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This paper documents firm mark‐ups and competition in Australia, and their impact on productivity, using administrative data. I find that mark‐ups increased by around 5 per cent since the mid 2000s, less than previously documented for Australia and slightly less than documented for the average advanced economy. While part appears to reflect technological change, part appears to reflect an increase in market power. This increase appears to explain part of the slowdown in productivity growth observed in Australia over the past decade, by slowing the efficient reallocation of resources from low productivity to high productivity firms. [ABSTRACT FROM AUTHOR]

This paper examines the efficiency consequences of bank mergers and acquisitions with particular reference to the ‘four pillars’ policy preventing mergers among the four major banks. Using data envelopment analysis, the technical efficiencies of banks operating in Australia over the period from 1983 to 2001 are estimated. A second-stage regression is used to evaluate ex-post efficiency performance of banks involved in mergers and acquisitions. The empirical results demonstrate that for the time being mergers among the four major banks may result in much poorer efficiency performance in the merging banks and the banking sector. [ABSTRACT FROM AUTHOR]

Aim: To describe the establishment of a cross‐border and multi‐university collaboration in rural Australia to mitigate potential competition, maximise Rural Health Multidisciplinary Training (RHMT) Programme investments and regional health workforce outcomes. Context: Rural Health Multidisciplinary Training programme investments have enabled the establishment of 19 Australian University Departments of Rural Health (UDRH) and 17 Rural Clinical Schools. The importance of these investments is acknowledged. However, in regional settings, due to limited clinical placement and training opportunities, there is potential for heightened competition between universities who are operating within shared geographical footprints. Competition between universities risks focusing RHMT programme activity on individual reporting requirements and activities, in preference to: regional needs; existing community–university relationships; and place‐based approaches to health workforce development. Participants: A rural New South Wales and Victorian RHMT‐funded departments, collectively known as the Sunraysia Collaboration. Approach: Strategic and operational processes, structures and actions underpinning collaboration formation and relationship consolidation will be described. Co‐design methodologies employed to collectively define collaboration vision and aims, governance framework and guiding principles, reporting structures and co‐contributions to teaching, research and service will be discussed. Collaboration sensitivity to the social, cultural, relationship and economic connectedness within the region and existing health workforce flows will also be explored. Conclusion: The Sunraysia collaboration demonstrates one approach towards mitigating potential competition between RHMT Programme funded universities within rural and remote Australia. The collaboration is an exemplar of co‐design in action providing an alternative approach to address RHMT Programme parameters and regional needs whilst supporting rural‐remote health workforce training and education innovations. [ABSTRACT FROM AUTHOR]

The Trade Practices Act 1965 was widely criticised as being weak and unproductive. It was a significantly watered-down version of the original Bill overseen by Garfield Barwick. Although the final form of the Act was perceived as ineffective at the time, it is now viewed as an important step towards a national competition policy and a precursor to the opening up of the Australian economy. This paper outlines the economic, political and social background to the introduction of the legislation. We specify some of the factors that explain why its creation caused controversy and its importance in initiating change in Australians' attitudes towards collusive behaviour and economic protectionism. [ABSTRACT FROM AUTHOR]

This paper estimates a simultaneous-equation model of wages and prices for Australia, underpinned by a competing claims framework of imperfect competition. Two separate co-integrating relationships for wages and prices are identified by imposing the economic hypotheses implied by the theory. The steady-state relationships for wages and prices are then embedded in a parsimonious, dynamic wage-price model. The final model is both simple and parsimonious and able to describe the process of wage and price inflation in Australia. [ABSTRACT FROM AUTHOR]

This paper documents differences in the levels and growth rates of manufactured exports across the Australian states and territories over the period 1989-1990 to 2000-2001 and then re-interprets these differences using shift-share analysis. Our results suggest that the relative changes in state exports of manufactured goods have been substantial and seem in large part due to state-specific characteristics that impact on state competitiveness. [ABSTRACT FROM AUTHOR]

This paper explores the debate on R&D policy in Australia via an analysis that compares the level of R&D in Australia to a cross-section of countries. Using survey data from the Global Competitiveness Report and economic data we find that R&D levels are consistent with expectations given business attitudes, the property rights regime and economic characteristics. [ABSTRACT FROM AUTHOR]

