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Estimating the Benefits of Hilmer and Related Reforms

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  • John Quiggin

Abstract

The Industry Commission’s 1995 study of the growth and revenue implications of Hilmer and related reforms has been influential in the debate over microeconomic reform. In addition to reform of Telstra, Australia Post, the Federal Airports Corporation, the Civil Aviation Authority, state electricity, gas and water authorities, and rail, road and port authorities, the Commission examined a broad‐ranging program including competitive tendering for the provision of public services, deregulation of the building industry and a move to self‐regulation of industries such as meat processing. The Commission estimated that the implementation of these reforms would result in a 5.5 per cent increase in GDP. In this paper, the Commission’s analysis is subjected to a detailed critique. It is argued that most of the estimated productivity gains are overoptimistic, representing upper bounds to possible achievement rather than likely outcomes. Furthermore, it is argued that the dominant flow‐on effects of microeconomic reform will be negative, arising from the fact that at least some of the workers directly displaced by reform will be permanently displaced from the employed labour force.

Suggested Citation

  • John Quiggin, 1997. "Estimating the Benefits of Hilmer and Related Reforms," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 30(3), pages 256-272, September.
    • Handle: RePEc:bla:ausecr:v:30:y:1997:i:3:p:256-272
    DOI: 10.1111/1467-8462.00025
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    Cited by:

    1. K.W. Clements, 2000. "Lower Energy Costs and the WA Economy: A general equilibrium analysis," Economics Discussion / Working Papers 00-13, The University of Western Australia, Department of Economics.
    2. Bayar, Ali & Ben-Ahmed, Ghazi & Safadi, Raed, 2002. "WTO Negotiations and the MENA Region: A Preliminary Appraisal," Conference papers 331040, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. James Giesecke & John R. Madden, 2003. "Regional Labour Market Adjustment to Competition Policy Reforms: A Dynamic CGE Framework for Assessment," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 6(3), pages 409-433, September.
    4. Nepal, Rabindra & Jamasb, Tooraj, 2015. "Caught between theory and practice: Government, market, and regulatory failure in electricity sector reforms," Economic Analysis and Policy, Elsevier, vol. 46(C), pages 16-24.
    5. Peter B. Dixon & Maureen T. Rimmer, 2005. "Explaining a dynamic CGE simulation with a trade-focused back-of-the-envelope analysis: the effects of eCommerce on Australia," Chapters, in: Sisira Jayasuriya (ed.), Trade Theory, Analytical Models and Development, chapter 10, Edward Elgar Publishing.
    6. Verikios, George & Zhang, Xiao-guang, 2015. "Reform of Australian urban transport: A CGE-microsimulation analysis of the effects on income distribution," Economic Modelling, Elsevier, vol. 44(C), pages 7-17.
    7. Naughten, Barry, 2003. "Economic assessment of combined cycle gas turbines in Australia: Some effects of microeconomic reform and technological change," Energy Policy, Elsevier, vol. 31(3), pages 225-245, February.
    8. Tim Nelson, 2017. "Redesigning a 20th century regulatory framework to deliver 21st century energy technology," Journal of Bioeconomics, Springer, vol. 19(1), pages 147-164, April.
    9. George Verikios & Xiao-guang Zhang, 2016. "Structural change and income distribution: the case of Australian telecommunications," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 21(4), pages 549-570, October.
    10. Aghdam, Reza Fathollahzadeh, 2011. "Dynamics of productivity change in the Australian electricity industry: Assessing the impacts of electricity reform," Energy Policy, Elsevier, vol. 39(6), pages 3281-3295, June.
    11. Verikios, George & Zhang, Xiao-guang, 2013. "Structural change in the Australian electricity industry during the 1990s and the effect on household income distribution: A macro–micro approach," Economic Modelling, Elsevier, vol. 32(C), pages 564-575.
    12. Peter Kenyon, 1998. "Discussion of 'Dimensions, Structure and History of Australian Unemployment'," RBA Annual Conference Volume (Discontinued), in: Guy Debelle & Jeff Borland (ed.),Unemployment and the Australian Labour Market, Reserve Bank of Australia.
    13. Tim Nelson & Stephanie Bashir & Eleanor McCracken-Hewson & Michael Pierce, 2017. "The Changing Nature of the Australian Electricity Industry," Economic Papers, The Economic Society of Australia, vol. 36(2), pages 104-120, June.
    14. Madden, John Robert & Giesecke, James, 2002. "Competition reforms and collaborative federalism: a dynamic multiregional applied general equilibrium analysis," ERSA conference papers ersa02p343, European Regional Science Association.
    15. Peter Kenyon, 2000. "The Good Society: A Guide to Economic Policy," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 7(4), pages 303-320.
    16. John Quiggin, 2001. "The Australian Productivity Miracle: A Sceptical View," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 8(4), pages 333-348.
    17. John L. Whiteman, 1999. "The Measurement Of Efficiency Where There Are Multiple Outputs," Centre of Policy Studies/IMPACT Centre Working Papers g-134, Victoria University, Centre of Policy Studies/IMPACT Centre.
    18. Evan Capeluck, 2016. "A Comparison of Australian and Canadian Productivity Performance: Lessons for Canada," CSLS Research Reports 2016-07, Centre for the Study of Living Standards.
    19. George Verikios & Xiao-guang Zhang, 2010. "Structural Change in the Australian Electricity Industry During the 1990s and the Effect on Household Income Distribution," Centre of Policy Studies/IMPACT Centre Working Papers g-207, Victoria University, Centre of Policy Studies/IMPACT Centre.
    20. Cowgill, Matt, 2013. "A Shrinking Slice of the Pie: The Labour Income Share in Australia," MPRA Paper 46209, University Library of Munich, Germany.
    21. John L. Whiteman, 1998. "The Potential Benefits of Hilmer and Related Reforms: Electricity Supply," Centre of Policy Studies/IMPACT Centre Working Papers g-128, Victoria University, Centre of Policy Studies/IMPACT Centre.
    22. Tim Nelson & Joel Gilmore & Tahlia Nolan, 2023. "Be Wary of Paying Wounded Bulls – Capacity Markets in Australia's National Electricity Market," Economic Papers, The Economic Society of Australia, vol. 42(1), pages 72-91, March.

    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • N47 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Africa; Oceania
    • N56 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Latin America; Caribbean

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