After only four months in office, the Labor government in the Australian state of Victoria has demonstrated that it will act sharply against workers in order to defend corporate interests.

On Monday Premier Steve Bracks intervened into the month-long dispute at Yallourn Energy, a privately-owned power provider in the Latrobe Valley. He invoked the Electricity Industry Act to order maintenance workers to resume work by 6pm that night under threat of heavy fines. The order followed days of government-imposed restrictions that cut electricity supplies to tens of thousands of homes and small businesses.

Under the Act, individual workers can be initially fined $10,000, followed by $1,000 for every day of non-compliance, and the six unions involved can be fined as much as $1 million each. Emergency legislation has not been used against Victorian workers for 15 years.

Only hours before maintenance workers met and voted after a heated meeting to accept a union recommendation to return to work, Bracks' spokesman had warned that the Premier “would not shy away” from using other provisions of the Act against them.

The provisions he cited allow the government to take over the power station and “order any person or body to take whatever action is necessary to ensure power is supplied”. These provisions would enable scabs or the military to be brought in.

The government directed its measures against the workers even though Yallourn Energy provoked the dispute. On January 10 the company locked out its 80 maintenance workers when they imposed work bans and refused to accept a new company contract that included reduced manning levels, the introduction of team-based work, further multi-skilling and the abolition of all restrictions on the use of contract labour.

At one point, Yallourn Energy's managing director Mike Johnston admitted that he had ordered the lockout to put pressure on the workers and “generate some impetus in the negotiations process”. On Monday the company rejected a proposed settlement worked out in three days of discussions between the management, the unions and Bracks' mediator, former minister Neil Pope.

After weeks of hanging back, hoping that the unions would strike a deal with the company, Bracks decided to act in the face of mounting criticism by employer organisations, the media, and the Liberal Party parliamentary opposition. Editorials late last week demanded that the government “stop prevaricating” and “act decisively” to end the dispute. The Liberals urged the government to “commit itself to using the emergency legislation and other powers at its fingertips to deal with a significant disputation.”

The demands became more strident when two generators in other power stations failed at the end of last week, adding to power cuts and failures in both Victoria and neighbouring South Australia. A spokesman for the Victorian Employers Chamber of Commerce and Industry said on Monday that the organisation “fully supported Premier Bracks' action”. As for Yallourn Energy, it was also “very pleased,” said Johnston.

The intervention has allowed Yallourn Energy to apply to the full bench of the Australian Industrial Relations Commission to quickly terminate the current Enterprise Agreement and end the official period of bargaining. Any further industrial action by the power workers would then be illegal under the federal Workplace Relations Act.

The union leaders pushed through acceptance of Bracks' order but faced hostility. After recommending the return-to-work at Monday's meeting, the Electrical Trades Union state secretary Dean Mighell said: “It was probably one of the worst meetings I have ever had to endure after 12 years as a union official. These workers felt betrayed by Bracks.”

Since the dispute began last September the unions have isolated the Yallourn Energy maintenance workers. The company's 500 production workers have been kept working. No industrial action has been called at other Latrobe Valley power plants, nor have mass meetings been convened.

In doing so, the unions have sought to protect the Labor government. Late last year media reports quoted a senior union official saying that industrial action in the Latrobe Valley would create “a messy situation that the Bracks government does not need”.

Union officials have tried to satisfy the company's requirements by finalising a new Enterprise Bargaining Agreement that will also cover contract workers. Union officials have repeatedly emphasised their willingness to strike a deal with the company. Last Saturday Mighell told the Melbourne Age that the unions had offered compromises in a meeting with the company the day before, only to have them rejected.

Just as the Bracks government has forced power workers to bow to corporate needs, so it has made households and small businesses bear the burden of the power cuts. It is using amendments to the Electricity Industry Act introduced by the previous Liberal government in the wake of the September 1998 Esso gas refinery explosion that cut Victoria's gas supplies for more than a month.

The amendments provide for rationing in the case of breakdowns or other emergencies, in order to protect the operations of the large corporate enterprises. Speaking in state parliament in support of the 1998 amendments, one leading Labor Party MP said: “If energy restrictions are imposed arrangements must be put in place to ensure that the effect on industry is minimal and that companies can continue to operate.”

The government imposed restrictions last week that cut electricity to tens of thousands of households and banned the use of a range of electrical appliances between 1pm and 7pm daily. The ban included air conditioners, even though temperatures had climbed to 40 ºC.

Ordinary working people have been the hardest hit. Some childcare centres have been forced to transform their playrooms into cooling baths for children under five. Invalids living at home have had vital life support systems disrupted. The Metropolitan Ambulance Service said 38 people had collapsed last Friday, eight more suffered heat-stroke and 22 others were affected by heat-related illnesses.

The Office of the Chief Electrical Inspector enforces the power restrictions with a squad of 150 specially trained inspectors drafted from the five private electricity firms. The inspectors have the authority to enter properties, issue warnings and cut off electricity supply. Householders ignoring the restrictions face hefty fines.

These developments further expose the claims that the privatisation of public utilities such as the Victorian electricity network would produce greater efficiency and cheaper more reliable supplies of energy and other services.

Companies such as Yallourn Energy, whose central concern is the generation of profit, have continuously eliminated jobs and reduced vital maintenance programs to cut costs. The private owners have also failed to invest capital to upgrade or replace facilities.

These factors have combined to produce a series of breakdowns, not only in Victoria. Serious power blackouts have developed in South Australia, Queensland and Auckland, New Zealand over the past two years, and Sydney's water supply was contaminated.