National Competition Council Competitive neutrality reform: issues in implementing clause 3 of the Competition Principles Agreement January 1997 © Commonwealth of Australia 1997 ISBN 0 642 26112 1 This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Australian Government Publishing Service. Requests and inquiries concerning reproduction rights should be directed to the Manager, Commonwealth Information Services, Australian Government Publishing Service, GPO Box 84, Canberra ACT 2601. Produced by Panther Publishing & Printing. Table of Contents 1 Introduction Advancing competitive neutrality reform 1 3 2 Competitive Neutrality: Interpreting Clause 3 Of The CPA Determining ‘net competitive advantage’ 5 7 3 Enterprises And Activities Covered Public trading enterprises and public financial enterprises Business activities which are part of a broader range of agency functions What is a ‘significant’ business activity? Government business activities that should be considered for competitive neutrality reform Determining when reform is appropriate 8 8 9 10 11 11 4 Mechanisms For Implementing Competitive Neutrality Corporatisation Reform of specific advantages or disadvantages Pricing reform Competitive tendering and contracting 12 14 15 17 19 5 Community Service Obligations 6 Complaints About Government Businesses 7 Reporting Progress Competitive neutrality policy statement Annual progress reports 20 22 23 23 24 8 The National Competition Council’s Role 9 The Next Steps 24 25 iii Appendix A: Clause 3 Of The Competition Principles Agreement Appendix B: Characteristics Of A Fully Corporatised Government Trading Enterprise Appendix C: National Competition Policy Contacts 28 30 34 Appendix D: Public Trading Enterprises And Public Financial Enterprises By Jurisdiction 36 References 57 iv Competitive neutrality reform 1 Introduction Australia’s ability to sustain higher rates of economic growth, enabling more people to be employed and better social outcomes, depends on how well our resources are used. Competition contributes to achieving higher growth by helping to ensure that the community’s resources — the physical environment, financial resources and people’s skills and ideas — are used in the most valuable way. Accordingly, Australia’s governments have taken the logical view that the disciplines imposed by effective competition, being the greatest drivers for improving productivity and encouraging innovation, need to be extended throughout all sectors of the economy for Australia’s standard of living to rise. The National Competition Policy agenda endorsed by all Australian governments in April 1995 offers a comprehensive package of reforms. Delivered through three intergovernmental agreements,1 the reform agenda comprises: 〉 extension of the reach of the Trade Practices Act 1974 to unincorporated businesses and State and Territory government businesses; application of competitive neutrality principles so that government businesses do not enjoy a competitive advantage simply as a result of public sector ownership; restructuring of public sector monopoly businesses; reviewing all laws which restrict competition; providing for third party access to nationally significant infrastructure; and extension of prices surveillance to State and Territory government businesses to deal with those circumstances where other competition policy reforms had proven inadequate. 〉 〉 〉 〉 〉 Over the past decade, several studies and reviews have revealed that the pricing practices and productivity of many government businesses have been 1 The Conduct Code Agreement, the Competition Principles Agreement and the Agreement to Implement the National Competition Policy and Related Reforms. 1 National Competition Council poor.2 Many of the problems related to the operating environments that had evolved under government ownership. In many cases, governments did not require their businesses to recover costs or price efficiently. Managers were generally not held accountable for business performance. Governments also commonly conferred monopoly rights on their businesses, sheltering them from competitive pressures and disciplines. As governments began to better understand the significant impact of their businesses on Australia’s economy, each started to examine the nature of its involvement in businesses. This has seen governments pursue a variety of reforms including, for example, corporatisation, commercialisation, privatisation and competitive tendering and contracting. A common objective of each of these reforms is to create a competitively neutral operating environment, whereby ‘neutrality’ is achieved by exposing government businesses to the competitive pressures and disciplines normally faced by private sector businesses. In brief, the objective of competitive neutrality policy is to ensure that no government business enjoys a net competitive advantage by virtue of its public sector ownership. Where properly implemented, reforms aimed at introducing a competitively neutral operating environment for government businesses can deliver a range of benefits, including: 〉 〉 more efficient pricing leading to resources being allocated to their best uses; longer term performance efficiency gains as a result of government business enterprises (GBEs) operating in a more competitive environment; savings to governments from better utilisation of infrastructure; transparency and greater efficiency in the provision of community service obligations; and increased service quality as a result of performance monitoring of GBEs. 〉 〉 〉 2 See, for example: Industry Commission (IC) 1991a; IC 1991b; Steering Committee on National Performance Monitoring of Government Trading Enterprises (SCNPMGTE) 1993; Bureau of Industry Economics (BIE) 1994; BIE 1995. 2 Competitive neutrality reform Thus, the competitive neutrality policies and principles outlined in the Competition Principles Agreement (CPA), where properly implemented, will have benefits for consumers and for business: for example, in terms of the price and quality of government services and improved customer focus. The removal of advantages available to government businesses because of their public ownership will enhance the ability of private businesses to compete with those owned by governments. Significantly, the Commonwealth is to provide financial transfers to those States and Territories which make satisfactory progress with reform, including in relation to competitive neutrality. Responsibility for assessing whether States and Territories have made satisfactory progress, and for advising the Commonwealth whether States and Territories have met the conditions for receipt of competition payments, lies with the National Competition Council. The Council is also available to assist governments to address competition reform issues supporting the National Competition Policy program. Advancing competitive neutrality reform Governments’ competitive neutrality obligations under the CPA include, but are not limited to: 〉 the publication of a policy statement on competitive neutrality, including an implementation timetable and a complaints mechanism, by June 1996; the publication of a separate policy statement on the involvement of local government, which must address competitive neutrality matters, by June 1996; the publication of annual reports on the implementation of competitive neutrality principles, including allegations of non-compliance; for significant business activities: corporatisation and imposition of full government taxes or tax equivalent systems, debt guarantee fees directed towards offsetting the competitive advantages provided by government guarantees and the application of regulations to which private sector businesses are normally subject; and 〉 〉 〉 3 National Competition Council 〉 for significant business activities where corporatisation is judged to be impractical: ensuring that prices charged for goods and services take account of full government taxes, debt guarantee costs and private sector equivalent regulation.3 As with the other components of the National Competition Policy agenda, governments have considerable flexibility in implementing competitive neutrality. Each has taken the first important steps. All governments have delivered their policy statements, and to varying extents have outlined the detail of their competitive neutrality program, including the nature and scope of reforms proposed, the timetable for their implementation and the means by which complaints about the application of competitive neutrality policy will be handled. As part of the task of evaluating progress with reform assigned to it by governments, the Council is examining these policy statements with a view to ensuring they offer comprehensive frameworks for reform consistent with the intent and spirit of the intergovernmental competition policy agreements. Preliminary consideration of the statements, coupled with consultation with a range of parties interested in competitive neutrality matters, has highlighted several areas for further discussion. These areas, which are examined in the remainder of this paper, include: 〉 〉 〉 〉 〉 the meaning of competitive neutrality as defined in the CPA; the businesses chosen for reform; the reform models which meet the requirements of the CPA; other means (additional to those specified in the CPA) by which governments might address their competitive neutrality commitments; the implications for community service obligations (important to many in the community but which may be supported by anti-competitive behaviour); the means by which governments handle complaints about competitive neutrality policy; and next steps in the process of reform implementation. 〉 〉 3 The text of clause 3 of the CPA is reproduced at Appendix A. 4 Competitive neutrality reform 2 Competitive Neutrality: Interpreting Clause 3 Of The CPA The objective of competitive neutrality policy, as stated in subclause 3(1) of the CPA, is the elimination of resource allocation distortions arising out of the public ownership of entities engaged in significant business activities. Resource allocation distortions can arise where government businesses face different costs or disciplines than private sector businesses. These differences may provide government businesses with competitive advantages or disadvantages which influence their pricing and production decisions. Some of the potential sources of ownership-related advantages and disadvantages are listed in Box 1. Several types of resource allocation distortions can arise as a result of these factors. For example, if a government business is not required to earn a return on the capital invested in the business or even cover operating costs, then it may be able to underprice the goods and services it produces. If this leads to the government business attracting custom from its more efficient competitors, then the community’s scarce resources are not being used as well as they might be. The underpricing may also encourage ‘overuse’ of the good or service, encouraging the business to invest in new plant and equipment that it would otherwise have not required. The way in which government businesses use inputs to produce goods and services can also affect resource allocation. Government businesses which operate inefficient production processes will use more resources — raw materials, physical capital, management and labour, and technical know-how — than necessary to produce a given level of output. This reduces the availability of resources to other businesses, and increases their cost to all users. Inefficient production processes also increase costs of production, undermining the government business’s financial performance. 5 National Competition Council Box 1: Some Potential Advantages and Disadvantages Affecting Government Businesses 〉 〉 〉 〉 〉 〉 〉 〉 〉 〉 Potential advantages Exemptions from Commonwealth taxes (including company tax, sales tax, financial institutions duty, import duties, fringe benefits tax, fuel excises) Exemptions from State and Local taxes (including property rates and taxes, land tax, debit tax, franchise and licence fees, payroll tax) No requirement to return a profit, rate of return on investments or account for depreciation expenses Tied clientele and the opportunity to cross-subsidise commercial operations from monopoly markets Immunity from bankruptcy and the threat of takeover Exemptions from various Commonwealth and State legislation (eg environmental regulation) Access to various corporate overheads free of charge (or at reduced rates), including office accommodation, payroll services, human resource services, marketing and IT services Cash flow advantages through budget arrangements which give agencies access to funds at the start of the financial year Cheaper capital financing (no risk premium where the agency is backed by an explicit or implicit government guarantee) Preferential input to tender specifications 〉 〉 〉 〉 〉 〉 〉 〉 〉 〉 Potential disadvantages Difficulty in accessing taxation benefits of depreciation, investment allowances and other deductions (eg through the transfer of taxation losses) Public sector employment terms and conditions and higher public sector superannuation contributions Lower degree of managerial autonomy, for example due to the requirement to comply with Ministerial directives Greater accountability costs given the public sector’s reporting and regulatory requirements Lack of flexibility in reducing or restructuring corporate overheads Constitutional and legal constraints, including being subject to Administrative Law Capital constraints – high debt / low equity Requirement to provide unfunded community service obligations Restricted access to product markets Explicit requirements in relation to industrial democracy and equal employment opportunity Source: from Industry Commission 1996, p. 294. 