This paper reviews the evolution and significance of the Trade Practices Act for the development of competition policy in Australia. The paper also discusses the role of the ACCC in the enforcement of competition law and speculates on future challenges facing the ACCC in this role. [ABSTRACT FROM AUTHOR]

Approaches to the study of knowledge management (KM) strategies from within the management and information systems (IS) literature have traditionally relied on a resource-based view (RBV) of sources of competitive advantage. Recent studies on young, high-technology firms have highlighted that in practice these types of businesses also acquire competitive advantage through interfirm relationships involving knowledge sharing and strategies based on industry structure involving knowledge blocking. This research highlights potential limitations to the RBV of KM and suggests the need for a more comprehensive framework to explore KM business practices among small and medium-sized enterprises (SMEs). Drawing on strategic manag&ggrave;ement theories of relational and industry-based sources of competitive advantage this paper presents a conceptual model that aims to encapsulate the range of potential KM strategies that may be deployed by SMEs. Leveraging current research into KM strategies amongst biotechnology SMEs, the model suggests ways in which the current approaches to KM may be modified and extended to more accurately reflect KM strategies deployed by SMEs within the Australian biotechnology industry. Copyright © 2004 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

The Industry Commission's 1995 study of the growth and revenue implications of Hilmer and related reforms has been influential in the debate over microeconomic reform. In addition to reform of Telstra, Australia Post, the Federal Airports Corporation, the Civil Aviation Authority, state electricity, gas and water authorities, and rail, road and port authorities, the Commission examined a broad-ranging program including competitive tendering for the provision of public services, deregulation of the building industry and a move to self-regulation of industries such as meat processing. The Commission estimated that the implementation of these reforms would result in a 5.5 per cent increase in GDP. In this paper, the Commission's analysis is subjected to a detailed critique. It is argued that most of the estimated productivity gains are overoptimistic, representing upper bounds to possible achievement rather than likely outcomes. Furthermore, it is argued that the dominant flow-on effects of microeconomic reform will be negative, arising from the fact that at least some of the workers directly displaced by reform will be permanently displaced from the employed labour force. [ABSTRACT FROM AUTHOR]

Over the past decade or more Australia amongst other jurisdictions has experienced substantial reforms to auditing regulation in an effort to boost public confidence in the auditing profession. This paper aims to examine whether these changes in the Australian regulatory environment for audits have (a) provided enhanced confidence in reported financial data, (b) impacted audit costs and (c) not limited competition in the market for audit services. Using qualitative interview data, this study reports on the perceptions of auditors, auditing standard setters and regulators in relation to the CLERP 9 reforms to the Australian auditing regime in the later part of the 2000s. A theoretical framework is developed to evaluate whether these reforms are substantive enough in nature to effect public confidence in reported financial data and market competition in audits. [ABSTRACT FROM AUTHOR]

More than a century elapsed between Australia's first legislative attempts to modify anticompetitive behaviour (the Australian Industries Preservation Act 1906) and its most recent efforts to criminalise price fixing ( Trade Practices Amendment (Cartel Conduct and Other Measures) Act 2009). After a burst of activity in the first decade of Federation, the intervening years saw only sporadic interest by governments to promote competitive markets, with limited impact until the late 1960s. This paper assesses the first period of Australia's attempts to promote competition. It traces the political, economic and social environments of anticompetitive business behaviour in Australia from 1901 up to World War I. We suggest that Australia's initial forays into regulating cartels were motivated more by protectionist aims than by efforts to increase competition, which in part also explains the next half-century of legislative apathy towards anti-competitive legislation. [ABSTRACT FROM AUTHOR]

Regulatory scholars have increasingly observed that it is not only public regulatory agencies and official enforcement action that motivate and enforce businesses' compliance with the law; in many situations, certain third parties may have greater capacity and power to motivate and enforce compliance with the law than do official regulatory agencies. This paper examines the extent to which businesses' worries about, and perceptions of pressure from, various third parties influence their internal compliance management activities and moral commitment in relation to complying with the objectives of competition and consumer protection law. Using data from a survey of 999 large Australian businesses, we find that businesses worry a lot about the reactions of a range of third parties including customers, shareholders, employees, and business partners to non-compliance. We find little evidence that these worries have much impact on what businesses actually do. However, perceptions of risk of complaints do influence what they do. [ABSTRACT FROM AUTHOR]

