The class reality of "people's capitalism" The following articles were published in "The Guardian", newspaper of the Communist Party of Australia in its issue of Wednesday, August 23rd, 2000. Contact address: 65 Campbell Street, Surry Hills. Sydney. 2010 Australia. Phone: (612) 9212 6855 Fax: (612) 9281 5795. CPA Central Committee: <[EMAIL PROTECTED]> "The Guardian": <[EMAIL PROTECTED]> Webpage: http://www.cpa.org.au> Subscription rates on request. ****************************** Class reality of "people's capitalism" Optus employees and other small shareholders got a taste of "people's capitalism" at the profit-hungry telecommunication company's AGM in Sydney last Thursday, August 17. by Anna Pha Optus is the main foreign-owned "competitor" lured to Australia by by tax breaks and guaranteed unfettered access to Telstra's technology. Floated on the sharemarket two years ago, its principal shareholder (parent company) is now the British company Cable & Wireless, which holds 52 per cent of its shares -- hence its new name, Cable & Wireless Optus. The other top 20 shareholders are the usual institutional shareholders -- banks, insurance companies, superannuation funds and other investment houses. Between them they hold more than 80 per cent of the 3.77 billion shares. Then there are the thousands of "mums and dads" and Optus employees with their relatively small bundles of shares. A number of them attended the AGM last week. Their voice was heard as they asked questions of the board, and voted overwhelmingly against a resolution to give Optus chief executive Chris Anderson 1.67 million free shares over the next three years -- presently worth $5 each on the stockmarket. But their votes counted for little -- voting is based on one- share one-vote -- no democracy here. The resolution, which had been defeated on a show of hands, was then passed in a formal poll based on the number of shares held and including the British company's (majority in its own right) proxies. Anderson's deputy, Norman Gillespie, was similarly granted 688,785 free shares. The total value of these shares at current market prices is more than $10 million -- what the chair of the meeting called "rewarding performance" and "incentifying future performance". The $10 million reward comes on top of their salaries, bonuses, superannuation, and other "rewards" which between the two of them totalled $3.8 million last year. Nice work if you can get it! In answer to a question from Burt Blackburne, representing the staff of Optus, the chair Sir Ralph Robins (also chair of the parent company) emphasised that the company was trying to reward results. He said they were "trying to reward people well if the company succeeds". And the company has certainly succeeded if the annual report is to be believed. It has turned around from an operating loss of $581 million two years ago to an operating profit of $264.3 million in 1999-2000. Optus paid NO income tax on the $264.3 million profit. The income of the 50 or so top executives totalled $22.884 million last year. They will also be rewarded with generous bonuses and share offers. An aggressive competitor in a rapidly growing market, last year Optus increased its sales revenue by 29 percent to $4,112 million last year. The operating profit per employee has risen by more than 50 per cent in the last two years from $105,000 to $158,000 -- surely a performance worthy of reward. In reporting on the surge in revenue, Anderson boasted that labour costs had fallen from 14 percent of revenue to nine percent of revenue in the last two years, a sterling performance by the Optus workforce. The company's response to this increased productivity is to try squeeze even more blood out of its employees. In fact, Anderson's and Gillespie's future bonuses are largely dependent on how much they can reduce the wages and conditions of the Optus workforce. There is no intention to pay just rewards to the workers who produced the massive productivity gains. The Communications Division of CEPU has been trying to negotiate an enterprise agreement with Optus, as Mr Blackburne, the union's Victorian Assistant Secretary, told the shareholders' meeting. The members want improvements in the current agreement but Optus has other ideas. It rejects any general wage increase before July 2001 and refuses to include guaranteed rights to sick leave, preferring to leave it to the whim of individual managers. Optus refuses to grant the 12 weeks maternity leave being sought, currently six weeks. There are differences over rostered days off, on non-payment of higher duties allowances, and Optus' failure to consult employees on changes. Optus also refuses to end its discrimination against employees hired after August 1999 in respect of superannuation options. The chair refused to discuss the enterprise agreement negotiations. The meeting was not surprised to learn in answer to a question that auditors KPMG received just over $1 million for their services last year. But they were shocked following questions about the independence of the auditors when they were told that the same auditors had been paid more than $4 million for other services to Optus. The chair denied a conflict of interest. Questions were also asked about Optus' cash-for-comment contract with Sydney radio commentator Alan Jones, who the company paid more than $2 million for his on-air promotion of Optus. Concerns were also raised about the non-payment of a dividend despite the huge profit. No guarantees were given about future dividends. Anderson summed up Optus' capitalist goals: it would maintain its momentum "in pursuit of one clear and overriding goal -- to deliver sustained and increasing shareholder value" -- meaning bigger profits for the handful of majority shareholders and higher rates of exploitation of its workforce. -- Leftlink - Australia's Broad Left Mailing List mailto:[EMAIL PROTECTED] http://www.alexia.net.au/~www/mhutton/index.html Sponsored by Melbourne's New International Bookshop Subscribe: mailto:[EMAIL PROTECTED]?Body=subscribe%20leftlink Unsubscribe: mailto:[EMAIL PROTECTED]?Body=unsubscribe%20leftlink
LL:ART: The class reality of "people's capitalism"
Communist Party of Australia Tue, 22 Aug 2000 04:44:35 -0700
