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2023 | Book

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Monopoly Control

Government Ownership and Control of Network Utility Industries in Australia from 1788 to 1988

Authors: Malcolm Abbott, Bruce Cohen

Publisher: Springer Nature Singapore

Part of: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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About this book

This book traces the historical development of the network utilities sector in Australia (communications, rail, gas, electricity, water supply, and sewerage services). It looks across industries, time periods and the state and federal jurisdictions, to identify what motivated the various governments to establish these enterprises and what issues arose. The book is therefore informed by the relationship between politics and society on the one hand and economic history on the other; as well as the efforts of governments in Australia to promote economic growth and the wealth of Australians. The main focus of the book is to identify and analyse the following two main questions: (i) What were the main drivers and motivations for governments establishing government-owned business in the network utilities sector? (ii) To what degree were these government-owned businesses successful at achieving the aims of these governments? In doing so the inherent characteristics of these industries are identified, in terms of their need for rights of way, network effects, the monopoly characteristics, and the potential for stimulating growth.

Table of Contents

Frontmatter

Setting the Framework

Frontmatter
Chapter 1. Introduction
Abstract
Throughout Australia’s history there have been varying levels of concern about its often-tenuous position in the global economy. Situated as the country is, far from overseas markets and dependent to a high degree on a small range of agricultural and mineral exports, the national economy has tended to have been swept along by global forces, largely beyond the efforts of Australians to control these circumstances.
Malcolm Abbott, Bruce Cohen
Chapter 2. Australian Economic Development and Network Utilities
Abstract
Although Australia was inhabited by the Aboriginal and Torres Strait Islander peoples long before the start of the nineteenth century, the development of Australia’s modern economy and its network utilities—which is the focus of this book—dates to this period, with the migration of British (and other) settlers and the transplantation of many public institutions from the United Kingdom. This chapter, therefore, looks at the economic development context in which the Australian utilities were established in the nineteenth century.
Malcolm Abbott, Bruce Cohen

The Construction of the New Infrastructure: The Nineteenth Century

Frontmatter
Chapter 3. Infrastructure Development: Industrialization, Institutions, Private Interests, and Public Capital Investment
Abstract
In many ways the nineteenth century was the most interesting period in Australia’s economic development; it was after all at this time that so much of what today is regarded as typical of the Australian economy and society was established. Understanding what occurred during this period is therefore important to appreciating what subsequently took place, and so a description of this development is provided in this chapter.
Malcolm Abbott, Bruce Cohen
Chapter 4. The Colonial Post Office
Abstract
The first network-based government enterprise to be established in Australia after the arrival of the First Fleet in Sydney in 1788 was a postal service. Even today the postal service in Australia is still under government ownership, long after many other businesses have been privatized. From the earliest days of the New South Wales colony the postal service played a crucial role in the colony’s development, and later was followed by equivalents in each of the other colonies. These enterprises were also important in that to a large degree they provided the model for the other government-owned businesses that followed.
Malcolm Abbott, Bruce Cohen
Chapter 5. Local Supply Networks: Water and Gas
Abstract
In contrast to how postal and telegraph services developed in Australia during the nineteenth century was the experience of water and gas supply. Whereas post offices created networks that stretched across the country (as well as overseas delivery), water and gas relied on strictly local networks. This meant that invariably local governments became involved in their development. Local government in Australia developed slowly through the nineteenth century, yet during this time took an increasing level of responsibility for the provision of what were regarded as essential services such as roads, bridges, and water, as well as exercising a degree of control of private activities using by-laws.
Malcolm Abbott, Bruce Cohen
Chapter 6. Railways: Emergence and Development
Abstract
The most substantial public sector investment in the colonial economies in the nineteenth century was in the building of the railways. Contrary to British practice Australia’s colonial railways were primarily financed, constructed, and operated by governments. To a large degree much of the analysis and criticism by historians and economists, as well as support for, colonial socialism has centred on the impact of the governments’ construction of railways in Australia during this period. Understanding the reasons for the government development of railways is therefore important to understanding the development of government ownership of Australian public utilities.
Malcolm Abbott, Bruce Cohen

