Privatisation can be described as "the act of reducing the role of government or increasing the role of the other institutions of society in producing goods and services and in owning property" (Savas 2000: p.3). This can be achieved by de-nationalising industries, including through initial public offerings, by divestment, competitive tendering and 'contracting out' services traditionally undertaken by the public sector (Gray, Broadbent, and Lavender 2009) e.g. public transport and the utilities industry. This has been a common policy directive and development for Western governments (Broadbent and Laughlin 2004) for combating rising national budget deficits (Cavaliere and Scabrosetti 2008); increasing state revenues (Price Waterhouse in Megginson and Netter 2001); promoting the development of financial markets (Cavaliere and Scabrosetti 2008) and competitive behaviour (Fafaliou and Donaldson 2007); reducing government involvement in economic activity (Price Waterhouse in Megginson and Netter 2001); increasing efficiency (Cavaliere and Scabrosetti 2008); and fostering wider share ownership (Price Waterhouse in Megginson and Netter 2001) for investors.
Although it is reported that privatisation has been embraced by governments since the 1950s (Fafaliou and Donaldson 2007), it is claimed by Price (2007) that a significant shift towards private control did not occur until its adoption by the Regan and Thatcher administrations (in the United States (US) and the UK respectively) until the 1980s. This reform was wide-reaching in Britain (McCartney and Stittle 2008) and by 1987, privatisation had become a "central plank" of the UK's economic policy (Gray, Broadbent and Lavender 2009), extending to, for instance, the aviation, electricity and gas industries (McCartney and Stittle 2008), and later, perhaps due to its complex nature, the railway industry (McCartney and Stittle 2008).
Privatisation in Australia gained momentum during the early 1990s as a way to tackle perceived public sector inefficiencies. Privatisation in this country was one of a number of microeconomic reforms that were designed to "liberalise" the Australian economy (McKenzie 2008; Gray, Broadbent and Lavender 2009) including the introduction of National Competition Policy, Competitive Neutrality and Commercialism (Althaus, Bridgman and Davis 2007: p.75).
Despite the claimed liberalisation aim, examples of large-scale privatisation developments initiated by the Federal Government in Australia are few. They can be traced back to 1990 and include the part-privatisation of the Commonwealth Bank (Quiggin 2004) and the privatisation of Telstra (English 2006). State governments have been far more active in terms of actual projects (although in Victoria, privatisation extended to the State Electricity Commission and the Gas and Fuel Corporation). Later in the decade, the New South Wales State Government used privatisation to procure the construction of the Sydney Harbour Tunnel (Quiggin 2004).
In Victoria during the early 1990s, and in addressing what was claimed to be the "under-developed market" by Maguire and Malinovitch (2004), the Victorian State Government, in promoting infrastructure procurement to the private sector, offered developers indemnities and assurances to guarantee rates of return whilst retaining much of the associated project risks (Maguire and Malinovitch 2004) in order to encourage private investment. However, this financing model was considered by some public sector decision-makers to be inefficient, as ultimately some outcomes led to poor VfM for taxpayers (Maguire and Malinovitch 2004).
Coinciding with the emergence of privatisation as a major force in government reform in the US and the UK (Groot and Budding 2008) (and arising from what the Australian Public Service Commission (2003) and the Australian Task Force on Management Improvement (1993) claim has resulted from a reassessment of public sector values in Australia), 'New Public Management' was championed as a means to modernise government and to bring its machinations in line with the principles of market-based competition and to improve government and public administration practices (Diefenbach 2009; Groot and Budding 2008) beyond the scope of management 'by financial indicator' mentality (Jansen 2008).
The central tenets of the New Public Management movement appear to be broadly consistent with that of privatisation. According to Diefenbach (2009), this includes delivering VfM outcomes, being responsive to the needs of stakeholders and closer orientation towards addressing service user needs. Changes within the public sector itself are claimed to have been characterised by a more business-like approach to working practices that involve, for example, better resource (and arguably, risk) management, an increase in the use of commercial contracts, improved management techniques and the use of performance management (Hood 1995; Lapsley 1999) to achieve greater results (or at the very least, to introduce verifiable performance standards for the delivery of services) (Grimsey and Lewis 2004: p.53). Allied to this, it is stated by English (2006), that partnerships between government and private sector contractors grew to become an established feature of New Public Management during this era.
As mentioned earlier, a feature of the Australian public policy landscape during the beginning of the 1990s was National Competition Policy which formed part of a range of microeconomic reforms of that time (Hollander 2006). This federally initiated policy, it is claimed, was designed to remove unnecessary barriers to commercial competitiveness and to open up government monopoly to competition (Althaus, Bridgman and Davis 2007: p.75) in order to encourage economic growth through the belief that the private sector could provide public services more cost effectively (O'Neill in Lilley and De Giorgio 2004).
Closely associated with National Competition Policy (Althaus, Bridgman and Davis 2007: p.75), Competitive Neutrality and Commercialism were introduced during 1992 to ensure that the Federal and state governments in Australia are not favourably treated in the marketplace simply because of public sector ownership (Althaus, Bridgman and Davis 2007: p.75) and to make the commercial workings of government more transparent (Charles 2001).