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Australia has a long history of privately owned utility price regulation, one that is little known. This price control was designed to restrain the market power of several utilities (gas, rail, tramways, electricity, and water). The purpose of this paper, therefore, is to establish what types of price control that were used in Australia in the utilities sector before the First World War and to determine the degree to which this price control influenced efficiency. As price levels in this era were set in legislation, the lack of flexibility led to less-than-optimal outcomes, and eventually and led to new approaches were developed after 1912 to the utilities that remained in private ownership, and in some cases influenced the movement in Australia towards government control. [ABSTRACT FROM AUTHOR]

In the long history of monopolies, business method patents are a novel and recent edition. In the Digital Age, where time is money and speed is everything, innovative methods for undertaking business are as important to a business as the products or services it provides to its clients. In recent years several reviews, conducted in both Australia and internationally,4 have questioned the appropriateness of patenting business methods. This paper reviews the availability of business method patents in Australia in light of the 2006 decision of the Full Court of the Federal Court in Grant v Commissioner of Patents,5 which confirmed the need in Australia for a `useful product' to issue from the working of a method (business or otherwise) in order for the method to be patentable. This paper will review arguments both criticising and defending business method patents and consider whether business methods warrant special treatment. [ABSTRACT FROM AUTHOR]

Since 1991 Australian telecommunications has undergone substantial reform. To a large extent, the economic correctness of procompetitive policy depends on the non-existence of natural monopoly technology. This paper provides estimates of the Australian telecommunications system cost structure, and tests for subadditivity from 1943 to 1991. Additivity of the cost function after 1945 rejects the natural monopoly hypothesis and supports recent government policy. Diminished natural monopoly characteristics suggest that coordination between firms through networking can achieve similar economies as internal co-ordination within a monopoly. This finding is important, given the trend towards network unbundling, and service provision through interconnection. [ABSTRACT FROM AUTHOR]

Australia's history begins over 50,000 years ago, but a little over 200 years ago, this history was officially erased through the violence of settlement/invasion, and a new history was written into the official record. This paper addresses the particular “invisibility” that has, since, been the experience for Indigenous Australians in two modes. The first is the invisibility that was introduced by the legal fiction of “terra nullius” and sustained by two centuries of colonialism; the second is the invisibility occasioned by the erasure from official discourse and history of the differences between the 500 (or more) cultural groups that inhabited Australia, differences of culture, language, tradition, beliefs and worldview. Drawing on Paul's experiential knowledge and the findings from the fieldwork he undertook as part of his doctoral research and from Jen's cultural research into ways of seeing and the politics of being, we offer an account of the simultaneous visibility and invisibility of the indigenous people of Australia in an attempt to render particular views, values, perspectives and identities not only visible but also capable of being recognised as present and as valid on their own cultural terms. [ABSTRACT FROM AUTHOR]

This paper is concerned with the theoretical analysis of export price bargaining under bilateral monopoly conditions in trade. Part I of the paper provides a discussion of the sorts of factors likely to create scope for bargaining in a particular bilateral trade relationship, whilst Part II presents a relatively simple theoretical model, within whose framework, the bargaining process and the likely bargaining outcomes under alternative conditions are examined. The general analysis is clearly relevant to any bilateral trade situation, but the specific example discussed is the export from Australia to Japan of a single, homogeneous mineral product, M. Although the paper has no specific empirical content, the sorts of market conditions suggested as framing the bilateral trade ,relationship are, broadly, those which characterize minerals markets in general and the Australia-Japan trade in resource goods in particular. [ABSTRACT FROM AUTHOR]

The different institutional forms of water utilities of Singapore and Sydney provide an interesting natural experiment on the role of a regulator in government-owned utilities (GOUs). In both cities, water is provided by GOUs. In Sydney, however, there is an independent regulator whereas in Singapore the Public Utilities Board is a statutory board without a regulator. This paper compared the regulation and market-making efforts by water utilities of Singapore and Sydney. We find that both are similar in quality of service, operational and economic efficiencies, and private sector investments. The difference lies in their choice of the instrument for involving the private sector. Sydney does this by appointing a specific regulator whereas Singapore uses contracts. Indeed, it argues that the government-owned water utilities of both Sydney and Singapore seek to capture as many benefits as possible from market-making efforts, that is, from mimicking private sector behaviors and by operating from the basic tenets of the regulatory state. Both countries seek to make rules addressing the "market failure" of a monopoly. In Sydney, such efforts are seen in the explicit contestability of the market and the high engagement with customers whereas in Singapore the efforts are more muted on both counts and are instead motivated toward developing water businesses as a whole. [ABSTRACT FROM AUTHOR]

