Vol. 6, No. 3
SUMMARY
While the August 1993 Hilmer Report on National Competition Policy recommends structural reforms to public monopolies that would increase competition, it asserts that ownership of a business is not of direct concern to competition policy. However, privatisation will likely provide benefits to "consumers" (broadly defined) and increase resource efficiency, which are the main objects of competition policy. There is a danger that Hilmer's failure directly to address the issue of privatisation, together with other factors, will provide unwarranted support for those arguing for "reform from within", rather than privatisation, of public trading enterprises (PTEs).
Contrary to the perceived wisdom in some official Australian quarters, there is now considerable evidence of the benefits of privatisation in overseas countries, where the pace of privatisation is quickening. By contrast, pursuing only the corporatisation of PTEs has a number of disadvantages. Moreover, if a PTE is fully corporatised and told to act as if it were in the private sector, that raises the question as to why it should not be sold.
Much of the opposition in Australia to privatisation reflects outdated ideological hang-ups and a desire, particularly by unions, to hold on to entrenched positions of power and influence. Indeed, PTEs are the power base of the union movement. Concerns that privatisation could simply lead to private rather than public monopolies take inadequate account of changes in technology and economic theory, as well as the potential for foreign investors to provide competition. In any event it is better to have a private than a public sector monopoly.
INTRODUCTION
Over recent years the performance of public trading enterprises (PTEs) (1) and how that performance can best be improved have become major issues in economic policy. The importance of these issues is highlighted by the fact that, in 1991-92, PTEs accounted for 18 per cent of gross fixed capital expenditure (excluding dwellings), and controlled and operated 22 per cent of Australia's net capital stock (excluding dwellings). This would be among the highest proportions of capital stock controlled by a PTE sector in OECD countries, and it reflects a long history of state socialism in Australia. Clearly, the efficiency with which this capital is operated has the potential to have a major impact on the performance of the economy as a whole. However, while in 1991-92 the net rate of return on the capital stock of private corporate trading enterprises was 14.9 per cent, that was about 2.5 times higher than the net return on the capital stock of public trading enterprises. (2) Had the net rate of return of PTEs been the same as that for private corporate trading enterprises, it would have been about $16 billion higher than it was -- almost sufficient to wipe out the entire public sector borrowing requirement for that year.
Of course, in assessing such differences it is necessary to take account of the community service obligations (CSOs) imposed on public trading enterprises by governments. As EPAC has noted, however, these obligations are "only a fraction of the difference between the actual earnings of the GBEs and the level of earnings that private enterprises employing the same volume of assets would seek to obtain". (3) It is also important to note that there has been a period of considerably improved performance by the PTE sector, both absolutely and relative to the private sector. Thus, in the early 1980s the "gap" between the respective rates of return was very much larger, as can be seen from Table 1.
The closing of the gap has reflected reforms which improved the accountability and management of PTEs by applying improved pricing and investment appraisal and rate of return targets. This is reflected in the increase in total factor productivity (TFP) in PTEs of 3.6 per cent per annum between 1979-80 and 1991-92 compared to almost zero TFP growth in the private non-farm sector. (4) This faster growth reflects, however, a partial "catch-up" to private sector performance from the low level of productivity previously existing, and it is apparent that there is still a substantial amount of catch-up potential, both in respect of the private sector and international best practice. EPAC research found that, in 1990, the gap between the productivity of major Australian PTEs and best practice overseas was of the order of 30 per cent. (5)
It is not surprising, then, that the need for further reforms of public trading monopolies and how best to achieve them were major concerns of the August 1993 Hilmer Report on National Competition Policy, which recommended adoption of the following "principles" of reform:
- the separation of regulatory and commercial functions of public monopolies;
- the separation of natural monopoly and potentially competitive activities; and
- the separation of potentially competitive activities into a number of smaller, independent business units.
Table 1: Net Rates of Return on Capital (%)
| Private Corporate Trading Enterprises | Public Trading Enterprises | |
| 1977-78 | 12.9 | 0.7 |
| 1978-79 | 13.9 | 0.8 |
| 1979-80 | 15.0 | 0.8 |
| 1980-81 | 15.4 | 0.8 |
| 1981-82 | 13.9 | 1.1 |
| 1982-83 | 11.9 | 0.8 |
| 1983-84 | 16.3 | 1.7 |
| 1984-85 | 18.4 | 2.3 |
| 1985-86 | 17.3 | 2.8 |
| 1986-87 | 15.8 | 3.0 |
| 1987-88 | 16.4 | 4.4 |
| 1988-89 | 17.8 | 4.8 |
| 1989-90 | 17.5 | 4.2 |
| 1990-91 | 15.4 | 5.2 |
| 1991-92 | 14.9 | 5.8 |
Note: The capital stock used in the calculations excludes dwellings as well as assets such as land, financial assets and stocks.