6 Competitive neutrality reform Competitive neutrality helps overcome potential pricing and production problems by encouraging competition in the provision of services traditionally provided by governments. Competition provides strong incentives for managers to improve the efficiency of their businesses where those managers have responsibility for the health of their business. Specific action to address underpricing or overpricing helps ensure that the community’s scarce resources are used in the most valuable way. Even where there is no actual or potential competition, the adoption of competitive neutrality principles can encourage greater efficiency in resource allocation. It will mean, for example, that governments are better informed about the actual cost of providing goods and services, allowing for improved decisions about how to provide those goods and services. This is particularly relevant for local government, where in regional areas there may be very few competing non-government providers of the goods and services being offered by local government. Determining ‘net competitive advantage’ The central idea underpinning competitive neutrality is that the competitiveness of an enterprise should not be improved or impaired by virtue of its ownership arrangements.4 In this context, clause 3 of the CPA refers to the concept of ‘net competitive advantage’. This terminology, however, should not carry any connotation that advantages in one area are ‘compensation’ for disadvantages elsewhere as, clearly, two contra-allocative inefficiencies are unlikely to lead to efficient resource allocation outcomes. This suggests that, if the objective of efficiency in resource allocation is to be achieved, allowing inefficiencies to continue because they compensate for other inefficiencies makes little sense. The CPA explicitly identifies four areas of potential net advantage. Subclauses 3(4) and 3(5) specify action to neutralise potential advantages associated with exemption from taxation liability, access to capital at concessional rates, exemption from aspects of business regulation and pricing policies which do not take account of full production costs. 4 Factors relevant to the competitiveness of an enterprise but unrelated to ownership — such as size, management and staff skills, location and strategy — fall outside the scope of competitive neutrality policy. 7 National Competition Council The broad resource allocation objective specified in the CPA underscores the need for reforms, where relevant, in relation to all of the factors listed in Box 1. Indeed, the corporatisation model suggested in the CPA explicitly recognises the need for reforms additional to those specified in subclauses 3(4) and 3(5). Accordingly, for every government business where competitive neutrality reform is thought to be justified, every factor which contributes to an ownership-related advantage or disadvantage should be identified and, to the extent practicable, the advantage or disadvantage eliminated. In some cases, it may be necessary to employ proxies (for example, the tax equivalent regime suggested in the CPA or the arrangements for performance monitoring specified in the corporatisation model developed by the Government Trading Enterprise National Performance Monitoring Taskforce) where advantages or disadvantages cannot be removed directly, or where the transactions cost of their removal is too high. 3 Enterprises And Activities Covered Subclause 3(4) of the CPA specifies actions to be taken in respect of significant State, Territory and local government business enterprises classified by the Australian Bureau of Statistics (ABS) as ‘public trading enterprises’ or ‘public financial enterprises’. Subclause 3(5) specifies actions to be taken in respect of other significant government business activities of governments. Public trading enterprises and public financial enterprises Public trading enterprises and public financial enterprises are defined by the ABS as government undertakings which aim at recovering most of their expenses by deriving revenue from sales of goods and services (ABS 1994, p. 21). Entities categorised as public trading enterprises by the ABS include major commodity marketing authorities, electricity authorities, railway authorities, port authorities and, especially at the local government level, 8 Competitive neutrality reform water and sewerage businesses. Government-owned banks and insurance offices are examples of public financial enterprises. Public trading and financial enterprises have a range of legal forms, including departments of State, statutory authorities and companies. They may be managed by an independent board or report directly to the relevant Minister. The public trading enterprises and public financial enterprises classified on the ABS Public Finance Units Register are listed at Appendix D. Where information is available, the Council has updated the list provided by the ABS to reflect recent organisational restructures within jurisdictions. Business activities which are part of a broader range of agency functions There is no listing of government business activities equivalent to the ABS classification of public trading and financial enterprises. The CPA itself offers no guidance as to what might constitute such a business activity. It is not always easy to identify businesses which are part of a broader government agency. For instance, some operate on a commercial basis — they trade in a market — while some are predominantly tax funded. Some provide goods and services free of charge or at prices below costs of production, and sometimes sell only to government. Others have no identifiable board of management. All this suggests that the business activities of government agencies should be thought of as activities which are usually undertaken to earn revenue and recover costs, or are potentially or usually undertaken in competition with private firms or individuals. Accordingly, the interpretation of ‘government business activity’ for the purpose of subclause 3(5) should extend beyond those activities which are actually substantially funded by revenue and earn profits; to include the business activities of government agencies which could be undertaken on a commercial basis, but currently might not be. For example, a government bus service which earns little income as a proportion of costs (and is therefore substantially tax-funded) should be regarded as a business activity. However, all such activities will not necessarily fall within the ambit of competitive neutrality policy. A relevant factor is the right of governments to make policy decisions concerning the production of goods and delivery of 9 National Competition Council services. Thus, a business activity might operate on a commercial basis in one jurisdiction but be part of general government in another. For this reason, it is possible that the scope of application of competitive neutrality policies may differ among jurisdictions, depending on the policy decisions each has made. The bottom line, however, is that Australia will receive maximum benefit if competitive neutrality reforms are applied whenever they are expected to generate net benefits to the community, including in currently non-contested areas of government business activity. What is a ‘significant’ business activity? The CPA obliges governments to consider competitive neutrality reforms where they judge a business enterprise or activity to be ‘significant’. The intent of this qualification is to focus reform on those businesses where the benefits to the community will be greatest. However, the CPA does not formally define the term significant. One of the consequences of this is that some governments are proposing an approach which identifies significant businesses according to particular threshold criteria (such as turnover, income or employment). Identifying significant government businesses according to size alone carries a danger that businesses which are significant in their particular markets, but nevertheless below some arbitrary threshold size, will be excluded from consideration of pro-competitive reform. Accordingly, the Council sees value in a broader test of significance, involving consideration of the impact of an activity on its relevant market. Such an approach is more consistent with the spirit and intent of the April 1995 competition policy agreements. Judging significance in terms of the business’s impact on its markets would involve various considerations, for example, about the business’s size, its influence on the relevant market, its contribution to the local, state or national economy, the resources it commands and the effect of any poor performance. Size would play a part, but more appropriately in establishing reform priorities in order to achieve the larger reform gains as early as possible. 10 Competitive neutrality reform Government business activities that should be considered for competitive neutrality reform Examples of business activities which Australian governments have considered for pro-competitive reform in recent years are myriad. They include electricity supply, railroads, ports, aviation authorities, water and sewerage, gas pipelines, gambling and lottery services, housing trusts, marketing boards and authorities, abattoirs, land development authorities, forestry operations, vehicle fleet management, cleaning services, refuse collection, construction services, maintenance operations, legal services, financial services; information technology functions, human resource management, printing services, commercial activities of road authorities, hospital services such as laundering, cleaning and catering and office accommodation and furniture supply. These businesses are indicative of the types of activities which should be exposed to competitive neutrality reform. While analysis of governments’ recent reform programs reveals these activities as expected reform candidates, governments would assist the competitive neutrality reform process by identifying at an early stage the businesses, including those at local government level, which they intend to reform or review. What would help would be publication of a comprehensive listing of government businesses by all government owners of those businesses. Some governments have provided such a listing in their June 1996 policy statements. Determining when reform is appropriate Decisions as to whether particular CPA reforms are appropriate are guided by governments’ assessments that the benefits of reform outweigh the costs.5 In essence, governments are not obliged to implement competitive neutrality reforms if they judge that the costs of doing so are likely to outweigh the benefits. Without limiting the factors that could be considered in assessing benefits and costs, the CPA provides for consideration of matters relating to the interests of consumers, the competitiveness of business generally, ecologically sustainable development, social welfare and equity (including 5 CPA subclause 1(3). 11 National Competition Council community service obligations), industrial relations, occupational health and safety and access and equity, economic growth and regional development, and the efficient allocation of resources. In assessing whether reform is appropriate, it is important to keep in mind that the benefits from improvements in resource allocation are likely to be distributed across the economy. In contrast, the costs of reform are generally concentrated in particular areas. For example, a government enterprise required to make tax equivalent and debt guarantee payments may find that its ability to compete is reduced and that, as a result, it may be forced to reduce its production and staff levels. However, this may create an opportunity for other businesses to carry out work previously conducted by the government enterprise leading to job opportunities elsewhere in the economy. Appropriate account should be taken of the more widely dispersed benefits from increased competition. 