The trains in Sydney are a bit stuffed at the moment. I’ve written a piece in CityMetric that gives some of the details on why. Although I touch on the comparisons with the UK a bit in the piece, I thought I’d go on a bit more about them here because the original had to make sense to people who aren’t familiar with the UK system.

It’s rarely in an individual company’s commercial interests to let a strike take place among skilled workers – that is, anyone who you can’t replace more or less immediately from the unemployment line. The disruption to sales will generally outweigh the potential savings on wages/conditions.

This isn’t always true. If you’re in an exportable  goods/services industry and you’re able to move production to lower-wage areas, you might be able to tell your existing workers to get stuffed. And if you have a cartel with other employers to keep wages low, then all bets are off.

But – particularly in non-exportable service industries which it would be unviable to close down – the rational thing for an individual employer is usually to pay up.

We saw that in the UK rail industry in the early years of privatisation. Train crew strikes reached record lows and worker wages rose dramatically, because individual private train operating companies were competing with each other for skilled talent and faced major financial penalties from government if they failed to run an adequate service.

When commentators decry the UK’s rail system as financially inefficient (ditto the Blair/Brown NHS funding settlement), they often mean – without realising it – that staff who were heinously underpaid under the previous system are now getting decent wages.

The Sydney system, however, is fully state-owned. If you have a passenger railway job in New South Wales and you aren’t happy with it, your only options are working for the government, moving to a different state, or moving to a private freight operator – which is a very different skill and lifestyle. This is part of why NSW rail wages are so low, coming in at 20% lower than the privately-operated system in Melbourne.

This also explains why the industrial action was allowed to happen (I recognise that it literally hasn’t happened, due to the Fair Work decision; I mean why a settlement wasn’t reached earlier).

NSW has a right-wing-ish Liberal/National coalition state government. The premier, Gladys Berejiklian (a former transport minister herself) is relatively moderate, but party activists and local MPs are a long way to her right, and the current transport minister Andrew Constance is something of a right-wing headbanger.

So rather than making a settlement based on the most economically beneficial outcome, the government is choosing to cost the people of NSW millions of dollars in disruption for the sake of bashing the unions. It’s pure spiteful political principle.

This is also happening in the UK. Despite the great success of the arm’s length Network Rail and TOCs model during the 2000s, the government is increasingly taking more direct control of railways, supposedly with a focus on cutting system-wide costs. The Southern Rail dispute reflects this: although nominally privately operated, unlike most arm’s lengths franchises, this one is directly controlled by the Department for Transport. The decision to refuse to accommodate union demands leading to strikes and disruption was made by the government, not by the private operator, who would otherwise certainly have compromised.

So what? Well, basically, if you think UK rail nationalisation would be good news for workers or passengers, you should take a look at Sydney and at Southern Rail, and be careful what you wish for.

Image: “At night, rave near the guard’s compartment naked with a blue light”, Sydney CityRail, mid-2000s. By Simon Lieschke, CC-BY-NC 2.0

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