Privatisation involves selling state owned assets to the private sector. This is often achieved through listing the new private company on the stock market. The debate of privatisation is eminent in our society at present as the government has announced it’s plan to privatise Medibank. There are many valid arguments for and against privatisation and the governments decision to privatise Medibank along with other former Government Business Enterprises. This essay seeks to demonstrate this.
What is privatisation?
The transfer of ownership, property or business from the government to the private sector is termed privatisation. The privatisation of a public organisation ...view middle of the document...
In recent times the debate regarding privatisation has been prominent in our society as the government announced its plans to sell Medibank Private, a company created in 1979. Medibank is Australia’s largest health insurer, it provides health insurance through Medibank and AHM brands, and complementary health services. The Government’s reasoning for selling Medibank is that there are a number of companies offering the same services for a similar price. However some are concerned that if Medibank is required to chase a profit they will need to increase their prices and therefore encourage other health insurers to do the same.
Name some former Federal Government Business Enterprises which have been privatised in recent decades.
Telstra is one of Australia’s largest telecommunications and media companies. Telstra’s origins date back to 1901, and Australian Federation, when the Postmaster-General's Department was established by the Commonwealth Government to manage all domestic telephone, telegraph and postal services. Telecommunications was separated from postal functions in 1975. This saw the establishment of two separate statutory authorities, the Australian Postal Commission and the Australian Telecommunications Commission. Over the past few years Telstra has gone through many changes and is now fully privatised.
In July 1997, Telstra undertook a partial privatisation, meaning that the Commonwealth sold approximately 33 per cent of their issued shares to the public. A further global offering by the Commonwealth of up to 16.6 per cent of their shares was was launched in September 1999. In November 2006, the Commonwealth sold a supplemental 31% of it’s shares in the Company. In February 2007, the Commonwealth’s remaining 17 per cent shareholding was transferred to the Future Fund; completing the privatisation process.
The Commonwealth Bank was fully privatised in three stages from 1991 until July 1996. The Commonwealth Banks Restructuring Act of 1990 converted the Commonwealth Bank from a statutory authority to a public company with conventional share capital and part-Government ownership. The Privatisation of the Commonwealth was beneficial in many ways. For one, it focused on customer service. A new business unit, ’Group Sales and Service Support,’ created in April 2006, was aimed at establishing a service and sales culture across all commonwealth bank branches. Secondly it allowed for advances in technology. New computer service programs ‘ASSIST’ and ‘CommSee’ were put in place as management services aimed at dealing with individual customers with their information being accessible from any branch across the network.
Australia’s twenty two federal airports went through privatisation between 1997 and 2003, with long term leases sold to private operators. These leased airports are regulated under the Commonwealth Airports Act, and are not subject to state/territory or local government planning and building laws. In years...