4 Mechanisms For Implementing Competitive Neutrality The CPA encourages governments to corporatise their significant business enterprises and business activities. Where the cost of corporatisation is not justified, the CPA specifies that governments ensure that the prices of goods and services produced by significant government businesses reflect full attribution of production costs and the imposition of regulations equivalent to those applying in the private sector. In addition to the reforms specified in the CPA, governments over the past decade have also used mechanisms such as competitive tendering and contracting, franchising and privatisation to reform their business involvement. The CPA is silent in relation to these reforms. Nonetheless, the CPA does not rule out these approaches if they are seen by governments to meet their needs. This section first provides a summary of the main reforms pursued by governments in recent years, prior to examining the CPA proposals in more detail. Lastly, the section addresses the concept of competitive tendering and contacting. The inter-relationship of competitive tendering and contracting 12 Competitive neutrality reform and competition policy is a matter which is often raised with the Council, particularly by people with an interest in local government businesses. 〉 Corporatisation of a government business activity involves separating the business from the day to day control of government, with the aim of imposing commercial pressures similar to those faced in the private sector. The enterprise may be constituted as a government-owned enterprise under the Corporations law, or as a statutory authority under its own or umbrella legislation. Reform of specific advantages and disadvantages is a less comprehensive approach to the reform of government enterprises which directly targets the source of particular competitive advantages and disadvantages. This includes the removal of exemptions from competitive conduct rules and other regulations to which the private sector is normally subject, as well as the application to government enterprises of the full range of taxes and charges. Pricing reforms aim to neutralise any competitive pricing advantages that a government enterprise may enjoy relative to its private sector competitors. This is achieved by ensuring that production costs incurred by a government business activity are reflected in the prices charged for its goods and services, that is, prices are set on a commercial basis. These costs include direct costs such as wages and raw materials and a proportion of indirect costs such as office overheads and depreciation. In addition, prices should reflect implicit costs such as debt guarantee fees, tax equivalent payments, and a commercial rate of return. Competitive tendering and contracting is a process of opening up the provision of goods or services, which typically have previously been provided internally, to outside suppliers. The contracting agency calls for tenders to provide a good or service from suppliers outside, and where appropriate inside, the agency. Tenders are evaluated on the basis of selection criteria which should encompass both price and quality considerations. Where a government agency enters into a contract with an external supplier for the provision of goods and/or services which typically have been provided internally, the good or service is said to be contracted out. 〉 〉 〉 13 National Competition Council 〉 Franchising involves tendering out the management of government business assets for a fixed period. The government retains ownership of the assets and the right to operate the assets is awarded to the business with the lowest reasonable costs, subject to considerations of management capacity and supply quality. Privatisation is the process by which the ownership of a government asset or business is transferred to the private sector. This action ensures that all competitive advantages or disadvantages associated with government ownership are eliminated. The CPA does not advocate either public or private ownership of business activities. 〉 Corporatisation Corporatisation aims to improve the efficiency and performance of government firms through the introduction of commercial disciplines similar to those faced by private businesses. The Independent Committee of Inquiry into a National Competition Policy (the Hilmer Report) saw corporatisation as an important means of applying competitive neutrality principles to government businesses. It identified key principles for the corporatisation of government business enterprises.6 These principles, which underpin the corporatisation model proposed in the CPA, are: 〉 clarity and consistency of objectives — requiring governments to develop clear statements of objectives for their enterprises, including guidance on trade-offs where objectives conflict; management authority — requiring clear separation of decision making and accountability between Boards and owner governments for commercial, social and regulatory objectives; 〉 6 The principles identified in the Hilmer Report were based on a model developed by an intergovernmental taskforce on the reform of government trading enterprises. The taskforce model was intended as a statement of the principles which should be applied when corporatising government businesses rather than a prescription as to how corporatisation should occur. The elements of the taskforce’s corporatisation model are outlined in Appendix B. Some governments have developed corporatisation models which could also form the basis for meeting the competitive neutrality obligations in the CPA. 14 Competitive neutrality reform 〉 〉 effective performance monitoring by the owner government — to ensure that the Board and management are achieving commercial goals; effective performance-related rewards and sanctions — in order to create incentives for good performance by the Board and management; and competitive neutrality — incorporating the attainment of competitive neutrality in both input and output markets and effective natural monopoly regulation. 〉 Corporatisation can be viewed as an extension of the commercialisation approaches adopted by all Australian governments in recent years. While commercialisation can encompass most elements of the corporatisation model — clear business objectives, management independence and accountability, independent performance monitoring, competitive neutrality and an effective system of rewards and sanctions — there are some differences. For example, commercialised entities usually remain as business units within government departments, while corporatised agencies are separate legal entities distinct from their owner-governments and are normally corporatised under legislation. This is an important difference. It tends to strengthen the commercial focus of the organisation, and to make it less subject to the political direction of governments. Thus, corporatisation enhances the prospect of government businesses operating efficiently. Like corporatisation, commercialisation aims to place government businesses within a competitively neutral framework, although commercialisation is arguably a weaker model for this type of reform. In this respect, the strong support given by governments for corporatisation, subject to a test of costs and benefits, through CPA subclauses 3(4) and 3(5)(a) is noteworthy. Reform of specific advantages or disadvantages Reform of three areas of specific advantage and disadvantage is called for in the CPA. In this respect, in addition to the corporatisation of significant government business activities, the CPA specifies imposition of: 15 National Competition Council 〉 〉 〉 full Commonwealth, State and Territory taxes or tax equivalent systems; debt guarantee fees directed towards offsetting the competitive advantages provided by government guarantees; and those regulations to which private sector businesses are normally subject, on an equivalent basis to private sector competitors (although this should not be interpreted to mean removal of regulation applying to a government business enterprise or activity but not to the private sector where the relevant jurisdiction considers the regulation to be appropriate). The general principle underlying the application of a tax equivalent scheme to a government enterprise is that the enterprise should make payments to its owner government equivalent to the liability it would otherwise incur as a private corporation. These payments would need to take account of all Commonwealth, State and Territory taxes and duties including income tax, sales tax, payroll tax, stamp duties, excise duties, and superannuation income tax liabilities. The actual composition of tax equivalent payments will vary across jurisdictions depending on the extent to which the various taxation liabilities apply. The aim of a debt guarantee fee is to eliminate the competitive advantage enjoyed by government businesses as a result of explicit or implicit government guarantees on their borrowings. The fee should be commensurate with the credit risk the enterprise would face if it had no guarantee. Where borrowing is undertaken on the enterprise’s behalf by a central borrowing authority, the effect of any explicit guarantee should be removed and the enterprise charged full commercial rates of interest related to its credit risk in the absence of any guarantee. The actual amount of the fee is usually calculated as the size of the borrowing multiplied by the difference between the interest rate on government borrowings (say the long term bond rate) and the interest rate the enterprise would face if it were to borrow on its own account. It would be expected that, in most cases, the credit risk on borrowings by a stand-alone enterprise would be higher than on (virtually riskless) borrowings by a government. In practice, the removal of competitive advantages through proxies is not always straightforward. Apart from tax equivalent regimes and debt guarantee fees, proxies are likely to be needed to account for the influence of 16 Competitive neutrality reform a range of matters not addressed by direct measures, for example, capital structure and dividend policy, community service obligations, legislative requirements, and prices oversight arrangements. Guidelines addressing the design and implementation of proxy measures necessary to maximise the benefits from competitive neutrality policy would assist the reform process. Pricing reform For those significant government businesses where corporatisation is judged to be inappropriate, the CPA specifies reform of pricing arrangements such that prices for goods and services reflect the full attribution of all costs incurred by the business in the course of production.7 Attribution of costs should not only take account of direct costs, such as the cost of labour and raw materials, but also the range of overhead costs borne by the parent agency. In addition, the CPA requires that the implicit cost of tax equivalents, debt guarantee fees and adherence to regulations be incorporated in price setting. The objective in establishing an appropriate benchmark for full cost pricing is to measure the real resource or opportunity cost of producing the good or service in question. In principle, marginal cost provides a useful pricing benchmark for commercialised government businesses. Marginal cost is the cost of producing one more unit of a good or service (the incremental cost), or expressed another way, the money that would be saved by producing one less unit (the avoidable cost). Setting prices on a marginal cost basis is generally consistent with competitive neutrality as it ensures that only those costs which are actually varied by changes in the output of a particular government business activity are incorporated in pricing strategies. Unfortunately, marginal cost is often difficult to measure, and approaches which proxy marginal cost often need to be employed. Under the avoidable cost proxy, direct costs such as labour and raw materials (which vary with output and could consequently be avoided if the government business no longer produced the output), would be incorporated. A proportionate share of implicit costs, such as taxation liabilities, borrowing fees and a commercial 7 CPA subclause 3(5)(b). 