Source: ABS Cat. No. 5221.0, Australian National Accounts, Capital Stock, 1991-92.
The Report also recommended the establishment of a National Competition Council (NCC) by the Commonwealth and State governments. Among other things, this body would facilitate the pro-competitive structural reform of public monopolies in accordance with the above "principles", which were accepted by those Governments at the 25 February COAG meeting. (6) (The idea of the NCC is to provide a high level and independent analytical and advisory body which would be given references by governments on regulation review, structural reform of public monopolies, access regimes, monopoly pricing, and competitive neutrality). An Australian Competition Commission, which is to be formed by combining the existing Trade Practices Commission and Prices Surveillance Authority, will administer relevant aspects of the proposed competition policy.
HILMER AND PRIVATISATION
It will be noted that the Hilmer Report principles do not address the question of privatisation of PTEs. Although the Report notes that "there is evidence that privatisation may increase the efficiency of many businesses", it also asserts that "The ownership of a business is not of itself of direct concern from a competition policy perspective". (7) The emphasis of the Report is thus more on structurally reforming the public trading enterprise sector into competing units or natural monopolies, regardless of ownership. Given the political sensitivities associated with privatisation, it is perhaps unsurprising that, even though described as "Independent", a Report to Heads of Australian Governments should skirt around the politically-sensitive issue of ownership.
However, while it cannot be assumed that a change from public to private ownership will automatically lead to the establishment of a more competitive situation, there is a high probability that privatisation will lead to an improvement in efficiency that will benefit consumers. In this context the word "consumers" is used in a broad sense to cover not only the consumers of the goods and/or services sold by an enterprise but the taxpayers who fund the deficits or the below-par returns realised by it. Thus, even when privatisation results in some increase in prices paid by consumers because the previous PTE had been, say, making a loss or applying inappropriate cross-subsidies, the burden on taxpayers is reduced in that they no longer have to fund the loss. In the UK, for example, the nationalised industries were costing taxpayers £50 million per week in losses in 1979. To-day they are paying £60 million per week in taxes on the profits that they earn as private sector companies. (8) More broadly, if there is an improvement in efficiency and no reduction in the quality of service as a result of privatisation, there is a net benefit to the community generally. Further, while the distribution of efficiency gains from privatisation raises an important issue in circumstances where a natural monopoly is involved, there is a similar issue, albeit "hidden", in regard to the distribution of the natural monopoly inefficiencies of the previous PTE. By "hidden" I mean that, while the issue of distributing public sector monopoly losses is there, it is not specifically addressed.
It seems sometimes to be overlooked that we do not want competition for the sake of competition but for the benefits it brings. Given that consumer benefits and resource efficiency are the major objectives of competition policy, the probability that privatisation will improve both suggests that ownership should be of direct concern for competition policy -- and I include the question of foreign ownership in this regard.
In fact, the "principles" enunciated in the Hilmer Report arguing for the separation of potentially competitive activities from public monopolies, and the separation of such activities into smaller, independent business units, can on one interpretation be taken to imply support for privatisation. This implication derives from the fact that, if it is possible to separate out competitive business units, there would scarcely be any point in leaving such units in the public sector. Indeed, one reading of the Hilmer Report is that its main concern is to ensure that any public monopolies are not simply converted into private monopolies, but undergo the structural change needed to maximise the potential for competition. This approach should certainly be endorsed, even though it does not directly address the issue of whether or not to privatise.
There is, however, some danger that Hilmer's failure directly to address the issue of privatisation, when combined with the improvements in recent years in the performance of public trading enterprises, will lead to the conclusion that corporatisation rather than privatisation should be the preferred course. Already, while acknowledging that there remains scope for substantial further improvements in PTEs' efficiency, EPAC has argued that the empirical evidence of the effects of privatisation is "scanty or ambiguous" and that the main focus should not be on change of ownership but on the introduction of competition. The establishment by Commonwealth and State Governments of a national performance monitoring framework to enable comparative assessments to be made of the performance of PTEs also has potential to at least delay privatisation. While such benchmarking is welcome inasmuch as it puts pressure on enterprises to sustain improvements in the efficiency and effectiveness of service delivery and customer responsiveness, it also provides a basis for resisting privatisation on the argument that a policy of "reform from within" will maximise efficiency.
