A state-owned enterprise ( SOE ) is a business entity created or owned by a national or local government, either through an executive order or legislation. SOEs aim to generate profit for the government, prevent private sector monopolies, provide goods at lower prices, implement government policies, or serve remote areas where private businesses are scarce. The government typically holds full or majority ownership and oversees operations. SOEs have a distinct legal structure, with financial and developmental goals, like making services more accessible while earning profit (such as a state railway). They can be considered as government-affiliated entities designed to meet commercial and state capitalist objectives.
34-554: The Mackellar County Council ( MCC ) was a state–owned enterprise of the Government of New South Wales , Australia . Established in 1951, it was an electricity and gas supplier and retailer which primarily supplied the Northern Beaches area of Sydney, New South Wales , being jointly managed and operated by Manly Municipal Council and Warringah Shire Council . The Local Government Act 1919 (NSW) had provided for
68-472: A heraldic design that represented the area over which the council had responsibilities. Gledhill, who had noted to the Sydney Morning Herald that "They wanted something historic, something to represent light and something from the so-called arms of Manly and Warringah. Those arms aren't registered either, you know", made the following description of his design to the council: "The scroll bears
102-661: A public objective. For that reason, SOEs primarily operate in the domain of infrastructure (e.g., railway companies), strategic goods and services (e.g., postal services, arms manufacturing and procurement), natural resources and energy (e.g., nuclear facilities, alternative energy delivery), politically sensitive business, broadcasting, banking, demerit goods (e.g., alcoholic beverages ), and merit goods (healthcare). SOEs can also help foster industries that are "considered economically desirable and that would otherwise not be developed through private investments". When nascent or 'infant' industries have difficulty getting investments from
136-495: A regular enterprise, state-owned enterprises are typically expected to be less efficient due to political interference, but unlike profit-driven enterprises they are more likely to focus on government objectives. In Eastern Europe and Western Europe , there was a massive nationalization throughout the 20th century, especially after World War II . In the Eastern Bloc , countries adopted very similar policies and models to
170-562: Is a viable argument for SOEs is debated. SOEs are also frequently employed in areas where the government wants to levy user fees , but finds it politically difficult to introduce new taxation. Next, SOEs can be used to improve efficiency of public service delivery or as a step towards (partial) privatization or hybridization. SOEs can also be a means to alleviate fiscal stress, as SOEs may not count towards states' budgets. Compared to government bureaucracy, state owned enterprises might be beneficial because they reduce politicians' influence over
204-764: Is approximately 70% of total employment. State-owned enterprises are thus a major factor behind Belarus's high employment rate and a source of stable employment. In most OPEC countries, the governments own the oil companies operating on their soil. A notable example is the Saudi Arabian national oil company , Saudi Aramco , which the Saudi government bought in 1988, changing its name from Arabian American Oil Company to Saudi Arabian Oil Company. The Saudi government also owns and operates Saudi Arabian Airlines , and owns 70% of SABIC as well as many other companies. China's state-owned enterprises are owned and managed by
238-469: Is contestable under what circumstances a SOE qualifies as "owned" by a state (SOEs can be fully owned or partially owned; it is difficult to determine categorically what level of state ownership would qualify an entity to be considered as state-owned since governments can also own regular stock , without implying any special interference). Finally, the term "enterprise" is challenged, as it implies statutes in private law which may not always be present, and so
272-617: Is highlighted in the predominant local terminology, with SOEs in Canada referred to as a " Crown corporation ", and in New Zealand as a " Crown entity ". The term " government-linked company " (GLC) is sometimes used, for example in Malaysia , to refer to private or public (listed on a stock exchange) corporate entities in which the government acquires a stake using a holding company . The two main definitions of GLCs are dependent on
306-715: The State-owned Asset Supervision and Administration Commission (SASAC) . China's state-owned enterprises generally own and operate public services, resource extraction or defense. As of 2017 , China has more SOEs than any other country, and the most SOEs among large national companies. China's SOEs perform functions such as: contributing to central and local governments revenues through dividends and taxes, supporting urban employment, keeping key input prices low, channeling capital towards targeted industries and technologies, supporting sub-national redistribution to poorer interior and western provinces, and aiding
