Privatisation: Advantages of privatisation!

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PRIVATISATION:

Transfer of services, activities and operations from govt. to private enterprise.

ADVANTAGES OF PRIVATISATION

·Privtaely owned Firms are more cost efficient - because they need to make a profit.

·Privatisation places the risk in the hands of business or Private Enterprise.

·Govt. Businesses are subject to an enormous amount of red tape (Beauraucracy)

·Private enterprise is more responsive to customer complaints and innovation.

·Govt Ent. Have an advantage over private Ent. Because they can guarantee payment of bills and they don't pay tax.

·The Govt. should not be a player and an umpire.

·Privatisation provides a one off cash boost for Govt. This can be spent on Hospitals etc...

·Privatisation leads to lower prices and greater supply.

·Competition in privatization increases differentiation.

·Private sector uses less resources, therefore resources are free for other purposes.

·As a result of privatisation more tax income is generated for govt.

·Loss making activities no longer run by Govt. - No longer responsible.

·Private Sector managers are more efficient.

·Private sector is more flexible in relation to finance

·Govt. sector magangers are responsible to Govt. legislation.

·Private Ent. Can hire and fire by performance.

·Prvt. Organizations can use marketing advertising with Govt. Permission.

·Private Orgs can move into new

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