There are many reasons for establishing a public entity. As a consequence there are many types of public entities.
Public entities can be established in a variety of legal forms, such as statutory authorities, non-statutory advisory bodies and, in a small number of cases, a Corporations Law entity.
In Victoria, public entities deliver services, such as health, environmental and transport services. Some public entities perform regulatory functions, such as the Essential Services Commission and the Victorian WorkCover Authority. Others are run along business lines with corporate-style structures and reporting.
There are more than 1800 Victorian public entities with employees.
The Department of Premier and Cabinet divides Victorian public entities and their boards into four mutually exclusive categories:
- Group A: commercial boards of governance (3 per cent)
- Group B: significant industry and key advisory bodies and significant boards of management (2 per cent)
- Group C: advisory committees, registration boards and management boards of small organisations (95 per cent)
- Group D: inquiries or task forces and ad hoc expert panels (<1 per cent).
The following functions and features can define a public entity:
- Legal form: Public entities have many possible forms whether unincorporated, such as an advisory body, or incorporated. Most public entities are incorporated bodies that have the ability to enter into contracts, employ staff, own or lease property and engage in legal proceedings in their own name. They are part of government, but generally have a separate legal status to the Crown.
- Establishment mechanism: There are many ways public entities can be established, including by ministerial direction, by specific legislation, under the State Owned Enterprises Act 1992 and under the Corporations Act 2001 (Cwlth).
- Governance structure and relationship with the minister: Typically, public entities have a governing board with directors that are appointed by the minister. The degree of ministerial control varies in relation to the different functions. The minister’s powers of direction are usually identified in the enabling or umbrella legislation.
- Financial arrangement: There may be various sources of funding for a public entity, including appropriation administered by the monitoring department, commercial revenue, fees, fines and levies.
- Employment arrangement: Directors of public entities are generally appointed by the minister and are not considered employees, therefore they are different to public sector employees who are employed under public sector awards and agreements, such as Enterprise Bargaining Agreements.
- Function: Public entities provide a wide range of public functions. They also implement government policy within defined boundaries, clearly defined goals or objectives, and within the limits of their authority, at arm’s length from ministers. Functions can include service delivery, commercial activities and stewardship of public assets.