340-541: The 11 May 1949 proclamation of the local federal parliament Division of Mackellar , in honour of politician Sir Charles Mackellar and poet Dorothea Mackellar . The resolutions of these meetings were forwarded to the Minister for Local Government, Joseph Cahill , who consented to the establishment and Constitution of the Mackellar County Council which were proclaimed on 4 July 1951 and published in
374-712: The Manly Warringah Credit Union. Then later became the Northern Beaches Credit Union and in 2016 merged with Community First Credit Union. In 1968 the County Council was involved in litigation involving its responsibilities under the law over the liability of adjoining properties to its developments. The Supreme Court of New South Wales ruled that under the ordinances of the Local Government Act 1919,
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#1732782453426408-826: The Minister of Finance II, the Minister in the Prime Minister's Department in charge of the Economic Planning Unit, the Chief Secretary to the Government, Secretary General of Treasury and the heads of each of the GLICs (the Employees Provident Fund, Khazanah Nasional Berhad , Lembaga Tabung Angkatan Tentera (the armed forces pension fund), Lembaga Tabung Haji and Permodalan Nasional Berhad . Khazanah Nasional Berhad provided
442-880: The NSW Government Gazette of 13 July 1951. The first delegates to the Mackellar County Council were elected by the Warringah Shire Council on 16 July 1951 and by the Manly Municipality on 17 July 1951. The inaugural meeting was held at the Manly Municipal Council Chamber on 15 August and commenced operations on 1 September 1951. The Council eventually moved to more permanent headquarters, with the administrative headquarters positioned between Manly Local Court and Manly Town Hall on Belgrave Street in Manly and
476-1019: The USSR. Governments in Western Europe, both left and right of centre, saw state intervention as necessary to rebuild economies shattered by war. Government control over natural monopolies like industry was the norm. Typical sectors included telephones , electric power , fossil fuels , iron ore , railways , airlines , media , postal services , banks , and water . Many large industrial corporations were also nationalized or created as government corporations, including, among many others: British Steel Corporation , Equinor , and Águas de Portugal . A state-run enterprise may operate differently from an ordinary limited liability corporation. For example, in Finland, state-run enterprises ( liikelaitos ) are governed by separate laws. Even though responsible for their own finances, they cannot be declared bankrupt ;
510-570: The area shared by Manly Municipality and Warringah Shire first occurred in 1938 and again in 1943 but was postponed for consideration because of the Second World War. Manly and Warringah Councils considered the matter at a conference held on 17 March 1950, but Warringah Shire later withdrew its support for the proposal. However, later that same year, the Electricity Commission of New South Wales began investigations into
544-589: The council had liability over damage to adjoining properties to any of its developments. The case of Anderson v. Mackellar County Council is now an oft-cited case of precedent in construction law in Australia. By the late 1970s, the NSW Government resolved to restructure of electricity distribution areas in New South Wales, which included the reduction of the number of electricity councils. This
578-521: The district. The colours of the flowers, white and red, represent the English colours ." Government-owned corporation The terminology around the term state-owned enterprise is murky. All three words in the term are challenged and subject to interpretation. First, it is debatable what the term "state" implies (e.g., it is unclear whether municipally owned corporations and enterprises held by regional public bodies are considered state-owned). Next, it
612-534: The establishment of District Counties and County Councils by whole, groups of, or parts of municipalities and shires to perform nominated functions delegated by the Councils concerned, although the majority of those councils dealt with infrastructure or utility planning. In the Northern Beaches area, the idea of a County Council, specifically dealing with the control and development of electric utilities in
646-507: The form of Public Sector Undertakings (PSUs). The Malaysian government launched a GLC Transformation Programme for its linked companies and linked investment companies ("GLICs") on 29 July 2005, aiming over a ten-year period to transform these businesses "into high-performing entities". The Putrajaya Committee on GLC High Performance ("PCG"), which oversaw this programme, was chaired by the Prime Minister , and membership included
680-412: The leading application of the incomplete contract theory to the issue of state-owned enterprises. These authors compare a situation in which the government is in control of a firm to a situation in which a private manager is in control. The manager can invest to come up with cost-reducing and quality-enhancing innovations. The government and the manager bargain over the implementation of the innovations. If
