Government Trading Enterprise reform strengthens governance

  • Government Trading Enterprises Bill 2022 introduced into State Parliament
  • New Bill will drive significant change to Government Trading Enterprise governance
  • Umbrella legislation protects State’s long-term interests and part of McGowan Government’s reform program and ensures returns to the community are paramount
  • The McGowan Government has introduced the Government Trading Enterprises Bill 2022 to transform Government Trading Enterprises’ (GTEs) governance and provide a new transitional framework as part of its public sector reform work.

    GTEs provide some of the State’s most critical functions for the community, including the provision of essential services, the facilitation of trade and the development of land for both commercial and residential uses.

    The new legislation will provide GTEs with greater clarity in their relationship to Government and will harmonise good governance and key financial arrangements across the enterprises.

    It also supports GTEs in improving strategic documentation, quality information sharing and demonstration of outcomes they have agreed to deliver.

    The purpose of GTEs has been clarified in the new legislation to ensure Boards understand their role more broadly and Government’s expectation for GTEs to advance the public benefit, including through the provision of financial and non-financial returns on taxpayers’ investment through the GTEs.

    The Bill clarifies the balance between commerciality and broader policy objectives, recognising that providing returns to the community is the paramount duty of a GTE.

    It also provides a mechanism for issuance of policy orders that allows GTEs to contribute to delivery of the Government’s policy outcomes.

    The Bill does not mandate how GTEs undertake day-to-day business activities as it recognises the principles of the corporatised model established more than 20 years ago and acknowledges the skills and expertise of Directors and Boards of GTEs.

    It does however provide standardised provisions for Ministerial approval of significant transactions with ongoing and open consultation while retaining the ability for the GTE to effectively pursue commercial interests.

    The new legislation builds on the McGowan Government’s commitment to reform public sector.

    This includes the Service Priority Review, which delivered reforms for cultural change and an efficient public service, which the Government initiated swiftly upon taking office in 2017.

    The Bill also meets recommendations in the Special Inquiry into Government Projects and Programs, headed by former Under Treasurer John Langoulant, to strengthen the governance, transparency and accountability arrangements that oversee the State’s GTEs.

    As stated by Premier and Treasurer Mark McGowan:

    “The Government Trading Enterprises Bill 2022 is a significant, long-overdue reform that will protect the long-term interests of the State.

    “This is yet another measure that delivers on this Government’s strong commitment to accountability and transparency.

    “These reforms include the Government’s expectations of GTEs to advance the public benefit, including through the provision of financial and non-financial returns on taxpayers’ investment through the GTEs. 

    “The Bill is reasonable and responsible, and clarifies the balance between commerciality and broader policy objectives, recognising that providing returns to the community is the paramount duty of a GTE.

    “I want to acknowledge those involved in this transformation and thank them for their ongoing support and commitment in transitioning to the new framework.”

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