powerpoint slides - Faculty of Business and Economics

Tabatha Pettitt
PhD Scholar
Macquarie Graduate School of Management
Macquarie University
The focus of my research is the corporatisation of Australia’s
government-owned ports and their port corporations
Port corporations manage and operate ports in Australia
Corporatisation is a structural reform process which aims to make
government-owned entities commercially-focused and distance
them from government interference
It involves adoption or amendment of legislation to establish
corporatised entities such as port corporations
Corporatisation was introduced in Australia to reform ports
beginning with NSW in the 1980s. The rationale for its
introduction were efficiency gains and increased competition
Australia has over fifty ports around its vast coastline
The term “port” includes not only the waterside but also the
surrounding land (hinterland)
The only jurisdiction in Australia that does not have a port
is the landlocked Australian Capital Territory
Each state jurisdiction and the Northern Territory is
responsible for creating and maintaining its port legislation.
Recent calls for the Commonwealth to legislate for the ports
met with state and territory opposition
There is no uniform port legislation in Australia – legislation
has been enacted on a “needs” basis in each jurisdiction
Most of Australia’ major commercial ports are
government-owned and deal with containers and bulk
products such as grain and wheat. The Port of
Melbourne is Australia’s busiest container port
Since 1995 South Australia’s ports, the Port of Brisbane
and the Victorian ports of Geelong and Hastings have
been privatised. These ports are not subject to port
corporatisation legislation
New South Wales, Tasmania, Queensland, the
Northern Territory and Victoria (Melbourne &
Hastings) have port legislation that govern their port
corporations as corporatised entities
Over the last few decades Australian governments
have undergone intensive economic reform
Much of the public sector was found to be inefficient
and under-performing
Australian port performance was reviewed at this time
and the 1989 Inter-State Commission Report found
them to be inefficient and in need of reform if they
were to remain government-owned
At this time, Australia’s ports were part of government
departments. This meant that they were often subject
to much governmental and bureaucratic interference
which was seen to impede their operations
In 1993 the Industry Commission argued that if the
ports were to remain in government hands, there
needed to be a distancing from this interference
It was suggested that ideally the port authorities
should act as a landlord for the ports whilst the
commercial operations were leased out to the private
Why not just privatise the ports? Most commercial ports were
generally deemed too important to the economy to privatise (those
that were sold were making very large losses)
Corporatisation was seen to be the answer
Corporatisation was previously used overseas for port
management, such as in the UK and Europe. In the local region it
was introduced in New Zealand in the 1980s (The “New Zealand
Unlike in the UK and New Zealand, in Australia corporatisation
was not part of a course of port privatisation (New Zealand either
completely or partially privatised its ports)
Examines the two legislative models in use:
Government-Owned Corporations (GOCs) and
Statutory State-Owned Corporations (SSOCs)
Uses the ports of Tasmania (TasPorts) (GOC)
and the Port of Melbourne (SSOC) to
investigate corporatisation
Thesis uses a Case Study methodology
The Government-Owned Corporation (or GOC) is
created in accordance with the Corporations Act
2001 (Cth) or state incorporation statutes. In
Tasmania the Act is the Tasmanian Ports Corporation
Act 2005 (Tas)
The parliament is very limited as to what
requirements it can include in the legislation as the
Corporations Act 2001 (Cth) allows only minimal
shareholder input
The shareholding Ministers’ roles are limited to
reporting to the parliament
The Statutory State-Owned Corporation (or SSOC) is created
under a specific piece of legislation created for that entity.
In Victoria the Act is the Port Management Act 1995 (Vic)
There is potential for large degree of parliamentary input as
the legislation is drafted from scratch. Therefore parliament
can tailor-make provisions such as those relating to
accountability to parliament and Ministerial control.
The shareholding Ministers’ main powers are the power of
veto over board decisions, to give directions that must be
followed, and to make changes to port corporations as the
Minister sees fit. Some of these powers may be exercised in
order to meet the government’s own short-term goals,
which may not be in the port’s best interests
There is no widespread agreement as to whether
corporatisation has achieved its aims and benefited the
Australian port industry. Many commentators have
stated that it has not
Whilst much of the literature states that the reforms
have made the ports more customer-responsive, many
still argue that there are still disadvantages with the
corporatised structure
There is no agreement in the existing literature on what
business model could achieve the desired aims of
corporatisation. In fact there is no agreement on
whether such a model exists
To date there has been no detailed examination of the
corporatised legislative models in Australia
My research aims to fill in these gaps and investigate
whether there is a model that better meets the aims of
corporatisation than the existing models. Need to
create a framework for this
WHAT is it about the corporatisation models used
in Australian ports that prevent these aims being
The current business models under the legislation
prevent the distancing of government and therefore
enable Ministerial interference that does not occur in
non-government corporations
Under the Westminster model of Parliamentary
Responsibility there is a high level of accountability
that must be followed. There is a chain of
accountability from the Parliament (through the
Ministers) to the voting public
(1) Does the legislation under each model (GOC and SSOC):
(i) Distance government from the day to day operations of port
corporations and free them from political control, the element
seen as the cause of inefficiencies?
(ii) Create an effective business model that enables the port
corporations to respond to the forces of the market, which was
the fundamental objective of reform?
(2) Which model creates the more effective business model that
allows for the aims of corporatisation to be met, that is the
distancing of government from the daily operations of port
corporations and enabling of port corporations to more effectively
respond to the forces of the market?