Kiwirail bosses decision to make 70 workers redundant from a workforce of 172 at its Dunedin and Lower Hutt workshops brings into question the state owned enterprise (SOE) model for nationlised industries that allows the market to dictate it business decisions.
Shortly before announcing the redundancies Kiwirail gave a $500 million contract to an overseas firms to electrify Auckland's rail network and an $29 million contract to a Chinese firm to build 300 replacement flat top wagons rather than use its existing workforce and creating more skilled jobs!

The Rail Maritime and Transport Union (RMT) has estimated that an extra $7 million was needed to secure the work at Dunedin and Lower Hutt.  Instead these workshops will be downgraded to maintenance of the new rolling stock and with it  a further loss of skills and capability.

The RMT has called on the government to stop exporting jobs offshore.  Naturally this has fallen on deaf ears.  Despite a successful 1000 strong rally in Dunedin and pickets on the Port of Tauranga, where it has been reported that scab labour has unloaded the rolling stock, the job losses are to go ahead.

Unfortunately, the call from some unionists is towards protectionism and defending New Zealand firms from foreign competition.  This sort of petty nationalism is a blind alley.  It does not matter whether there is a protected capitalist market (like in the past) or an open capitalist market both roads do not deal with the fundamendal problem capitalism and profit – the unpaid  labour of the working class.  Under capitalism both roads eventually lead workers to the nearest WINZ office.

At present SOEs are run for the benefit of the capitalist economy as milch cows to be used to create vast profits from for the bosses and to return a modest amount to government coffers.  

The labour and trade union movement must demand that SOEs  abandon the  market model and introduce workers control and management.  All management to be elected by the workers with the right of recall.  This needs to be linked with a call for nationalisation of major capitalist firms that dominte the economy.  Socialist Appeal doubts whether the existing business people on the board of Kiwirail would be elected by the workforce if this was so!

The need for a socialist society in New Zealand has never been greater   Such a society that uses the wealth created in a planned manner for productive purposes, for the benefit of the whole of society, not the profits of a handful of super-rich is the only way forward if the scourge of unemployment is to be got rid off.