Queensland Consolidated Acts

GOVERNMENT OWNED CORPORATIONS ACT 1993 - SECT 16

The 4 key principles of corporatisation, and their elements, are as follows--

(a) Principle 1--Clarity of objectives

The elements of this principle are that--

• each GOC will have clear, non-conflicting objectives;

• each GOC will be set specific financial and non-financial performance targets for its commercial activities;

• any activities of a governmental policy formulation or regulatory nature will be transferred from the GOC to a department, separate regulatory authority or other agency;

• any community service obligations of the GOC will be--

• clearly identified in the GOC's statement of corporate intent; and

• separately costed;

• the GOC will be appropriately compensated for its community service obligations and any funding will be made apparent;

• the GOC will be set performance targets for its community service obligations;

(b) Principle 2--Management autonomy and authority

The elements of this principle are that--

• each GOC will have a board of directors;

• the board will be required to use its best endeavours to ensure that the GOC meets its performance targets;

• the board will be given the autonomy and authority to make commercial decisions within areas of responsibility defined by the corporatisation framework;

• existing detailed controls over management decision making will be replaced with strategic monitoring procedures;

• the role of Ministers in relation to the GOC will be clearly defined;

• Ministerial reserve powers will be required to be exercised in an open way;

(c) Principle 3--Strict accountability for performance

The elements of this principle are that--

• the GOC's board will be accountable to the shareholding Ministers for the GOC's performance;

• the GOC's statement of corporate intent will form the basis for accountability;

• performance will be monitored by the Government against performance targets specified in the statement of corporate intent;

• Government monitoring of the GOC is intended to compensate for the absence of the wide range of monitoring to which listed corporations are subject by, for example, the sharemarket and Commonwealth regulatory agencies;

(d) Principle 4--Competitive neutrality

The elements of this principle are that--

• the efficiency of overall resource use in the State is promoted by ensuring that markets are not unnecessarily distorted;

• in order to ensure, wherever possible, that each GOC competes on equal terms with other entities carrying on business, any special advantages or disadvantages of the GOC because of its public ownership or its market power will be removed, minimised or made apparent;

• in circumstances where a GOC has excessive market power--

• structural reform may be necessary to increase competition; and

• special monitoring may be necessary to prevent market abuse.