It’s business as usual at Sydney Ferries.
Unions have managed to secure a cosy little deal with the government. Along with 3.25% annual wage increases for the next two years, workers will receive a once-off bonus payment of 30 weeks pay simply for taking a job with the soon-to-be private ferry operator. All financed of course by the NSW taxpayer.
A month ago I released a paper arguing that the franchise reform planned for Sydney Ferries will not create any meaningful change for Sydney’s taxpayers. I argued that whilst there may be a lot of talk about improvement and value for taxpayers, there will be no competition, no reduction in subsidies, and no incentive to increase productivity. The controls, the restrictions and the wasted tax dollars will all continue, only under the guise of reform and privatisation.
At the time I wrote the paper, all the hallmarks of union abuse were there – inflexible work practices, low productivity, generous pay and benefits, and abuse of sick leave and other penalties. I was hopeful that even if new management could not solve the structural problems of monopoly and subsidy, perhaps they could solve these cultural problems and increase productivity.
If these recent events are anything to go by, it looks like the unions are set to transfer their old obstructive, rent-seeking behaviours to the new operator and the government have acquiesced to it.
So what was happening in the private market while the workers were off the job securing their juicy accord? The two private fast-ferry companies that operate alongside Sydney Ferries on the Manly leg took full advantage of Sydney Ferries’ absence by adding extra services and slashing prices.
The words of Manly Fast Ferry’s Richard Ford sum it up quite nicely: ‘The market is always a better place if there’s competition.’
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