Financial Performance of Government Trading Enterprises 2004-05 to 2005-06

The Productivity Commission has released its latest scorecard on the financial performance of 85 Australian, State and Territory Government trading enterprises (GTEs). The report - Financial Performance of Government Trading Enterprises 2004-05 to 2005-06 - also examines the influence of different asset valuation methods and rate of return measures on performance comparisons and capital management.

The 85 GTEs monitored in this report control just under 3.5 per cent of Australia's non household assets ($197 billion), and account for around 2 per cent of GDP.

Although in aggregate, profitability increased in all sectors (with the largest improvements in the electricity, railways and forestry sectors), 37 per cent of GTEs recorded declines, and 13 per cent did not report a profit.

Despite some improvement, about half of the monitored GTEs did not achieve commercial rates of return in 2005-06, underscoring a long-term failure of governments to operate these businesses on a fully commercial basis in accordance with their competition policy undertakings.

Commission Chairman Gary Banks said that the efficient operation of GTEs is important both to the wellbeing of the community and to the competitiveness of Australian industry, including our export performance. He added that the Commission's continued monitoring of GTEs will assist in evaluating the progress and gains from further infrastructure reforms.

Financial performance monitoring of GTEs forms part of the Commission's research into the performance of Australian industries and the progress of microeconomic reform. The monitored GTEs provide services in key sectors of the economy - including electricity, water, urban transport, railways, ports and forestry.

Preliminaries
Cover, Copyright, Foreword, Contents, Abbreviations

PART A

Key Points

1 Introduction
1.1 Scope
1.2 Approach
1.3 Performance comparisons over time
1.4 Capital management research
1.5 Report structure
Attachment 1.1 Data item definitions

2 Financial performance overview
2.1 Monitored GTEs
2.2 Market environment
2.3 Profitability
2.4 Financial management
2.5 Transactions with government

3 Asset valuation and capital management
3.1 How can specialised assets be valued?
3.2 Accounting standards and Treasury guidelines
3.3 How are specialised assets valued?
3.4 How do valuation methods affect capital management?

4 Rate of return measures and capital management
4.1 How can capital efficiency be measured?
4.2 Accounting and economic rate of return measures
4.3 Comparing accounting and economic rate of return measures
4.4 What are the implications for capital management?

PART B

5 Electricity
5.1 Monitored GTEs
5.2 Market environment
5.3 Profitability
5.4 Financial management
5.5 Transactions with government
5.6 Implications of the new accounting standards
5.7 GTE performance reports

6 Water, sewerage, drainage and irrigation
6.1 Monitored GTEs
6.2 Market environment
6.3 Profitability
6.4 Financial management
6.5 Transactions with government
6.6 Implications of the new accounting standards
6.7 GTE performance reports

7 Urban transport
7.1 Monitored GTEs
7.2 Market environment
7.3 Profitability
7.4 Financial management
7.5 Transactions with government
7.6 Implications of the new accounting standards
7.7 GTE performance reports

8 Railways
8.1 Monitored GTEs
8.2 Market environment
8.3 Profitability
8.4 Financial management
8.5 Transactions with government
8.6 Implications of the new accounting standards
8.7 GTE performance reports

9 Ports
9.1 Monitored GTEs
9.2 Market environment
9.3 Profitability
9.4 Financial management
9.5 Transactions with government
9.6 Implications of the new accounting standards
9.7 GTE performance reports

10 Forestry
10.1 Monitored GTEs
10.2 Market environment
10.3 Profitability
10.4 Financial management
10.5 Transactions with government
10.6 Implications of the new accounting standards
10.7 GTE performance reports

11 Australian Government Trading Enterprises

A Monitored GTEs

References