Political scientist Hugh Heclo put together what he calls a learning theory of public policy. He examined the fact that the income security systems of Britain and Sweden, noting that despite their commencement at the same time and with not dissimilar social, economic and political fundamentals, developed in fundamentally different ways. Governments don’t only “power”, he says, they also puzzle. The way that social and political systems develop relates less on the rational consideration of evidence than on what went before. Precedence is the great predictor of the future.

The same might be proposed with respect to the current round of health enterprise bargaining in the Victorian health sector and the nurses’ industrial dispute that has closed many hospital beds.

The current dispute has its origins in the savage cuts to the health budget initiated by the first Kennett government in 1993-4. That government was elected on the back of the “guilty party” advertising campaign, which threw out the supposed profligate Cain-Kirner government. In the pre-GST, pre-poker machine era, state governments were largely dependent upon stamp duty and payroll tax. In a recession, both diminished markedly and state budgets collapsed.

Victoria’s financial position suffered in the 1991-2 “recession that we had to have” and also because of the Pyramid collapse, which saw $1.4 billion taken out of the state’s economy. A hapless government had no response to the crisis and despite the fact that the economy was already recovering by late 1993 and with some relatively minor pruning would have recovered entirely within a few years, the Kennett government was elected with a claimed mandate to slash the public sector.

In health, cuts of 13% were applied in the first year, using casemix funding to apply these rationally. Hospital managers made the cuts where they could. Medical services were largely protected because they drive activity and in fact doctors did very well out of the deregulation of their wage fixing that occurred at the same time and that allowed pattern bargaining. Hotel services (laundry, cleaning, catering) were cut savagely; reserve capacity was removed and nursing numbers slashed.

Hospitals were increasingly claimed to be “dirty”, patients spent more time on gurneys because there were no beds available for admissions and nurses wilted under the increased workloads. Many apparent economies were ephemeral as direct care staff were replaced by an army of contract managers and outsourcing consultants, who produced no services.

In order to reduce the workforce, retrenchment packages were offered for public servants and these were taken up in the main by younger staff who had other prospects. The effect was to aggravate the structural problem of ageing in the health and education sectors, the core of which was a workforce recruited in the 1960s and ’70s. At the same time, the tertiary education sector was undergoing structural change with the out workings of the Dawkins amalgamations and the deregulation of course profiles.

Universities found themselves gifted with large numbers of student places in education and nursing, which were largely taken by students with middling entrance scores. Prestige in the higher education sector is in part founded on exclusivity and many vice-chancellors moved to convert these places to more highly sought courses with high entrance cut-off scores and for boutique programs that were in vogue, without regard to the workforce implications. The result was that by the end of the 1990s, the public sector was facing a largely self-imposed workforce crisis. The core of the workforce was edging towards retirement or was leaving because workplace stress was intolerable; wages and conditions were unattractive and there were insufficient replacement staff being trained.

By the time the Victorian electorate had concluded that its government was too arrogant and self-satisfied and replaced it with the Bracks government in 1999, radical action was required to repair the health workforce system. Wages were improved and government became very active in workforce planning. Victoria’s initiatives at this time have formed the basis of the Commonwealth government’s approach and the creation of Health Workforce Australia.

The most significant development, however, was the adoption of nurse-patient ratios. The ANF, which had seen the workforce slashed in the Kennett years and the development of intolerable workloads, fought a successful battle for ratios to be included in the enterprise bargaining agreement. The Blair arbitration of this agreement secured a 1:4 ratio requirement across the system. It is the cornerstone of the industrial settlement from the union’s perspective and Victorian nurses have accepted lower base wages than their interstate colleagues over two enterprise bargaining agreements in order to preserve it.

EBAs come up for renegotiation once every four years. This is the point at which government gets an opportunity to negotiate change. For government nurse-patient ratios are an inflexibility and a cost. While they acknowledge that they have been instrumental in the recovery of nursing numbers, they see the ratios as in impediment to the flexible deployment of the workforce to respond to variability in demand. Their current position is to argue to retain the ratios but with increased flexibility. There is some merit to the argument.

For nurses, however, the lessons of the 1990s are too current. They have seen that when faced with short-term financial constraints patient care and staff well-being can too easily be abandoned. An uncompromising ratio that is universally applied and easily monitored is a defence against an employer that cannot be trusted when the times get tough. Nurses will go to the wire for the ratios as they have demonstrated in their defiance on two occasions of directions by Fair Work Australia to lift bans.

The current industrial conflict is not merely an expression of the ritualistic process of negotiation by the parties. It carries the weight of its precedents. The Victorian government health policy during the 1990s was based upon assumptions of the expendability of the public sector workforce and the subservience of patient care to politically determined budget constraints. Now, almost two decades afterwards those assumptions form part of the precedent conditions of current policy stances and conflicts.