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The Forum > General Discussion > Costs of contracting out

Costs of contracting out

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The costs of contracting out are too great for society as a whole. Economically & socially contracting out will eventually impact as much as civil war or major natural catasrophe..
It will bring any nation to its knees. The evidence will be there as soon as the money runs out.
Posted by individual, Sunday, 7 November 2010 11:43:25 AM
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You've got it dead right with this one, belly, although it should be pointed out that a major reason for contracting out is the enormous cost of paying public service employees, thanks largely to the efforts of the very powerful public service unions over many years.

If the RTA could demand as much productivity per employee that private enterprise does, then there'd be no incentive to contract out.
Posted by Antiseptic, Sunday, 7 November 2010 12:44:31 PM
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I also agree Belly.

In the APS there were often moves to outsource for budgetary reasons but in reality the costs were always proved to be higher.

The labour was cheaper per hour but the cream off the top added to the profit margin of the contract companies and the costs were either the same or more expensive in the long term, and without the benefit of committed and loyal workforce. In many cases contract labour had to work side by side with permanent employees on less money per hour even with a casual loading and no usual entitlements like sick leave etc.
Posted by pelican, Sunday, 7 November 2010 1:01:57 PM
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Belly, things might be different in your particular case, I can't
judge that. Contracting out in NSW might also be different.
The way I understand it, NSW is not unknown to be corrupt, which
of course changes everything.

But I think that the unions brought this on themselves to some
degree. Whilst they had the monopoly on things, they hardly made
an effort to provide taxpayers with value for money. I once
watched 5 of them standing around a hole while one was digging.
One of the guys piped up "They don't pay us very much, but then
we don't actually do very much" He had a valid point.

Contracting works fine, when its competitive. If you look at the
big miners, they contract out huge amounts. For good reasons.
The machinery is used more efficiently. You can get rid of dud
employees. There is competition, so a reason to do things more
efficiently. Net result a win-win all round.

If that is not working in NSW, then one would have to ask why
and check out who is mates with whom.

Miners can benchmark their costs and compare.

The real problem when working for Govt is that none of them
have a personal stake, so they have no reason to use taxpayers
money effectively. Everyone is busy feathering their own nests,
as best as possible.

People like you, might be an exception, rather then the rule.
Posted by Yabby, Sunday, 7 November 2010 1:10:42 PM
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Since Council amalgamation the Qld Govt. doesn't think twice about engaging a contractor from far across the field as long as his hourly rate is less than a local's. The fact that it costs three times more in flying the contractor in , accommodation, shipping equipment etc. is besides the point because it comes out of another budget. Never mind that it's all public funding that is wasted in further destroying local enterprise. I suppose it does create better superannuation for the bureaucrats who can claim to remain within budget. I just wonder how long we've actually got with that kind of economic logic.
Can anyone explain if I'm wrong & don't understand ?
Posted by individual, Sunday, 7 November 2010 4:02:03 PM
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You know all of the reasons why the Roads and Traffic Authorities fail Belly, therefore your question should be: "when is a Minister, Management, and Staff of NSW Transport going to perform in their positions in order to ensure that Management and Foremen and Women in the NSW Transport Industry perform competently and adequately in their jobs, for the payment they receive?

Belly, just adding my long overdue frustration and disappointment regarding roads and rail for many years.

Cutting costs, incompetency regarding funds and lack of expertise at the higher levels, [know of recent roads entirely stuffed up in two states I travel regularly]: these are a total waste of taxpayer funds.

Incorrect alignment detected by any person not into engineering are one of the key problems. The long stretches of roads will undoubtedly need to be laid again early next year. The aggregate used is cheap on many roads, and broken up within a few months of primarily light weight vehicles used upon these sections of roads; few heavy vehicles used on these roads.

If common sense prevailed and all transport industry bodies acknowledge that it costs LESS and SAVES more lives, to get the roadworks and rail systems RIGHT the first time around, by employing and listening to long term experienced employees and Foremen, at the same time efficiently overseeing all Staff, along with employing the most experienced engineers and heeding their advice, every Australian should benefit, be it employees and or road users.

The sacred ingredient: the old old time great [common sense]is missing.

BTW, Where are all of those old safeguards [working flashing lights and rail boom gates] that were to be installed at most country road level crossings [including Victoria] that have claimed more lives over the past two years?

If those boom gates with the flashing lights had been installed, it is a fair comment to say, that those people may well be alive today.
Posted by we are unique, Sunday, 7 November 2010 5:23:49 PM
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