What Is the Purpose of National Competition Policy - Assignment Example

Assignment questions Name of the Student: Name of the Instructor: Name of the course: Code of the course: Submission date: Assignment questions Question 2: What are statutory authorities (SAs), government business enterprises (GBEs), and regulatory agencies? How have deregulation and privatization impacted on these institutions? Illustrate your answer with examples of the three types of institutions. In a generic sense, a statutory authority can be perceived as an entity in the public sector which is created through legislation which is in alignment with specific law of a particular state or region (Commonwealth of Australia, 2003). Thus, the statutory authorities are set up under the law and are mandated with the role of enforcing legislation on behalf of particular state or country. In a broader sense, these bodies are predominant in countries whose governance is primarily founded on the British style of parliamentary democracy, for instance, in Australia and New Zealand among other countries although they are also found in other states using different governance models. On the other hand, government business enterprises (GBEs) can be viewed as entities which are established by a government under a legal framework and are mandated with the role of undertaking commercial activities on behalf of the government which owns them. The main difference between the GBEs and other forms of government agencies or state agencies is that the GBEs are usually established to pursue financial objectives while majority of other state entities purely pursue non-financial goals. Lastly, regulatory agencies can be viewed as bodies which are formed by the government and mandated under the terms of a statute (legislative act) and are aimed at ensuring that there is extensive compliance with the provisions of the act under which they are formed and in carrying out its designated purpose (Business Dictionary, 2012). The regulatory agencies are also sometimes referred to as regulatory authorities or regulatory bodies. Deregulation and privatization in different countries around the world has posed extensive impacts on these institutions. In regard to the government business enterprises (GBEs), there has been extensive research on the impact of privatization, mostly in the emerging economies as exemplified by Nellis and Kikeri (1989), Ramamurti (1992), Laban and Wolf (1993) and De Castro and Uhlenbruck (1997) among others. Privatization of the GBEs has been perceived to have an overall impact of increasing the performance of these institutions mostly with the injection of corporate leadership in these institutions. As a result, these leaders are bound to institute reforms in the human resources which in turn translate to improved performance in the long-term. This fact is supported by Nadler and Tushman (1990) who determined that the instigation of new leadership into the GBEs which is result oriented and seeks to explore more opportunities aimed at maximizing profits are essential in ushering in transformations into an institution based on the fact that they provide the psychological boost to the human capital for the energies, aspirations and hopes of the people working in the newly privatized GBE and thus serve as a powerful role model. This has an overall impact of translating to elevated performance of the privatized GBE. Nonetheless, deregulation often culminates to negative impacts on the GBEs in terms of increased competition which in turn translates to eroded market share. This is best epitomize by Telstra in Australia whereby after the first phase of privatization in the late 1990s and subsequent deregulation in July 1997, the firm at first competed robustly with the private-owned carriers but since then, the company has lost its market share in both the domestic long-calls as well as oversees calls and at the present time faces stiff competition in mobile telephony (King, 2002). In regard to the statutory authorities (SAs), deregulation has the overall impact of resulting to the fluctuation of products’ prices in the market as the SAs lose their grip on enforcing the legislations aimed at regulating the prices in the market and thus their inefficiency. This is best epitomized by the Australian Competition & Consumer Commission whereby the instigation of deregulation culminated to extensive competition in the market and subsequent fluctuation of product prices in the market. As a result, this commission has increasingly lost its previously high authority in enforcing legislations on prices of various products in the market thus eroding its relevance and efficiency. Similarly, deregulation results in increased strain of the regulatory agencies in ensuring the compliance with the provisions of various acts as new entrants get into the market. This is exemplified by the Australia Therapeutic Goods Administration whereby the instigation of deregulation has seen increased new entrants in the therapeutic industry in Australia which has strained the efforts of TGA in approving the therapeutic goods which are supplied in the country and subsequently, increased amount of non-approved therapeutic goods are bound to find their way into the Australian market, jeopardizing the safety of the Australian citizens. Question 6: What is the purpose of national competition policy? Discuss the impact of the Hilmer Report on the regulation of competition in Australia, and the present role of the Australian Competition and Consumer Commission In a basic view, National Competition Policy denotes set policies which were instigated in Australia in the 1990s with the primary goal of promoting microeconomic reforms. Towards this end, the NCP is geared towards encouraging a more profound utility of the resources in the country and subsequently culminate into higher standards of living through elevating the level of competition in the country (Queensland Government, 1996). This is founded on the cognition of the fact that the generic lack of competition in core markets in the country has the overall impact of contributing to elevated inefficiencies within diverse institutions. Thus, based on the fact that elevated competition leads to better and more efficient institutions, providing the consumers with lower prices for various products as well as a greater choice of higher quality services in the market, National Competition Policy has the primary purpose of increasing the level of competition in the mainstream markets in Australia (Queensland Government, 1996). It is imperative to be cognizant of the fact that in the early 1990s, the Australian governments instigated extensive reforms process at the microeconomic level in major Australian infrastructure industries which include but