19 - Microeconomic reform

Summary

Over the past 30 years governments in Australia introduced a set of policies that have come to be known as microeconomic reform. This chapter provides an overview of main reforms and rationales. It describes a major area of reform, and evidence on specific effects of that reform, roughly in the sequence that the reforms occurred. Political economy has a major role in most accounts of the introduction of microeconomic reform in the 1980s and early 1990s. In particular, several factors assisted the federal Labor government of this period to introduce reforms. The reforms to regulation of the finance sector in Australia had been primarily implemented to improve the capacity to manage the macroeconomy. The chapter discusses agricultural sector, manufacturing industry, government sector, transport sector, communications sector, utilities sector, competition policy and labour market in Australia. Finally, it presents an overall assessment of the effects of microeconomic reform.