Restructuring Protected Industries: The efficacy of policy responses to disruption in the sugar, automotive manufacturing, and taxi sectors

Disruption created by globalisation and emerging technologies has resulted in various policy responses to manage the decline of long-standing, protected industries in Australia. The Australia-United States Free Trade Agreement, cheaper labour rates overseas, and challenges to existing regulated monopolies have affected the sugar, automotive manufacturing and taxi sectors respectively. In the first two cases, the Commonwealth introduced policy responses to manage the decline of the sugar and automotive manufacturing industries, whereas state governments have responded to the emerging ride-sharing providers by lowering the barriers to new market entrants. In each case, different approaches to compensating existing industry players for the impact of market restructuring have produced various policy approaches. This paper, then, compares the rationale for the respective policy responses to disruption in the sugar, automotive manufacturing, and taxi sectors. While the Commonwealth managed industry restructuring with deliberate, well-organised policy responses, the states ignored the need for reform until a disruptive business model had garnered such support from consumers that the states, politically, had little choice but to rush through policy responses that do not augur well for approaches to managing future disruptions. Indeed, the states created a high level of sovereign risk that has had a significant financial impact on small business investors in the taxi industry that may set a precedent for policy responses to the sharing economy in other state-governed industries such as hospitality. The paper argues that the states’ protracted policy responses to disruption, compounded by limited resources for policy-making, have resulted in inefficacious outcomes compared to the industries governed by the Commonwealth. Based on the experience of the three cases, the paper concludes with recommendations for governing future industry disruptions to ensure that small businesses do not bear the financial brunt of poorly implemented anticipatory industry policies.