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Stopping the wage bleed

Written By: - Date published: 11:40 am, January 10th, 2018 - 46 comments
Categories: employment, wages, workers' rights - Tags: ,

In today’s Herald, Tramways Union Secretary Kevin O’Sullivan has written about the need to end competitive tendering based on driving wages down. It’s a simple change the Government could make to improve the lives of tens of thousands of Kiwis.

The Herald‘s editorial call at New Year for prosperity for all is a good one and I’m all in favour of it as a bus driver and a unionist. But we need more than a growing economy to get there. We also need to make sure people and their families can get their share of that growth.

That’s not just about wage minimums and safety nets and government top-ups like Working for Families. No, it’s going to require changes to the way we do business. One big change we need is to stop competing by lowering Kiwi’s incomes.

I’ve got to make a disclaimer here, I’m a union official and one of the 700 bus drivers in Wellington facing a massive cut in income because the regional council here has tendered its public transport service on cost.

This is a mature industry where the buses, the depots, the fuel, all cost more or less the same regardless of provider, which means there are only two ways for bus companies to compete. Reduce the payroll or reduce the service.

For more than a decade we’ve worked with the current provider, NZ Bus, to increase safety, to grow our drivers’ terms and conditions and to increase efficiencies. The pay off has been that we’ve been able to maintain good solid middle incomes.

It used to be that way in Auckland too. And around the country. You were never going to get rich as a bus driver but you could pay the mortgage or rent, afford a meal out now and then, and make sure your kids had what they needed to do well — hopefully to do better than you.

Competitive contracting has taken that away for nearly every bus driver in New Zealand. Over and again, modest terms and conditions that were slowly and carefully built up over time have been taken away with nothing more than a change of contractor, leaving us to start building from scratch again.

The full piece is here.

You can show your support for Wellington Drivers here.

46 comments on “Stopping the wage bleed ”

  1. Ad 1

    +1000 to Kevin and all his members. Go hard Union team!

  2. mac1 2

    This problem caused by competitive tendering affects the provinces, too.

    Locally, the takeover of tendered health services from home help through to psychiatric services by firms based in big cities means that locals employed are put out of a job.

    Locally, cleaning services provided to schools has been tendered out to big firms and the locals put out of work. Some of these locals are in some way less employable but the good heart of their employer, for whom I have worked so I know what I’m talking about, meant that they had work at above minimum wage.

    The follow on from tendering means for the provinces that people are reluctant to take work in such services as their job tenure is not secure.

    We therefore lose even getting enough people to provide these essential services.

    A lot of energy is spent at the local level in the tendering process.

    This applies also to tendering for contracts for scientific study in regional industries, including wine, marine, agricultural areas. A lot of energy is spent chasing these tenders, by scientific professionals some of whom are recognised world-wide.

    There is a good set of reasons also for tendering.

    But, we all hear stories of low tenders being accepted which has the effect of destroying local competition and then costs being recouped later with renegotiated prices.

    We hear too of tenders that have extraordinarily long terms such as the ones for providing hospital food. These too destroy local competition.

    The effect is to destroy competition which is surely the main justification for tendering.

    • SPC 2.1

      Government saving money by spending/funding restraint. The providers tendering out services to reduce costs. Wages being reduced, government facing higher WFF tax credit and AS costs. Government forced into another cycle of spending/funding restraint.

      The way larger corporations operate is to exploit those going down this path, to build a monopoly on service supply. Monopolies become quite profitable. Years ago Microsoft offered schools free computers as part of taking out educational computer competitors.

  3. Ovid 3

    The Greater Wellington Regional Council should expand its living wage commitment beyond direct council employees to its contractors. It should be a condition of its tenders.

  4. feijoa 4

    Is tendering a requirement under Rodney Hides Local Government act?

  5. indiana 5

    The sooner we get driverless public transport the better…

    • Ed 5.1

      Don’t you want people to have jobs?

      • Craig H 5.1.1

        Yes, but driverless mass transit would allow for cheap, regular 24/7 service, which would improve lives immeasurably.

        • Carolyn_Nth

          Seriously?! 24/7 mass transit without staff? This little old lady would not be wanting to travel on one of those, especially at night.

          Have you seen how some people behave on some trains when there’s no security in a carriage – and in the day time? Pretty worrying to be a staff-free zone, totally!

