GBAB Profile | INGOA - A Practitioners' Network

Australia - Government Businesses Advice Branch (GBAB)

GBAB provides advice to the Australian Government on its Government Business Enterprises (GBE) and other commercial entities.

GBAB was originally known as the Commonwealth Shareholder Advice Unit when it was established in 1997 to centralise the oversight, provision of advice to the Minister for Finance and Administration on the financial performance and strategic direction of the Australian Government's commercial entities.

GBAB is a branch that sits within Asset Management Group (AMG). Some of AMG's other areas of responsibility include asset sales, the management of the Australian Government's procurement policies and management of the Australian Government's non-defence property portfolio and major construction projects. AMG also manages insurance and risk management in addition to special claims and land policies.

AMG is one of seven business groups within the Department of Finance and Administration (Finance). Finance is known as a ‘central agency' along with the Department of Prime Minister and Cabinet and Department of Treasury.

Governance framework

GBEs are prescribed in regulations under the Commonwealth Authorities and Companies Act 1997 (CAC Act). The Governance Arrangements for Commonwealth Government Business Enterprises (Governance Arrangements), approved by the Government in June 1997, provide a more prescriptive regime for the oversight of these entities, including guidelines on reporting, Board of directors and financial governance. Links to these documents are available from our website GBAB.

The governance regime in place for GBEs is a transparent and effective mechanism to enable active oversight and enhanced accountability of GBEs.

The Australian Government's relationship to its GBEs is similar to the relationship between a holding company and its subsidiaries, features of which include:

a strong interest in the performance and financial returns of the GBE;
reporting and accountability arrangements that facilitate active oversight by the shareholder;
action by the shareholder in relation to the strategic direction of its GBEs where it prefers a different direction from the one proposed;
management autonomy balanced with regular reporting of performance to shareholders; and
boards that are accountable to shareholders for GBE performance, and shareholders that are accountable to Parliament and the public.

The GBE governance framework requires, amongst other things, wholly owned GBEs to provide a Corporate Plan, Statement of Corporate Intent (SCI) and progress reports for their comment. Of these documents, and in support of public accountability, the SCI is required to be made public as it contains no commercially sensitive material.

GBAB's role

GBAB's primary tasks in relation to GBEs is to:

provide sound strategic and analytical advice to the Minister for Finance and Administration, in particular by engaging with the GBEs, analysing their operations and their environment, and consulting with stakeholders;
action the Minister's decisions including communicating objectives;
advise the Minister on Board appointments for commercial entities that he/she has a responsibility for; and
ensure that there is a robust and sound governance framework in place by initiating change and contributing to policy development.
GBAB also provides advice on other entities, which are not prescribed as GBEs.

Structure

GBAB has three teams that are responsible for the oversight of the Australian Government's GBEs and other commercial entities.

GBAB also works closely with the Asset Sales Branch, another branch in AMG. This branch is responsible for the oversight and sale of Australian Government businesses where the Government has decided to divest its interests.

Size of organisation

GBAB currently employs 12 staff.

Portfolio of companies and entities

Those entities monitored by GBAB:

GBE	Description
Australian Government Solicitor (AGS)*	AGS is a statutory authority, within the Attorney General's portfolio, established under the Judiciary Act 1903. AGS was converted to a GBE in 1999. AGS operates commercially, competing with private law firms for Government work. AGS employs over 700 people and had revenues of AUD$116m in 2005-06. The Attorney-General and the Minister for Finance and Administration are joint shareholder Ministers for AGS.
Australian Postal Corporation (Australia Post)*	Australia Post is a statutory authority, established by the Australian Postal Corporation Act 1989. Australia Post is a provider of letter, parcel, retail and associated services. Australia Post is subject to the CAC Act and the Minister for Finance and Administration and the Minister for Communications, IT and the Arts are joint shareholder Ministers for Australia Post.
Australian Rail Track Corporation Limited (ARTC)*	ARTC is a Commonwealth Company GBE that operates the non-urban national standard gauge rail network from Kalgoorlie, Western Australia to the Queensland border, including the NSW Hunter Valley coal lines. ARTC is subject to the CAC Act and the Minister for Finance and Administration and the Minister for Transport and Regional Services are joint shareholder Ministers.
Defence Housing Authority (DHA)*	DHA is a statutory authority, within the Defence portfolio, established under the Defence Housing Authority Act 1987, that is responsible for providing housing to the Department of Defence for the members of the Australian Defence Force with dependants. In 2005, the Australian Government decided to expand the function of the DHA and allow it to compete for the provision of housing and housing related services to other Commonwealth agencies. DHA is subject to the CAC Act and the Minister for Finance and Administration and the Minister for Defence are joint shareholder Ministers.
Health Services Australia Limited (HSA)*	HSA is a Commonwealth Company GBE that provides medical assessment, occupational health, and travel health services. HSA is subject to the CAC Act and the Minister for Finance and Administration and the Minister for Human Services are joint shareholder Ministers.
Other Bodies	Description
Airservices Australia (Airservices)	Airservices is a statutory authority that is wholly owned by the Australian Government and operates with a Board. Airservices provides air traffic management and related services to the aviation industry in the Australian Flight Information Region. Airservices is subject to the CAC Act. The Minister for Transport and Regional Services is responsible for Airservices and the Air Services Act 1995 and consults the Minister for Finance and Administration on the financial performance and strategic direction of the entity.
Australian River Company (ARCo)	ARCo is a Commonwealth Company that owns and charters two bulk vessels used by the Charter Party to transport alumina and is responsible for managing residual insurance claims arising from the former Australian National Line (ANL). The Government's intention is to either wind ARCo up or to sell ARCo in the coming years. As a consequence, ARCo is not taking on new business and oversight of ARCo involves considerable less strategic planning. ARCo is subject to the CAC Act and the Minister for Finance and Administration is the sole Shareholder Minister for ARCo
Australian Industry Development Corporation (AIDC)	AIDC is a statutory authority, established by the Australian Industry Development Corporation Act 1970 (AIDC Act), that is responsible for managing the wind down of residual obligations of the Government's former venture capital entity, AIDC Limited. A Ministerial Direction from the then Parliamentary Secretary to the Minister for Finance and Administration in May 2002, instructed AIDC to manage and wind-down its operations to finality in a prudent and commercial manner. AIDC is subject to the CAC Act and the Minister for Finance and Administration is the sole Shareholder Minister for AIDC.
Export Finance and Insurance Corporation (EFIC)	EFIC is a statutory authority that is responsible for managing the affairs and overseeing the operations of EFIC. EFIC provides finance and insurance products to support Australian companies exporting capital goods or services or investing overseas. EFIC is subject to the CAC Act. EFIC is the responsibility of the Minister for Trade who consults the Minister for Finance and Administration on the financial targets and strategic direction of the entity.
Film Australia Limited (FAL)	Film Australia Ltd (FAL) is a Commonwealth Company that develops, produces and distributes programs that deal with matters of National Interest. FAL is subject to the CAC Act. FAL is the responsibility of the Minister for Communications, IT and the Arts who consults the Minister for Finance and Administration on the financial performance and strategic direction of the entity.
Film Finance Corporation (FFC)	Film Finance Corporation (FFC) is a Commonwealth Company that provides investment to the Australian film and television industry. FFC is subject to the CAC Act. FFC is the responsibility of the Minister for Communications, IT and the Arts, however, the Minister for Finance and Administration is consulted on the financial performance and strategic direction of the entity.
Snowy Hydro Limited (SHL)	SHL operates the Snowy Mountains Hydro-electricity Scheme. The ownership structure is as follows: 58% by the NSW Government; 29% by the Victorian Government; and 13% by the Australian Government. The shareholders have equal voting rights independent of equity. SHL is not a Commonwealth company and is not subject to the GBE Arrangements or most of the provisions of the CAC Act. Governance is defined in its constitution and shareholders' agreement. The Minister for Industry, Tourism and Resources is the shareholder Minister for the Commonwealth. The Minister for Finance and Administration and the Minister for Industry, Tourism and Resources have agreed to act as a joint shareholder Ministers consistent with the model for GBEs.

Those entities monitored by the Asset Sales Branch:

Name	Description
ASC Pty Limited (ASC)*	Formerly the Australian Submarine Corporation, ASC was established in 1985 and selected in 1987 as the prime contractor for the design and construction of six Collins Class submarines for the Royal Australian Navy. The Australian Government assumed full ownership of ASC in 2000. The company now provides through-life support and maintenance for the Collins Class submarines, and in May 2005 was selected as the preferred shipbuilder for Australia's Air Warfare Destroyer project. ASC is a Commonwealth Company GBE subject to the CAC Act, with an independent board of directors reporting to the Minister for Finance and Administration. A scoping study is being undertaken to examine the future ownership of ASC.
Albury-Wodonga Corporation (AWC)	The AWC is an Australian Government statutory authority established by the Albury-Wodonga Development Act 1973 (AWD Act). It is not subject to the CAC Act. The Corporation is a major property-owner in the Albury-Wodonga region. Its core activity is land and asset management and sales. The statutory functions of the Corporation reflect the requirement to prepare for its winding-up and abolition by a future Act. The Parliamentary Secretary to the Minister for Finance and Administration is the responsible Minister for AWC and for administration of the AWD Act.
Medibank Private Limited (Medibank)*	Medibank is a Commonwealth Company GBE that offers private health cover for hospital and ancillary services to Australians, as well as a range of health insurance products to overseas students and visitors. Medibank is a not-for-profit company that is wholly owned by the Australian Government and operates with an independent Board. Medibank is subject to the CAC Act with the Minister for Finance and Administration as its sole Shareholder Minister. In April 2006, the Australian Government announced that it intends to sell Medibank by sharemarket float in 2008 if re-elected.

*Those entities prescribed as GBEs.