Unions Wellington committeeperson and PSA organiser, Ashok Jacob, details the Wellington Works report and their fight to keep public services in public hands.
Unions Wellington were confronted by the opposition to our campaign to retain the public stake in Wellington Airport. We saw the power of organised money and bureaucratic inertia, and by the last stage of the campaign, we began to quietly question whether we could win. When we did, we were taken aback. Over decades, the stripping of ownership and capacity from the state had become such a bipartisan inevitability that many people forgot it could be stopped.
KEEPING THE MOMENTUM
In the wake of the Keep the Airport Ours campaign, we wondered how we could capitalise on this rare win for public ownership. We commissioned research into functions of our local council that had been outsourced in the past, having been told of failed attempts to keep waste collection and the electricity network under public ownership. We were buoyed by the popular support for public ownership and wondered how we could use this for another campaign.
Our initial research revealed that three major outsourced utilities in Wellington are ultimately owned by holding companies registered in the same building in the Cayman Islands, the world’s most notorious tax haven. One of them, EnviroWaste, which holds the contract for local rubbish collection, operates an ongoing $120m loan to their shareholders, on which they pay a third of the tax they would pay if they were registered in Aotearoa.
PROFITS OVER PEOPLE
The research was clear: private companies profit from operating local public services, and the profits are often paid to shareholders as low-tax dividends from overseas holding companies. These monopoly deals cannot stand – especially when the cost of remedying much of the country’s $200bn infrastructure deficit falls on local councils.
From these findings, we developed a report – It’s Time for Wellington Works, which examined how Wellington City Council could bring back outsourced services into public ownership. The report was met with praise by activists and academics from around the world and was launched to a packed hall at Newtown School in April.
The report found that outsourcing costs money from the outset, by paying excess profits to monopoly contractors. In the long run, it erodes the capacity of councils to understand what they are actually paying for, leading to underestimated costs and mismanagement of large projects and specialist work.
SUSTAINABLY FUNDING PUBLIC SERVICES
The report makes simple recommendations to end the upward transfer of wealth and ensure public services are funded sustainably:
1. Investigate insourcing “low-hanging fruit” services with comparatively low up-front capital requirements
2. Fix the procurement strategy and procurement policy, taking organisational capacity and efficiency into account rather than a narrow focus on cost
3. Actively oversee Tiaki Wai and council-controlled organisations, making sure that bodies operating with public money like Wellington Water/Tiaki Wai aren’t cosying up with monopoly contractors
The Wellington Works recommendations can be adopted by any council across Aotearoa – in the last forty years, the impacts of outsourcing and privatisation have been suffered by every council. With strong political leadership and dedicated campaigning, we can rebuild state capacity to meet the social and infrastructure challenges of the twenty-first century.
Ashok Jacob is a committeeperson on Unions Wellington and was one of the core group behind the campaign against the sale of WCC's shares in Wellington Airport. By day he works as an organiser for the PSA.
