Review of Commonwealth Government Business Enterprises ...

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3.2 Corporate Plans
3.2.1 GBEs are required to prepare a corporate plan at least once a year and provide it to the
Shareholder Minister(s) under sections 17 and 42 of the CAC Act (for Commonwealth
authorities and companies respectively).
3.2.2 Subsections 17(6) and 42(6) of the CAC Act specify what information GBEs are to include
in corporate plans (so far as they are applicable). Finance considers that this specifc
information should be outlined in a subsidiary instrument to the CAC Act and in a form
that would facilitate periodic amendment. As such, Finance considers that the information
contained in these subsections should be removed from the CAC Act and instead
prescribed under the CAC Regulations.
3.2.3 In making reference to the GBE’s mandate in the corporate plan, GBEs are to distinguish
between core business (activities that are in line with existing core competencies) and
non-core business (activities that require new competencies to be developed). The
distinction between core and non-core business relates to the threshold for the
Shareholder Minister(s) consultation requirements (refer also to 3.6.5).
3.2.4 GBEs are also required to provide a number of key fnancial and non-fnancial performance
indicators in corporate plans. As a minimum, Finance would expect GBEs to ensure
that the KPI information contained in the corporate plan refects the GBE’s performance
across a fve-year period (two prior years and three forward years) to facilitate the analysis
of trends and longer term performance. The Victorian Government has published a
comprehensive guide to the information required to allow for comparison and analysis of
their state-owned enterprises 27 with other like businesses and Finance considers that the
provision of similar fnancial information would be appropriate.
3.2.5 It should be noted that Finance considers the list of KPIs to be a minimum for measuring a
GBE’s fnancial and non-fnancial performance. Boards and/or the Shareholder Minister(s)
may propose and agree other indicators that are relevant to measuring the performance of
the GBE. In recognising that it may not be valuable to report against each KPI in quarterly
progress reports, some KPIs will only be measured on an annual basis. This recognises
that for some KPIs, quarterly measurement will not contribute anything useful to the
assessment of performance.
3.2.6 To strengthen the reporting of annual performance by each GBE, the Corporate Plan is to
include an estimate of the current shareholder (commercial) value of the Commonwealth’s
investment in the GBE and how that value was assessed. This will enable the Shareholder
Minister(s) to determine whether GBE boards are increasing shareholder value over time.
While the preference is for such valuations to be determined using a discounted cash fow
methodology, other methodologies which may be more appropriate for individual (smaller)
GBEs can be used.
Exposure Draft
27 http://www.dtf.vic.gov.au/CA25713E0002EF43/pages/publications-regulation-guidelines#corporateplanningrequirements, Victorian Government,
Corporate Planning & Performance Reporting Requirements for Government Business Enterprises October 2009, page 18 outlines a comprehensive
table of both fnancial and non-fnancial Key Performance Indicators and the information required to develop the measures.