Telco e-Bulletin 2014 - # 7

1. More job cuts at Optus

2. Slash and burn: Abbott releases Commission of Audit report

3. Attack on minimum wage shows government’s real agenda

4. CWU engages Telstra on grading issues

5. Telstra job swap policy

6. M2 announces cuts to staff

7. Connection delays pose challenge to NBN cut-over

8. Telco sector productivity low says report

9. 457 review: stand up for Australian jobs and training opportunities

10. Unions oppose Abbott tax grab

11. How to raise revenue: close tax loop holes for global IT giants

More job cuts at Optus

#Optus has announced that it will cut another 350 positions despite recording a 5.5% rise in profits, year-on-year, only last December.

The losses will come from virtually all Optus’ present areas of operations, though the Consumer Business Unit appears to be the hardest hit. Outsourcing of functions in this area, including work of fixed network field staff, is on the agenda.

The cuts come on top of the 750 positions which were stripped out of the company last year as part of the wider restructure of Singtel’s regional operations. This saw certain roles performed in Australia moved offshore.

The CWU opposes Optus’ strategy of maintaining profit levels at the expense of its workforce rather than through investing for revenue growth.

Although it is now expanding its 4G network in response to both Telstra’s and Vodafone’s roll-outs, Optus has been relatively slow in doing so and has paid the price in terms of market share.

Cutting staff, however, will not fix that problem. If anything it will make things worse as falling staff numbers –and morale- affect customer service.

The CWU is also concerned that jobs involving higher level IT skills are being offshored by companies like Optus and Telstra at a time when Australia needs to be enlarging its own workforce capabilities in such areas. The union has asked Optus to explain its longer-term plans for developing skilled jobs here.

The union is seeking further information about the current redundancies and about the opportunities for redeployment for those affected. CWU members facing redundancy as a result of these cuts should contact their state branch if they want advice about their options and entitlements.

Slash and burn: Abbott releases Commission of Audit report

The report from the Abbott Government’s Commission of Audit #COA has at last been released.

Its recommendations exceed the worst fears anyone could have had about where the most backward elements of our ruling elites would like to take Australia.

If the Commissioners, led by former Business Council head Tony Shepherd, have their way:

• The real value of the minimum wage will be cut every year for ten years and then it will be scrapped altogether.
• Medicare will be dismantled and the long-standing policy of free universal health care abandoned.
• Elderly Australians will be made to pay the price for inflated property values by making many of them ineligible for the aged pension.
• Young unemployed people will be forced to relocate to areas where there is (supposedly) work or lose their benefit.
• Students will pay more for their tertiary education.
• Key public services and corporations, including Australia Post, will be privatised.
• 15,000 jobs will be lost from the Commonwealth public service.

Perhaps, though, we should thank the Commissioners for crystallising so clearly the meaning of Joe Hockey’s call for an end to the “Age of Entitlement”.

Every man for himself, with a few scraps off the table thrown to those who through age, background, educational or physical disadvantage have fallen behind in the struggle for survival.

The report’s recommendations are a comprehensive attack not only on the specific gains made by Australian working people over more than a century but on the very idea of a just and egalitarian society. They will be resisted by the labour movement and should be rejected by all fair-minded Australians. #ausunions #auspol #honestworker

Attack on minimum wage shows government’s real agenda

Australia's minimum wage will be reduced to 44% of average weekly earnings, wiping off $136 per week in today’s dollars, if the Commission of Audit #COA recommendations are accepted by the Government.

ACTU President Ged Kearney said this radical move represented the biggest attack on Australian wages since the Great depression.

"Tony Abbott asked the head of the business lobby to tell him what to do with the Federal Budget but what they've actually done is go after the wages of Australia's lowest paid workers," Ms Kearney said.

"The minimum wage has nothing to do with the Federal budget but what this shows is that the Government and Big Business will take any opportunity to drive down the wages of working people. #honestworker

"The changes Prime Minister Abbott is considering would see $136 wiped off the minimum wage per week - in today's dollars - taking the minimum wage down to around $480 per week, or just $12 per hour.

"Low paid workers in this country are already doing it tough - cutting the minimum wage like this would make it even harder for them to make ends meet."

CWU engages Telstra on grading issues

The CWU is trying to progress a number of unresolved grading issues within #Telstra.

These relate to new roles and new work being performed by field staff, primarily in the digital product space:

• The Digital Business product – the CISCO based Ethernet product currently being installed in a variety of business customers’ premises.

• The Telstra Premium Technician role, particularly in relation to the IT-based fault finding work.  

