Australian Economic Institutions - Case Study Example

Australian economic institutions and performance Student’s Name University Affiliation Introduction The transport and communication sectors have always been considered as traditional services because minimal skills were required. Nonetheless, in the recent times, the sectors have rapidly transited from traditional features to knowledge-intensive undertakings. The widespread adoption of new technology has enabled introduction of knowledge-intensity in personal transport, use of internet for travel services, use of computerization in goods handling, application of internet in travel services. In that respect, developments have signified convergence between communication and transport sectors. All the modifications that have transpired in the two sectors of Australian economy have been associated with countless regulatory challenges and changes. The government has been forced to play a leading role because serving the public interest and achieving efficiency is part of its core mandate. Activity 1: What has been the role of the Commonwealth Constitution in setting the framework for regulation of transport and communications? The commonwealth of Australia was actualized on 1 January 1901. The commonwealth constitution dictated that legislative powers were to be exercised via a federal parliament. After Federation, the colonies were converted into states that could exercise legislative powers subject to new federal constitution. The constitution, paved way for creation of regulations ate both Commonwealth and state level. However, there was a provision for establishment of numerous government organizations outside the scope of core public services. Such organizations were meant to undertake various functions and services to the community. Organizations of that nature were chiefly government utilities for provision of fundamental services, such as water supply, electricity supply, transport and non-commercial broadcasting. The commonwealth constitution had a great influence on establishing a framework for regulating the transport and communication sectors. The constitution was responsible for establishment of the Australian Public Service (APS), which formed the basic regulating structure. Two important Public Service Acts were formulated in 1902 and 1922 to assist in management of public sectors. The public service Act of 1902 was instrumental because it established a foundation for managing public sectors. While drafting the new federal Public Service Act, the Victorian Public Service Board, New South Wales and the British Civil Service Commission systems were applied as principal models. The regulatory framework was a basis for emergence of a career in public service. It created a merit-grounded competitive staffing criterion, which affected entry into public service, promotional opportunities, protection against unlawful termination of services and security of tenure to retirement. The 1902 Act was also accredited for introduction of centralized control in public service. According to the Act, the Public Service Commissioner was in charge of decision-making. The Public Service Commissioner was in charge of handling issues arising from various departments administered by states. In 1911, the structure of public service management was altered considerably when public servants were given a leeway to find solutions for disputes in the Commonwealth Court of Conciliation and Arbitration. The 1922 Act was a new wave that emerged as a reaction against strong centralized control in public service. Pressure for change increased after the First World War led to negative impact in public service administration. The 1922 public service Act was to be administered through a board of three members. The Act was meant to divide administrative powers between the public service board and the public service administration. The board was tasked with responsibility of reviewing and stimulating the economy via public service efficacy. After the World War II, their responsibility became increasingly important for reconstruction of environment. The structure established by the 1922 Act was used for almost 70 years in Australia. Although during the period, various areas of APS administration like promotion, recruitment, discipline, redeployment and retirement were subjected to legislative reforms. It was only during the 1980s that new elements were introduced to the legal framework to provide for anti-discrimination provisions, development of merit and adoption of equal employment opportunities. Activity 2: Why was it considered normal for there to be government-owned monopolies in most areas of transport and communication up to the 1980s? Discuss the ownership and regulation of railways and telecommunications until that time. Both transport and communication were categorized under natural economies. The reason was that huge amount of resources were required to set up necessary structures to provide the services. On the other hand, the services rendered via the sectors were treated as crucial for the public. Thus, the government took responsibility to invest huge amounts of capital so that the public could easily access the services at reasonable prices. For many