THE first comparative report on the performance of government trading enterprises published last week is welcome and necessary. It compares the performance state-by-state of such things as urban transport, ports, water, gas and electricity.
Formally called the report on the Monitoring of Government Trading Enterprises, it was prepared by the Steering Committee of National Performance which was set up at the Special Premiers Conference in 1991. The report will become an annual event.
Unlike private enterprise whose performance can be measured through the rigours of the share-market and the threat of going broke, public enterprises can at best on only compare themselves against their own performance in previous years. Before the report, government enterprises could wallow in the glory of, say a 2 per cent, improvement on last year, but that is of small joy to the taxpayers if all it means is that the enterprise has only improved from worse to bad. Now, comparisons can be made across the states on indicators like hours of electricity disconnection, transport boardings per employee, number of employees per household served and so on.
Last week, much was made of the report’s comparison of bus services in the ACT Legislative Assembly, by both sides. While the Government said it showed that ACTION was doing better and compared reasonably favourably with other states, the Opposition said, predictably enough to the contrary. The conclusion that can be readily drawn, however, is that while ACTION is getting better in some areas of performance, according to most efficiency indicators, is was well below average. In the most critical one as far as taxpayers are concerned _ cost recovery _ it is doing worst among the states and doing worse than the previous year. In the ACT it was only 22.4 per cent in 1991-92 down from 24.2 per cent the previous year. It means that of the total cost of ACTION only 22.4 per cent comes from fares, the rest comes from government subsidy _ now running at more than $50 million a year. The high was NSW with 48.3 per cent.
There is rightly a social-justice element to public transport. No-one expects full cost recovery. But people do expect a reasonably efficient service. Now they have a tool with which to measure it. This first report may be open to different interpretations and different indicators can give joy or ammunition to the political debate. But the fact that it will be done annually will itself give an impetus for improvement in efficiency and will in subsequent years provide comparisons that poor performing enterprises will find difficult to wriggle out of. It will be an incentive for the Minister for Urban Service, Terry Connolly, to continue with more rigour the Government’s efficiency drive.