The regulation of infrastructure by the ACCC and other economic regulators in Australia is based around net present value estimation techniques. Recently, Monkhouse (2007) suggested that real options valuation would provide better incentives for investment in infrastructure, but did not elucidate how a regulatory system based on real options valuation should operate. This paper endeavours to sketch the outlines of such a system, and finds that it has considerable promise as an alternative to the status quo, provided an appropriate technique for addressing monopoly rents can be developed. [ABSTRACT FROM AUTHOR]

Abstract: Mandatory information system (IS) investments occur when government regulations require firms to alter their IS. These investments are additional expenditures added onto the initial expenditures of non-mandatory IS investments. Managers are concerned about associated costs and in an attempt to reduce the expenditures, most firms refrain from formal planning methods when mandatory investments are imposed upon them. Drawing on Henderson’s and Sifonis’ (1988) IS Planning and Investment Model as our theoretical lens, this paper argues that firms should re-consider this practice. It is hypothesised that formal planning methods are beneficial because they enable firms to combine mandatory and non-mandatory investments in such a way that competitive advantage can be achieved. We use a secondary dataset provided by the Australian government to test the hypotheses. Results show that only two out of three investigated formal planning methods are positively associated with competitive advantage. We conclude that in the special case of mandatory investments, formal methods are only beneficial if they incorporate information from the entire firm, rather than information from particular departments only. [Copyright &y& Elsevier]

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]

Four important issues form the basis of this paper. These are: (i) What are the major crosssubsidies in Australian telecommunications — who gains, who loses and by how much? Previous studies (including that of the BTCE, but not the Davidson Report) have emphasised the gains and overlooked the losses to those who pay. (ii) How much do the recipients of benefits value the subsidies they receive? (iii) What are the implications of the implicit taxes and subsidies for the allocative efficiency of the Australian telecommunications system? This aspect of CSOs has not previously been examined in any detail. (iv) Given that subsidies are justifiable on some basis, how best can they be provided? Prior to broaching these issues we first provide the necessary background through a review of the previous 'official' and 'quasi-official' approaches to the subsidy and 'cross-subsidy' issues, noting how the granting of covert political favours through this means has never been properly revealed or justified. [ABSTRACT FROM AUTHOR]

This paper presents some Harberger-type estimates of the welfare losses due to monopoly in the Australian manufacturing sector for the period 1968-69 to 1973-74, and investigates whether a relationship exists between industry welfare losses and the extent of price-fixing and other restrictive practices.
While our results must be treated with caution, due to the data which were available and the methodology employed, they nevertheless suggest that in Australia only a relatively small proportion of G.D.E at factor cost is accounted for by welfare losses due to monopoly power. Based on the assumption of a unitary elasticity of demand across all industries, welfare losses in manufacturing amounted to a little over one tenth of one percent of G.D.P.; when this loss was used to estimate the economy-wide welfare loss as a percentage of G.D.P., the resulting figure was about one half of one percent, representing an average annual amount of some $150m over the period investigated.[27] Nevertheless, our estimated welfare losses suggest that a considerable welfare gain could be achieved by selective attempts to reduce the abuse of positions of market power. Over 59 percent of the total loss was concentrated in ten industries, of which seven were classified as underexpanded. It is perhaps significant that few of the top 25 welfare loss industries are subject to relatively strong import competition. They are either heavily protected by tariffs (e.g., motor vehicles; wine and brandy), or by the expense of freighting competitive goods from overseas, or by the nature of the industry (several industries involve the processing of metals, and five involve food and beverage products, most of which are heavily differentiated, either by geographic location or heavy advertising). Many of these 25 industries essentially face regional rather than national markets, and so firms in these industries are even isolated from interstate competition. In addition, several of the top... [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]

We derive formulas for the optimal tariff rate in four theoretical models. We start with a model in which industries are competitive and then successively allow for: monopoly pricing by export industries, revenue-replacement costs and cold-shower effects. The theoretical formulas accurately explain results from MONASH, a detailed computable general equilibrium model. A critical parameter in determining the optimal tariff is the export-demand elasticity. Modellers are often reluctant to adopt empirically justifiable values for export-demand elasticities because such values generate embarrassingly large optimal tariff rates. A way out of this dilemma is the adoption of a non-linear cold-shower specification. [ABSTRACT FROM AUTHOR]

