Privatization 'a recipe for disaster'

FRIDAY, MARCH 2: Selling off public services to the private sector is “a recipe for disaster”, the boss of Bermuda’s biggest union said yesterday.

Chris Furbert, president of the Bermuda Industrial Union (BIU), said selling off services like the post office, buses, ferries and airport operations would inevitably lead to job losses, cuts in services and higher costs for consumers.

And he questioned whether the private sector could do a more efficient job in running services now in Government’s hands.

He said: “We’re in this economic mess because of the private sector, after all.”

And he warned: “You can’t just automatically turn services over to the private sector because if you have 650 employees and you cut it to 500, that’s 150 people out of work.

“Loss of jobs, people become the responsibility of Government, you’re looking at possible increases in fares as high as 50 per cent and you’re looking at cuts in services.

“The unions have always been against privatization – it implies that someone is going to come in and either offer staff less benefits or have less workers.

“Our experience has been that when privatization takes place, workers get the thin end of the stick – and that has happened across the world.”

Mr Furbert was speaking as he lined up with the Bermuda Public Services Union to resist calls to privatize loss-making public services.

They reacted after businessmen called for the sale of some services to the private sector to reduce the public payroll, save money and generate income from bidders to take over the running of the services.

Mr Furbert added that – although around 47 per cent of the cost of Government was in pay and benefits for staff – that compared favourably with much of the private sector.

He said: “They’re making it sound like the private sector can do a much better job of managing services – I don’t know if that’s going to be true or false.

“Just about every employer in this country is paying between 50 and 60 per cent for employee costs. The fact that Government is paying 47 per cent is reasonable.”

Mr Furbert said Government should look at raising the fare and fee rates in public services – pointing out that some ferry fares went up last year for the first time in several years, while bus fares had remained at the same level for some time.

He added: “What the Government needs to look at going forward is what is the overall cost of that service, talk to the public as say ‘we have to raise fares from time to time’.”

Mr Furbert added that private concerns, especially in recession, shed jobs, even if they were still making a profit, to maintain shareholders’ income.

He said: “Private enterprise is in business to make money – profit is the bottom line, always has been, always will be.

“Shareholders need to understand that in a recession, profits will be down and they have to accept that.”