The paper analyses the competitive process and performance behaviour of Japanese manufacturing between 1985 and 1997. Technological changes, international competition and reducing barriers in domestic and international markets are playing a significant role to speed up the performance behaviour in Japanese manufacturing. Scale economies, product differentiation and openness of the economy are used in explaining profit behaviour of manufacturing firms. Findings are compared with existing studies from Japan as well as from other developed countries such as Australia and the USA. [ABSTRACT FROM AUTHOR]

The level and nature of competition in supermarket retailing in Australia has been hotly debated as a policy issue in recent times. The creeping acquisitions of smaller groups by Coles and Woolworths have led to several investigations amid claims that consumers will be disadvantaged by the growth of the two big chains. Yet little convincing evidence has been found to support these assertions. Although on occasions the big two may have used their power vertically to squeeze suppliers, consumers have experienced highly competitive retail markets. In this paper, it is argued that it is market conduct, not structure, that should be the prime focus of regulatory and policy interest, and that recent corporate activity may lead to a third force in supermarket retailing in Australia that could not only ensure continued competitiveness in the industry, but could also help to constrain the successful exercise of vertical market power by the two big chains. Accordingly, it is argued that intervention as a general policy in supermarket retailing would not be socially efficient, at least not until a wide range of objective and quantitative assessments have been carried out on the operation of the supermarket sector. [ABSTRACT FROM AUTHOR]

A special-interest tourist market that holds out great promise for continued growth well into the next century is that of MICE (meetings, incentives, conventions, exhibitions). At the same time, changing prices in particular destinations relative to others are regarded as one of the most important economic influences on destination shares of total international tourism flows. The question arises as to the price competitiveness of major competing MICE destinations. Although earlier research has recognised that a destination's price competitiveness differs according to a visitor's country of origin there has been relatively little attention paid to tourism price competitiveness from the perspective of those having different motives for travel. This paper has four major aims: first, to provide a method by which price competitiveness of tourism by journey purpose can be estimated; second, to construct price competitiveness indices that measure, absolutely and relative to major competitors world-wide, the price competitiveness of Australia's MICE tourism industry; third, to compare Australia's price competitiveness as a MICE destination with its price competitiveness for total inbound tourism; fourth, to discuss the implications of the results for travel and tourism decision-makers in both the private and public sectors. Copyright © 2001 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Third-party access to major infrastructure facilities is a key component of National Competition Policy. In many situations, both through state regimes and access undertakings under the new part IIIA of the Trade Practices Act, access will be governed by explicit or implicit rate-of-return procedures. Infrastructure assets will be valued and translated into an allowable return for the owners. However, setting allowed returns is only the first part of the regulatory process. This paper uses a simple model to evaluate the 'second-best' access prices under rate-of-return regulation. We show that optimal access prices will depend on the degree of downstream competition. With imperfect price competition and fixed numbers of firms downstream, optimal access prices will 'mimic' downstream competition and reduce downstream profits. With free entry downstream, optimal access pricing should determine an optimal level of downstream participation. We also show that the access provider's incentives to introduce optimal access prices will depend on the degree of vertical integration. [ABSTRACT FROM AUTHOR]

Contributions of Australian economists to understand the effects of a boom export industry are reviewed. Effects are considered on: the real exchange rate; output, prices and factor incomes of the boom industry, other trade-exposed industries and nontraded industries; and national income and its distribution. Theoretical models and empirical models are reviewed. Different effects are considered for supply-side- versus demand-side-driven booms, and then for the price increase, investment increase and production increase phases of the boom. Evaluations of industry and macroeconomic policy options are canvassed. [ABSTRACT FROM AUTHOR]

This paper discusses the performance of Australian banks over the past decade, focusing on the forces that have shaped bank strategies and outcomes. The robust Australian economy and associated demand for credit, particularly from the household sector, have been significant drivers of bank success. Intensifying competition in lending and deposits has also played a role, manifesting itself largely as price pressure, but also spurring product innovation and the easing of lending standards. While the combination of these forces has allowed bank balance sheets to grow rapidly, the sector has remained well capitalised and has low levels of non-performing assets. [ABSTRACT FROM AUTHOR]

Australia's national electricity market (NEM) is national in name only. It is eight years since the NEM commenced and the objective of a fully competitive market has not been reached. The NEM's structural characteristics, shaped strongly although not exclusively by its evolving regulatory regime, have created the exact antithesis. This paper examines the NEM's key structural characteristics, the consequential pricing and investment outcomes and the conundrums posed for governments and regulators elucidating the reasons why a fully competitive NEM--beyond an increased number of buyers and sellers, and choice of supplier for all consumers--can not be attained without substantial changes. [ABSTRACT FROM AUTHOR]