A New Nation and Its Networks: 1901 to 1945

Frontmatter
Chapter 7. Infrastructure Provision for a New Nation
Abstract
Looking back at the nineteenth century, over the long run, it was the combination of technological developments that took place during that period together with a variety of geographic and economic factors present in an emerging society that were influential in promoting the creation of government enterprises amongst the network utility industries of water supply, rail, post, and the telegraph in the Australian colonies. The creation of publicly owned network utilities—primarily by colonial governments, though also in some instances local governments—enjoyed a broad political consensus. Yet, this support does not appear to have been based on any strong aversion to provision of services by private enterprise. Rather it was founded on a desire to speed up the construction of infrastructure and the delivery of services, so as to improve the quality of life as well as encourage the economic development of Australia, particularly in regional areas, and also to link those regions more strongly with the capital cities.
Malcolm Abbott, Bruce Cohen
Chapter 8. The Development of Telecommunications
Abstract
The decades following federation saw the substantive development of widespread telecommunications services across Australia. This growth in both access to and usage of these services was built upon the initial introduction of telephony that had occurred in the country in the two decades prior to 1901.
Malcolm Abbott, Bruce Cohen
Chapter 9. Urban Amenities: Electricity, Gas, and Tramways
Abstract
In the decades after federation, one of the most important network utility developments involved the construction of large-scale electricity generation plant and regional transmission grids. Although electricity began to be used for public purposes in the 1880s its impact was only slight before federation. In the years between federation and World War II, however, electricity consumption grew substantially both in absolute terms and per capita. Whereas GDP growth averaged around 2 per cent per annum over the whole of that period electricity consumption grew at around 8–10 per cent.
Malcolm Abbott, Bruce Cohen
Chapter 10. The Railways: Growth and Decline
Abstract
The most important network industry constructed in Australia in the nineteenth century, both in terms of the financial scale involved and its overall importance to economic development, was that of the railways. The railways helped to promote the development of the hinterlands of each of the six colonies by reducing the transportation costs of moving export commodities (agricultural, forestry, and mining) to the ports. Every colony developed rail networks separate from those in the other colonies, and although each attempted to standardize rail gauges within their respective jurisdictions generally they did not coordinate these efforts with each other. Initially in the twentieth century the railways expanded, but after the 1920s when into a prolonged decline.
Malcolm Abbott, Bruce Cohen

The Post-war Era: 1945 to 1988

Frontmatter
Chapter 11. The Post-war World
Abstract
The post-war years up to the time of Australia’s Bicentenary did not see the sort of disruption to economic development that occurred during the depression of the 1930s and two World Wars. Instead, it was for much of its duration a period of steady, long-term growth during which new products and technologies were developed and introduced to Australia such that the country’s inhabitants were able to enjoy a substantially higher standard of living than had occurred previously. At the beginning of the period, most enterprises were conducted on relatively small scales, supplying goods and services for local markets or for export. This was true of manufacturing just as much as it was for the rural sector and services. By the end of the era enterprises had grown in both size and scope, and the Australian economy reached a level of considerable complexity and maturity. 
Malcolm Abbott, Bruce Cohen
Chapter 12. Telecommunications: Extending the Network
Abstract
In the post-World War II years one of the most important areas of government involvement in network utilities was in the communications sector. This took place at a time when public sector expenditure remained at significant levels. In this period the expansion of the telephone network came to dominate communications, replacing the more labour intensive postal network with a more capital intensive one.
Malcolm Abbott, Bruce Cohen
Chapter 13. Urban Growth and Change
Abstract
As the growing urbanization of Australian society continued from the inter-war years into the 1950s and 1960s, ongoing emphasis on the provision of urban utility services was an important aspect of government intervention in the post-war world. The burgeoning spread of motor cars and home ownership helped to increase demand for domestic appliances which in turn led to greater demand for water, electricity, and gas. Substantial investments, therefore, were made into these industries by governments.
Malcolm Abbott, Bruce Cohen
Chapter 14. Transport: A New Way Forward
Abstract
The period after World War II was one of considerable change for Australia’s transport sector. The developments that occurred were varied but included the continued rise in importance of motor transport which had begun before the war, the ongoing decline of rail and later its focus on the transport of bulk commodities and long-distance containers, and the explosive growth of air travel.
Malcolm Abbott, Bruce Cohen

Conclusion

Frontmatter
Chapter 15. Economic Policy, Service Delivery, and Productivity
Abstract
The last decades of the twentieth century and the early years of the new millennium saw a major institutional change in Australia—the horizontal and vertical disaggregation of the majority of its network utilities and the privatization of many of the government-owned enterprises operating in the utilities sector. This included the sale (or long-term lease) of electricity, gas, telecommunications, rail, and, in Melbourne, tram assets. This then raises the questions of just why in the past the public utilities were taken into government ownership in the first place, and did they perform well enough to satisfy Australians. 
Malcolm Abbott, Bruce Cohen
Backmatter
Metadata
Title
Monopoly Control
Authors
Malcolm Abbott
Bruce Cohen
Copyright Year
2023
Publisher
Springer Nature Singapore
Electronic ISBN
978-981-9927-26-5
Print ISBN
978-981-9927-25-8
DOI
https://doi.org/10.1007/978-981-99-2726-5