An analysis of the economics of opening Telstra, the national railways and post and public electricity and water systems to competition.
The Australian economy is undergoing its most comprehensive challenge since Federation in 1901. An intensive package of microeconomic reform, driven by the Hilmer Report and culminating with the National Competition Reform Act 1995, is to drag the economy into the age of international competitive advantage.
The heart of these reforms is to increase and make more effective the access of industry to the nation s essential and hitherto public infrastructure facilities. Unlocking the Infracstructure takes a close and essential look at the assumptions, anticipated benefits and intended practice of these changes.
Rod Maddock and Stephen King's analysis is as comprehensive as it is surprising. After explaining the nature of the National Competition Policy, they cogently argue:
the policy does not remove the need for regulation of the unlocked infrastructure industries
access to the infrastructure does not guarantee, and by itself is unlikely to achieve, any improvement in economic efficiency
access negotiations between the owners and users of the infrastructure cannot be expected to produce any advantage for the end user or consumer
greater access to the national infrastructure may have significant and undesirable affects on business investment, and
the vertical breakup of infrastructure enterprises may indeed reduce economic efficiency in those industries.
Coverage extends to all infrastructure sectors, with case study examination of telecommunications, post and gas. The policy issues addressed include the public utility problem, access, pricing, natural monopolies, investment incentives and service integration.
Unlocking the Infrastrucutre is essential reading for the management of and policy makers for Australia s infrastructure industries, those companies reliant on that infrastructure, and students and academics in microeconomic policy and reform.
Rodney Maddock is Prof of Economics, La Trobe University and has advised the Reserve Bank, Australia Post, Telecom, Optus, the ANZ Bank, the UN and the Evatt foundation on industry structure.
Stephen King is a Research fellow at the RSSS, Australian National University. Harvard PhD and Wells prizewinner. ANU University Medallist. Consultant to AUSTEL, Industry Commission, TPC, Victorian Office of State Owned Enterprises.
Table Of Contents:
2 Review of the infrastructure industries
3 Hilmer and the national competition policy
4 Review of the public utility problem
5 Pricing and natural monopolies
6 Access to essential facilities
7 How will access alter investment incentives?
8 Benefits and costs of breaking up integrated firms
9 Case studies
10 Conclusion: how can it be made to work?
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