The author discusses the role of the ACCC in promoting competition policy in Australia. The ACCC's regulatory activities in focusing on of those industries where competition is limited are examined. It is argued that the focus here is two fold: to create conditions for fair competition in industries that rely on the services of facilities with natural monopoly characteristics and the administration of price caps to minimise the impact of monopoly power. [ABSTRACT FROM AUTHOR]

In conclusion, this paper has outlined how the 'Living Wage' claim is applied in terms of effective minimum award rates and safety net adjustments; the efficiency and equity grounds of the claim; and, how the claim is consistent with the current macroeconomic environment. It has been designed to ensure that the award system meets the needs of working families and remains relevant in the changing labour market of the 1990s. The claim provides the means for an equitable share of economic growth and productivity for low paid workers whilst meeting the overall economic requirements of sustainable low inflationary growth and an internationally competitive economy. Finally the claim will assist the nation's need for economic growth and social cohesion. The need for a community to meet both social equity and economic considerations was understood by both Adam Smith and Justice Higgins. The 'Living Wage' claim reflects and respects both those economic and social considerations in the contemporary Australian context of 1996-97. [ABSTRACT FROM AUTHOR]

This paper examines the impact of capital mobility within the context of a simple general equilibrium model where the supply of labour is endogenous and the producer services sector is subject to monopolistic competition. It is shown that the presence of monopolistic competition influences the size of all comparative static results. The paper also shows that the size of the elasticity of substitution between leisure and consumption of the final good plays a crucial role in determining the impact of changes in the supply of capital on utility-maximising labour supply and welfare. Specifically, it is shown that capital mobility has no impact on optimal labour supply if the elasticity of substitution is equal to unity. The impact of a small capital inflow on welfare can be negative if the elasticity of substitution is sufficiently larger than unity. [ABSTRACT FROM AUTHOR]

The electricity supply industry has historically offered a homogenous good supplied via economically regulated transmission and distribution networks. Competition was introduced into the contestable generation and retail supply chain components as part of the 1990s Hilmer reform process. After a century of incremental technological developments, the industry is now being transformed by new distributed energy technologies and a global focus on reducing anthropogenic greenhouse gas emissions. Policy-makers did not anticipate these changes. A number of key reforms are likely to be required. These include: assessing whether the return on capital provided to network operators is appropriate given changing economic conditions; determining the role of competition in the provision of 'behind the meter' energy services; and integration of climate change policy with wholesale energy market design. [ABSTRACT FROM AUTHOR]

Analysing private market research data, we estimate the degree of market concentration across 481 industries in the Australian economy. On average, the largest four firms control 36 per cent of the market. Some industries are considerably more concentrated. In department stores, newspapers, banking, health insurance, supermarkets, domestic airlines, Internet service providers, baby food and beer, the biggest four firms control more than 80 per cent of the market. We suggest ways in which high market concentration may increase inequality and discuss some policy ideas to address the problem. [ABSTRACT FROM AUTHOR]

The food industry in Australia (agriculture and manufacturing) plays a fundamental role in contributing to socioeconomic sectors nationally. However, alongside the benefits, the industry also produces environmental burdens associated with the production of food. Sectorally, agriculture is the largest consumer of water. Additionally, land degradation, greenhouse gas emissions, energy consumption, and waste generation are considered the main environmental impacts caused by the industry. The research project aims to evaluate the eco-efficiency performance of various subsectors in the Australian agri-food systems through the use of input-output-oriented approaches of data envelopment analysis and material flow analysis. This helps in establishing environmental and economic indicators for the industry. The results have shown inefficiencies during the life cycle of food production in Australia. Following the principles of industrial ecology, the study recommends the implementation of sustainable processes to increase efficiency, diminish undesirable outputs, and decrease the use of nonrenewable inputs within the production cycle. Broadly, the research outcomes are useful to inform decision makers about the advantages of moving from a traditional linear system to a circular production system, where a sustainable and efficient circular economy could be created in the Australian food industry. [ABSTRACT FROM AUTHOR]

