The Cambridge Handbook of the Social Sciences in Australia

By Ian McAllister; Steve Dowrick et al. | Go to book overview
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Chapter 1
Privatisation
John Quiggin

Unlike many elements of the program of microeconomic reform undertaken in Australia since the 1970s, the policy of privatisation was adopted, and its implementation begun, before any significant discussion of the issues had been undertaken by the economics profession, in Australia or abroad. The comprehensive program of microeconomic reform advocated by Kasper et al. (1980) contains hardly any discussion of privatisation in the strict sense of the term, although related policies, such as voucher systems of educational finance, were canvassed.

Even in the UK, privatisation was, and to some extent has remained, 'a policy in search of a rationale' (Kay and Thompson 1986). The most important early statement of the rationale for privatisation was probably that of Beesley and Littlechild (1983).

By the time the first important Australian contributions to the literature (Domberger and Piggott 1986; Hartley 1986; Abelson 1987a, 1987b) appeared, 1 a political consensus in favour of privatisation had been established, although the official pronouncements of the Labor Party, then in government, did not reflect this until the end of the 1980s. From this point until the mid-1990s, privatisation in Australia proceeded apace, with bipartisan political support. Enterprises privatised in this period included the Commonwealth Bank, Qantas, the Commonwealth Serum Laboratories, and the State Electricity Commission of Victoria.

Despite the backing of both major parties, privatisation has never enjoyed strong electoral support, and public opposition to privatisation appears to have hardened over time.The popularity of private infrastructure schemes has also declined, though more sophisticated versions of the idea, under the name public–private partnership (PPP), are still being pursued.

The course of the debate within the economics profession has followed a broadly parallel course. The survey by Domberger and Piggott (1986), drawing largely on literature from the UK, set the tone for the first decade of the debate.While broadly supporting privatisation, Domberger and Piggott focused on the need for the creation of competitive markets. This argument contributed to the rise of national competition policy as the dominant element of the economic policy agenda of the 1990s (see chapter 2, by Stephen King).

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