Business Short-Answer Questions - Assignment Example

Assignment Two: Short-Answer Question Name Institution Assignment Two: Short-Answer Questions Question 3 In this era of high social value stressed on the economic efficiency of transport and communication networks, uniform national laws should be enacted to regulate economic infrastructure in Australia (McCann, 2005). In Australia, the establishment of frameworks that regulate transport and communication has been divided between the state and commonwealth government. Currently, the commonwealth and state spend more than $500 billion in service delivery in Australia. The constitution regulates and dictates the level of government that will deliver various services (Lindell, 2005). The commonwealth constitution offers the rules and regulations for the government. The framework for the regulation of transport and communication by the commonwealth constitution lies on the division of power between the state and commonwealth government (Lindell, 2005). The constitution does not divide power between commonwealth and states. It’s just specifies the extents to which the commonwealth will legislate. Commonwealths powers are synchronized to those of states with few exceptions (Uhr, 2005). The states have as much power to legislate as the commonwealth. However, according to section 109, where the commonwealth and state legislation conflict, a valid commonwealth law often prevails with regard to the inconsistency. The major areas where commonwealth can legislate are presented in sections 51 and 52 of the constitution. Section 52 deals with the power of parliament while section 51 deals with the legislative power of commonwealth (Lindell, 2005). The important areas taken care of by the commonwealth is social security, taxation, trade to name a few. However, the commonwealth has no constitutional authority to legislate in various important areas. In practice, nevertheless, the commonwealth has a major role in areas that have been state responsibilities (Zines, 2007). Section 96 of the constitution presents the commonwealth with the responsibility of providing financial assistance to states. The power of the commonwealth thus extends to functions such as telecommunication and transport (Sims, 2007). This is due to its financial capacity and the constitutional power to offer financial assistance to states. The commonwealth make use of its financial capabilities to fund functions and programs that would be considered state responsibilities like roads, hospitals and public housing (Sims, 2007). In practice therefore, the constitution has enabled the commonwealth take up the responsibility of funding infrastructure. The commonwealth’s constitutional authority has the capacity to deal with infrastructure problems. Using its law making powers offered by the Australian constitution, it has the ability to regulate large area of the transport, communication and energy sectors (Twornet, 2007). Investments in economic infrastructure and social infrastructure have a fundamental impact on community’s wellbeing (Uhr, 2005). Commonwealth constitution has an important impact in providing such infrastructure. Commonwealth constitution influences the provision of transport and communication in three Main ways: through the development of framework policies that supports the provision of funds to states and territories in infrastructure development and in the investment in government business enterprises. Infrastructure provision framework policies are the regulations and legislation that establish the factors that the governments and private sector use in making investment decisions (Zines, 2007). Examples of such policies include Income Tax Assessment Act and the National Competition Policy (Winterton et al., 2007). The commonwealth constitution’s actions affect the direction that the governments and private sector take with regard to the provision of infrastructure. Framework policies set by the commonwealth constitution influence investment decisions. For instance, Income Tax Assessment Act influences the infrastructure decisions involving the private sector. Many framework policies and legislation influence investment indirectly. These policies operate through organizations with the function of interpreting and instituting legislation (Zines, 2007). The constitution has also given power to the commonwealth to influence provision of infrastructure through investment by government business enterprises. These are company listed under Commonwealth Authorities Companies Acts. GBE investment has multiple functions. Some investments are for commercial sales of commodities and services for these decisions are made owing to their expected commercial viability and returns. Other investments serve policy purposes (Winterton et al., 2007). For instance, company such as Telstra supplies telecommunication services but has to undertake community services even though no funding come from commonwealth. In addition, government departments and agencies also take part in infrastructure investment. Agencies invest in buildings and other infrastructures like information technology network. The reasons for investment in infrastructure by agencies and government