Australia's principal container ports, located in its state capitals, are owned and operated by state authorities that largely return profits from port operations to state governments. Since they govern the volumes of trade in most merchandise, they command immense influence over the openness and flexibility of the national economy. In this study, we estimate the elasticities of substitution between container services of ports in Brisbane, Sydney and Melbourne. We also examine the pricing of port services to estimate the extent of their interaction, from which we derive conjectural variations parameters to assess the actual and potential levels of price collusion. The results confirm the conventional wisdom that the degree of substitution between the major east coast ports is small. While this highlights the possibility that these ports possess substantial market power, actual mark ups are considerably smaller than the predicted mark ups, suggesting that the ports' localised monopoly power is constrained by factors other than price competition. [ABSTRACT FROM AUTHOR]

Purpose - To compare the profitability and technical efficiency of firms in a monopoly industry, airports, operating with different degrees of market power and under differing regulatory regimes, minimalist in New Zealand and interventionist in Australia. Design/methodology/approach - Unlike previous privatisation studies, this study measures efficiency and profitability separately. Using data envelopment analysis (DEA), the technical efficiency of privatised airports is assessed, and this independent measure is used in regression analyses to determine whether efficiency, regulation or privatisation is related to airport profitability. Findings - For firms with monopolistic characteristics operating under minimalist regulation, profitability is related to market power, not efficiency improvements. For firms operating in a regulated environment, profitability is related to regulation, which constrains market power but does not impede efficiency. Research limitations/implications - This study is limited by its small sample size and its generalisability due to its single industry and regional focus. However, the findings support assertions that the impact of privatisation cannot be assessed independently of industry structure and regulation. Practical implications - Policy makers considering SOE privatisation in non-competitive markets should introduce either competition or regulation if firm efficiency is a desired outcome. Originality/value - Academics and policy makers should be aware that privatisation and competition are not only complementary, as per the extant literature, but they are essential bedfellows. In the absence of competition, regulation is required to control for market power. [ABSTRACT FROM AUTHOR]

In this article we present new estimates of the degree of welfare loss resulting from monopoly elements in Australian manufacturing. The measure suggested by Cowling and Mueller is modified to take into account the presence of oligopolistic firms, which are imperfectly collusive. One conclusion of our article is that the social costs of monopoly in Australia are likely to be substantially higher than previous estimates have suggested. We also look at the characteristics of the industries which have high ratios of welfare loss to turnover, and we estimate a simple econometric model of the welfare loss by industry. There appears to be a (weak) relationship between the size of the welfare loss and the degree of concentration in the industry. [ABSTRACT FROM AUTHOR]

The late nineteenth and early twentieth centuries saw the emergence of large single-product organisations whose expansion was stimulated by a desire to control a substantial part of a particular product market. An Australian example is the Colonial Sugar Refining Company Ltd (CSR). By 1915, the company accounted for 90 per cent of refined sugar production in Australia. CSR had achieved this control over the Australian refined sugar market by using underselling, strategies that denied its competitors outlets for their refined sugars and amalgamations with rivals. After 1890, however, CSR was interested in sharing the Australian market for refined sugar with its rivals by forming spheres of influence in marketing areas or adopting production quotas, although the Queensland National Bank was the only organisation to successfully negotiate annual market share agreements with CSR in the 1900s. These agreements ensured the survival of its Millaquin Refinery. Other competitors eventually exited the industry. In 1915, the Commonwealth government institutionalised this duopoly in the sugar refining sector by agreements with CSR and the Queensland government, and allowed it to continue until deregulation of the Australian sugar refining sector in the early 1990s. [ABSTRACT FROM AUTHOR]

The Australian supermarket industry has gone through a number of significant structural changes over the past forty years. Most of these changes have been driven by a series of radical innovations, which have dramatically changed the competitive positions of the retailers. At each phase there has usually been one major supermarket chain that has taken the initiative and used innovation as the key driver to secure a competitive advantage. It has been the interplay between innovation and strategy that has shaped the supermarket industry. This interplay explains the past, but equally provides knowledge and insight for those retailers who wish to dominate the future. [ABSTRACT FROM PUBLISHER]

This article considers some of the economic issues surrounding innovation and growth. The process of innovation requires firms to invest resources now in anticipation of future profits. The level of future profits is dependent on the extent of monopoly power. Profit maximisation occurs where marginal cost and marginal revenue intersect, yielding a price and quantity. To maximise welfare for society, therefore, the amount produced should be where the marginal cost equals price. Monopoly power should be reduced by introducing competition into the market. The intellectual property system provides a method by which inventors can legally protect the knowledge, technology, products or processes that they create. Externalities are important in economics since they imply a transfer of value which has not been passed through the market system. The new growth theory suggests that the amount of resources invested in innovation will be linked to the rate of economic growth. A static analysis implies monopoly profits should be reduced or removed, while a dynamic analysis puts monopoly profits at the centre of innovation and growth.