SOME EVIDENCE ON PRIVATISATION
I note that the EPAC conclusion about privatisation differs significantly from that reached in a 1991 Industry Commission report, viz.,
Market disciplines which apply to private organisations -- such as the threat of takeover, the risk of bankruptcy and monitoring mechanisms associated with listing on share markets -- do not apply to government bodies (irrespective of whether they are corporatised). Moreover, even with a corporatised public body, there is always the possibility that government will interfere in operating decisions and apply pressures for short-term political ends which will damage economic performance. Consequently, there is the potential for greater efficiency in a private enterprise than in a public enterprise.
The EPAC conclusion also differs significantly from that reached in a World Bank study (9) of the results of privatisations in a number of countries. That study concluded that the main lessons of experience are clear.
First, private ownership itself makes a difference. Some state-owned enterprises (SOEs) have been efficient and well-managed for some periods, but government ownership seldom permits sustained good performance over more than a few years. There is a higher probability of efficient performance in private enterprise, and that needs to be considered in choosing whether to invest public funds in SOEs -- or in health, education, and other social programs.
Second, the process of privatisation, though not simple, can and has worked; this is true for a variety of enterprises in a variety of settings, including in poor countries. These lessons are already being put into practice. Privatisation is widespread and accelerating. More than 80 countries have launched ambitious efforts to privatise their state-owned enterprises. Since 1980, more than 2,000 SOEs have been privatised in developing countries, 6,800 worldwide. Up to 1990, many of the SOEs sold in Bank borrower countries were small or medium in size; but the last two years have witnessed not only an increase in the number of large SOEs being sold or readied for sale, but also an increase in the number of countries adopting privatisation, and a pick-up in the pace of sales.
This 1992 World Bank report is given added force by the wave of privatisations that has since developed in Western Europe following the apparent comparative success of privatisation in some ex-Communist countries. (10) In (old) West Germany, for example, privatisation is now being progressively extended into the postal service, telecommunications and railways and consideration is being given to privatisation of Federal highways. (11) In the UK, the process is still continuing, with the latest move being the privatisation of the historic bastion of state socialism, British Coal, after nearly 50 years in the public sector. It is interesting to have regard to one or two of Industry Minister Heseltine's comments in introducing the Coal Industry Bill on 18 January, 1994. Mr Heseltine argued that the original nationalisation policy had been "designed to transfer the commanding heights of the economy to state control". He went on to point out that
The naive political rationalisation at the time was that control would be vested in the people. In reality, power rapidly shifted to monopoly providers and monopoly producer unions. What power the people possessed was exercised by civil servants, who rapidly became both protector and confidant of the industries' self-interest, and, worse, by the political convenience of the party in power. The traditional -- and, in the end, the only effective -- disciplines of the marketplace were replaced by ill-disciplined compromises and cash-consuming delay. The objectives of enhanced efficiency, increased productivity and a high quality of service played little part in the day-to-day practices or assumptions.
Mr Heseltine also pointed out that most of the £20 billion "invested" by the government in the National Coal Board since 1979 (of which £8 billion was capital investment and £12 billion was on redundancy payments) will have to be written off and he suggested that privatisation held out the best prospect for securing improvements in productivity. "Time and again," he said, "privatisation has demonstrated the ability of industries which had previously lagged behind their international competitors to catch up and, increasingly, to set the pace".
Also relevant are the citations by both the World Bank and the IMF of New Zealand as a country which has benefited from properly executed privatisations. An IMF study commented that "the case of New Zealand ... is particularly instructive for other countries contemplating ... a privatisation programme." (12) That study drew particular attention to the greater success of full privatisations rather than partial privatisations involving the float of part of the capital of the enterprise, leaving the government as the major shareholder, as has been the case with the Commonwealth Bank.
Against the background of the very extensive privatisation programme which has been undertaken overseas, and which is continuing apace, the question has to be posed as to whether the overseas governments involved are all "ideologically motivated" -- as Australian proponents of privatisation are often accused -- or whether they see real benefits for their communities from the process. Given the range of governments involved and the extent of privatisation undertaken, one has to wonder when the penny will drop in Australia, and when it will be recognised that corporatisation should generally only be a stage on the way to privatisation.