• The fibre splicer/link certifier/testing role currently being done by Wideband (formerly Network Construction) staff.

The correct grading of employees doing such work has been a matter of disagreement between Telstra and the CWU since last year.

Telstra has now agreed to meet on these issues, starting with the Premium Tech role. The CWU is expecting to conduct field visits/ride-ons to observe work functions in the coming weeks.

Telstra job swap policy

The CWU has queried #Telstra about its job swap policy following the company’s refusal to allow job swaps to several of our members.

The members did not want to be made redundant while others were willing to take a package.

But NO. Telstra managers have been saying that volunteers cannot be released if they are valuable workers and regularly exceed expectations (EE).

Inquiries have confirmed that this is indeed Telstra policy. i.e.

• #Telstra will generally not approve job swaps where:

The employee seeking redundancy achieved Exceed Expectations or Significantly Exceeds Expectations in the preceding 12 months; or

The employee has been assessed as top talent.

Looked at one way, this makes sense. But from another ….

The CWU will leave members to judge whether this policy is more likely to boost or dampen productivity.

After all what would you do if you wanted a swap but were too good a worker to be given one?

M2 announces cuts to staff

Tier 2 carrier M2 Telecommunications has announced that it will shed some 150 jobs from its Australian operations. Jobs across administration, customer service, technology, provisioning and sales have been targeted.

M2 has a total workforce of around 3,000 but the majority of its employees are based outside Australia, in New Zealand and The Philippines. M2 reported it had added 1900 Philippines staff to its operations over the 2012-13 financial year.

Only about 1,000 employees are based in Australia, so these job cuts represent a 15% reduction of local opportunities – larger, proportionately, than either Telstra’s or Optus’ job reduction programmes of the last 12 months.

The company has in recent years pursued a strategy of growth through acquisitions, buying up Dodo, Eftel, Unitel, People Telecom and Primus Telecommunications. This, it says, has led to duplication of roles.

About 100 jobs were cut from the company in October last year, following the finalisation of acquisitions in May 2013.

But M2 CEO Geoff Horth has also pointed to the wider industry context to explain M2’s actions.

The realisation that scale will be all important in an NBN-dominated world has been driving mergers and acquisitions (and hence job rationalisation) in the industry for several years. And those new entities will also need to be highly efficient.

“The realisation that we all become resellers in an NBN-world is a very important one” says Horth.

“So to make good margins when you're sweating someone else's infrastructure you just have to be very, very efficient."

Hardly good news for employment growth in the industry!

Connection delays pose challenge to NBN cut-over

Reports of customers experiencing long delays in getting connected to the NBN raise questions about how smoothly the cut-overs scheduled for later this month will proceed.

Copper-based services to some 19,000 premises are due to be decommissioned on 23 May.

The most recently published concerns are voiced in a submission by the Tasmanian ICT peak body, TASICT, to a Tasmanian inquiry. The submission says that customers in Tasmania have experienced long wait times between ordering and connecting to the NBN.

It also reports estimates that up to 50 per cent of appointments with customers were being missed by NBN contractors.

“There is anecdotal evidence that some of these appointments are being ignored because ­contractors arrive at the appointment, identify a difficult or time-consuming job and make an assessment it is not worth the rate being offered,” TASICT says.

The sub-commercial rates being offered to sub-contractors has been an ongoing problem for the NBN roll-out to date. More broadly, though, the whole structure of the NBN project, with responsibilities for cut-overs and service provision split between NBN Co, Telstra and Retail Service Providers, is hardly likely to make for a clean process.

NBN Co says that the majority of the 19,000 premises due for copper disconnection have already switched to the NBN. Certainly the “services activated” rate has risen over the last few month, with the most recent NBN weekly report showing new activations running at about 2,000 a week – roughly twice that being achieved last year.

But the coming weeks will still be a test of how thoroughly NBN Co and the wider industry have done their homework in the first cut-over sites.

Telco sector productivity low says report

According to a recent report, the Australian telecommunications industry is not pulling its weight in the struggle for higher productivity growth.

The Productivity Commission’s recent Productivity Update says that productivity growth across 12 major industry sectors was negative in both 2011-12 and 2012-13.

But the Information, Media and Telecommunications sector made the largest proportional decline, recording a drop of 7.2% over 2012-2013 (as opposed to a drop of 3% in 2011‑12).

The report does not analyse the causes of this decline, but broadly it would appear to reflect a rise in capital inputs – up 6.3% in 2012-13 – that is not being matched by revenue growth.