departments are for commercial purposes and in serving policy objectives. The constitution allows the commonwealth to influence infrastructure provision through specific payments to the states (Zines, 2003). The largest function is transport and communication. The specific purpose payments with regard to transport and communication involve funding for road programs. It is the role of the commonwealth under the constitution to fund for four programs namely; national highway, road to recovery initiative, the black spots initiative, and the roads of national importance. In addition, the commonwealth guided by the Local Government Act 1995 offer financial assistance to government for roads (Zines, 2007). Question 7 The National Competition Policy is considered an Australian microeconomic reform program (Daniel, 2002). It was founded upon the concept that competitive markets in Australia should serve the interest of the wider community. The phrase National Competition Policy is a set of policies that were introduced in the 1990s in Australia to promote microeconomic reform. The stated objectives and importance of National Competition Policy since 1995 as it applies to the public sector involves achieving the most effective provision of publicly offered commodities and services by use of reforms that are established to minimize restrictions on competition while promoting competitive neutrality (Hawkins, 2006). The National Competition Policy has had an impact on productivity growth. It has acted as a new regime that prevent business organisations that control an ‘essential facility’ from taking advantage of their market power. The Policy also has the importance of assisting in underpinning the strong era of Australian economic growth (Hawkins, 2006). It has expanded the roles of Australian Competition and Consumer Commission that offer advice on issues related to inter-governmental arrangements (Hawkins, 2006). Australian Competition and Consumer Commission (ACCC) is an independent authority that was established in 1995 with incorporation of the Prices Surveillance Authority and Australian trade Practices Commission (TPC) to run the Trade Practices Act 1974 (Kalb, Peters and Woolley, 2007). In addition, the National Competition Policy has assisted in extending the power of the Trade Practices Act to unincorporated businesses and government businesses in order for the set competitive conduct rules to apply to every business activity in Australia (Kalb, Peters and Woolley, 2007). The policy also extended prices surveillance arrangements to government businesses to take care of those situations where all competition policy reforms are inadequate. The public important aspect of National Competition Policy ensures governments take into consideration all governmental and community objectives when reviewing reform options and weigh all the pros and cons of particular measures before deciding what policy should be implemented. The public benefit test is effective if the benefit provided to the community overweighs the costs. NCP also warrant restrictions on competition (Kalb, Petersand Woolley, 2007). The National Competition Policy framework require that laws should not limit competition unless the benefits of the restriction overweighs the costs and the objectives of the law can be achieved only by limiting competition (Kalb, Peters and Woolley, 2007). The Australian Competition and Consumer Commission is considered an independent commonwealth statutory authority with the function of enforcing various legislations including Competition and Consumer Act and promoting completion and fair trading in addition to regulating national infrastructure in Australia (Nagarajan, 2013). ACCC enforces the Competition and Consumer Act and take action as supported by the Federal Court of Australia in enforcing its provisions. The provisions under Competition and Consumer Act include provisions on anti-competitive conduct, regulation of energy industries and Australian consumer Law. Under the Act, the Australia Competition and Consumer Commission regulates certain businesses by offering access to national infrastructure (Quiggin, Mallawaarachichi and Cambers, 2012). Competitive markets contribute to the prosperity and success of the Australian communities. Therefore, Australian Competition and Consumer Commission has the role of protecting, strengthening, reinforcing and supplementing the way competition takes place in the Australian markets and businesses in order to improve the efficiency and effectiveness of the economy at the same time increase the welfare of its citizens. This means that the commission take action to improve consumer welfare, prevent conducts that are anti-competitive and harmful to consumers, protect the concept of competition and promotes and upholds the proper functioning of the country’s markets (ACCC, 2008). Its priority revolves around maintaining and promoting competition that assist in preventing market failure. It also protects the interests of the consumers and supports fair trading, promote economically effective operations of the monopoly infrastructure and increase engagement with a wide range of groups that are affected by its operations. ACCC initiatives