In reality, the enormous privatisation movement right around the world is a response to the growing recognition amongst economists and others that, while most markets operate imperfectly, governments tend to operate even more imperfectly and their record in operating trading enterprises is poor indeed. The consistently poor performance of public trading enterprises has provided an important rationale for privatisation in countries that have become increasingly dissatisfied with their economic performance in a world that has become more and more competitive.
A major problem with corporatisation in a context where it is intended to retain an enterprise within the government sector, is that the enterprise has the appearance and form of being a body that is outside political control and influence yet at the same time the government, and some Minister within the government, has to accept final responsibility for its outcomes. So, by corporatisation we can create a situation that has the worst of all possible worlds -- a body that has the potential to use its privileged position as a government body and its arm's-length position from the Minister to take unjustifiable risks or generally to pursue policies that are not in the interests of the community, and a Minister who is told that he should not interfere. In the end, however, the Minister has no alternative to taking action to stop the pursuit of inappropriate policies, thus destroying the image of independence and recognising the reality that the government has ultimate responsibility.
We saw this situation arise with the State Banks of Victoria and South Australia and with Tricontinental, to mention just three instances. In those situations it is now clear that the government guarantee and the governments' general policy of wanting the Banks to play an active role in promoting economic development of the respective States led to excessive risk-taking by them. The governments apparently felt, however, that, as the Banks were operating at arm's length, they did not require close attention or supervision at the State Government level. Yet, in the end, Ministers had no choice but to accept responsibility for the imprudent polices of the Banks. (13) There is really no satisfactory alternative to acknowledging responsibility from the start and establishing mechanisms to ensure that major policy decisions are cleared with the Minister -- which contradicts the whole concept of delegation.
There is also a danger in corporatisation from another viewpoint. That is, while the enterprise may appear to be at arm's length and hence operating free of political influence, the reality is likely to be different. It is in fact difficult for the government and the Minister to avoid having a significant direct and indirect influence on the key policies to be pursued by the corporatisation. Thus the Board has to be appointed by the government/Minister, as generally is the Managing Director, and Board Members rely on the Minister for appointment. There is also a tendency to make Board appointees from among those who are sympathetic to the government of the day, and/or who are representative of interest groups which have particular barrows to push. This is not likely to produce the most satisfactory commercial outcomes. Indeed, a major reason for the poor performance of PTEs is that they have been forced by governments to make concessions to interest groups whose support was regarded as important for electoral purposes. Beyond that, the government can exploit the monopoly position of a corporation by using it as a vehicle for collecting additional tax revenue through the guise of "dividend" policy, which is inevitably determined by the Minister or the Treasurer.
Apart from this, the Board and management of the enterprise may operate policies that are inconsistent with the interests of the enterprise simply because they judge it "impolitic" to change policies. They may judge that any such change will result in the Minister directing that it not be made, or failing to re-appoint them.
Thus, a corporatisation move that gives the appearance of putting an even greater distance between the government and the PTE poses potential problems. Of course, if a PTE charter provides for it to try to replicate the private sector in regard to rate of return on capital employed and other performance criteria, it may be felt that the PTE's Board and Management can then be just left to get on with the job. However, if the PTE's charter is to replicate private sector practices, that immediately leads to the question of why not privatise. What is the point of having a PTE if its raison d'être is to act as if it is in the private sector?
THE OPPONENTS OF PRIVATISATION
Much of the opposition to privatisation in Australia is a reflection of outdated ideological hang-ups and a desire to hold on to entrenched positions of power and influence than with concern about improving living standards, jobs and national efficiency. In particular, the very strong opposition to privatisation by the Australian trade union movement reflects the fact the PTEs are the power base of the union movement and unions are resisting any undermining of that power base. In a sense, unions in Australia have established a "property right" in PTEs and do not wish to cede it. It is not widely realised that nearly 70 per cent of Australia's public sector is still unionised and there is a heavy concentration of membership among public enterprises. This provides a striking contrast with the private sector where unionisation is now down to around 30 per cent. With Labor governments in office at the Federal level and in a majority of the States during most of the 1980s, it is scarcely surprising, given the close association between Labor and the union movement, that Australia has been dragging the privatisation chain.
Of course, reality has a habit of breaking in now and again when things get really bad. Thus, the emergence of a serious debt problem in Victoria, together with the development of large losses, led even the Labor government in that State to sell the State Bank and the State Insurance Office. But note that these were sold to other public enterprises in what, in effect, amounted to Clayton privatisations. Note also that, while the acquisition of the State Bank of Victoria by the Commonwealth Bank provided Federal Treasurer Keating with the opportunity to float off part of that bank, union opposition has prevented its full privatisation, leaving the Commonwealth government in an anomalous position of majority owner of an enterprise that is operating in a deregulated and competitive industry and yet requires (sic) a government guarantee. The astonishing thing is that nobody seems to regard that particular situation as comical! There can be no substantive case for maintaining that guarantee, let alone the 51 per cent ownership by the Commonwealth Government.