not limited to port services, electricity, gas, telecommunication and postal services, urban passenger transport, rail freight, water and sewerage among others. The primary aim of these reforms was to elevate the level of competition and performance in the aforementioned industries which would eventually yield in the short and long-term effect of higher living standards among members of the Australian population (Verikios & Zhang, 2011). At the center of these reforms was the The Hilmer Report of August 1993 which proposed a wide alley of recommendations on the development of a National Competition Policy previously analyzed. This report had far reaching impacts on the regulation of competition in Australia. Some of these impacts are explored in the subsequent analysis. Firstly, through the recommendation that there ought to be mechanism to elevate the level of competition in the market, this has resulted in increased competition in different industries and as a result, diverse players have been making more profound efforts to expand their portfolio as well as enhancing the quality of their products in order to sustain their competitive advantage in the market. In addition, majority of the players have been on the forefront of in expanding their services to other regions outside their original areas of jurisdiction aimed at tapping the opportunities in these unexploited areas. The above fact is epitomized by the move by Queensland Rail to consider the possibility of developing a rail link between Goondiwindi and Moree aimed at being in a favorable niche to compete for the export cotton and grain freight (Troedson, 1995). This has thus had the overall impact of elevated infrastructural development in Australia as a result of elevated competition for new markets. On the other hand, through the recommendation by the Hiemer report that the monopoly advantage of different service providers be removed, this has seen reduced monopoly level in the provision of services by various industries in Australia and this has had the cumulative impact of creating a level playing ground for all the players in the market. This has in turn resulted to a greater trend towards increased innovation and creativity in the market as all the players seek to enhance their products and services and consequently, the quality of the products from various industries has seen a major boost. In addition, the consumers have been presented with a wide alley of products choice in the market. Lastly, the Hiemer report has seen the reduction of entry barriers in the infrastructure industry and as a result, stimulated the level of competition and heighted contestability among the players. Consequently, elevated competition pressure as a result of the minimal barriers of entry has seen the lowering of prices for various products and services in Australia as well as elevating the standards of service provision (Verikios & Zhang, 2011). In regard to the present role of the Australian Competition and Consumer Commission which is a statutory authority in Australia, it primary roles are to enforce and administer the competitive conduct rules and the consumer protection segment of the Trade Practices Act, prices surveillance and considering the notifications and applications for authorization among other roles (Smith, 1996). Question 9: Why was it considered normal for there to be government-owned monopolies in many areas of communications up to the 1980s? Why have those monopolies been privatized? How is communications now regulated? In a rudimentary perspective, government-owned monopolies in various sectors can be seen whereby is single institution which is under ownership and management of the government controls most, if not all, prices and outputs in a given sector as a result of the massive economies of scale and entry barrier which are often associated with the industry (Thierer, 1994). Prior to the period in the 1980s, it was considered normal for there to be government-owned monopolies in many realms of communication based on several reasons. Firstly, different areas in communication were associated with high cost of entry and thus necessitated massive investments in the undertakings of establishing the necessary infrastructure. As a result, the high entry costs for new private firms made it problematic for them to gain a ledge in this particular industry (Thierer, 1994). Therefore, the government which is endowed with massive financial capacity was perceived as the only entity with adequate capacity to successfully invest in this particular industry which eventually culminated in the government-owned enterprises enjoying extensive monopoly in the market in aspects like price determination, formulation and implementation of the regulatory frameworks and determining the level and extent of communication which was to take place. Thus, the basic presumption of the inability of private entities to successfully invest in various areas of communication based on their inadequate financial capacity made majority of the people in different regions of the world to perceive the government-owned monopoly as being normal. Secondly, it is imperative to be cognizant of the fact that most parts of the periods before the 1980s were characterized by widespread political volatility, best epitomized by the world wars and the subsequent cold war. As a result, the government-owned monopolies in communication were considered as being central in the preservation of the ideological foundations of various countries and thus aspects like censorship of what was to be communicated was perceived as being normal in different states like China and U.S.S.R among other states. Against this backdrop, the government-owned monopolies were considered to be normal by majority of the people based on their role mentioned above. Lastly, the state-owned monopoly ensured that the materials which were disseminated to the general public were not contravening the religious and moral foundations of the state. This was mostly predominant in the Muslim countries like Iran and Saudi Arabia whereby the government-owned monopolies made sure that the communicated materials were in line with Islamic teachings and laws. Thus, state-owned monopolies in various areas of communication were considered to be normal by majority of the people in these regions. Nonetheless, recent decades have seen a greater paradigm shift towards privatization. One of the major reasons has been to reduce the financial and administrative burden on the public sector. This is founded on the fact that the process of privatization represents the transfer of significant communication areas to the private sector which has to bear all the financial and administrative cost thus removing the obligation to support these communication areas