Labor, government business enterprises and competition policy

Long before the introduction of federal trade practices legislation or tariff reform, governments in Australia - especially Labor governments - attempted to reduce the costs or improve the quality of goods and services by establishing government business enterprises. With the rise of neo-liberalism industry policy of this kind all but disappeared. According to the National Commission of Audit (NCA), established by the Howard Government, there were only three circumstances in which Government Business Enterprises (GBEs) could be justified: when 'the private sector was seen as incapable of delivering the required products or services'; when 'the community considered it appropriate that government should own a firm that operated as a natural monopoly'; or when 'the government wanted to fulfil a community service obligation'. This article offers a historically-grounded critique of the NCA's position. It traces the history of GBEs as a spur to competition across the states and the Commonwealth. It shows that what counts, or doesn't count, as a government's 'core activity' is as much a matter of politics as it is of economics, and it locates the politics of the NCA within the broader neo-liberal project of limiting collective choice.