also covers additional functions such as promoting consumer education especially those found in rural areas and indigenous communities (ACCC, 2008). ACCC roles compliment and support those of state and local consumer affairs agencies whose functions involve administering minor consumer protection laws in the jurisdictions (Heyward, 2004). Additionally, ACCC also offer secretariat services and expertise to the National Competition Council such as advice and support with regard to NCC recommendations, administrative services and reports. The ACCC is considered by business people and consumer as essential and is generally held in high regard for his role in the Australian economy. It serves the role of bringing court actions against businesses that go against the Competition and Consumer Act (Nagarajan, 2013). Companies that breach restrictive trade practices of CCA are fined by the Federal court. For instance, firms that breach consumer protective provisions stated by the CCA may be fined up to $1.1 M. The ACCC have the power to accept court enforceable undertakings (Nagarajan, 2013). Such undertakings may involve various remedies to the conduct. In spite of the act, the actions of the ACCC do not favour either the consumer or supplier as it strives to achieve an effective market without restrictions (ACCC, 2008). Question 10 International trading system encompasses variety of unilateral, bilateral and multilateral agreements among independent countries (Bonapace, 2004). Above these agreements and rules is the World Trade Organisation (WTO) which comprise of 153 members. World trade organization is an intergovernmental organization that regulates international trade and it officially started in January 1995 within the Marrakesh Agreement whereby 123countries signed in April 1994 resulting to replacement of General Agreementon Tariffs and Trade (GATT) (Bonapace, 2004). The WTO has provided legal framework for national policies that impacts international trade among members. The main role of the WTO is to offer freer and predictable conditions for trade. Nevertheless, the fundamental goal of WTO is to promote non-discrimination between trading nations that has remained to be an essential principle of the international trading system (Brummer, 2007). For this reason, bilateral trade agreements have proliferated. Before 2000, the bilateral trade agreements were growing slow but in good pace. Afterwards, this pace accelerated and by 2004, the number of bilateral trade agreements (BTAs) doubled. An important reason for the proliferation of BTAs is the disenchantment with the speed of development with liberalization at multilateral level. Many nations feel that WTO fails to deliver and therefore have pursued BTAs as a way of pressing onwards with their trade initiatives. A kind of domino effects has acted as a driving force in the proliferation of Bilateral Trade Agreements. For instance, in the Asia-Pacific countries, interest in developing Bilateral Trade Agreements started in 1990s with New Zealand, Japan and Korea initiating (Whalley, 2008). By 2000, Australia, Thailand and the United States incorporated the trend, with over 40 new Bilateral Trade Agreements being negotiated. The trend continued for years to the point where other countries would have felt disadvantaged or out of place if they had not gathered the momentum. For this reason, the number of BTAs grew dramatically. In addition, it is thought that most BTAs are politically motivated. Political economy plays a huge role in driving proliferation of such trade agreements (Ravenhil, 2006). It is easy to understand why bilateral Trade Agreements are not hard to negotiate as compared to multilateral trade agreements. BTAs involve two parties and thus the possibility for disagreement is minimal. Moreover, due to the shift of liberalisation away from easier ways of reducing taxes, establishing a multinational trade agreement is very difficult as the initiative aims to address more complex issues and less apparent forms of protection (Menon, 2007). With only two parties required to negotiate and agree, a Bilateral Trade Agreement faces fewer obstacles than regional or multinational trade agreement. Therefore, BTAs can easily be implemented compared to multinational trade agreements. Free trade generally improves the economic warfare. Free trade generally is a policy which some international markets follow whereby the governments from various countries do not restrict exports to or imports from other countries. Although free trade agreements such as bilateral trade agreements bring about overall benefits, the elimination of trade barrier on a given good can hurt the shareholders of the domestic industry sector producing that particular good (Kawal, 2007). Some of the parties that are affected by the foreign competition employ politic power for the purpose of obtaining protection against imports. This to some extent brings a lot of harm to any country as they do not tend to serve best interest rather than a political one. While most of the economist thinks that bilateral trade agreements are desirable, they are linked to weakening the international trade system. Nevertheless, such trade agreements may bring about some