That finding is hardly surprising. The last few years have seen extensive investment in both mobile (4G) and fixed network (NBN) infrastructure. At the same time, revenue growth has been flat across the telco sector and negative for some companies.

The problems facing the media sector are also well known.

It is the nature of the telecoms industry that there is often a lag between the large up-front investments it requires and the returns those investments produce. Optus’ long road to profitability is a case in point.

What we are seeing at present though suggests that the fixed and mobile areas are making very different contributions to the overall productivity result.

The Australian Communications and Media Authority recently estimated that mobile broadband services had boosted the productivity growth in that sector by an average 11.3% per annum between 2006-2013. So, within telecoms, the problem would appear to be more on the fixed network side.

The fact is that the massive expenditures involved in the NBN project are likely to weigh on the industry productivity figures for years to come.

At a national level this may –or may not – be offset by the boost to productivity that universal high speed broadband promises.

But either way, those working in the industry should not be asked to pay for a problem that is not of their making through cuts to wages, conditions and jobs.

457 review: stand up for Australian jobs and training opportunities

The Abbott Government is conducting an ‘independent’ review into the #457visa programme for temporary overseas workers.

If the Government and employers get their way, they will deregulate the program, taking away important protections and safeguards that unions have fought for.

• Employers will no longer have to employ Australians first before employing overseas workers.
• Employers will be able to undercut Australian wages and conditions because they will have no obligation to pay  market rates
• The #457visa program will be extended to cover more unskilled occupations, where overseas workers are even more vulnerable to exploitation   
• English language standards for overseas workers will be lowered, again creating a more vulnerable workforce.

Unions are calling on the 457 review panel not to water down the current protections and to make recommendations that will ensure Australians get increased opportunities to apply for local jobs before employers seek to fill positions with a temporary overseas workforce.

“Not only must current regulations around the 457 visa program be upheld, we need to strengthen those laws,” ACTU Secretary Dave Oliver said.

The ACTU is seeking feedback and support on this question from its affiliates and their members.

The CWU strongly encourages all members to have their say on this important matter. Please go to the ACTU link and fill out the questionnaire: http://www.australianunions.org.au/457review

Unions oppose Abbott tax grab

Trade unions have spoken out against the Abbott government’s proposal for a new “levy” to address the federal budget deficit, saying that it will unfairly burden low and middle-income earners.

The levy appears to be the brain-child of the Prime Minister and is meeting rising opposition within the government’s own ranks. The proposal is also at this stage light on detail, so its actual impacts cannot yet be fully assessed.

Two things are already clear, though. Firstly a “levy” that is designed to go into consolidated revenue rather than address a specific emergency (e.g. the flood levy) is just a tax by another name. Secondly the tax will largely hit middle income earners.

The government is said to be considering a threshold of $80,000 a year, just a bit over the average adult wage of $75,000, as the point at which people would start paying the tax. There may be a second threshold of $180,000 for a higher rate.

ACTU President Ged Kearney said that unions recognised the need to boost government revenues and supported fair taxation to provide essential social services to the community.

“Australia is one of the lowest taxing advanced countries in the world,” she said, “and unsustainable tax cuts in the boom years have put pressure on the budget.”

“We need to raise more public revenue, but to do so in a fair and considered way, not through a short-term political fix that hits low-and-middle income earners. This isn’t real tax reform.”

How to raise revenue: close tax loop holes for global IT giants

While the Abbott government continues to ponder the political wisdom of a “deficit levy”, global mega-corporations are continuing to develop more and more elaborate schemes to avoid paying taxes.

Among the worst offenders are the US-based IT giants such as Amazon, Google and Apple. These companies regularly funnel funds out of countries like Australia into subsidiaries in low-tax countries such as Singapore or Ireland.

Google for instance paid $7.07 million in tax in Australia in 2013 on profits of $46.5 million – a tax rate of only 15%! That was possible because, according to Google, profits from its search business here are really being made by its Singapore subsidiary.

From there they may be funnelled off to Ireland before ending up in Bermuda – via the Netherlands.

Last year Assistant Treasurer David Bradbury named Google as a major user of this “Double Irish Dutch Sandwich” tax avoidance strategy. But it is not alone. Increasingly the big international pharmaceutical companies are setting up similar schemes.

Australian companies are not far behind. Last December the tax office said that there were about 7500 local companies with international related party transactions totalling about $270 billion in transactions.

Capturing the profits from those activities for Australian tax purposes would surely go a long way towards the $2.5 billion a year Abbott hopes to raise through his “deficit levy”.