      • indiana 5.1.2

        Fewer jobs will be lost than banning dairy farming in NZ.

    • Carolyn_nth 5.2

      I wouldn’t feel that safe with driverless mass transit – we need a security presence.

      • indiana 5.2.1

        Drivers don’t provide you that now.

        • Carolyn_Nth

          On buses, their presence has a dampening effect on potential bad behaviour. Ditto security and other rail staff on trains.

          I wouldn’t want to be on a driverless bus without some other staff present – especially at night. So, no saving in person-power

        • One Anonymous Bloke

          So a Google search for “bus driver saves” returns no results then eh? Fascinating. Your perceptual ability is truly miraculous.

        • Drowsy M. Kram

          I perceive an ounce of prevention to be worth a pound of cure.


          Recommendation 2: Maximize bus operator training – expand the use of de-escalation techniques, conflict resolution and avoidance, and basic body language (posturing, threatening vs non-threatening) programs to assist operators in resolving incidents in an effective way.”

          BTW, a Google search for “bus driver saves” returned “About 87,200 results (0.47 seconds)”.

  6. David Mac 6

    Contractors take the headaches out of running any entity. Responsibility for getting the job done and on budget moves to someone else.

    If I’m the Parks and Reserves manager for a District Council I have the choice of managing a crew of 20, machine maintenance, inclement weather, rate payer complaints, etc or being taken to lunch by the marketing managers of the companies keen to land the contract.

    I’ve employed many people over the years. I don’t think I ever will again, these days a primary pre-requisite of any opportunity I’m considering is: ‘Can I contract most of it out and still turn a profit?’

    I don’t think contracting out tasks is going away anytime soon, we need to get much better at how we do it. As per Penny Bright’s crusade ‘Who the hell is this company and why the hell did they get the job?’

    The Wellington drivers don’t have to be working for a faceless giant bound to pay them peanuts because of the cut to the bone tender that was required to win the business. The Wellington drivers could form their own company and tender for the business. Start a school, train drivers etc. The cream returned to them.

    • savenz 6.1

      Not a bad idea “The Wellington drivers could form their own company and tender for the business.”

      • David Mac 6.1.1

        It’s a drum Draco beats.

        As with Serco and prisons I suspect there are a variety of performance bonuses structured into any contract. Performances are much more likely to exceed expectations if it’s each driver getting $2k at Christmas instead of a CEO and the Sycophants living it up in the Maldives.

        Monty Python pretty much nailed ‘The Neoliberal’ with Mr Creosote all those years ago.

        • Ed

          All these services should be nationalised.

          • David Mac

            I think we should be aiming for efficiency, a 20 hour working week for everyone.

            I’m not convinced ‘Run by the State’ = efficiency.

            Every time I’ve heard ‘I’m from the government and I’m here to help.’ In nearly all cases, assistance has not been the outcome.

            I think the best way to get the best out of people is to give them a direct stake in outcomes, skin in the game.

            But not in a game so large it includes all of us. We want to stand with our brothers in task.

            • David Mac

              I think it would be interesting to see what happens with the numbers of people leaving jail having learned to read and write if it were prison staff reaping the financial and emotional rewards rather than Serco landing the bonuses.

            • Draco T Bastard

              I’m not convinced ‘Run by the State’ = efficiency.

              Reality says otherwise:

              The largest study of the efficiency of privatized companies looked at all European companies privatized during 1980-2009. It compared their performance with companies that remained public and with their own past performance as public companies. The result? The privatized companies performed worse than those that remained public and continued to do so for up to 10 years after privatization.

              That’s not to say that there’s no room for private enterprise. It just isn’t in government services.

              Every time I’ve heard ‘I’m from the government and I’m here to help.’ In nearly all cases, assistance has not been the outcome.

              You still listening to Reagan after all these years?

              I think the best way to get the best out of people is to give them a direct stake in outcomes, skin in the game.

              I agree. That means getting rid of capitalism and brining in full communism. People should have a stake in their community and a say in their governance.

              It certainly shouldn’t be left to unaccountable multi-national corporations.

              But not in a game so large it includes all of us.

              Any system that removes some of us and the power that each of us should have within the community is an oppressive system.