17 National Competition Council return, would also need to be included as they could be avoided if production ceased. Some proportion of overheads, such as a payroll costs and personnel staff, should also be part of the avoidable cost calculation. However, some other overhead costs are ‘common’ across all goods and services produced by a government agency and cannot be avoided even if a particular good or service is not produced.8 For example, costs such as senior management or generic agency advertising may remain fixed irrespective of the level of business activity. Thus, for the purposes of pricing under competitive neutrality, it may be appropriate not to allocate a proportion of these common costs to particular government business activities, where to do so would impose on the business activity an ownership-related competitive disadvantage. Arguably, an upper bound to the ‘full cost’ price of goods and services provided by public enterprises is set by the concept of stand alone cost. Stand alone costs are the costs of providing a good or service in isolation from other products, that is the existing costs of the enterprise less those costs which would be avoided if all other goods and services were not produced. However, government businesses typically use common facilities to provide a number of different services, and as a result, the cost to the business of supplying services simultaneously is less than the sum of the costs of supplying the services in isolation from each other. Consequently, using stand alone cost as a pricing benchmark will generally not capture the reduction in costs available from economies of scale and scope. Noting these considerations, further discussion between jurisdictions in relation to the application of the CPA full cost pricing principle, including in relation to government monopoly businesses, would assist appropriate implementation of competitive neutrality reform. It would particularly assist the reform process if there was a common understanding across jurisdictions as to the principles underlying full cost pricing. 8 Common costs are costs spread across more than one output which would still be incurred in total even if only one output were produced. 18 Competitive neutrality reform Competitive tendering and contracting Provision of goods and/or services by government agencies through a competitive tendering process may or may not involve bids from an in-house provider. Whether or not a competitive tendering and contracting process is employed, and whether or not in-house bids are considered, is a policy decision for governments. Competitive tendering and contracting is not a requirement under the CPA One consideration for governments is the potential for improvements in the delivery of goods and services. This may be encouraged through the range of criteria used to determine successful tenderers including price, service or product quality, timeliness, efficiency and use of local materials or labour. While recognising that competitive tendering and contracting is not required under the CPA, the process nonetheless involves some important competitive neutrality considerations. First, where a robust tender process results in a tender being awarded to an external party, any net competitive advantage associated with public ownership is necessarily eliminated in relation to the tendered activity. Second, where an in-house team participates in the tender process, maximisation of potential benefits relies on the application of competitive neutrality. In essence, competitive neutrality does not preclude bidding by inhouse providers, but it does require that the in-house bidder does not have an unfairly advantaged position relative to its external competitors. In practice, it will require the in-house bidder to apply (at a minimum) the full cost attribution model. It is also likely to involve the creation of physical and informational barriers separating the bidding team from those responsible for purchasing services. Such barriers aim to place the in-house bidder in a position equivalent to external parties in terms of access to information and influence over the tender evaluation process and on-going contract management. 19 National Competition Council 5 Community Service Obligations One matter which has attracted a great deal of community interest in considering competition reform is the provision of community service obligations (CSOs). CSOs are goods and services which government businesses are required or expected to supply to certain sections of the community on a non-commercial basis.9 They generally relate to governments’ broader policies or social goals. Common examples include concession fares for public transport travel, rebates on utility bills to low income consumers and the provision of services in rural areas at prices below the economic cost of delivery. The CPA places an obligation on governments to address CSO issues in implementing competitive neutrality principles. In particular, the means by which CSOs are funded is an important competitive neutrality issue. Governments in Australia have typically funded CSOs through a mix of cross-subsidies and acceptance of reduced rates of return, lessening the transparency of the true cost of the CSO and requiring restrictions on competition. CSOs are relevant in considering competitive neutrality reform because they can provide both a competitive disadvantage and a competitive advantage. A CSO funded through a cross-subsidy will usually constitute a competitive disadvantage for a government enterprise as it represents an additional cost which a competitor may not be required to bear. On the other hand, crosssubsidies usually require regulatory barriers to protect the profitable markets of government enterprises from competition in order to facilitate the funding of CSOs. Cross-subsidisation, by creating pricing distortions which can encourage under-consumption of high-priced goods and services and over-consumption of those which are ‘free’ or subsidised, is inconsistent with the resource allocation objective of competitive neutrality policy. Furthermore, the objectives of corporatisation — in particular, the need for clear commercial objectives, effective performance monitoring and competitive neutrality in 9 The SCNPMGTE defined a CSO as arising when a government specifically requires a public enterprise to carry out activities relating to outputs or inputs which it would not elect to do on a commercial basis, and which the government does not require other businesses in the public or private sectors to generally undertake, or which it would only do commercially at higher prices (SCNPMGTE 1994). 20 Competitive neutrality reform input and product markets — also support a move away from funding CSOs through cross-subsidies and regulatory restrictions on competition. Research by the Steering Committee for National Performance Monitoring of Government Trading Enterprises (SCNPMGTE) points to the desirability of governments directly funding CSOs (SCNPMGTE 1994). The SCNPMGTE saw the primary advantage of direct funding as providing for greater transparency in the provision of CSOs. Direct funding necessitates the clear identification of each CSO and its associated cost, encouraging review of the merit of continuing or enhancing the CSO. In addition, direct funding of CSOs relieves pressure on government businesses to finance CSOs through cross-subsidies, reducing the likelihood of inappropriate allocation of resources. Funding CSOs directly can also create the potential for competition between suppliers of goods and services. For example, concession travel on buses is a CSO which could equally be provided by a private bus operator (through a competitive tendering process) or a public operator. One outcome of this may be that people receiving the benefit of a CSO are no longer restricted to one supplier, and can choose the supplier who provides the most suitable good or service. Two methods of estimating the cost of CSOs enjoy wide recognition. Under the fully distributed costs method, all costs incurred by an enterprise are allocated across all services provided. Because these costs include costs which arise directly as a result of providing the CSO and costs which would have been incurred even if the CSO had not been provided, the fully distributed costs approach may overestimate the true cost of delivering the CSO. Consequently, it might result in overpayment of CSO providers. The other approach to costing CSOs is the avoidable cost method. As discussed earlier in relation to pricing reform, this approach focuses on those costs which would be avoided if a good or service is not provided. Accordingly, avoidable cost is likely to provide a better estimate of the cost of a CSO. The appropriate treatment of CSOs raises some significant questions for governments. Competitive neutrality reform does not mean that government businesses should not provide CSOs. However, the way that governments identify, cost and fund CSOs are important competitive neutrality issues, and there is benefit in continued examination of jurisdictions’ approaches to these matters. Specifically, the funding of CSOs via cross-subsidies depending on restrictions to competition needs to remain a central focus. 21 National Competition Council 6 Complaints About Government Businesses Under the CPA, the Commonwealth, States and Territories agreed to publish a competitive neutrality policy statement which incorporates a mechanism for handling complaints about matters relating to the implementation of competitive neutrality. This mechanism is an important aspect of competitive neutrality reform. If the discipline of competition is to be used in a constructive way, it is necessary that any party which considers it is being adversely affected by advantages it perceives are available only to its government-owned competitors can have its objections dealt with effectively. The objective of the complaints mechanism is to provide a means for interested parties to pursue concerns regarding government policy insofar as it confers competitive advantages or disadvantages on government-owned businesses. The mechanism is not intended to address concerns against the independent actions or behaviour of individual government businesses, as such concerns can in general be pursued through avenues such as industry regulators, the Trade Practices Act, ombudsmen and the court system. As with many of the National Competition Policy reforms, the intergovernmental agreements establish the principle of a complaints mechanism rather than specify its form. While each government is free to develop its own approach to handling complaints about the implementation of competitive neutrality, there are certain characteristics which are desirable in a complaints mechanism. 〉 A complaints mechanism should incorporate a first-step filter to quickly address simple misunderstandings and to help identify frivolous complaints. There should be user friendly access so that complainants are not unduly deterred and complaints are considered quickly. The arbitrator of genuine complaints should have independence from the enterprise about which the complaint is made. This does not necessarily require independence from the owner government, or relevant Minister, as long as the designated arbitrator has a clear responsibility to be fair and independent. 〉 〉 22 Competitive neutrality reform 〉 Complainants and the relevant government business should receive formal advice as to the outcome of complaints, including reasons supporting decisions on complaints in writing. Where the substance of a complaint is found to exist, action to rectify problems should be taken promptly. 〉 There is also a strong case for complaints mechanisms to be accessible in respect of competitive neutrality complaints concerning all governmentowned businesses, not just those businesses to which competitive neutrality reforms are applied as government policy. This approach has considerable attraction given the flexibility available to governments to determine which of their business activities will be subject to competitive neutrality reform. Some governments are looking at extending the reach of their complaints mechanisms beyond those businesses to which competitive neutrality policy is formally applied. While there is a need for care in relation to the expectations of complainants, this broader approach would point to potential competitive neutrality problems earlier and help identify businesses for future reform. 