This article discusses the key recommendations of the Final Report of the Competition Policy Review Panel relating to the competition provisions of the Competition and Consumer Act 2010 (Cwlth)-specifically, with regard to substantive rules, recommendations concerning the prohibitions on misuse of market power and cartel prohibitions and, with regard to form, recommendations concerning simplification of the law. It also critiques the Review Panel's failure to articulate a position on the statutory objects of the competition provisions. The article concludes that the recommendations in question should be accepted by government. However, the extent to which they achieve beneficial outcomes in practice will turn on the manner in which the new rules are drafted and the approach taken to their enforcement. [ABSTRACT FROM AUTHOR]

The purpose of this review is to synthesise the existing research literature regarding the underlying structure and competitiveness of the Australian audit market. We consider the findings of Australian academic research, which has examined audit fees, non-audit fees, market concentration, auditor choice, auditor switching and audit firm mergers. We identify the key metrics used to evaluate market structure in the academic literature and then document changes in these metrics in the Australian audit market for listed company audits during the period 2000-2011. Our analysis shows that the audit market is both highly segmented and supplier-concentrated. We find that audit fees in Australia have increased over this period, which can be attributed to increased regulation and resulting increased audit effort needed to complete audit engagements in times of regulatory change and more recently, the global financial crisis. We provide regulators, standard setters and the profession with an evidenced-based perspective on the market for the listed company audits, which is an important input into any future proposals to regulate the Australian audit market. [ABSTRACT FROM AUTHOR]

Microeconomic reforms that established Australia' s National Electricity Market during the 1990s were extensive. State-owned electricity commissions were vertically and horizontally restructured and many of the restructured businesses were privatised. A mandatory gross pool market was established to facilitate competition amongst generators and retailers and quickly became one of the best-performing wholesale electricity markets in the world. Networks remain regulated under unresponsive 5-year rate cases with flat-rate tariffs persisting, while inflexible 'subsidy schemes' proliferated and forced generation plant entry into an already-oversupplied market. End-use electricity tariffs have since doubled. Misguided and overlapping policy failures are primary causes. [ABSTRACT FROM AUTHOR]

We provide an overview of the challenges, risks and opportunities experienced by Australia' s liquefied natural gas industry over the past 25 years. This includes an evaluation of the cost competitiveness challenge of the sector, the importance of effective public oversight and regulation to attract investments and progress developments and the need for community trust. We find that an effective and fair fiscal regime and regulatory process, a trustworthy and transparent process of approvals and monitoring that effectively manages risks are necessary to maximise the national benefits of liquefied natural gas developments. [ABSTRACT FROM AUTHOR]

In this article, a survey is provided of the privatisation of government-owned enterprises in Australia since the 1980s. In particular, the article evaluates the evidence that has been compiled on the success or failure of privatisation in enhancing efficiency in various industry sectors. In terms of efficiency improvements, some privatisations have been a clear success. In other cases, however, most of the improvements in efficiency took place after corporatisation, rather than following privatisation. In most cases, improvements in efficiency were also probably due in varying (and sometimes substantial) parts to regulatory reform, increases in competition and technological change. [ABSTRACT FROM AUTHOR]

This article deals with the evolution of a quasi-market system in the employment services in three countries: Australia, the Netherlands and Belgium. Based on an in-depth analysis of the reform process over the past two decades, we arrive at the observation that Australia and the Netherlands, unlike Belgium, make comparable choices when restructuring this policy domain, although their context of a welfare state is different. Second, the new structures in those countries which have made the same choices are seen to evolve differently after only a short period of time. This article argues that no convergence towards the same competitive market model is to be found. It provides an institutional explanation by tracing elements of a new system logic which entered the existing structure, and identifying change mechanisms which generate a cumulative process of smaller changes. [ABSTRACT FROM AUTHOR]

The conventional view of the fortunes of European newcomers who cropped land in mid-nineteenth-century Victoria is confined to a description of their difficulties. This article critically assesses the scope for profit-making in the local farming sector in the late 1830s to early 1870s. The microeconomic environment in which early colonial farmers operated is reconstructed in this article with the use of modern Michael Porter's five forces of competition model. The article shows the high profit potential of crop farming - even when on a small scale - throughout the period, with the exception of the last few years when intensified competition among farmers affected their profits. [ABSTRACT FROM AUTHOR]