            • Stuart Munro

              “I’m not convinced ‘Run by the State’ = efficiency.”

              It isn’t always. From time to time some institutions become so degraded that they would be better built afresh from the ground up. The old state run shipping services to the Chatams and Stewart Island had reached that state.

              But private enterprises erode too, and at least here in NZ they rarely lose their comfortable state contract when they do. Really any state contract should be subject to periodic review with a pretty serious likelihood of loss or sanctions for declining performance. As things stand I don’t think even Serco has been thrown out, and they have certainly fallen well short of the requisite standards.

  7. savenz 7


    Not only the bus drivers but the food services in hospitals going to overseas multinational firms like spotless, driving down the wages and conditions and quality of the food in hospitals. Cleaning services and so forth in government and councils. Private prisons where the prisoners seem to run the place etc etc.

    At the same time, services like parking being sold and run by multinationals are price gouging the public while paying little in taxes. All and all leading to less and less money in people’s pockets .

    Neoliberalism and globalism have created the race to the bottom and massive profits for a few, not a climb for all to the top.

  8. greg 8

    the local body contracts are rife with exploitation of workers i know some workers in Auckland went backward in the latest round a lot of the costs are being externalized to workers that are already being screwed eg using there own gear and car to carry out the work the whole area is fertile ground for collective agreements and strike action the disparity between different contracts and workers carrying out the same tasks is huge.take city parks services workers at that company don’t loose there jobs they get given a contract yet every other worker out on contract through no fault of there own loose there job we have created 2 classes of workers and that is wrong.its not the workers who created this system.councils own staff are creaming it contract workers are being shafted. council screws workers wages then screws them again with huge rates bills.

    • David Mac 8.1

      When our council has more than 100 people in it’s PR Dept….and their first job is to convince Aucklanders that their rates aren’t being wasted…What elephant?

      If I had 100 people in my PR department and hobbled along with their reputation…I’d be a laughing stock.

      It’s not like they need to convince people to deal with them, the justification for most PR companies. They just post out a letter. “Give us this much soon or your credit rating is going to Uranus.’

      Fab business, mafia without the violence. Extortion with a calming smile.

      Contracting the tasks of council out is ok with me. Interested parties request tender docs. A min wage level, worker conditions etc can be set at this stage. I’d put every applicant through the Penny Bright test, set her loose on the short list of possibles. Go with the survivor.

      • savenz 8.1.1

        Yep it’s a joke 100 PR people and still get less than 20% satisfaction rate in their own surveys. People are against rates rises, because what Auckland councils spends ratepayers money on is crap, and they pay crap people and crap ideas and crap systems (metro water and Auckland transport two institutions getting mega money and doing their jobs as slowly as possible while asking for more money which the council seems to want to give them. How many years do they need before someone says – not working like other cities that have public transport that works and transports millions of people every hour, and also don’t shit into their own oceans after a bit of rain). Don’t give Auckland COO’s more, fire their arses and start afresh with new ideas and firm deadlines.

        Don’t even get me going on NZTA works in Auckland, who wasted and inconvenienced people for years, and spent millions on for example making Northwestern motorway wider and higher (for global warming), then after the latest storm (in summer not even winter) it still floods. They are completely fuck ups who could not organise a piss up in a brewery. Who did their engineering the CTV building engineers???

        Now we have a 10% fuel tax in Auckland, more money for jam for screw up quasi corps who can’t do their jobs.

        • savenz

          Dual Auckland wharf decisions hope to create jobs


          Lets face it, only the big corps mostly based offshore like Sky city and hotel chains are going to get the money from America’s cup. The taxpayers will pay for the infrastructure and have less money in their pockets and more inconvenience and more pollution and modification of the harbour for a billion dollar hobby and to help more billionaire profits. I’m not against America’s cup, but are against being forced to pay for someone else’s hobby and taking more and more of our harbour away for business and billionaire interests.

          The workers will be bought in from overseas due to the drugged out locals that are deemed unsuitable as will not work for low enough $$ and the corps jumping up and down frenetically, that they will not finish in time “due to the massive labour and skills shortages”. Another massive influx of migrants to remedy this, will in turn cause more housing and transport shortages and hospital waiting lists for Aucklanders continuing the massive Ponzi screw up, that is Auckland.

