Employment – We can fix Wellington’s bus problems by ending the PTOM experiment once and for all

The familiar pattern of bad faith bargaining by bosses, industrial action by workers and bus cancellations for passengers could be avoided once and for all if we are able to learn from recent clashes in Wellington and deal with ultimate culprit – the Public Transport Operating Model (PTOM) – which is currently being reviewed by Government, FIRST Union said today.

As part of the Government’s review of PTOM, FIRST Union has submitted (attached) that private contracting of essential bus services to companies like NZ Bus, Go Bus and Ritchies has resulted in stagnating wages, inefficiency, precarity of employment and that PTOM is unlikely to be fit for purpose in a future that requires compliance with climate change goals as well as fairness for transport workers.

“The situation that NZ Bus drivers have been dealing with in Wellington is almost identical to every other major breakdown in negotiations that have been occurring around the country since the implementation of PTOM,” said Jared Abbott, FIRST Union Secretary for Transport, Logistics and Manufacturing.

“Companies are competing as bidders for private council contracts and always seem to come to the conclusion that the best way to keep their costs low is to cut workers’ pay and conditions and wear the resulting industrial action, meaning cancellations and service reductions.”

“In the recent Wellington example, NZ Bus has made things even worse by attempting to increase book-off times for drivers from 3 hours to 4 hours to ‘balance out’ a proposed increase in wages – it’s a zero-sum game for drivers.”

“Who wants to work for twelve hours and only get paid for eight of them?”

“It’s time to cut out the middleman and return bus services to public ownership.”

– There are numerous barriers to achieving superior efficiency in the private sector, including higher costs of capital than in the public sector, the extraction of shareholder dividends, the cost and inefficiency of tender processes. The submission presents evidence indicating that where superior private sector efficiency is achieved is usually due to wage or service cuts.

– The Climate Commission has identified the need to more than double the mode share of public transport, with Auckland almost tripling its share. At the same time, the Labour Goverment has committed that by 2025 we will only buy zero emissions buses; progressively replacing the current fleet is estimated to cost around $1.8 billion, while necessary e-bus infrastructure will cost even more. Achieving this will cost significantly more under PTOM due to the reasons identified above.

– As a result, the PTOM discussion document considers alternative scenarios, for example having Government own the buses on behalf of Councils and letting private companies operate them. This exacerbates the current scenario in which operators are essentially labour hire companies who can only generate additional revenue by impacting labour costs.

– The deregulation of the bus industry has had a major impact on wages and conditions. In 1990 the bus driver award rate was 61% above the minimum wage; maintaining this relativity to the minimum wage would equate to a $32.23 standard hourly rate for bus drivers, more than $7.00 higher per hour than the highest standard rate in a FIRST Union collective agreement.