7 Reporting Progress To assist accountability, and to enable the Council to assess progress for the purpose of the competition payments, all governments agreed to document their progress with the implementation of competitive neutrality policy. This has two components. First, governments agreed to produce a policy statement on competitive neutrality. Second, governments agreed to report annually on their progress in the implementation of competitive neutrality. Competitive neutrality policy statement Each party to the CPA undertook to publish a policy statement on competitive neutrality by June 1996. Subclause 3(8) of the Agreement specified that policy statements were to include an implementation timetable and a mechanism for dealing with complaints in relation to competitive neutrality 23 National Competition Council issues, although the complaints mechanism did not need to be formally established as at June 1996. All Australian governments have published their competitive neutrality policy statements. Copies of the statements are available by contacting the relevant State or Territory agency.10 Annual progress reports Each party to the CPA has also undertaken to publish an annual report outlining its progress in achieving the broad policy objectives outlined in subclause 3(1) and the minimum reforms specified in subclauses 3(4) and 3(5). The annual report is to include allegations (if any) of non-compliance with competitive neutrality policy. Although not explicitly stated in the CPA, the Council would envisage that allegations of non-compliance would be considered by the complaints body with details of such complaints, and of the actions taken by jurisdictions in respect of complaints, provided in annual reports. 8 The National Competition Council’s Role Under the Agreement to Implement the National Competition Policy and Related Reforms (Implementation Agreement), the Commonwealth is to provide National Competition Policy payments to each State or Territory conditional upon that State or Territory making satisfactory progress with implementation of specified reforms. In relation to competitive neutrality, satisfactory progress is defined in terms of ‘giving effect to the Competition Policy Intergovernmental Agreements and, in particular, meeting the deadlines prescribed therein’. The Implementation Agreement provides a role for the National Competition Council to assess the progress made by each jurisdiction with the 10 Contact details are provided at Appendix C. 24 Competitive neutrality reform implementation of competitive neutrality prior to 1 July 1997, 1 July 1999 and 1 July 2001. The Council’s assessment will form the basis of its recommendations to the Commonwealth Treasurer regarding the granting of the competition payments. Governments’ competitive neutrality policy statements and reports of progress will be important in the Council’s assessment. The Council has commenced examining jurisdictions’ policy statements to ensure they offer a satisfactory framework for reform against which progress on implementation can be assessed. In consultation with each State and Territory, the Council is now focussing on the scope and nature of proposed reforms (that is, the business activities identified for reform and the reforms applied), the form of the complaints mechanism and the timetable provided for reform. Governments’ annual progress reports will be an important tool in the Council’s assessments of progress. While the Intergovernmental Agreements do not specify what constitutes satisfactory progress, it is likely that the Council will judge a government’s progress on competitive neutrality sufficient if (i) the Council is satisfied with that government’s proposed reforms, timetable and complaints mechanism, and (ii) that government’s annual progress reports demonstrate that the reform proposals are being achieved in a timely fashion consistent with the intent and spirit of the CPA. 9 The Next Steps All governments have made considerable progress in recent years — most notably through commercialisation, corporatisation and privatisation — in addressing issues relating to their involvement in business. Coordinated implementation of competitive neutrality principles through the National Competition Policy represents a new stage in this element of competition policy reform. Governments have taken the first step in formalising their approaches to implementing competitive neutrality under the National Competition Policy by publishing policy statements in line with their CPA obligations. 25 National Competition Council Implementation of governments’ reform commitments and the Council’s assessment of implementation performance are the next steps in this process. In assessing progress with the implementation of National Competition Policy, the Council has encouraged governments to take a broad approach to reform consistent with the spirit and intent of the April 1995 competition policy agreements. In this light, there are several observations about the preferred approach to the competitive neutrality issues identified in the introduction to this paper that are worth making. First, governments would maximise the benefits from reform by identifying the businesses, including those at local government level, to which they intend to apply competitive neutrality reforms. Ideally, this would be a comprehensive listing reflecting the presumption in the CPA favouring reform. Listing the businesses scheduled for reform at an early stage would have the advantage of providing greater certainty for both the management of targeted businesses and their customers. Governments’ identification of businesses for reform according to size is understandable from the viewpoint of prioritising reforms in order to achieve larger results as early as possible. However, identification of ‘significant’ businesses according to size alone may see many government business activities which have a significant influence on the market in which they operate exempted from reform. The possibility that size thresholds may arbitrarily exclude significant government businesses from consideration of competitive neutrality reform is a major concern. Certainly, the leadership example of larger gains as the driver of an overall cultural change within government businesses is important. However, it is also important to avoid the feeling on the part of organisations below an arbitrary threshold size that they are exempt from reform. Second, governments need to clearly identify the competitive neutrality issues that they will be addressing. They should consider direct removal of advantages and disadvantages where relevant, or the use of proxies (such as tax equivalent systems) where the transaction costs of direct removal are too high, to ensure that government businesses face the same competitive disciplines as other resource users. Third, the nature of the action which will satisfy governments’ obligations under the CPA requires continued development. The CPA states that 26 Competitive neutrality reform significant government business activities should be corporatised where the cost of doing so can be justified, and actions taken to impose taxes or tax equivalent systems, debt guarantee fees and apply those regulations to which private businesses are normally subject. Where corporatisation is not warranted on an analysis of community costs and benefits, the principle of full cost attribution is to be applied in pricing goods and services. The costs which might be included under this principle were discussed earlier in this paper. The reform process would benefit from examination of how full cost pricing principles might be consistently applied across jurisdictions. Similarly, the adoption of a common approach to the identification and costing of CSOs — an objective which has been the subject of some research by governments — would be valuable. More discussion about other means by which governments might satisfy their CPA obligations would also be useful. For example, it is not the case that competitive neutrality reform requires, as a matter of course, that services be ‘contracted out’. However, opening service provision to competitive tender is clearly one means governments might adopt to satisfy the requirements of the CPA, although it will not achieve the benefits anticipated if in-house teams are not exposed to competitive neutrality disciplines. Similarly, privatisation is not a requirement of the CPA, but it could be a means by which governments choose to satisfy their competitive neutrality obligations. Finally, the mechanism for handling complaints about competitive neutrality matters should ensure a fair hearing for genuine complainants. The confidence of external parties in the arrangements instituted by governments is critical to the success of competitive neutrality reform. In this respect, it is important that the mechanism for handling complaints provides for public access, independence from the activity which is the source of the complaint and formal advice of outcomes to affected parties. It would also help if governments were to offer a mechanism whereby competitive neutrality complaints could be raised in general, rather than to confine considerations to areas where they have implemented competitive neutrality arrangements. 27 National Competition Council Appendix A: Clause 3 Of The Competition Principles Agreement 3.(1) The objective of competitive neutrality policy is the elimination of resource allocation distortions arising out of the public ownership of entities engaged in significant business activities: Government businesses should not enjoy any net competitive advantage simply as a result of their public sector ownership. These principles only apply to the business activities of publicly owned entities, not to the non-business, non-profit activities of these entities. (2) (3) Each Party is free to determine its own agenda for the implementation of competitive neutrality principles. A Party may seek assistance with the implementation of competitive neutrality principles from the Council.11 The Council may provide such assistance in accordance with the Council’s work program. Subject to subclause (6), for significant Government business enterprises which are classified as “Public Trading Enterprises” and “Public Financial Enterprises” under the Government Financial Statistics Classification: (a) the Parties will, where appropriate, adopt a corporatisation model for these Government business enterprises (noting that a possible approach to corporatisation is the model developed by the inter-governmental committee responsible for GTE National Performance Monitoring); and the Parties will impose on the Government business enterprise: (i) (ii) (iii) full Commonwealth, State and Territory taxes or tax equivalent systems; debt guarantee fees directed towards offsetting the competitive advantages provided by government guarantees; and those regulations to which private sector businesses are normally subject, such as those relating to the protection of the environment, and planning and approval processes, on an equivalent basis to private sector competitors. (4) (b) (5) Subject to subclause (6), where an agency (other than an agency covered by subclause (4)) undertakes significant business activities as part of a broader range of functions, the Parties will, in respect of the business activities: 11 For the purposes of this Agreement, Council means the National Competition Council. 28 Competitive neutrality reform (a) (b) where appropriate, implement the principles outlined in subclause (4); or ensure that the prices charged for goods and services will take account, where appropriate, of the items listed in paragraph 4(b), and reflect full cost attribution for these activities. (6) Subclauses (4) and (5) only require the Parties to implement the principles specified in those subclauses to the extent that the benefits to be realised from implementation outweigh the costs. Subparagraph (4)(b)(iii) shall not be interpreted to require the removal of regulation which applies to a Government business enterprise or agency (but which does not apply to the private sector) where the Party responsible for the regulation considers the regulation to be appropriate. Each Party will publish a policy statement on competitive neutrality by June 1996. The policy statement will include an implementation timetable and a complaints mechanism. Where a State or Territory becomes a Party at a date later than December 1995, that Party will publish its policy statement within six months of becoming a Party. (7) (8) (9) (10) Each Party will publish an annual report on the implementation of the principles set out in subclauses (1), (4) and (5), including allegations of noncompliance. 