          When John Key was worried about Kiwis being tenants in their own country he didn’t realise than soon only 40% of Kiwis now can afford to live in NZ biggest city and the amount of Kiwis able to live there is, decreasing.

  9. web-developer 9

    I support the unions with this.
    This is an interesting situation and is an excellent opportunity to get a better idea of what is going to happen to the rest of us eventually.
    Drivers are going to be replaced by technology really, really soon.
    When we have gone through role extinction phases in the past, it seems to me it’s generally been the lowest-paid and lowest skilled roles that have been obviated. This is because the technology has only ever been able to replace very low skilled or no-skilled work. Now the technology is starting to replace skilled and will eventually be replacing even highly-skilled people.
    That’s one of the reasons people get the feeling that ‘this time, it’s different.’ It will be interesting to see how smarter and better-organised groups deal with these changes.

    • One Anonymous Bloke 9.1

      really, really soon.

      That’s what the people who tout fusion reactors keep saying.

      I can see lawyers and accountants being replaced by algorithms a lot sooner than drivers, notwithstanding Musk’s fragile confidence.

      The street is a messy and unpredictable environment.

    • Carolyn_nth 9.2

      Really, driverless buses, and no staff in train carriages?

      And do you realise what a wild jungle zone mass transit will be without staff providing a security presence? That’s part of the role drivers play. And the weakest, old, young, female, disabled, will become targets for the thugs.

    • ropata 9.3

      Expect more automated driver assists to be added to buses over the next 10 years, but going completely driverless would be a huge social change. Makes more sense to have a human to monitor the vehicle and passengers for the foreseeable future.

      • Carolyn_Nth 9.3.1

        There have been very helpful technological innovations to buses in recent years: e.g. video cameras giving all round and rear vision to drivers; 2-way comms channels with their base, informing of up-coming road issues, or of problems with/on the bus.

        • ropata

          Yes all sorts of cool things to improve safety and make driving easier. But I wouldn’t be happy flying on an airline that is run completely by autopilot, with no ACTUAL pilot. Need a skilled human to handle situations that computers can’t.

          Software bugs and insecurities are real and pervasive.

  10. NZJester 10

    Competitive contracting does not save any real money in the long run. While the wages of the workers go down the wages of those in the boardrooms go up to swallow that money they screw out of the worker’s pockets and more. So the cost ends up going up as the service and quality tend to go down.

    The other thing that tends to happen is the local economy normally takes a hit as money is funneled out of the region instead of being circulated through it.

    • indiana 10.1

      You know this because you have boardroom experience?

    • savenz 10.2

      +1 NZJester

      For example if you go for the lowest bid for trains but they turn out to be full of asbestos and can’t be used. Or you organise trains but the stations can’t fit the trains or the trains can’t be upgraded to sustainable energy then you are not saving money. You are wasting money and also lowering collective productivity as our transport system is a joke. It’s not the drivers it’s the management continually making bad decisions that seems to be the idiot class. Or you rant on about increasing jobs in NZ but then at every opportunity you get offshore companies to build everything due to ideology. So nope, competitive contracting seems to not be working in NZ.

      • indiana 10.2.1

        Funny how it is state appointed boardrooms that make most of the bad decisions…

        • One Anonymous Bloke

          It’s good of you to acknowledge that the SOE model is broken. It was a fraudulent lie to begin with.

          Sack all the overpaid directors and return public service to public servants.

          • timeforacupoftea

            I agree ONE Anonymous Bloke –
            It is about time TVNZ made a up to date program based on the old series
            Glide Time.

            I can imagine scandal after scandal after scandal with those overpaid directors with gobs in the trough !
            The sex scandals would be pretty thick as the staff attempt to reach the trough too.
            Oh dear wouldn’t it be great.
            Seen so much crap going on where I work.

  11. NZJester 11

    The charter school was also just a version of this for schools. The cost spent per student was higher in a charter school, but less of that money was actually spent on the education of the students themselves. They allowed charter schools to put in unqualified teachers aids to teach the kids and the majority of the money there was going into the pockets of those running the schools.
    The supposed model of public and private funding where the private sector chips in to help run the school has never really happened with almost 100% of the funding coming from the public purse. Any private sector input a lot of the time to these schools is normally advertising material pushed as learning material.

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