DR PETER McCawley, Australian executive director at the Asian Development Bank, makes the important point (AFR, August 22, 1995) that one of the main reasons why Australian enterprises are largely missing out on Asia's current infrastructure "boom" is that many other relevant Australian enterprises "are government-owned enterprises at the State level".
Government-owned enterprises are much less likely to be risk-takers and are much more likely to be constrained by politically imposed controls and influence. In the comprehensive review of privatisation in The World Bank Research Observer last June it was pointed out that, contrary to earlier academic theory, there are positive benefits from private ownership as well as from merely establishing a competitive market structure. With increasing awareness of these potential benefits, World Bank research reveals 15,000 privatisations world wide (most since 1990).
In Australia, both Federal and State governments have been far too slow to privatise, and are still surprisingly reluctant to do so even now. The Hilmer reforms, involving establishment of a competitive market structure for government enterprises to operate within, are fine as far as they go. But governments need to press ahead now with privatisation so that Australia cannot only take greater advantage of the enormous openings in Asia in the areas mentioned by Dr McCawley, but also reap the domestic benefits in terms of increased investment and employment.
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