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Financial Performance of Government Trading Enterprises 2004-05 to 2006-07

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  • Productivity Commission

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Abstract

This report is the latest scorecard on the financial performance of 86 government trading enterprises (GTEs). The report 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.

Suggested Citation

  • Productivity Commission, 2008. "Financial Performance of Government Trading Enterprises 2004-05 to 2006-07," Research Papers 0802, Productivity Commission, Government of Australia.
  • Handle: RePEc:ris:prodrp:0802
    as

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    File URL: http://www.pc.gov.au/__data/assets/pdf_file/0003/82227/gte-2006-07.pdf
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    File URL: http://www.pc.gov.au/research/commissionresearch/gte0607
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    References listed on IDEAS

    as
    1. Lin, Justin Yifu & Cai, Fang & Li, Zhou, 1998. "Competition, Policy Burdens, and State-Owned Enterprise Reform," American Economic Review, American Economic Association, vol. 88(2), pages 422-427, May.
    2. Lawson, Colin, 1994. " The Theory of State-Owned Enterprises in Market Economies," Journal of Economic Surveys, Wiley Blackwell, vol. 8(3), pages 283-309, September.
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