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Public Sector Contracting: An Australian Study of Changing Work Conditions

Author

Listed:
  • Neal Ryan

    (School of Management, Queensland University of Technology)

  • Craig Furneaux

    (School of Management, Queensland University of Technology)

  • Anthony Pink

    (School of Management, Queensland University of Technology)

  • Kerry Brown

    (School of Management, Queensland University of Technology)

Abstract

Throughout the 1990s, government reports such as the Competitive Tendering and Contracting Report (Industry Commission1996) and the Report of the Independent Commission to Review Public Sector Finances (McCarrey 1993), suggested that the contracting-out of government services would improve the delivery of public goods in Australia. This article reports on the findings of a case study of contracting-out of building maintenance services in the state of Western Australia in Australia. The study focuses on evaluating the impact of the contracting-out of these services on the wages and conditions of employees affected by moving from public sector to private sector employment. The study found differences in the employment conditions of white collar and blue collar workers. In general, the conditions of white collar workers improved but there was a marginal decline in the conditions of blue collar workers. The article concludes that while contracting-out created budgetary savings for government, these resulted partly from a reduction in wages and benefits of former blue collar staff, despite the best efforts of the Western Australian government to protect staff wages and benefits. The research makes an important theoretical contribution by arguing that the impact of contracting-out on staff wages, benefits and conditions is conditional upon the level of competition in the labor market for worker?s expertise. In "thick markets", wages, benefits and conditions are likely to reduce, due to strong competition for expertise. However in ?thin markets?, wages, benefits and conditions are likely to increase, due to weak competition for expertise (Borland, 1994).

Suggested Citation

  • Neal Ryan & Craig Furneaux & Anthony Pink & Kerry Brown, 2005. "Public Sector Contracting: An Australian Study of Changing Work Conditions," management revue - Socio-Economic Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 16(4), pages 438-457.
    • Handle: RePEc:nms:mamere:1861-9908_mrev_2005_04_ryan
    as

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    File URL: https://www.nomos-elibrary.de/10.5771/0935-9915-2005-4-438
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    References listed on IDEAS

    as
    1. John Quiggin, 1994. "The Fiscal Gains from Contracting Out: Transfers or Efficiency Improvements," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 27(3), pages 97-102, July.
    2. Stephen P. King, 1997. "National Competition Policy," The Economic Record, The Economic Society of Australia, vol. 73(222), pages 270-284, September.
    3. Jeff Borland, 1994. "On Contracting Out: Some Labour Market Considerations," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 27(3), pages 86-90, July.
    4. Domberger, S & Meadowcroft, S & Thompson, D, 1988. "Competition and efficiency in refuse collection : a reply," Fiscal Studies, Institute for Fiscal Studies, vol. 9(1), pages 86-90, February.
    5. Stephen J. Rimmer, 1994. "Competitive Tendering and Contracting: Theory and Research," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 27(3), pages 79-85, July.
    6. John Quiggin, 2002. "Contracting Out: Promise and Performance," The Economic and Labour Relations Review, , vol. 13(1), pages 88-104, June.
    7. Simon Domberger, 1994. "Public Sector Contracting: Does It Work?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 27(3), pages 91-96, July.
    8. King, Stephen P, 1997. "National Competition Policy," The Economic Record, The Economic Society of Australia, vol. 73(222), pages 270-284, September.
    9. Stephen P. King, 1994. "Competitive Tendering and Contracting Out: An Introduction," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 27(3), pages 75-78, July.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Contracting-out; Work Conditions; Wages; Work Intensity; Labor Market;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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