Module 4 Flashcards
Why is infrastructure important?
- Provides essential services
- Major influence on firms costs and competitiveness
- Social infrastructure have major impact on well being of society.
- Government dominates infrastructure provision
How does the government at each level contribute to Australia’s infrastructure?
- Commonwealth - post, telecommunication, highways, airports, education
- State - roads, rail, schools, hospitals, public housing, prisons, water, gas & power supply
- Local - roads, water, electricity facilities, community and recreational facilities
What are PPPs?
Public Private Partnerships
What is placing pressure on Australian infrastructure?
- Speed of technological development
- High rates of technical obsolescence
- Structural changes in Australia’s economy
What are infrottlenecks?
Direct and indirect costs of bottlenecks arising from inappropriate infrastructure.
What is the conundrum of public sector privatisation?
That the private sector will only pursue it if it is profitable, but most public sector infrastructure is public because it is not profitable.
How does the Government cater for the conundrum of public sector privatisation?
- underpricing public assets
- selling only profitable parts
- allowing high rates of depreciation
In what ways is Australia behind many other nations on infrastructure?
- irrigation and storm water drains are old and dilapidated
- ports need deepening
- rail freight infrastructure is run down
- Broadband rollout is poor
The National Competition Policy regulated privatised infrastructure and the competition commissions have sought to facilitate competition, how have they failed to get the balance right?
- Not allowing for the cost of replacing assets
- Electricity price caps do not cover cost of supply
- Rail freight pricing is too low to sustain the rail system
- Telecom prices too low to justify new network investment.
What are Sim’s six guiding principles to a good national infrastructure plan?
- use infrastructure pricing to send appropriate signals to influence demand and supply
- establish competitive markets wherever possible so there is minimum need for regulation
- involve private sector where possible and make accountable
- Where regulation is needed make it national and soundly based
- Do not pick winners
- take a federal approach to infrastructure policy
What are the two economic booms for Australia?
1990’s productivity boom - growth surged 2.05%
Current resources boom
What sort of education reform is being called for?
- better recognition and pay for teachers
- more competitive needs based school funding
- extra funding for learning difficulties and behaviour
- expansion of alternative settings to mainstream schools
- vocational education alternatives
- limit the ‘dole’ for early school leavers
- voluntary military or peace corp services.
What should be included in Industry Policy (Hawkins)
- measures to promote industrial investment
- policies directed to industrial sectors
- measures to support small and medium enterprises
- regulatory reform & competition policy
- regional development policy
- environmental and energy policies
- measures related to international investment and trade
- industrial cooperation
What is the role of the government in industrial policy?
- Develop stock of human skills
- Provide market infrastructure
- Create an entrepreneurial climate
- Strengthen elements of local industry
- Encourage expert orientation
Explain the pursuit of economic growth
OECD suggests this is required. I believe sustainable is important (Easter Island). Economic growth requires incentive, with incentive comes competition and with competition there are winners and losers leading to welfare.