29 National Competition Council Appendix B: Characteristics Of A Fully Corporatised Government Trading Enterprise The corporatisation model proposed in subclause 3(4)(a) of the CPA was prepared by the Taskforce on Other Issues in the Reform of Government Trading Enterprises in April 1991. The Taskforce’s objective was to establish a theoretical benchmark incorporating general principles about the reform of government trading enterprises. Application of the Taskforce model is intended to be informed by the experience of governments in the reform of their trading enterprises and the problems they encounter. Accordingly, the model is not a prescription as to how corporatisation must occur, but rather a statement of the principles which should be put in place when corporatising government businesses. The elements of the Taskforce’s corporatisation model are outlined below. 1 〉 Clarifying objectives Government enterprises should have a clear statement of the objectives which their government wishes them to pursue, as well as clear guidance on trade-offs where commercial, social and regulatory objectives conflict. A clear commercial objective, maximising the value of the government’s investment in the enterprise, should be a priority. Social policy objectives (CSOs) should be the subject of explicit contracts between the owner government and the enterprise. The delivery of CSO services should be costed on a fully commercial basis, funded by the government budget and open to competitive tender, to ensure cost minimisation. Policy or regulatory functions should be separated and removed to another agency. Ministerial responsibility for commercial performance of an enterprise should be vested separately from responsibility for regulatory functions and responsibility for CSO contracts. 〉 〉 〉 〉 30 Competitive neutrality reform 2 〉 Managerial responsibility, authority and autonomy Board members should be appointed based on their experience, knowledge, skills and, therefore, expected contribution. The Board should determine commercial objectives while Ministers should set social or regulatory objectives. The owner government should determine ‘core’ activities for the enterprise, an overall dividend policy, target rates of return and capital structure. In all other areas of the enterprises’ conduct and organisation the owner government should operate at arm’s length from the Board and management. The Board and management should have full responsibility and accountability for decisions affecting enterprise performance, including terms and conditions of employment, enterprise structure, and implementing investment and borrowing programs. Effective performance monitoring by the owner-government Providing the Board and management with the flexibility to manage day to day operations in order to achieve commercial goals ensures that they can be held personally accountable for performance. Independent and objective performance monitoring regime required for public enterprises to substitute for debt and equity market assessment of private firms. Monitoring should focus primarily on commercial performance. Performance targets, disclosure and reporting requirements should be clearly specified. Corporate (3-5 year) and business (1 year) plans should underpin the monitoring process. Central monitoring unit with specialist expertise should be established to report to shareholder Ministers. 〉 〉 3 〉 〉 〉 〉 〉 31 National Competition Council 4 〉 Effective rewards and sanctions related to performance Performance monitoring processes are a basis for incentive systems to encourage and reward good performance and penalise poor performance. Rewards and sanctions must be pre-defined against agreed performance targets, understood and strongly applied to be effective performance enhancers. Reward structure should encompass salary, non-cash rewards, bonus schemes etc. Sanctions may include tighter reporting and oversight arrangements, reducing scope of enterprise activities, removal of discretion over investment and borrowing decisions, salary reviews etc. Attaining competitive neutrality in input markets Government enterprises should not face special competitive advantages or disadvantages in the cost of inputs relative to private sector enterprises because of their public ownership. Ensuring competitive neutrality in input markets will involve: 〉 Applying an explicit fee for the existence (or perception) of a government guarantee of debt funding to eliminate the interest rate advantage associated with continuing government ownership. The fee should be commensurate with the credit risk the enterprise would face without a guarantee. Costing government equity on the same basis as that supplied by private investors to privately owned enterprises, that is, ie at an equivalent rate of return requirement to a private enterprise with similar risk profile. Removing any unique restrictions on labour resources (eg award pay and conditions) which are particular to government enterprises. Ensuring government enterprises face the same taxation (or taxation equivalent) arrangements on their commercial operations as a private enterprise. 〉 〉 5 〉 〉 〉 〉 32 Competitive neutrality reform 6 〉 〉 Attaining competitive neutrality in output markets Any protective barriers which reduce the degree of competition faced by government enterprises in product markets should be removed. Where there is evidence of market failure, any regulatory regime should target the relevant failure and the enterprise should be subject to the same legislative regulations as are equivalent private sector enterprises, eg in areas such as environmental regulation. Effective natural monopoly regulation The removal of legislative barriers to competition may not result in a more competitive operating environment in certain markets because of the existence of natural monopoly conditions (eg electricity transmission networks) or because long term regulatory barriers have provided the incumbent government enterprise with significant advantages. This situation requires a public policy framework to regulate government enterprises such that natural monopoly powers cannot be abused. In particular, structural regulation measures should be in place to ensure that unavoidable monopoly in some markets (eg transmission grids) does not result in unnecessary monopoly in related, but competitive, markets (eg generation). Conduct regulation (such as rate of return regulation or price control) is a heavy-handed approach which undermines incentives to produce output at the lowest possible cost and should be avoided. 7 〉 〉 33 National Competition Council Appendix C: National Competition Policy Contacts To obtain copies of governments’ policy statements on competitive neutrality, please contact the relevant Commonwealth, State or Territory competition policy unit. For information about the National Competition Policy reform process, please contact the National Competition Council. National Competition Council Level 12 Casselden Place 2 Lonsdale Street MELBOURNE VIC 3000 Telephone: 03 9285 7474 Facsimile: 03 9285 7477 Email shanec@c031.aone.net.au New South Wales Inter-Governmental Relations Unit The Cabinet Office 15th Floor State Office Block Macquarie Street SYDNEY NSW 2000 Telephone: 02 9228 4324 Facsimile: 02 9228 4408 Commonwealth Commonwealth Policy Branch Commonwealth Treasury Block B, Parkes Place PARKES ACT 2601 Telephone: 06 263 3887 Facsimile: 06 263 2937 Victoria Economic Development Branch Department of Premier and Cabinet 1 Treasury Place MELBOURNE VIC 3002 Telephone: 03 9651 5143 Facsimile: 03 9651 6457 34 Competitive neutrality reform Queensland National Competition Policy – Implementation Unit Queensland Treasury 100 George Street BRISBANE QLD 4000 Telephone: 07 3224 5673 Facsimile: 07 3229 3501 South Australia Strategic Policy and Cabinet Division Department of the Premier and Cabinet State Administration Centre 200 Victoria Square ADELAIDE SA 5000 Telephone: 08 8226 3525 Facsimile: 08 8226 2211 Northern Territory Economic Services Northern Territory Treasury 6th Floor 38 Cavenagh Street DARWIN NT 0801 Telephone: 08 8999 7406 Facsimile: 08 8999 6446 Western Australia Competition Policy Unit Treasury Level 13 197 St George’s Terrace PERTH WA 6000 Telephone: 09 222 9222 Facsimile: 09 222 9914 Tasmania Economic Policy Department of Treasury and Finance Franklin Square Offices Murray Street HOBART TAS 7000 Telephone: 03 6233 3100 Facsimile: 03 6223 2755 Australian Capital Territory Office of Financial Management Chief Minister’s Department Level 1, ACT Administration Centre 1 Constitution Avenue CANBERRA CITY ACT 2600 Telephone: 06 207 0280 Facsimile: 06 207 0267 35 National Competition Council Appendix D: Public Trading Enterprises And Public Financial Enterprises By Jurisdiction The following tables list public trading enterprises and public financial enterprises by jurisdiction. The tables have been derived from the ABS Public Finance Units Register for Commonwealth, State, Territory and local government public enterprises.12 Approximately 720 enterprises were listed on the register in December 1995. The Council has revised the register where governments have advised it of changes to their organisations. However, as restructuring, corporatisation and privatisation are continuing, the register will require regular updating. The terms of the CPA do not limit competitive neutrality reform to the government business activities listed below. As the ABS does not hold a listing of government business activities operating within agencies (relevant for the purposes of clause 3), governments will need to identify the business activities additional to those listed below for which competitive neutrality reform is appropriate. Public Trading Enterprises Commonwealth Aboriginal Hostels Ltd Airservices Australia & Subsidiaries Australia Defence Industries Ltd Australian Dairy Corporation Australian Dried Fruits Corporation Australian National Line Commonwealth Australian National Railways Commission Australian Postal Corporation Australian Shipping Commission Australian Technology Group Ltd Australian Wine and Brandy Corporation 12 The ABS Public Finance Units Register may be obtained by contacting the Public Sector Accounts Division, ABS, PO Box 10, Belconnen ACT 2616. 36 Competitive neutrality reform Commonwealth Australian Wool Research and Promotion Corporation Avalon Airport (Geelong) Pty Ltd Defence Housing Authority Federal Airports Corporation Film Australia Pty Ltd National Rail Corporation Snowy Mountains Engineering Corporation Snowy Mountains Hydro-Electric Authority Telstra Corporation New South Wales Barraba Shire Council Water Supply and Sewerage Undertakings Bathurst City Council Gas Supply Undertaking Bathurst City Council Water Supply and Sewerage Undertakings Bega Valley Shire Council Gas Supply Undertaking Bega Valley Shire Council Water Supply and Sewerage Undertakings Bellingen Shire Council Water Supply and Sewerage Undertakings Berrigan Shire Council Water Supply and Sewerage Undertakings Bingara Shire Council Water Supply and Sewerage Undertakings Bland Shire Council Water Supply and Sewerage Undertakings Blayney Shire Council Sewerage Undertaking Bogan Shire Council Water Supply and Sewerage Undertakings Bombala Shire Council Water Supply and Sewerage Undertakings Boorowa Shire Council Water Supply and Sewerage Undertakings Bourke Shire Council Water Supply and Sewerage Undertakings Brewarrina Shire Council Water Supply and Sewerage Undertakings New South Wales Advance Energy Albury City Council Water Supply and Sewerage Undertakings Armidale City Council Gas Supply Undertaking Armidale City Council Water Supply and Sewerage Undertakings Balranald Shire Council Water Supply and Sewerage Undertakings Ballina Shire Council Water Supply and Sewerage Undertakings Barley Marketing Board for the State of NSW 37 National Competition Council New South Wales Broken Hill City Council Abattoir Undertaking Broken Hill Water Board Byron Shire Council Water Supply and Sewerage Undertakings Cabonne Shire Council Gas Supply Undertaking Cabonne Shire Council Water Supply and Sewerage Undertakings Camden Municipal Council Water Supply and Sewerage Undertakings Carrathool Shire Council Water Supply and Sewerage Undertakings Casino Municipal Council Water Supply and Sewerage Undertakings Central Coast (NSW) Citrus Marketing Board Central Darling Shire Council Water Supply and Sewerage Undertakings Cessnock City Council Sewerage Undertakings Cobar Shire Council Water Supply and Sewerage Undertakings Cobar Water Board Coffs Harbour Shire Council Water Supply and Sewerage Undertakings Coleambally Irrigation Area New South Wales Coolah Shire Council Water Supply and Sewerage Undertakings Coolamon Shire Council Sewerage Undertaking Cooma-Monaro Shire Council Water Supply and Sewerage Undertakings Coonabarabran Shire Council Water Supply and Sewerage Undertakings Coonamble Shire Council Water Supply and Sewerage Undertakings Cootamundra Shire Council Gas Supply Undertaking Cootamundra Shire Council Water Supply and Sewerage Undertakings Copmanhurst Shire Council Water Supply and Sewerage Undertakings Corowa Shire Council Water Supply and Sewerage Undertakings Cowra Shire Council