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John Passant

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February 2009
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My interview Razor Sharp 18 February
Me interviewed by Sharon Firebrace on Razor Sharp on Tuesday 18 February. (0)

My interview Razor Sharp 11 February 2014
Me interviewed by Sharon Firebrace on Razor Sharp this morning. The Royal Commission, car industry and age of entitlement get a lot of the coverage. (0)

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Santos: hot profits, frozen wages

Santos is an Australian mining company and last year made a record $1.7 bn profit, a 359 per cent increase in a year.

Even taking out the capital profit of almost $1.2 bn Santos made from the sale of a share of a liquefied natural gas project in Queensland, the underlying profit of $572 million was 42 per cent higher than the previous year.

Santos will pay a fully franked dividend of 42 cents per share for the year. This is five per cent more than last year. So they have rewarded shareholders.

And how does Santos reward its workforce? With a wages freeze! On the very same day Santos reported its huge profit it announced that it would freeze wages to contain costs. It must be pretty confident it has union leaders and maybe its workforce on side.

This freeze is an effective real wage cut of almost 3 per cent (i.e. the estimated inflation rate for the year.) Why not real wage increases for those whose labour created the massive profits?  Why not five per cent for workers like the five per cent for shareholders?

The Santos CEO, David Knox, is paid almost $2 million a year.  Meeting performance targets, (which he presumably has done with this massive profit increase), doubles that.   There does not appear to be any mention of a freeze on bonuses, options or performance target payments for executives of the company.

And what has been the reaction of the unions at Santos work sites to this wage freeze? Silence. They appear to be too busy pressuring the Rudd Government over Chinese companies buying into Australian mining companies than to protect their members from wage freezes.

Shame, unions, shame.

I can understand the silence of the Australian Workers Union, a conservative and openly boss friendly union.

The Construction, Forestry, Mining and Energy Union (which used to be a left wing union) has already accepted a wage freeze for some of its members at Alcoa.  Similarly the Australian Manufacturing Workers Union has accepted postponing large wage claims.

The bosses will use these wage cutting precedents from strong unions to screw the rest of us. No wonder Santos feels confident about its wages freeze.

Here is what Sharon Barrow, the president of the peak union body, the ACTU, said back in January:

We will be responsible and flexible, but we will not accept wage freezes that actually cut the real incomes of Australian workers. It is no fault of workers that we had a financial crisis. They still have to pay their bills, so the time to actually maintain wages is now because you keep demand in the economy.

It’s all Barrow bullshit, because wage freezes (which the ACTU accepts in reality, if not in rhetoric) automatically cut real incomes in times of inflation. This union ‘responsibility’ means real wage cuts.  And still the bosses will sack us as their system falls apart.

Workers can’t rely on the tired old boss friendly union officials to defend their wages and jobs. They need to organise independently of this conservative force (some masquerading as left wingers) in the union movement, a force infected with class collaborationist ideas.

Rank and file strikes and occupations might concentrate the bosses’ mind on paying real wage increases to their workers and keeping jobs.

After all, with an overall profit of $1.7 bn in the kitty, Santos can certainly afford to pay their workers a fairly modest wage increase of five per cent and guarantee no job losses . If it’s good enough for shareholders it’s good enough for workers.



Comment from Abigail Petit
Time February 21, 2009 at 6:01 pm

Your prose is adearingly pedantic.