from the public budget (Shar & Kesan, 1999). On the other hand, privatization culminates to greater involvement of the private sector in the economic development of the country. This integration is fundamental to foster public-private partnership which is integral in economic growth. In addition, privatization is associated with increased efficiency and effectiveness of operations as various private entities will be competing in the market thus resulting to better performance and improvement of the services being offered. Lastly, privatization of different communication areas has been perceived as being key in elevating the government revenues while at the same time reduces the government investments. This is whereby when the private communication enterprises are subjected to good management, this often transforms to high profits and these private institutions remit taxes to the government which is integral in increasing the revenue capital of the government while at the same time the government commits limited investments as previously mentioned. In the contemporary world, the communications are usually regulated differently in diverse countries around the globe. However, this is mostly through regulatory agencies which are mandated with the role of ensuring that there is compliance with the provisions of various communications acts in different countries, for instance, the Telecommunication Act, Radio Communication Act and Broadcasting Act in Australia. Question 10: What is the role of Fair Work Australia? Why does Australia have such a powerful labour market regulator? Fair Work Australia can be perceived as the national tribunal in Australia which is concerned with workplace relations. It is a body which enjoys significant autonomy and independence and endowed with power to carry out several functions (Fair Work Australia website, 2012). Some of the basic functions of this body include industrial action in terms of employees going on a strike or imposition of work bans among other actions. In addition, this body has the role of ensuring the safety net of the minimum wage for the employees and the conditions of employment as well as industrial bargaining. It also assists in the resolution of disputes, for instance, disputes emanating under the general protections provision for the Fair Work Act, 2009 among other disputes. Lastly, this body is concerned with termination of employment among other matters in the workplace (Fair Work Australia website, 2012). In the question of why Australia has such a powerful labor market regulator is founded on the evolutionally trend of the labor regulatory system in the country. According to Lloyd and Ramsay (2009) most part of the 20th century since 1904 saw Australia labor regulatory system being under a peculiar nationally ‘centralized’ labor market regulatory system which was founded on obligatory conciliation, arbitration and wage setting which was also judicially structured and enforced. Since then, the Court of Conciliation and Arbitration and the successive organizations which went by slightly different name played a core role in the socio-economic regulation in Australia until as late as 1996. Thus, it was the cornerstone of the labor regulation market among all the members of the Australian society as much as it was for the wider Australian economy (Lloyd and Ramsay, 2009). Thus, this regulating institution was the sole and powerful site where majority of the dispute settlements were conducted, bargaining over the economic shares to labor and capital as well as the general wage and conditions setting. This reality has thus become chiefly influential in determining the powerful nature of the labor market regulator in the contemporary Australian setting. Another reason behind this trend can be found in the workforce reality in Australia in the present times. It is worth to be cognizant of the fact that the workforce in Australia has encountered major shifts in the recent decades, mostly with the advent of human capital from foreign countries whereby these workers in different industries have flooded the Australian labor market. As a result, this has necessitated the instigation of a powerful regulator in the efforts to address the labour complications which mostly emanate from this development in terms of wage dynamics among others. In addition, increased liberalization of the Australian market has also seen the entry of contractors and sub-contractors from other countries, mostly in the construction industry although other industries like communication have also experienced this reality. As a result, extensive disputes have been on the rise and cases of arbitration and litigation have drastically grown which are made more complex by the inconsistencies in the dispute resolution laws between different countries. As a result, Australia has been obliged to establish a powerful labor market regulator in order to address these disputes and protect its local investors from being disadvantaged by being subjected to foreign arbitration or conciliation processes. Lastly, recent economic dynamics in the global spectrum have also played a part necessitating the development of a powerful labour market regulator. This is exemplified by the recent global economic slump in 2008 which saw majority of the industries around the world being adversely affected and corporate disputes being on the rise. In addition, issues of workforce retrenchment were on the rise as well as industrial actions. Such national and international economic risks can be perceived to fortify the necessity for the establishment of a powerful labour market regulator which would be efficient and effective in addressing various labour dynamics which would emanate from such unforeseen economic risks. All these factors have played a big role in different degrees in influencing the existence of a powerful labour market regulator in Australia and the trend of continued legislations to make this regulator more robust are projected to continue in the future aimed at making it aligned with the unfolding labour dynamics in the future. Reference Business Dictionary (2012). Regulatory Agency. Retrieved 06 December, 2012 from http://www.businessdictionary.com/definition/regulatory-agency.html Commonwealth of Australia (2003). Review of the corporate governance of statutory authorities and office holders. Canberra: Commonwealth of Australia. De Castro, J. O., & Uhlenbruck, N. (1997). Characteristics of privatization: Evidence from developed, less-developed, and former communist countries. Journal of International Business Studies, 28: 123-143. Fair Work Australia website (2012). Retrieved 06 December, 2012 from http://www.fwa.gov.au/index.cfm?pagename=home King, S.P. (2002). 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