Be accountable for social costs: PSC
Thursday August 16, 2007

A study is underway to determine whether the value of grants given to State-owned enterprises to perform non-commercial functions is appropriate or whether outsourcing should be pursued.

Public Service permanent secretary Taina Tagicakibau said the ministry has set up a committee comprising representatives from the ministries of Public Enterprises and Finance to facilitate work in this area.

“The Committee had started working on State-owned entities who already have existing contracts with the Government. They’ve started interviewing Post Fiji and Fiji Broadcasting Corporation Limited on ways to streamline their existing contracts,” Tagicakibau said.

“We are prioritising our work first to concentrate on these entities and then give priority on other entities that we think need to be looked at quickly,” she said.

“We were hoping that we could complete at least one or two entities in time for submissions for the 2008 budget. But, this is an ongoing process and even if we don’t complete all of them this year, we hope to complete them for the 2009 budget,” she said.

Tagicakibau said the study arose out of an earlier Cabinet decision to cost social obligations carried out by Government Commercial Companies (GCCs).

The decision to carry out a similar study on Commercial Statutory Authorities (CSAs) was necessary as it would provide some indications of government’s financial commitment to the various CSAs.

As for GCCs, the study provides the cost of services which are clearly non-commercial and therefore contribute to the low profitability of GCCs.

An earlier study was done on costing out the social obligations performed by GCCs as required under the Public Enterprises Act, 1996. The PE Act states that the Government pays for the social obligation that it wants GCCs to perform.

“On the other hand, the PE Act only ensures that commercial discipline is instilled into the operations of CSAs and does not change any other matters in relation to how a particular CSA is governed. “So, in that respect, the study provides useful information for Government”.

“Some of these CSAs are provided grants by government to cater for these responsibilities,” said Ms Tagicakibau.