decades, the sectors were confined to government administration and control because consumer protection was deemed fundamental for economic development (Hunter, 2006). The two sectors were also considered as natural monopolies because the huge financial outlay required and comparatively low returns made it unviable for private sector. Natural monopolies in the telecommunication and transport sectors were considered important for economic development because of economies of scale. In those sectors, it made a lot of sense to achieve cost reduction by channeling financial resources to one huge undertaking that could serve interests of the public. Competition was eliminated in the sectors before the 1980s because it was believed that entry of business community could raise prices to untenable levels. In that case, the economy could be hurt due to increasing cost of living. Ownership and regulation of railways During the 19th and 20th century, railway system in Australia was largely owned by the government. However, there were a few private railways in timber, mining, quarrying, manufacturing and agricultural sectors. For government-owned railway networks, every state was responsible for regulating and controlling its transport systems (Bromby, 2004). During the 1930s, efforts were made to standardize interstate railway systems. The standard gauge networks that were put in place were meant to connect different states and enable people to move from one region to another. State regulations and policies were used to control undertakings at state railways. However, the Commonwealth Railways that were created in 1911 continued to be controlled and regulated by the federal government. In 1975, the Australian National Railways Commission was created for administration of the Commonwealth Railways (Purnendu, 2001). Ownership and regulation of telecommunication During the early days of the 20th century, the Australian government took control of development of communication systems because communication services were considered a right of all its citizens. Section 51 (v) of the 1901 Australian constitution gave powers to Federal Government over telephonic, telegraphic, postal and other communication services. In 1932, the Australian Broadcasting Commission was created to oversee broadcasting services. Development of postal services followed suit when oversees main was created in 1934. In 1946, the Oversees Telecommunications Commission (OTC) was launched to oversee international telecommunication services. The 1950s, 60s and 70s witnessed an explosion in the communication sector (Brown, 2000). It was during that time that communication satellites INTELSAT II and I came into existence. In 1975, telecommunication service was separated from postal services because it had grown into an independent industry. Throughout the decades before 1980, telecommunication services in Australian were largely monopolized and owned by the government. Some of the Acts and regulations established before the 1980 for administration in telecommunication industry include the Trade Practice Act of 1974, Telecomm’s (Interception & Access) Act of 1979 and the Telecommunications Act of 1975. After the launch of the Telecommunications Act in 1975, the Australian Telecommunications Commission (Telecom) gained exclusive rights to erect and service telecommunications infrastructure. Before the 1980s, the principal objective of government in telecommunications industry was provision of services to all citizens based on non-discrimination and affordable prices. It was only until 1997 that private ownership and competition was allowed in the telecommunication industry. Activity 3: What was the Two-Airline policy? Briefly outline its operation. What replaced it and what is the institutionalized form of regulation of airline today? The Two-Airline policy was a regulation that was adopted by the Australian Federal government in early 1950s to 1990s. After the Second World War, existing airlines were unwilling to continue because the future appeared uncertain. In 1952, the Fifth Menzies Ministry decreed that only two airlines would be endorsed to control regional city airports and inter-state capital cities (Kirby, 1979). The legislation was crafted in such a manner that both airlines would compete on equal terms to ensure profitability. The two airlines operated the same equipment. In addition, schedules and fares were sternly controlled in all competing truck routes. In that respect, almost every feature was similar, meaning that passengers would only choose an airline name (Hunter, 2009). The Ansett Airlines and the publicly owned Trans Australian Airlines formed part of the Two Airlines Agreement. The privately owned Ansett Airline was guaranteed subsidies on routes that were considered unprofitable. The end of the Two-Airline policy came during the 1990 when the Australian government chose to embrace deregulation. Deregulation paved way for new airlines to enter the market. Introduction of competition greatly reduced airfares and standards for operating airlines in the industry. After deregulation, the government was keen in warranting that operational policies are put in place to prevent major carriers from monopolizing the industry. Since