Identifying the ‘downside’ of competition policy raises the question of whether there is an ‘up‐side’. Competition is supposed to drive the organisers of commodity production to minimise the costs they have to bear in some short to medium term, within environments more or less circumscribed by government regulations. The actual period tends to be that for which the providers of finance are prepared to wait for returns after a poorly performing company is restructured. Economists used to say that cost minimisation requires an industry structure in which there are many independent producers. Nowadays, more enlightened writers speak of ensuring that the market positions held by existing producers are contestable by prospective new producers.
The question of what government in Australia may do to establish competition in this sense of competition has recently focussed on the desirable re‐organisation of public enterprises, perhaps especially those that exist at the level of the states. So what are the dimensions of the ‘downside’ of opening the market positions occupied by public enterprises to contestation by private companies, especially those which are monopolies? The answer takes a large measure of the gloss off the Hilmer promises. The problems to be addressed are: the limit put on contestability where there is an element of natural monopoly; the tendency for cost minimisation to depend on the tighter management of labour; and, the difficulty of insisting simultaneously on both ‘competition’ and the satisfaction of ‘community service obligations’ (CSOs).
Research on the determinants of housing expenditure in Australia is limited by inadequate treatment of the distinction between three types of households: home renters, homeowners in the process of purchase, and homeowners who own outright. In this paper the authors use published and unpublished cross-sectional data from 1966–1968 and 1975–1976 to demonstrate the importance of the various determinants of housing across the three household types and, for the first time, to compare the characteristics at two points in time almost a decade apart. It was found that the influence of sociodemographic variables such as age, employment status, and household size was statistically significant, and that their influence varied considerably across the three household types. Detailed analysis has shown that income elasticity estimates of demand for housing were all found to be invariant over time, to be substantially less than 1.0 and to differ markedly between tenure type, with home renters having the lowest values (0.46–0.49), outright homeowners the highest (0.69), and mortgaged homeowners in between (0.53–0.59).
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