Privatising Water In The Driest State: The Impacts On Employees And Industrial Relations Of The Corporatisation And Outsourcing Of Metropolitan Water And Sewerage Services In South Australia

Abstract

The South Australian government's decision in 1995 to corporatise and outsource its metropolitan water services to transnational corporations was the first privatisation of a major water service system in Australia. The Government's rationale for outsourcing included claimed cost savings delivered through a reduced workforce. Claims of increased efficiency and improved services lacked credibility following scandals in the contract process and a major sewerage treatment failure following outsourcing. These events fuelled strong public opinion against outsourcing and chastened the industrial relations approach. This was less radical than that taken by the Federal and Victorian governments both of which combined outsourcing with attempts to de-unionise workers, using new industrial relations legislation. Union participation in the public debate strengthened their bargaining position and they were able to re-organise in the new context. The companies reduced workforce numbers but negotiated employment conditions through collective bargaining. Water privatisation remains a high-risk political strategy for governments.