Financial Scorecard for Government Businesses

The Productivity Commission has released its latest scorecard on the financial performance of 86 government trading enterprises (GTEs). The report also examines the impact on capital management of inadequate compensation for community service obligations and of the persistent poor performance of some GTEs.

The 86 GTEs monitored provide services in key sectors of the economy — including electricity, water, urban transport, railways, ports and forestry — and account for around 1.7 per cent of Australia's GDP.

Aggregate profitability increased in the electricity, urban transport and ports sectors, but declined in the rail, water and forestry sectors.

Despite some improvement, about half of the monitored GTEs did not achieve commercial rates of return in 2006-07, underscoring a long-term inability to operate these businesses on a fully commercial basis in accordance with competition policy undertakings.

The Commission observed that the efficient operation of GTEs was important both to the wellbeing of the community and to the competitiveness of Australian industry and that the continuing poor performance of many GTEs was therefore of concern.

Financial performance monitoring of GTEs forms part of the Commission's research into the performance of Australian industries and the progress of microeconomic reform.