At the present time, union opposition is preventing or seriously inhibiting a wide range of full privatisations proceeding at both the Commonwealth and State government level. At the Commonwealth level, one obvious current target is the Australian National Line, whose privatisation is strongly opposed by the maritime unions. The current compromise proposal is for the government to undertake a partial privatisation involving the public float of 49 per cent of ANL capital. This would clearly be a less-than-desirable outcome.
Union opposition to privatisation has led to the enunciation of disadvantages said to be associated with privatisation that are more imagined than real. For example, union opponents of privatisation sometimes say that because public enterprises are owned by the public and belong to the people, they should not be sold. Such suggestions are, however, nonsensical. If the people own an asset, then through their elected representatives it can be sold and the proceeds devoted to some alternative public purpose (such as reducing debt, and the taxes required to service that debt). Indeed, as most public enterprises still earn less than the interest rate on government bonds, there is likely to be an immediate net addition to the on-going government revenue stream if the proceeds of sale are used (as they should be) to reduce public sector debt. As noted, government tax revenues should also benefit.
Union opposition to privatisation also focuses on the likely reduction in employment in the first instance as competition forces a lift in productivity. However, the rationale of privatisation is that, in the medium term, it will actually create jobs by making the whole economy more competitive. In this respect it operates in a similar way to reductions in protection for particular areas of private industry.
Opponents of privatisation also highlight the potential problem that privatisation could lead to the establishment of private monopolies. It is relevant to recall that a significant element in the original justification for establishing public trading enterprises was to prevent what were perceived to be monopolistic tendencies in the private sector or sectors concerned. The Commonwealth Bank and Australian Airlines were certainly established partly to act as counterfoils to keep the private sector from developing a monopolistic position. Telecom and the Post Office were seen as "natural" monopolies that needed to be operated by government ab initio, and railways were also judged to have natural monopoly characteristics, although in their case other (political) considerations also played a large part.
However, there have been some important changes in the economy since public enterprises were first established to run these activities and there is now a reduced risk of private sector monopolies developing in such areas. For one thing, technological change has increased the scope for competitive units to be established. This is particularly true in telecommunications. That apart, developments in economic theory since the public monopolies were established suggest that, where there is the threat of entry from another competitor, this can impose an effective discipline and prevent, or at least inhibit, the development of monopolistic practices. Also, even where the likelihood is that privatisation will lead to the establishment of private monopolies, there is now a much greater capacity and experience on the part of governments in controlling and limiting attempts by private sector companies to levy monopoly profits.
One aspect of the monopoly "problem" from privatisation that is often overlooked is the role of foreign investment policy. Given that even the threat of entry from another competitor can prevent monopolistic practices, a change in foreign investment policy to ease the entry of private foreign enterprises could considerably reduce the potential for private monopolies after privatisations. New Zealand appears to have adopted a more liberal policy in this regard and the sale of NZ Telecom and NZ Rail to foreign companies appears to have reduced the potential for monopoly problems and to have been successful in terms of improving efficiency and producing consumer benefits. (14) As a general rule, Australians should not be concerned if foreigners take over former public monopolies, provided that the result is not simply to establish a private monopoly that is protected from the threat of takeover.
According to The Australian of 18 March 1994, the Chairman of the Trade Practices Commission, Professor Alan Fels, argues that a private monopoly is "just as bad" for consumers as a public monopoly. However, against the background outlined above, it can now reasonably be argued that it is in fact better to have a private sector monopoly than a public sector monopoly. A private sector monopoly faces the test of the capital market whenever it needs to raise capital and it is subject to the threat of takeover if its performance slips. This operates as an important discipline on management, a discipline which does not exist in the public sector. The fear of domination by large monopolies might be somewhat diminished if it were realised that large firms often have fairly short lives. Of the 100 firms heading Fortune magazine's list of the US's largest firms in 1956, only 29 were still there in 1992.
Of course, as the Hilmer Report effectively proposes, it is desirable wherever possible to avoid simply transferring a public monopoly into a private monopoly. That goes almost without saying and it justifies the pursuit of structural changes before privatisation. Further, if a private sector monopoly cannot be avoided, it is important to establish an appropriate regulatory system. But privatisation should not be avoided simply because of the possibility of monopoly.