This study empirically investigates the value shareholders place on excess cash holdings and how shareholders' valuation of cash holdings is associated with financial constraints, firm growth, cash-flow uncertainty and product market competition for Australian firms from 1990 to 2007. Our results indicate that the marginal value of cash holdings to shareholders declines with larger cash holdings and higher leverage. However, firms that are more financially constrained, that have higher growth rates and that face greater uncertainty exhibit a higher marginal value of cash holdings. These findings are consistent with the explanation that excess cash holdings are not necessarily detrimental to firm value. Firms with costly external financing and that also save more cash for current operating and future investing needs find that the market values these cash hoarding policies favourably. Finally, there is limited evidence of an association between various corporate governance measures and the value of cash holdings for a shorter sample period. [ABSTRACT FROM AUTHOR]

This research analyses international and domestic air services in Australia during a six year period, 2005-2010. We place air services into their urban context by relating them to city-based measures such as population, tourism, and producer services employment among other measures. The research takes a supply-side approach in an assessment of international and domestic capacity at major Australian airports from the perspective of the number of seats, the nature of links, and competition. Multiple linkage analysis and the concept of effective competitors allow us to explore this perspective at greater depth. Our findings show substantial changes in international patterns, specifically favouring Melbourne, Perth, and Gold Coast. In contrast, the domestic scene is characterised by little change, an outcome we link to the underlying stability in the settlement system and the location of some major economic activities. While the results are related to our measures of urban characteristics, some special region-specific aspects are also at work. Finally, in both the international and domestic cases we find evidence of greater airline diversity which may benefit consumers. [ABSTRACT FROM AUTHOR]

'Dutch Disease' refers to the adverse effects through real exchange rate appreciation that the mining boom can have on various export- and import-competing industries. The distinction is made between the booming sector (mining), the lagging sector (exports not part of the booming sector and import-competing goods and services) and the non-tradeable sector. What should the government do to reduce this Dutch 'disease'? The principal options are: do nothing, piecemeal protectionism, moderate exchange rate effects by running a fiscal surplus, combined with lowering the interest rate, and possibly establishing a sovereign wealth fund. The costs of the latter measures may be considerable. [ABSTRACT FROM AUTHOR]

In 2005-06 the Australian government announced the establishment of 65 Family Relationship Centres (FRCs) - a 'gateway' service assisting separating couples to reach agreement about child custodial arrangements without recourse to courts. The use of a multi-round competitive contracting regime for the purpose of selecting service providers gave rise to a number of tensions amongst not-for-profit organisations (NFPOs) which, to a degree, compromised the full realisation of stated public policy aims. Reporting on fieldwork conducted with a sample of FRC operators, industry representatives and key government officials this article evaluates the extent to which the case of FRCs conforms to critiques commonly aired in the social policy literature that attribute various forms of policy failure and/or social capital depletion to the competitive contracting of human services within quasi-markets. Although the competitive selection process imposed significant costs on the NFPOs involved, the program also exhibited substantial collaborative and collegial behaviours between government and NFPOs, thus diverging from the critique usually portrayed in the literature. [ABSTRACT FROM AUTHOR]

Independent regulatory agencies, faced with multiple and often conflicting demands from regulatory stakeholders, yet operating at arm's length from government, may be under considerable pressure to demonstrate the legitimacy of their decisions and the regime they administer. This article considers how regulators employ presentational strategies to establish and maintain their legitimacy by documenting the findings of a comparative study of two independent agencies responsible for the regulation of trade practices in their respective jurisdictions: the UK Office of Fair Trading and the Australian Competition and Consumer Commission. Its findings demonstrate that presentational activities may be an important means by which regulators give concrete expression to their obligations of transparency, promote the effectiveness of the regime they administer, and publicly demonstrate how their work serves the community. The mass media is relied upon by both agencies as the primary vehicle through which they seek to communicate to their targeted audiences and the public at large, actively seeking to manage the ambivalence that infuses the regulatory enterprise. [ABSTRACT FROM AUTHOR]

For economists, the main test of a microeconomic policy change is its effect on efficiency: gains minus losses, equally weighted. However, it is standard economics that individuals value losses more than gains. Moreover, imposing large, uncompensated and uninsurable policy-induced losses would be widely regarded as unfair, when they are merely collateral damage from policy action. The article argues the case for adjusting the calculation of efficiency to take account of this ‘unfairness’ and discusses how it could be done. The context is the relatively recent acceptance in Australia of competition, if planned and regulated, as being generally socially beneficial. [ABSTRACT FROM AUTHOR]

