Photo AI
The National Broadband Plan is the government’s commitment, over the next five years, to bring high speed broadband to every home and business in rural Ireland - Leaving Cert Economics - Question b - 2017
Question b
The National Broadband Plan is the government’s commitment, over the next five years, to bring high speed broadband to every home and business in rural Ireland. In J... show full transcript
Worked Solution & Example Answer:The National Broadband Plan is the government’s commitment, over the next five years, to bring high speed broadband to every home and business in rural Ireland - Leaving Cert Economics - Question b - 2017
Step 1
Explain the term privatisation.
Answer
Privatisation refers to the process of transferring ownership of a state-owned company or asset, in whole or in part, to the private sector. This often occurs as a government strategy to enhance efficiency, reduce public debt, and improve service delivery by leveraging private sector investment and expertise.
Step 2
State and explain the economic arguments for and against privatisation using any Irish example.
Answer
Economic arguments for privatisation include:
-
Revenue for Government: Selling state assets can generate significant revenue, allowing the government to reduce its level of borrowings.
- Example: The sale of Eircom raised funds for the government that could be used for public services.
-
More Competition: Privatisation can lead to increased competition in the market, resulting in better services and lower prices for consumers. For instance, the privatisation of air travel services in Ireland introduced competition, improving service quality.
-
Employment Opportunities: In cases of newly privatised firms, there can be growth in employment opportunities, as private companies often expand operations.
However, there are also valid arguments against privatisation:
-
Loss of Public Control: The public may lose control over essential services. For example, when electricity services were privatised, concerns arose about the prioritization of profits over public welfare.
-
Increased Prices: There’s a risk that the new private owners will prioritize profit, leading to price hikes at the expense of consumer access to services.
- Example: The privatisation of water services in some regions has led to increased costs for consumers.
-
Job Security Concerns: Employees in formerly public sectors may face job insecurity or layoffs post-privatisation due to restructuring and cost-cutting measures.