October 1990, domestic airline industry has remained largely deregulated (Hunter, 2009). However, the international wing remains controlled at the Commonwealth level. The reason is that the international airline industry has to adhere to detailed capacity controls engrained in bilateral air service agreements (ASAs). Deregulation was also accompanied by creation of the Aviation and Airports Division charged with responsibility of advising the government on various regulatory and policy framework within the industry. The division is also responsible for ensuring sustained relationship between Australian government and the Australian airlines, Airservices Australia and the Civil Aviation Safety Authority (CASA). Besides, the division I also tasked with management of the country’s partaking of the activities of International Civil Aviation Organization (ICAO) and International Air Services Commission (IASC). All those bodies provide guidelines that are instrumental in undertaking various activities and functions within the Australian airline industry. Some of the regulations and policies that have been implemented following the expiry of the Two-Airline policy include the International Air Service Commission Act 1992, Civil Aviation Regulation 1991, Damage by Aircraft Act 1999, Aviation Transport Security Act 2004 and aviation Transport Security Regulations 2005. Other policies and regulations have also been put in place to control various aspects of operation within the industry. The numerous Acts, standards, policies and regulations have encouraged formulation of many bodies to oversee implementation of necessary directions. Activity 4: How is the media sector regulated today? Outline the roles of the Australian Press council, the ACMA, the Australian Competition & Consumer Commission, and the media ownership rules. In Australia, media is mainly regulated via legislations that have been formulated including the Broadcasting (Ownership and Control) Act 1989, the Broadcasting Amendment Act 1990, 1991, and the Broadcasting services act 1992. The Australian Communications and Media Authority (ACMA) are tasked with the responsibility of administrating and implementing broadcasting services. In 2002, the Australian government sought to amend its media rules by introduction of the Broadcasting Services Amendment (Media Ownership) Bill. Role of Australian press council The Australian Press council, which came into being in 1976, was tasked with a number of responsibilities including encouragement of freedom of expression via media, ensuring community access to information and promoting high standards of media practice. The council is the solitary body assigned to handle complaints concerning Australian magazines, newspapers and digital outlets. The council has three basic roles. First, APC is concerned with development of standards and media practices to be applied when handling complaints. Second, APC is required to respond to complaints brought by public concerning material in magazines, newspapers and digital outlets (Swift, 2013). Lastly, the APC is required to submit policy statements to various interest groups within its scope, like commissions, parliamentary committees and other public bodies. Role of the ACMA ACMA is an anti-spam government agency aimed at child protection and protection of members of public. It carries out sensitization program through its international training program. According to the Telecommunications Act of 1997, ACMA has powers to search business locations and seize equipment if its officials have reasonable ground to believe that provisions under the Act have been breached. The body is responsible for providing a wide range of information to members of public on how to reduce spam. It also provides guidelines to organizations on how to reduce sending spam and ways of meeting standards established under Spam Act 2003. ACMA is also in charge of investigation of cases involving contravention of provisions laid down by the Spam Act 2003 (Swift, 2013). Role of the ACCC The Australian Competition and consumer Commission (ACCC) was established to implement the competition and Consumer Act 2010 (Healey, 2013). Its mandate also included regulation of national infrastructure to benefit the public, encouraging fair-trading and promoting competition. Ideally, the role of ACCC lies in four priority areas. First, it was established to promote and sustain competition and cure market failure. Second, it is tasked with supporting fair-trading and protection of consumer interests. Third, the body has to promote economically resourceful operations. Lastly, the ACCC is required to promote collaboration with many groups that have interest in what they do. Media ownership rules Rules concerning media ownership in Australia are contained in numerous media ownership bills that have been enacted. Current ownership rules in Australian media industry can be traced to the Broadcasting (Ownership and Control) Act of 1987. Under the legislation, an individual owning a television license was not allowed to have ownership exceeding 15 percent of a newspaper published 4 days a week and circulating in more than 50 percent of area covered by the license. On the other hand, one holding a newspaper