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Legislative Assembly for the ACT: 1997 Week 8 Hansard (28 August) . . Page.. 2646 ..

MR KAINE (continuing):

corporatisation is a process that requires scrutiny and assessment of a government business enterprise, its internal systems, its efficiency, its objectives, its operating environment, its future business plans, how it is regulated in terms of price, and so on.

Whilst Territory-owned corporations are required as far as possible to be subject to the same accountability requirements as their private sector counterparts, there are important differences which arise from their government ownership. The accountability of Territory-owned corporations to Government Ministers and, through them, to the Assembly is expressed in many different ways. For example, we can assess the performance of their functions with due regard to economic, social and environmental impacts and decide whether they are doing what we wanted them to do.

Accountability is reflected in the use of powers prescribed in their legislation, in the maintenance of high standards of propriety and probity, in the provision of ongoing information to shareholder Ministers and to the public, in the acceptance of scrutiny by Assembly Ministers and others, in the answering of parliamentary questions, in the submission of an annual statement of corporate intent, which is required to be tabled in this Assembly, through the auditing of accounts by the Auditor-General, through releasing their annual reports, through the requirement for the Minister to answer to the Assembly for the overall performance of the corporation, and by their review through Assembly committees, including the Estimates Committee and the Public Accounts Committee. These are additional requirements imposed on government-owned corporations which, by and large, public sector corporations are not subjected to.

Furthermore, these accountability arrangements are reinforced by other measures - that is, by ensuring that responsible Ministers have the ability to issue directions on some matters and requiring such directions to be tabled in the Assembly so that the Assembly can see what the Minister has determined shall be the basis of a direction; by incorporating additional safeguards in legislation, such as the ability of a responsible Minister to require Territory-owned corporations to furnish information on request; and by subjecting Territory-owned corporations to independent price regulation, which ACTEW has been subjected to in recent times. While such enhanced accountabilities may be taken by some as compromising the principles of competitive neutrality and may entail additional costs, government ownership demands much higher accountability standards than are currently regarded as appropriate for the private sector and provides counterbalancing benefits.

I am firmly of the view that, through clearer specification of objectives and other conditions of performance targeting through the statement of corporate intent, corporatisation strengthens the accountability of Territory-owned corporations by the need to be specifically accountable for performance. It is quite clear, under these accountability arrangements, that there is no question about the right of members of the Assembly to scrutinise the economic, social and environmental performance of those corporations.

It is also obvious that the accountability of Territory-owned corporations is strengthened through dual accountability regimes provided by the Territory Owned Corporations Act and that imposed by the Corporations Law. Accountability is reinforced under Corporations Law when that imposes on directors a duty to act honestly, a duty of care and diligence, and a duty to avoid a conflict of interest. The directors are required to act

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