High neonatal mortality is one of the most salient ‘facts’ about firm performance in the industrial organisation literature. We model firm survival and examine the relative influence of firm, industry and macroeconomic factors on survival for new vis-à-vis incumbent firms in Australia. In particular, we focus on how the intensity of innovation in each industry relates to firm survival. Our results imply that while new firms thrive in risky and innovative industries, they are also more susceptible to business cycle effects such as changes in the rate of growth of industry profits and the availability of equity finance. [ABSTRACT FROM AUTHOR]

Despite widespread adoption of Porter's Industrial Cluster Theory as a policy development framework by federal and state governments over the past decade, Australia remains significantly below the OECD average in terms of its industries' economic contributions to real wealth creation ( Brown 2000 ; OECD 1998 ). The major cause cited for this relatively poor performance has been inability of key government officials to implement effective industry policy that simultaneously avoids de facto protectionism and distortion of competition. This article provides an insight into the key policy decisions undertaken by the Tasmanian state government that coincided with development of an internationally successful shipbuilding industry in that state. As such, this article provides a reflection on policy initiatives that may be valuable for government officials elsewhere. [ABSTRACT FROM AUTHOR]

This article discusses whether at a theoretical level the large and growing role of the vertically integrated supermarket chains raises a buyer-power concern because of potential harm to other retailers, suppliers, and/or consumers. Even if this is possible, whether it is a real concern depends on whether provision exists to constrain the exercise of that power through market responses, such as entry, or through regulatory provisions, such as those contained in the Trade Practices Act. [ABSTRACT FROM AUTHOR]

In recent years, heated debate has arisen concerning the media practices of Australia's competition and consumer regulator (“the ACCC”), with a number of industry leaders asserting that the ACCC engages in “trial by media.” The public disquiet surrounding the ACCC's use of the media was so significant that the Australian Parliament established an independent committee of inquiry (“the Dawson Inquiry”) to investigate (amongst other things) whether Australian competition legislation “provides adequate protection for the commercial affairs and reputation of individuals and corporations.” In its report, the Dawson Inquiry observed that widespread misgivings about the ACCC's media practices had emerged from the submissions that it had received. In its recommendations to the Australian Parliament, the Dawson Inquiry recommended that the ACCC should develop a media code of conduct to govern its use of the media, particularly in relation to enforcement proceedings. In making these recommendations, the Dawson Inquiry drew from a hitherto unpublished research study conducted in 2002 that sought to identify the extent to which the ACCC engages in “trial by media.” This article documents the design, methodological bases, and findings of that study in order to facilitate broader dissemination of the research findings upon which the Dawson Inquiry's policy recommendations concerning the ACCC's use of the media were based. [ABSTRACT FROM AUTHOR]

The article presents information on the report of the Australian Financial System Inquiry, which was established in May 1996, under the chairmanship of Stan Wallis, in relation to balancing regulation and the evolution of the markets. The Wallis Report is in many respects a path-breaking document which will have a major positive impact on the evolution of a more efficient financial system in Australia. This achievement will follow directly from the Report endorsing and facilitating the institutional structures and evolutionary path being dictated by current market trends. It would be surprising, however, if a Report of this type, produced in this time frame, did not show some signs of the multiple personality disorder that is commonly associated with numerous authors and divergent views. In the case of the Wallis Report, problems of this type are most starkly displayed by its conservative stance on the relative roles of market discipline and regulation in providing efficiency. The single most important aspect of the Report is its explicit embrace of the competitive and regulatory implications of a single financial services marketplace.

The article presents information on the report of the Australian Financial System Inquiry, which was established in May 1996, under the chairmanship of Stan Wallis. The Wallis Report (Financial System Inquiry 1997) is far from comprehensive in its coverage of the problems in the financial system, but this characteristic was only to be expected given the short time allowed to the Committee. Another problem with the strict deadline imposed on the Committee is that it had to rely heavily on material from submissions to bolster its arguments. It did not have time to do its own research. However, in spite of these short-comings, it makes some significant recommendations. It will be useful to recognize some of these points before moving on to my major points of difference with the Report which arise largely in the prudential area. Another way of looking at this problem is to note that deposit accounts must be subsidized out of the income earned from other products. Until recently, housing mortgages were a major source of this cross-subsidy. This created a competitive opportunity for the independent mortgage providers who could undercut deposit-taking institutions..