Gas Supply Undertaking Cowra Shire Council Water Supply and Sewerage Undertakings Crookwell Shire Council Water Supply and Sewerage Undertakings Crown Land Homesites Culcairn Shire Council Water Supply and Sewerage Undertakings 38 Competitive neutrality reform New South Wales Deniliquin Municipal Council Water Supply and Sewerage Undertakings Department of Housing Department of Public Works State Brickworks Dubbo City Council Abattoir Undertaking Dubbo City Council Gas Supply Undertaking Dubbo City Council Water Supply and Sewerage Undertakings Dungog Shire Council Water Supply and Sewerage Undertakings Elcom Collieries Pty Ltd ENC (Management) Pty Ltd Great Southern Energy (Energy South) Eurobodalla Shire Council Water Supply and Sewerage Undertakings Evans Shire Council Water Undertaking Australian Inland Energy (Far West Energy) First State Power Fish Marketing Authority Forbes Shire Council Water Supply and Sewerage Undertakings Forestry Commission of NSW New South Wales Freight Rail Gilgandra Shire Council Water Supply and Sewerage Undertakings Glen Innes Municipal Council Gas Supply Undertaking Gloucester Shire Council Water Supply and Sewerage Undertakings Gosford City Council Gosford City Council Water Supply and Sewerage Undertakings Goulburn City Council Abattoir Undertaking Goulburn City Council Water Supply and Sewerage Undertakings Grafton City Council Water Supply and Sewerage Undertakings Grain Sorghum Marketing Board for the State of NSW Great Lakes Shire Council Water Supply and Sewerage Undertakings Greater Lithgow City Council Gas Supply Undertaking Greater Lithgow City Council Water Supply and Sewerage Undertakings Greater Taree City Council Sewerage Undertakings Griffith Shire Council Water Supply and Sewerage Undertakings 39 National Competition Council New South Wales Gundagai Shire Council Water Supply and Sewerage Undertakings Gunnedah Shire Council Abattoir Undertaking Gunnedah Shire Council Water Supply and Sewerage Undertakings Gunning Shire Council Water Supply and Sewerage Undertakings Guyra Shire Council Water Supply and Sewerage Undertakings Harden Shire Council Abattoir Undertaking Harden Shire Council Water Supply and Sewerage Undertakings Hastings Municipal Council Water Supply and Sewerage Undertakings Hay Shire Council Water Supply and Sewerage Undertakings Holbrook Shire Council Sewerage Undertaking Homebush Abattoir Corporation Housing Commission of NSW Hume Shire Council Water Supply and Sewerage Undertakings Hunter Water Corporation Huntley Colliery Pty Ltd Inverell Shire Council Gas Supply Undertaking New South Wales Inverell Shire Council Water Supply and Sewerage Undertakings Jerilderie Shire Council Water Supply and Sewerage Undertakings Junee Shire Council Sewerage Undertaking Kempsey Shire Council Water Supply and Sewerage Undertakings Kiama Municipal Council Gas Supply Undertaking Kyogle Shire Council Water Supply and Sewerage Undertakings Lachlan Shire Council Water Supply and Sewerage Undertakings Land Commission of NSW Land Development Working Account Landcom Leeton Shire Council Water Supply and Sewerage Undertakings Lismore City Council Gas Supply Undertaking Lismore City Council Water Supply and Sewerage Undertakings Lockhart Shire Council Sewerage Undertaking Luna Park Amusement Maclean Shire Council Sewerage Undertakings 40 Competitive neutrality reform New South Wales Macquarie Generation Maitland City Council Abattoir Undertaking Manilla Shire Council Water Supply and Sewerage Undertakings Merriwa Shire Council Water Supply and Sewerage Undertakings EnergyAustralia (Met-North Energy) Integral Energy (Met-South Energy) Moree Plains Shire Council Water Supply and Sewerage Undertakings Mudgee Shire Council Water Supply and Sewerage Undertakings Mulwaree Shire Council Water Supply and Sewerage Undertakings Murray Shire Council Water Supply and Sewerage Undertakings Murrumbidgee Region Irrigation Areas Murrumbidgee Shire Council Water Supply and Sewerage Undertakings Murrurundi Shire Council Water Supply and Sewerage Undertakings Muswellbrook Shire Council Water Supply and Sewerage Undertakings Nambucca Shire Council Water Supply and Sewerage Undertakings New South Wales Narrabri Shire Council Water Supply and Sewerage Undertakings Narrandera Shire Council Water Supply and Sewerage Undertakings Narromine Shire Council Water Supply and Sewerage Undertakings Newcastle Port Corporation Newcom Collieries Pty Ltd NorthPower Energy NSW Grain Corporation Pty Ltd NSW Lotteries Nundle Shire Council Water Undertaking Nymboida Shire Council Water Supply and Sewerage Undertakings Oberon Shire Council Water Supply and Sewerage Undertakings Orange City Council Gas Supply Undertaking Orange City Council Water Supply and Sewerage Undertakings Pacific Power Parkes Shire Council Gas Supply Undertaking Parkes Shire Council Water Supply and Sewerage Undertakings Parramatta Stadium Trust 41 National Competition Council New South Wales Parry Shire Council Water Supply and Sewerage Undertakings Penrith City Council Sewerage Undertakings Port Kembla Port Corporation Power Coal Property Services Group Public Servant Housing Authority of NSW Public Trustee Public Works and Services’ Commercial Services Division Engineering/Property Services Queanbeyan City Council Water Supply and Sewerage Undertakings Quirinda Shire Council Water Supply and Sewerage Undertakings Rail Access Corporation Rice Marketing Board for the State of NSW Richmond River Shire Council Water Supply and Sewerage Undertakings River Operations Rylstone Shire Council Water Supply and Sewerage Undertakings Scone Shire Council Water Supply and Sewerage Undertakings New South Wales Severn Shire Council Water Supply and Sewerage Undertakings Shoalhaven City Council Gas Supply Undertaking Shoalhaven City Council Water Supply and Sewerage Undertakings Singleton Shire Council Water Supply and Sewerage Undertakings Snowy River Shire Council Water Supply and Sewerage Undertakings State Forests State Lotteries Office of NSW State Rail Authority of NSW State Transit Authority Sydney Cricket and Sports Ground Sydney Market Authority Sydney Opera House Trust Sydney Port Corporation Sydney Water Corporation Tallaganda Shire Council Water Supply and Sewerage Undertakings Tamworth City Council Abattoir Undertakings Tamworth City Council Water Supply and Sewerage Undertakings Teacher Housing Authority of NSW Temora Shire Council Sewerage Undertaking 42 Competitive neutrality reform New South Wales Tenterfield Shire Council Water Supply and Sewerage Undertakings Totalizator Agency Board TransGrid Tumbarumba Shire Council Water Supply and Sewerage Undertakings Tumut Shire Council Water Supply and Sewerage Undertakings Tweed Shire Council Water Supply and Sewerage Undertakings Ulmarra Shire Council Water Supply Undertaking Uralla Shire Council Water Supply and Sewerage Undertakings Wagga Wagga City Council Gas Supply Undertaking Wagga Wagga Water Supply and Sewerage Undertakings Wakool Shire Council Water Supply and Sewerage Undertakings Walcha Shire Council Water Supply and Sewerage Undertakings Walgett Shire Council Water Supply and Sewerage Undertakings Waste Recycling and Processing Service Weddin Shire Council Gas Supply Undertaking New South Wales Wellington Shire Council Gas Supply Undertaking Wellington Shire Council Water Supply and Sewerage Undertakings Wentworth Shire Council Water Supply and Sewerage Undertakings Wingecarribee Shire Council Water Supply and Sewerage Undertakings Wollondilly Shire Council Water Supply Undertakings Wyong City Council Wyong Shire Council Water Supply and Sewerage Undertakings Yallaroi Shire Council Water Supply and Sewerage Undertakings Yarrowlumla Shire Council Water Supply and Sewerage Undertakings Yass Shire Council Gas Supply Undertaking Yass Shire Council Water Supply and Sewerage Undertakings Young Shire Council Water Supply and Sewerage Undertakings Zoological Parks Board of NSW Victoria Aluminium Smelters of Victoria Aluvic 43 National Competition Council Victoria Avoca Reculvert and Precasting Works Barwon Water Central Highlands Region Water Authority City of Geelong - Shopping Centre City of Melbourne - Market Operations City of Oakleigh Abattoir Operations City of Werribee - Tip Refuse Undertakings City West Water Coliban Region Water Authority Construction Industry Long Service Leave Board Dandenong Valley Authority Deakin Quarry East Gippsland Region Water Authority Gas Transmission Corporation GASCOR Generation Victoria Gippsland Water Glenelg Region Water Authority Goulburn Valley Region Water Authority Victoria Goulburn-Murray Rural Water Authority Grampians Region Water Authority Kiewa Murray Region Water Authority Lower Murray Region Water Authority Loy Yang Power Ltd Melbourne and Olympic Parks Trust Melbourne Market Authority Melbourne Port Corporation Melbourne Ports Services Melbourne Water Mid-Goulburn Regional Water Board Mildura Shire Council Abattoir Undertaking Office of Housing Otway Region Water Authority Ovens Region Water Authority Portland Coast Region Water Authority PowerNet Victoria Public Transport Corporation SECV Shell Shire of Korumburra - Historical Park 44 Competitive neutrality reform Victoria Shire of Korumburra - Municipal Sale Yards South East Water Pty Ltd South Gippsland Region Water Authority South West Water Authority Southern Hydro Pty Ltd Southern Rural Water Authority Sunraysia Rural Water Authority The Mt Eliza Geriatric Centre Urban Land Authority Victorian Channels Authority Victorian Dairy Industries Authority Victorian Plantations Corporation Victorian Power Exchange Warrnambool City Council Abattoir Undertaking Western Metropolitan Market Trust Western Region Water Authority Westernport Region Water Authority Wimmera-Mallee Rural Water Authority Wodonga Saleyards Yarra Valley Water Queensland Administrator Aurukun Shire Albert Shire Council Water Supply and Sewerage Undertakings Atherton Tableland Maize Marketing Board AUSTA Electric Back Creek Water Supply Board Balonne Shire Council Water Supply and Sewerage Undertakings Banana Shire Council Water Supply and Sewerage Undertakings Beaudesert Shire Council Water Supply and Sewerage Undertakings Benleith Water Board Bewyando Shire Council Water Supply and Sewerage Undertakings Boonah Shire Council Water Supply Undertaking Boondooma Water Board Bowen Harbour Board Bowen Shire Council Water Supply and Sewerage Undertakings Brigooda Water Board Brisbane and Area Water Board Brisbane City Water Supply and Sewerage Brisbane Exposition and South Bank Redevelopment Authority 45 National Competition Council Queensland Brisbane Market Authority Brisbane Transport Broadsound Shire Council Water Supply Undertaking Bundaberg City Council Water Supply and Sewerage Undertakings Bundaberg Port Authority Bundaberg Public Abattoir Board Burdekin Shire Council Water Supply and Sewerage Undertakings Caboolture Shire Council Water Supply and Sewerage Undertakings Cairns City Council Water Supply and Sewerage Undertakings Cairns Mulgrave Water Supply Board Cairns Port Authority Calliope Shire Council Water Supply and Sewerage Undertakings Caloundra City Council Water Supply and Sewerage Undertakings Caloundra Maroochy Water Supply Board Capricornia Electricity Corporation Cardwell Shire Council Water Supply Undertaking Charters Towers City Council Water Supply Undertaking Queensland Chinchilla Shire Council Water Supply Undertaking Cloncurry Shire Council Water Supply Undertaking Committee of Direction of Fruit Marketing Condamine Plains Drainage Board Condamine Plains Water Board Coreen Water Board Cowley Drainage Board Crest International Hotel (Brisbane) Pty Ltd Dalby Town Council Gas Supply Undertaking Dalby Town Council Water Supply and Sewerage Undertakings Darling Downs Moreton Rabbit Board Douglas Shire Council Water Supply Undertaking DPI Forestry DPI Water Resources Commission Duaringa Shire Council Water Supply and Sewerage Undertakings Egg Marketing Board (South Queensland) Emerald Shire Council Water Supply Undertaking 46 Competitive neutrality reform Queensland Far North Queensland Electricity Corporation Flinders Shire Council Water Supply Undertaking Gatton Shire Council Water Supply Undertaking Gayndah Shire Council Water Undertaking Gladstone Calliope Aerodrome Board Gladstone City Council Water Supply and Sewerage Undertakings Gladstone Port Authority Gladstone Water Board Glamorganvale Water Board Gold Coast City Council Gold Coast City Council Water Supply and Sewerage Undertakings Gold Coast Waterways Authority Golden Casket Office Goondiwindi Town Council Water Supply and Sewerage Undertakings Grainco Grevillea Water Board Gympie City Council Water Supply and Sewerage Undertakings Gympie District Aerodrome Board Hervey Bay City Council Queensland Hinchinbrook Shire Council Water Supply and Sewerage Undertakings