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SA Pubic Hospital Electricians and Plumbers Strike Against Downer Group, A Profiteer Raiding the Public Purse.

Written by: Ned K. on 17 February 2023


(Photo source:  CEPU  SA  Facebook page)

On Friday 17 February Electricians and Plumbers, members of the CEPU, took 24-hour strike action against their employer, Downer Group. 

The strike followed Downer Group's enterprise agreement pay offer of 4% in the first year and 3% for each of the next three years in a four-year Agreement. With inflation running at 7-8% and rising interest rates, workers saw the pay offer as an insult. The small pay offer came after Downer delayed progress in negotiations for months and after the Downer Corporation made $152 million after tax profit last year. 

To add insult to injury, Downer Group, after delaying negotiations, refused to back pay their wage offer to when the existing Agreement nominally expired in October 2022. Workers have not received a wage increase since November 2021.

These CEPU members provide maintenance services not only to the Royal Adelaide Hospital but also to the nearby Adelaide metropolitan railway service and the University of Adelaide.

All three of these public services - hospital, railways and the university - outsourced or privatized their maintenance service crews to Downer Group which sometimes trades under the more widely known name of Spotless Services.

Over a number of years, both Liberal and Labor Governments privatized maintenance and other services in various guises. Sometimes they called it outsourcing, sometimes privatization and then the more deceptive method of Public Private Partnership.

The current strike is by CEPU members employed by the Downer Group at the Royal Adelaide Hospital to provide services to that hospital.

The Royal Adelaide Hospital non-medical services are operated by a company called Celsus. 

Celsus is a private consortium whose major shareholders include Spotless Services which is now wholly owned by the Downer Group! Other major shareholders of Celsus include Hansen Yuncken, AMP Capital, Infrared Capital and DXT Technologies (formerly Hewlett Packard).

Celsus operate the hospital until 2046 under a Public Private Partnership with the SA Government. Under this deal, the SA Government have to pay back Celsus $1 million a day until 1946 when the hospital is meant to become fully public again,

By 2046, the hospital will be in need of major upgrade and suffer from the hospital being run for profit by Celsus since 2016.

In 2018 the Spotless Service arm of the Celsus said that the Royal Adelaide Hospital part of the broader Downer Group (of which Spotless was a part) was " a cash negative underperforming contract"!

In plain English Downer Group were saying that they wanted profits out of operating the hospital and if no profits, why stay in the contract!

So it is clear that Downer's measly wage offer to CEPU members on strike is about the class struggle in the economic arena of profits vs wages.

The fact that Downer Group made $152 million profit last year is not mentioned by them now.

There is good reason though to question Downer Group's claim that they make no profit from the hospital contract. The Group, through Spotless Services, also provides catering, cleaning and security services at the hospital under their contract with Celsus. Over the last few years, Spotless have reduced staffing levels, increased workloads and subcontracted out security services to reduce labour costs (to increase profits). They have also employed more casuals and labour hire casuals.

Another reason to question Downer's claims about not making a profit from the hospital services contract is the past practices of Spotless Services in SA Government contracts.

Under the SA Labor Governments of Rann and Weatherill from 2002 to 2018, Spotless had an Across Government Facilities Management Contract to manage the facilities at a range of government sectors including CBD buildings, schools and TAFEs to name a few.

The contract was worth $400 million per year for 9 years and probably indexed each year.

In 2015 a government audit found that Spotless had breached its contract in a number of areas including "overcharging estimated at greater than $500,000 a year"!

Despite this the government proceeded with the Spotless/Downer being part of the Celsus Consortium that won the Public Private Partnership for the new Royal Adelaide Hospital and still maintains Spotless as a major government preferred facilities management company.

Premier Malinauskas says that the fundamentals of the Public Private Partnership at the major public hospital in Adalaide are rock solid!

With the Downer Group complaining about not making enough profit from the hospital, the public of South Australia are left wondering what lies ahead. Will the whole Consortium come tumbling down or is the hard line on wages by the Downer Group in the current enterprise agreement negotiations with the CEPU an indication it is about to get out of the hospital services contract and sell it off to another profiteer!

Given the precarious situation, the CEPU members and all the workers in the hospital deserve widespread support for the hard work they do.

The rallying cry should be Make Downer and Celsus Pay! Return The Hospital To Public Hands!



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