license was restricted to owning less than 5 percent of television license within the same area of operation (Quiggin, 1996). The ownership laws were meant to enhance competition, reduce concentration of media ownership within a locality and enable public to get access to various viewpoints. Activity 5: Given modern sources of information and means of communication, such as the internet and mobile phones, should Australia remove existing controls on the media and telecommunications sector? What role is there for government ownership, regulation, and censorship in the twenty-first-century? Control rules applied by Australian government were formulated close to 20 years ago. During that period, copious changes have been observed in the society leading to adoption of new ways of communication. The fast changing nature of technology has rendered numerous elements of control regulations obsolete. The dynamic nature of the postmodern society has made many aspects of existing regulations to be unfit. Traditional regulations focus on merger rules, foreign investment rules, media diversity rules and suitability rules. Notably, those rules were established to cover television and print media (Healey, 2013). Developments in postmodern society have seen emergence of internet and use of mobile phones as instrumental tools for communication and accessing information. Sadly, numerous policies are yet to capture challenges posed by new media and telecommunication channels. Apart from failing to capture current developments, existing regulatory framework contains numerous clauses that are deemed obsolete. For instance, rules concerning licensing in local broadcasting areas were based on media diversity, which has greatly decreased in relevance. The reason is that numerous media platforms have emerged providing information on national and global scale. Traditional rules have acted as impediment towards accessing and taking advantage of numerous opportunities that have surfaced because of new technology. The existing regulatory framework has also failed to capture new form of diversity emanating from the new media platforms, especially the internet (Hitchens, 2010). Emergence of new media actively provoked high levels of competition on traditional media channels. Since the traditional media channels continue to struggle with draconian rules, investment opportunities may be lost because resources can be easily diverted to emerging media platforms. Despite the great push for privatization and deregulation of media and telecommunication, government ownership, regulation, and censorship in the twenty-first-century is still vital. It is highly recommended that government actively participate in ownership, regulation and censorship of media because it is a sensitive sector. The government has to be involved because if control element is eliminated, unscrupulous individuals will undertake activities deemed destructive, such as copycat behavior, unfair competition, overpricing and disregard of public interest. The government’s involvement ensures that public interests are considered. Through its censorship programs, the government ensures protection of vulnerable groups in the society. For instance, many censorship programs are targeted at protecting children against harmful media images. The adults also are protected from unsolicited material that may offend them. There is also need to protect national culture, values, norms and tradition. For that reason, the government has mandated a 55 percent content of all television content to reflect national beliefs (Healey, 2013). Conventions and controls have been established because it is believed that standards of decency and morality have to be maintained. A classification scheme has been put in place to categorize publications, video games and films for protection of various groups. The Australian government has continued to maintain ownership of media channels because it beliefs that rights and interests of its citizens must be protected. References Purnendu, M. (2001). Railway Reform Regulation of Freight Transport Markets. Sydney, NSW: OECD Publishing. Bromby, R. (2004). The railway age in Australia. South Melbourne: Lothian. Brown, A. (2000). Book Review: Robert Albon and Franco Papandrea. Media Regulation in Australia and the Public Interest. Journal of Media Economics, 13(1), 49-51. Healey, J. (2013). Media ethics and regulation. Thirroul, N.S.W.: Spinney Press. Hitchens, L. (2010). Broadband in Australia: First Steps in Policy and Regulation. Journal of Media Law, 2(2), 213-225. Hunter, A. (2009). Australia's Two-Airline Policy. The Business History Review, 43(1), 110. Hunter, A. (2006). Restrictive Practices And Monopolies In Australia. Economic Record, 37(77), 25-49. Kirby, M. G. (1979). Australia's two airline policy: an economic analysis. Canberra: Australian National University, Faculty of Economics and Research School of Social Sciences. Quiggin, J. (1996). Great expectations: microeconomic reform and Australia. St. Leonards, NSW, Australia: Allen & Unwin. Swift, A. (2013). Regulating journalists? The Finkelstein Review, the Convergence Review and news media regulation in Australia. Journal of Applied Journalism & Media Studies, 2(1), 181-199. Read More