CONCLUSION
The "principles" of structural reform proposed in the Hilmer Report and accepted at the COAG meeting of 25 February, 1994 are eminently sensible and should be pursued by Commonwealth and State governments. However, the suggestion by Hilmer that ownership is not of direct concern for competition policy is mistaken and, when considered in conjunction with other developments and with the continued strong union opposition to privatisation, risks the adoption of a policy of "reform from within" for PTEs rather than privatisation.
Evidence of overseas privatisations suggests that that approach rather than corporatisation is to be preferred. There is a high probability that privatisation will benefit both efficiency and consumers and it is not correct to suggest that a private monopoly is as bad as a public monopoly.
The need now is for Commonwealth and State governments to recognise the likely benefits from privatisation and to restructure their PTEs as quickly as possible so that they can be privatised. Australia has been dragging the privatisation chain and we need to catch up with most of the rest of the world in this important area of the economy.
* * *
ATTACHMENT
Extract from COAG Communique, 25 February 1994.
At the 25 February meeting of the Council of Australian Governments in Hobart, agreement was reached on the "principles" of competition articulated in the Hilmer Report. The COAG also agreed:
- any recommendation or legislation arising from the Hilmer Report being applicable to all bodies, including Commonwealth and State Government agencies and authorities;
- that the Trade Practices Commission and the Prices Surveillance Authority be merged to form the basis for the Australian Competition Commission. The Australian Competition Commission would also have new powers. Commonwealth, State and Territory Governments are to develop the detailed arrangements for the establishment of this body, including the process for State and Territory participation in the appointment process;
- State, Territory and Commonwealth Governments will also commence work jointly on the new legislation with the aim of considering it in August;
- State, Territory and Commonwealth Governments will establish by report to the next Council meeting, the practicalities of applying the Hilmer Report;
- the Commonwealth will consider assistance to the States and Territories for loss of monopoly rents and the process for managing adjustment; and
- it was recognised that the broadened application of the Act will require changes to some existing State and Territory regulatory arrangements and business practices. A two-year transitional period has been recommended by the Hilmer Report, and officials will explore how to provide the State and Territories with a capacity beyond this period to authorise or exempt, temporarily, particular conduct, practices or arrangements on a case-by-case basis.
* * *
This Backgrounder is a slightly edited version of an address to the IIR Conference on Structural Reform of GBEs Under the New Competition Regime, held in Sydney in March 1994.
ENDNOTES
1. The term "public trading enterprises" is used in preference to "government business enterprises" on the ground that the use of "business" overstates the commerciality of many of the enterprises.
2. ABS Cat. No. 5221.0, Australian National Accounts, Capital Stock, 1991-92.
3. R. Clare and K. Johnston, Financial Performance of Government Business Enterprises: An Update, EPAC Background Paper No. 25, April 1993, page 12, estimated the cost of CSOs to 38 major PTEs at about $2 billion in 1991-92.
4. "Productivity Growth For Government Business Enterprises and The Private Sector", EPAC Media Release, 21 July 1993.
5. R. Clare and K. Johnston, Profitability and Productivity of Government Business Enterprises, EPAC Research Paper No. 2, August 1992.
6. See attached extract from COAG communique of 25 February 1994 (on page 8 of this Backgrounder).
7. National Competition Policy Report by the Independent Committee of Inquiry, AGPS, August 1993.
8. From Second Reading Speech on the UK Coal Industry Bill by Industry Minister Heseltine, 18 January 1994.
9. Country Economics Department, The World Bank, "Privatisation: The Lessons Of Experience", 1992.
10. For further details, see Richard J. Wood, "Some Thoughts About Abroad", Backgrounder, 13 August 1993.
11. According to The Australian of 27 January 1994, the privatisation bill for Deutsche Telekom, the German postal services and the Postbank now has formal backing of all German parties, including the opposition Social Democrats.
12. S. Jones, "The Road To Privatisation: The Issues Involved, and Some Lessons From New Zealand's Experience", Finance and Development, March 1991, page 39.
13. The financial difficulties of the publicly-owned Credit Lyonnais, France's largest bank, again illustrate the problem. The bank's motto is "The power to say yes"!
14. See Richard J. Wood, "Privatisation: Australia and New Zealand Experience (or how the Kiwi beat the Kangaroo)", Backgrounder, 13 August 1993.
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