benefits. The economic gain is reinforced when countries agree to the reduction in trade barriers (Martin, Will and Patrick, 2007). This results to the broadening of the market and specialisation, thereby boosting efficiency and customer incomes. Bilateral trade agreement minimizes political oppositions with regard to free trade. Consequently, such trade agreements between nations are very beneficial in liberalising world trade (Hill, Hai and Jayant, 2008). Critics of bilateral trade agreements approaches have many arguments. They highlight that these approaches tend to undermine instead of support the multilateral level trade (Martin, Will and Patrick, 2007). Therefore, the long-term effect of bilateral approach could be a weakening of the global trading system into discriminatory regional trading alliances that will eventually result to the added complexity that tend to complement the smooth and proper flow of goods and services between countries. Bilateral trade agreements have resulted in a mess in the global trade involving agricultural produce (Martin, Will and Patrick, 2007). The mix of national policies and bilateral rules has resulted to plugging commodity prices. Due to this, farmers have been forced out of their lands since they can no longer make profits. Yet, the trade agreement policies have damaged communities in developed countries. In order to strengthen the international trade system, gradual adjustments are required in the bilateral approaches. The WTO agreements allow nationals introduce beneficial changes through progressive liberalization. Developing countries are given longer periods to fulfil their obligations. For instance, the Doha Round was established to correct the imbalances of the trade agreements which raised hopes for developing countries (Kawal, 2007). References ACCC (Australian Competition and Consumer Commission) 2008, Report of the ACCC inquiry into the competitiveness of retail prices for standard groceries, Canberra Bonapace, T. (2004), "Regional Trade Agreements: ESCAP Situation and Interaction with WTO Rules", Bangkok: UN-ESCAP. Brummer, Chris J. (2007) "Ties that Bind: Regionalism, Commercial Treaties, and the Future of Global Economic Integration" , Vanderbilt Law Review 60(5), October. Daniel Orland. (2002). The Australian Competition and Consumer Commission -- role and functions. Dickson, A.C.T: The Commission. Hawkins, J 2006, The Concept of Competitiveness, Treasury Working Paper 2006 — 02, The Treasury,Canberra,Aprilhttp://www.treasury.gov.au/documents/1097/PDF/Treasury_Working_Paper_2006 02_Competitiveness.pdf (accessed 14 February 2009) Heyward, B. 2004, National policy implementation in Queensland: the politics of National Competition Policy in Queensland in the 1990s, unpublished Ph.D theses submitted to James Cook University, Townsville Hill, Hal and Jayant Menon (2008), “Freeing up world trade: let’s get back to fundamentals”, Far Eastern Economic Review 171(5), June. Kalb, D., Peters, G. & Woolley, J. (2007). State of the union presidential rhetoric from Woodrow Wilson to George W. Bush. Washington, D.C: CQ Press. Kawai, Masahiro (2007), "Evolving Economic Architecture in East Asia", Discussion Paper No.84, Tokyo: ADB Institute. Lindell, Geoffrey (2005) ‘Commonwealth Control of Ports as an Exercise of the Commonwealth’s “First and Most General Power”?’ Public Law Review 16. Martin, Will, and Patrick Messerlin (2007). “Why is it so difficult? Trade liberalization under the Doha Agenda.” Oxford Review of Economic Policy, 23(3), 347-366. McCallum, Ron (2005) ‘The Australian Constitution and the Shaping of our Federal and State Labour Laws’ Deakin Law Review 10. Menon, Jayant (2007) “Bilateral Trade Agreements”, Asian-Pacific Economic Literature 21(2), November, 29-47. Nagarajan, V. (2013). Discretion and public benefit in a regulatory agency : the Australian authorisation process. Acton, ACT, Australia: Australian National University E Press. Quiggin, J., Mallawaarachchi, T. & Chambers, S. (2012). Water policy reform : lessons in sustainability from the Murray Darling Basin. Cheltenham Northampton, Mass: Edward Elgar. Ravenhill, John (2006), “The Political Economy of the New Asia-Pacific Bilateralism: Benign, Banal, or Simply Bad?”, in Vinod K. Agrawal and Shujiro Urata (eds.), Bilateral trade Agreements in the Asia-Pacific¸ London: Routledge, 27-49. Sims, Rod (2007) ‘Revitalising Infrastructure Reform’ in Business Council of Australia, Infrastructure: roadmap for reform. BCA September. Twomey, Anne (2007) ‘Federalism and the Use of Co-operative Mechanisms to Improve Infrastructure Provision in Australia’ Public Policy 2:3. Uhr, John (2005) ‘The Role of Governments — How Can it be Improved?’ in Committee for Economic Development of Australia, Infrastructure: Getting on with the Job. Melbourne: CEDA. Whalley, John (2008), “Recent Regional Agreements: Why So Many, Why So Much Variance in Form, Why Coming So Fast, and Where Are They Headed?”, The World Economy, 31(4). Winterton, George et al. (2007) Australian Federal Constitutional Law: commentary and materials, 2nd edn. Sydney: Law Book Co. Zines, Leslie (2007) ‘The High Court and the Constitution in 2006’, University of New South Wales Law Journal 174 Read More