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Issue #1498      4 May 2011

It’s all about profits

People used to wonder what would be discussed around the dinner table at the Rudd household. Before he became Prime Minister, Kevin Rudd’s wife Therese Rein was already an entrepreneur on the way up. Her specialty – providing outsourced employment services to the federal government’s Jobs Network. In opposition, the ALP was critical of the nasty piece of privatisation the “network” represented but in a limp sort of way. Talk of a conflict of interest after the ALP’s 2007 election victory finally persuaded a reluctant Ms Rein to sell off the Australian chunk of her booming business. Rudd went on to perform further feats of privatisation of the public sector.

Gillard has taken up where Rudd left off. The looming federal budget has been the cue for tough talk and threats against those on pensions and benefits. The PM’s words about the dignity of labour would not have been out of place in the Victorian era when the destitute were driven into miserable workhouses. Clearly, we are being softened up for changes in the way social security is viewed and administered by our governments.

“Future news” for Australians is being written in Britain at the moment and Therese Rein is right in the thick of it. Her company, Ingeus UK has just won contracts estimated to be worth $1.42 billion over the next five years for providing welfare-to-work services to the unemployed and people with disabilities. The 50-50 joint venture with financial services giant Deloittes makes Ms Rein’s company the biggest provider of these services by far in Britain. Ingeus won all seven contracts it tendered for. It sharply discounted its asking price for the work making competitors wonder how Ingeus proposes to carry it off. Some have cried foul over the appointment of former senior public servant Mark Dean as company chief executive.

Former Queensland Premier Wayne Goss made the business pages lately with denials that he had anything to do with Ingeus UK’s latest remarkable success. Mr Goss was on the board of Ingeus Australia for several years and has been chairman of Deloitte’s Australian operations for six years. Deloittes has been sniffing hard for opportunities from Australia’s besieged public sector for some time. By the way, Kevin Rudd was a staffer for Goss when he was premier. It’s a small world at the top.

Britain is blazing a trail for other neo-liberal governments to travel down. As Peter Wilson’s piece in The Australian noted recently, “The new work contracts are an important philosophical break from the outsourcing efforts of the previous Labour government because for the first time they use savings in jobless benefits to reward outside providers, opening access to a much larger pool of cash to buy job placement services.”

Providers will get £4,000 (approx. $6,000) for getting an unemployed person into a job for six months and £14,000 (approx. $21,000) for placing a long term recipient of “incapacity benefits” in a job for more than two years. The pressure on these “clients” to accept the jobs on offer – no matter how inappropriate or substandard – will be immense. Fat private profits are going to be taken out of the hide of the most disadvantaged people in the community. There will be greater downward pressure on pay and conditions for all workers in Britain.

In 2007, charities and unions complained that Ingeus’ contracts for its own workers didn’t guarantee access to unions or entitlements anything like those in the public sector. Charities protested that their credibility had been used as a Trojan horse for profit-gouging companies to come in and plunder the public coffers, destroy public sector jobs and exploit the vulnerable. Massive protests have greeted the latest round of government cutbacks and privatisations but the Cameron government is pressing ahead with his pioneering neo-liberal agenda.

Therese Rein is flat out with her business and charitable work. Kevin Rudd is busy aligning our foreign policy ever more closely with that of the US. There wouldn’t be much time for chat over the dinner table but, then again, not many people would wonder anymore about the likely topics of conversation. Australians aren’t interested any longer in whether Rudd describes himself as a “Christian socialist”, a “social democrat” or a “fiscal conservative”. The penny has dropped. It’s all about profits and preparing the ground for more business.  

Next article – Sacred sites: NLC attacks discriminatory Intervention

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