The State-Owned Enterprises Act 1986 set up State-owned enterprises (SOEs) to improve efficiency in government trading operations, such as telecommunications, postal services, railways, electricity and broadcasting. In many cases, the establishment of SOEs has been followed by the sale of business assets.
SOEs have the principal objective of operating as successful businesses. All SOEs are registered as public companies and are bound by the provisions of the Companies Act. Chief executives of SOEs are accountable to their respective boards, and boards are accountable to the shareholding ministers for the performance of the SOEs. The Crown Company Monitoring and Advisory Unit (CCMAU), an independent unit administered by Treasury, provides advice to shareholding Ministers in their role in holding boards to account. The majority of SOEs operate in deregulated markets and are on equal terms with the private sector. SOEs are listed in the first schedule to the Act.
Until January 2005, the SOE Act required SOEs to consult the State Services Commissioner over the terms and conditions to be included in the collective agreement before entering into it. The Commissioner now no longer has this role, unless the Governor-General by Order in Council provides for this, in relation to a particular SOE listed in the Second Schedule to the SOE Act.