Ipswich City Council Water Supply and Sewerage Undertakings Ipswich-Moreton Water Supply Board Island Industries Board Jabiru Water Board Johnstone Shire Council Water Supply and Sewerage Undertakings Kayanna Bore Water Supply Board Kingaroy Shire Council Water Undertaking Kooringal Water Board Livestock and Meat Authority of Queensland Livingstone Shire Council Water Supply and Sewerage Undertakings Logan City Council Water Supply and Sewerage Undertakings Longreach Shire Council Water Supply Undertaking Mackay City Council Water Supply and Sewerage Undertakings Mackay Electricity Corporation Mackay Port Authority Marathon Bore Water Board 47 National Competition Council Queensland Mareeba Shire Council Water Supply and Sewerage Undertakings Maroochy Shire Council Water Supply and Sewerage Undertakings Maryborough City Council Water Supply and Sewerage Undertakings Merlwood Water Board Middle Park Bore Water Supply Board Moreton Shire Council Water Supply and Sewerage Undertakings Mornington Shire Council Mt Isa City Water Mt Morgan Shire Council Water Supply Undertaking Mulgildie Water Board Mulgrave Shire Council Water Supply and Sewerage Undertakings Murweh Shire Council Water Supply Undertaking Navy Bean Marketing Board Noosa Shire Council Water Supply and Sewerage Undertakings North Queensland Electricity Corporation Oaky Creek Water Board Paroo Shire Council Water Supply Undertaking Queensland Pine Rivers Shire Council Water Supply and Sewerage Undertakings Pioneer Shire Council Water Supply and Sewerage Undertakings Port of Brisbane Corporation Ports Corporation of Queensland Powerlink Queensland (Queensland Transmission Corporation) Proserpine Shire Council Water Supply and Sewerage Undertakings Public Trust Office Queensland Abattoir Corporation Queensland Fish Board Queensland Grain Handling Authority Queensland Housing Commission Queensland Motorways Ltd Queensland Rail Queensland Sugar Corporation Queensland Tourist and Travel Corporation Redcliffe City Council Water Supply and Sewerage Undertakings Redland Shire Council Water Supply and Sewerage Undertakings Roadvale Water Board Rockhampton City Council 48 Competitive neutrality reform Queensland Rockhampton City Council Water Supply and Sewerage Undertakings Rockhampton District Salesyards Board Rockhampton Port Authority Roma Bungil Showgrounds and Salesyard Board Roma Town Council Water Supply and Sewerage Undertakings Roma Town Council Gas Supply Undertaking Silkwood Drainage Board South East Queensland Electricity Corporation South East Queensland Water Board South West Queensland Electricity Corporation Stanthorpe Shire Council Water Supply and Sewerage Undertakings State Coke Works State Gas Pipeline Unit, Dept of Resource Industries State Wheat Board Qld Taberna Water Board Tarampa Water Board The Barley Marketing Board The Butter Marketing Board The Cannery Board Queensland The Central Qld Egg Marketing Board The Central Qld Grain Sorghum Marketing Board The Cotton Marketing Board The Harvey Bay-Woocoo Water Supply Board The Peanut Marketing Board The Tobacco Leaf Marketing Board Qld Thuringowa City Council Toowoomba City Council Water Supply and Sewerage Undertakings Toowoomba Public Abattoir Board Torres Shire Council Water Supply Undertaking Totalisator Administration Board of Queensland Townsville City Council Townsville Port Authority Townsville Public Abattoir Board Townsville Thuringowa Water Board Wambo Shire Council Water Supply Undertakings Wambo Shire River Improvement Trust Warwick and District Salesyards 49 National Competition Council Queensland Warwick City Council Water Supply and Sewerage Undertakings Wide Bay-Burnett Electricity Corporation Widgee Shire Council Water Supply Undertaking Woodmillar Water Board Western Australia Metro Bus Metropolitan Cemeteries Board Perth Market Authority Port Hedland Port Authority Rottnest Island Authority State Housing Commission (Homeswest) Subiaco Redevelopment Authority Totalisator Agency Board Water Corporation Western Australian Land Authority (LandCorp) Western Power Westrail Western Australia Albany Port Authority AlintaGas Perth Theatre Trust Fremantle Cemetery Board Bunbury Port Authority Bunbury Water Board Busselton Water Board Dampier Port Authority East Perth Redevelopment Authority Eastern Goldfields Transport Board Esperance Port Authority Fremantle Port Authority Geraldton Port Authority Gold Corporation Grain Corporation of Western Australia Ltd Lotteries Commission South Australia Adelaide Convention Centre Adelaide Entertainment Centre Adelaide Festival Centre Trust Australian Barley Board (jointly owned by Victoria) Austrics Corp Town of Peterborough Department of Primary Industries Forestry Division Department of Woods and Forests 50 Competitive neutrality reform South Australia District Council of Cleve District Council of Coober Pedy District Council of Elliston District Council of Hawker District Council of Kanyaka Quorn District Council of Le Hunte District Council of Murat Bay Dried Fruits Board (SA) Enfield Cemetery Trust ETSA Corporation Gas Investments Pty Ltd GCR Computer Services Pty Ltd Golden Heights Irrigation Board Hills Transit Lotteries Commission of SA Lyrup Village Association Medvet Science Pty Ltd Port Pirie Abattoirs Pty Ltd Renmark Irrigation Trust Roxby Downs Water Supply SA Government Employee Residential Properties SA Housing Trust SA Urban Projects Authority Sagaust Ltd Sagric International Pty Ltd South Australia South Australia Meat Corporation South Australia Teacher Housing Authority South Australia Timber Corporation South Australia Urban Land Trust South Australian Ports Corporation South Australian Totalizator Agency Board South Australian Water Corporation State Clothing Corporation Streaky Bay District Council Sunlands Irrigation Board The South Australian Egg Board TransAdelaide West Beach Trust Zeds Tasmania Burnie Port Authority Circular Head Municipality Water Supply and Sewerage Undertakings City of Hobart Corporation Water Supply and Sewerage Undertakings Civil Construction Services Corporation Coal River Irrigation Scheme Cressy-Longford Irrigation Scheme 51 National Competition Council Tasmania Derwent Entertainment Centre Management Authority Devonport Municipal Council Abattoir Undertaking Devonport Municipal Council Water Supply and Sewerage Undertakings Forestry Corporation Glenorchy City Council Water Supply and Sewerage Undertakings Herd Improvement Board of Tasmania Hobart Regional Water Board Housing Division Hydro-Electric Commission Hydro-Electric Commission Enterprises Corporation King Island Abattoir Board Launceston Corporation Water Supply and Sewerage Undertakings Launceston Corporation Water Supply and Sewerage Undertakings Marine Board of Circular Head Marine Board of Flinders Island Marine Board of Hobart Marine Board of King Island Metropolitan Transport Trust Municipality of Beaconsfield Water Supply and Sewerage Undertakings Tasmania Municipality of Brighton Water Supply and Sewerage Undertakings Municipality of Burnie Water Supply and Sewerage Undertakings Municipality of Clarence Water Supply and Sewerage Undertakings Municipality of Deloraine Water Supply Undertaking Municipality of Esperance Water Supply Undertaking Municipality of Fingal Water Supply Undertaking Municipality of George Town Water Supply and Sewerage Undertakings Municipality of Huon Water Supply Undertaking Municipality of Kentish Water Supply and Sewerage Undertakings Municipality of Kingborough Water Supply and Sewerage Undertakings Municipality of Latrobe Water Supply and Sewerage Undertakings Municipality of Lilydale Water Supply and Sewerage Undertakings Municipality of Longford Water Supply and Sewerage Undertakings Municipality of Lyell Water Supply Undertaking 52 Competitive neutrality reform Tasmania Municipality of New Norfolk Water Supply and Sewerage Undertakings Municipality of Penguin Water Supply Undertaking Municipality of Portland Water Supply Undertaking Municipality of Queenstown Water Supply Undertaking Municipality of Scottsdale Water Supply and Sewerage Undertakings Municipality of Sorell Water Supply and Sewerage Undertakings Municipality of Spring Bay Water Supply and Sewerage Undertakings Municipality of St Leonards Water Supply and Sewerage Undertakings Municipality of Westbury Water Supply and Sewerage Undertakings Municipality of Wynyard Water Supply and Sewerage Undertakings Municipality of Zeehan Water Supply Undertaking North West Regional Water Authority Port Arthur Historic Site Management Authority Port of Devonport Authority Port of Launceston Authority Potato Industry Authority Tasmania Prosser River Water Scheme Richmond Municipality Water Supply Undertaking Rivers and Water Supply Commission North Esk Southern Regional Cemetery Trust Stanley Cools Stores Board Tasmanian Apple and Pear Marketing Authority Tasmanian Dairy Industry Authority Tasmanian Film Corporation Tasmanian Grain Elevators Board Tasmanian International Velodrome Management Authority Tasmanian Totalisator Agency Board The Egg Marketing Board of Tasmania Printing Authority of Tasmania The Public Trustee Theatre Royal Board Transport Tasmania (TT Line Company Pty Ltd) Ulverstone Municipal Council Water Supply and Sewerage Undertakings West Tamar Water Supply 53 National Competition Council Australian Capital Territory ACT Forests ACT Milk Authority ACTEW ACTION Canberra Theatre Trust Gaming and Liquor Authority (ACT) – ACT TAB Home Purchase Trust Account Totalcare Industries Northern Territory Grain Marketing Board (To be abolished) International Project Management Unit Lotteries Fund Northern Territory Housing Commission – Housing and Lending Power and Water Authority Racing and Gaming Commission Lotteries Territory Insurance Office Territory Wildlife Park Totalizator Administration Board Northern Territory Ayers Rock Resort Co Ltd Darwin Bus Service Darwin Port Authority Department of Transport and Works Public Financial Enterprises Commonwealth Australian Industry Development Corporation Commonwealth Bank of Australia Commonwealth Funds Management Ltd Export Finance and Insurance Corporation Commonwealth Housing Loans Insurance Corporation 54 Competitive neutrality reform Western Australia New South Wales Building and Construction Industry Long Service Payments Corporation State Government Insurance Commission Western Australian EXIM Corporation (To be wound up) Western Australian Fire Brigades Superannuation Board Western Australian Government Holdings Ltd Victoria Rural Finance Corporation State Trustees Ltd Transport Accident Commission Treasury Corporation of Victoria Victorian Funds Management Corporation Victorian Workcover Authority South Australia Construction Industry Long Service Leave Board DEFIC 1, 2, 3 Homestart Finance Ltd LGFA Motor Accident Commission Public Trustee SAAMC SAFA SAFTL SAICORP SGIC Holdings Ltd State Government Insurance Commission Workcover Corporation Queensland Queensland Industry Development Corporation Queensland Investment Corporation Suncorp Workers Compensation Board Western Australia Coal Industry Superannuation Board Construction Industry Long Service Leave Board (To be wound up) Government Employees Superannuation Board 55 National Competition Council Tasmania Motor Accidents Insurance Board Public Finance Corporation Australian Capital Territory Construction Industry Long Service Leave Board Northern Territory Territory Insurance Office Source: Australian Bureau of Statistics 56 Competitive neutrality reform References ABS (Australian Bureau of Statistics) 1994, Government Financial Statistics Australia: Concepts, Sources and Methods 1994, Catalogue Number 5514.0, Canberra. BIE (Bureau of Industry Economics) 1994, International Performance Indicators – Overview, Research Report 53, February, AGPS, Canberra. —— 1995, International Performance Indicators – Overview 1995, Research Report 20/95, AGPS, Canberra. Hilmer, F., Rayner, M. and Taperell, G. (The Independent Committee of Inquiry into a National Competition Policy) 1993, National Competition Policy, AGPS, Canberra. IC (Industry Commission) 1991a, Annual Report 1990–91, AGPS, Canberra. —— 1991b, Rail Transport, Volume 1; Report No. 13, AGPS, Canberra. —— 1996, Competitive Tendering and Contracting by Public Sector Agencies, Report Number 48, AGPS, Melbourne. SCNPMGTE (Steering Committee for National Performance Monitoring of Government Trading Enterprises) 1993, Government Trading Enterprises Performance Indicators 1978–88 to 1991–92, Canberra. —— 1994, Community Service Obligations – Some Definitional, Costing and Funding Issues, Canberra. TOIRGTE (Taskforce on Other Issues in the Reform of Government Trading Enterprises) 1991, Characteristics of a Fully Corporatised Government Trading Enterprise, Background Paper, reproduced by the NSW Treasury, Sydney. 57