on the Goonyella coal haulage system, which is struggling to meet the demands of the mineral resources boom. QR has revenue of $3 billion a year and hauls more than 175 million tonnes of freight — 90% of it coal.

The state government has pledged billions of dollars to fatten up QR for eventual sale. Some $3.5 billion is being spent to meet the demand of the coal industry, with another $1.7 billion earmarked for longer term projects. A $500 million upgrade of the Jilalan rail yard has already begun in order to boost the coal supply chain in the Bowen Basin. The capacity of the maintenance and service yard will be increased by 40%, with private firms winning contracts to expand the rail yard.

While the government has given a written assurance that QR will not be privatised, there is no guarantee against the closure of parts of QR, or against partnerships with private road transport companies, in which the private partners gradually or quickly become dominant.

QR’s new structure was announced last December by its chairperson, former BHP chief executive John Prescott, but the details are only now emerging. Prescott said that he intended QR to become a national logistics business competing with Paul Little’s Toll Holdings. The restructure involves splitting QR into six separate companies. The parent company, QR Limited, will remain a government-owned corporation. The other five companies will be wholly owned subsidiaries of QR. The argument is that QR cannot sustain cross-subsidisation. Each “business unit” must present an accurate profit and loss statement, without subsidy from better- performing parts of the business.

QR Limited will hold the majority of the physical assets of the business, but each of the subsidiary companies is to have its own board, management and employees. Most employees of QR will be transferred to the subsidiaries. This is essentially the same model used by companies such as Asciano, which owns and operates the Patrick stevedoring company; Patrick’s boss Chris Corrigan used this model against the Maritime Union of Australia in the 1998 waterfront dispute.

More managers, less service

The executive structure of QR will remain fundamentally unchanged. State transport minister John Michel claims the restructure is needed to focus managers on specific parts of the business”, “simplifying structures for coal customers”, “improving financial accountability” and “creating a good impression in the marketplace”.

In reality, the restructuring will worsen, not improve, QR’s accountability because management structures will be duplicated several times over. QR’s bureaucratic inefficiencies, complexity and corporate overheads will be intensified, producing declining service as cuts are made to meet the bottom line. Regional services and passenger services in particular are most likely to suffer. Passenger trains in south-east Queensland are already operating at full capacity; many commuters on the Gold Coast line bring their own chairs or sit on the floor for journeys that costs $50 per week.

QR’s partnership with private business is well down the track. It has acquired a number of subsidiaries, such as freight operators Interail and CRT, as well as the Western Australian bulk haulier ARG, bought for $1.3 billion in a partnership with investment bank Babcock and Brown. QR is in talks with other major transport groups such as Linfox, and has also signed an agreement for P&O Ports to take over the Acacia Ridge interstate rail terminal.

In mid-May the combined railworker unions presented Mickel with a business argument for retaining QR as a single organisation. But the government is not looking to the unions to replace the advice it gets from its high-paid consultants. The rail unions are also discussing with QR’s “workplace reform unit”, seeking to reach agreement on common core conditions. QR wants “flexible industrial arrangements”; it considers the current arrangements an “impediment to business improvement”.

“Business improvement” is code for increased productivity: getting more out of workers for less pay and worse conditions. If the workforce is weakly organised, there will always be new and more vicious speed-up schemes. In the railways, where speed-up is not very practical due to physical constraints, attempts have been and will be made to lower wages by dividing workers into competing sections. QR has proposed as many as 36 separate agreements to replace the current enterprise agreement. It is also proposing involuntary redundancies, seriously undermining the bargaining power and job security of the work force. As a consequence of the Work Choices legislation, which has not been repealed by the federal ALP government, all state award entitlements are up for negotiation.

Involve the members!

QR has repeatedly walked away from negotiating wages and hours of work with the rail unions. The approach of the combined unions has been to advise their members that they are in negotiations and that any developments will be reported to them. There has been no consultation with the membership on the core conditions being negotiated.

The unions do not have a united position on the restructuring, which has caused considerable uncertainty in the workplace. In an article on the Rail, Tram and Bus Union’s Queensland branch website, state secretary Owen Doogan stated: “The unions have not opposed the restructure of QR which could have created separate divisions within the organisation. Whilst some issues have had to be addressed, the final decision on the structure of the business is that of the employers. However there does not appear to be any reason why the organisation should be splintered into several separate companies.”

This is no time for equivocation: QR has already put job losses on the table and the government is manoeuvring to carve up the business. As of July 1, the WA company owned by QR, ARG, is to operate the Townsville-Mt Isa rail corridor. It is not yet clear what the impact on station and yard employees will be in regional freight-handling centres at Charters Towers, Hughenden, Cloncurry and Mt Isa.

The restructure needs to be halted in order to preserve the wages, conditions and entitlements of the workforce. But so far, the rail unions have done everything they can to avoid industrial action. They have advised their members to write letters to their MPs, faxed the state transport minister thousands of letters, placed full-page advertisements in newspapers, mounted a legal challenge to the restructure and planned to lobby the ALP state conference. But there has been nothing to challenge QR with strikes or industrial action of any kind.

ALP to blame

There is a perception on the workshop floor that the lack of any information or initiative from the unions is due to the opportunism and ineptitude of the officials. But that is not the whole story. The failure of the unions to challenge the rail bosses can be directly attributed to the hegemony of the ALP within the trade unions. It is, after all, an ALP government that is carrying out the QR restructure.

The rail unions have so far largely excluded the members from any role in opposing the restructure. The active involvement of the entire membership is absolutely vital to this struggle, and this requires mass meetings to determine a course of action.

What this dispute has already demonstrated is that trade unions cannot defend their members’ interests unless they are independent of the employers and the parties that serve their interests. Now more than ever, trade unionists need to campaign for their unions to disaffiliate from the ALP and build a genuine workers’ party.

[Andrew Martin is a fitter and member of the Australian Manufacturing Workers Union at the Redbank workshop of QR.]