714-511: The name 'MACKELLAR COUNTY COUNCIL' and if desired the date of its institution could be added by placing beneath the scroll the date 1951. The lower portion of the seal shows the landing of the first white man in Manly, viz., Governor Phillip , on 21st January 1788. The two aboriginals shown holding spears representing the original holders of the country. Phillip speaking of the Manly blacks said 'their confidence and manly behaviour induced me to give
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#1732782453426748-400: The name Manly Cove to this place'. The Barrenjoey lighthouse shown is erected at the extreme north of the area of the County Council and is emblematic of light, from the beacon lights of mediaeval times to the modern lights of today. The flannel flowers remind us of what has been looked upon as the emblem of Warringah. This, together with the waratahs , are symbolic of the wild flowers of
782-592: The negotiations fail, the owner can decide about the implementation. It turns out that when cost-reducing innovations do not harm quality significantly, then private firms are to be preferred. Yet, when cost-reductions may strongly reduce quality, state-owned enterprises are superior. Hoppe and Schmitz (2010) have extended this theory in order to allow for a richer set of governance structures, including different forms of public-private partnerships . SOEs are common with natural monopolies , because they allow capturing economies of scale while they can simultaneously achieve
816-570: The overall feasibility of the proposal. In its report of 14 March 1951 the Commission identified advantages of creating a county council comprising the two local government areas for the purpose of developing consistent electric utilities in the region. After further discussions in 1951, the councils of Manly and Warringah resolved to establish the Mackellar County Council consisting of three elected representatives from each Council to commence on 1 September 1951. The council adopted its name, following
850-399: The private sector (perhaps because the good that is being produced requires very risky investments, when patenting is difficult, or when spillover effects exist), the government can help these industries get on the market with positive economic effects. However, the government cannot necessarily predict which industries would qualify as such 'infant industries', and so the extent to which this
884-428: The proportion of the corporate entity a government owns. One definition purports that a company is classified as a GLC if a government owns an effective controlling interest (more than 50%), while the second definition suggests that any corporate entity that has a government as a shareholder is a GLC. The act of turning a part of government bureaucracy into a SOE is called corporatization . In economic theory ,
918-451: The question of whether a firm should be owned by the state or by the private sector is studied in the theory of incomplete contracts developed by Oliver Hart and his co-authors. In a world in which complete contracts were feasible, ownership would not matter because the same incentive structure that prevails under one ownership structure could be replicated under the other ownership structure. Hart, Shleifer, and Vishny (1997) have developed
952-537: The secretariat to the PCG and managed the implementation of the programme, which was completed in 2015. As of 2024, Philippines Amusement and Gaming Corporation (PAGCOR) is the most profitable state-owned enterprise in the Philippines. It is the third largest contributor to government revenues, following taxes and customs. Royal Australian Historical Society Too Many Requests If you report this error to
986-469: The service. Conversely, they might be detrimental because they reduce oversight and increase transaction costs (such as monitoring costs, i.e., it is more difficult and costly to govern and regulate an autonomous SOE than it is the public bureaucracy). Evidence suggests that existing SOEs are typically more efficient than government bureaucracy, but that this benefit diminishes as services get more technical and have less overt public objectives. Compared to
1020-465: The state answers for the liabilities. Stocks of the corporation are not sold and loans have to be government-approved, as they are government liabilities. State-owned enterprises are a major component of the economy of Belarus . The Belarusian state-owned economy includes enterprises that are fully state-owned, as well as others which are joint-stock companies with partial ownership by the state. Employment in state-owned or state-controlled enterprises
1054-497: The state's response to natural disasters, financial crises and social instability. China's SOEs are at the forefront of global seaport-building, and most new ports constructed by them are done within the auspices of the Belt and Road Initiative . As of at least 2024, an Ethiopian SOE is Africa's largest and most profitable airline, as well as Ethiopia's largest earner of foreign exchange. In India , government enterprises exist in
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1088-523: The technical headquarters situated in offices next to the Warringah Shire Hall on Pittwater Road, Brookvale . On 14 September 1962 the Minister for Local Government and Highways, Pat Hills , opened the new headquarters building of the County Council, located on 48-52 Sydney Road, Manly. In May 1965, the employees of the County Council registered the "Mackeller County Council Employees Credit Union Limited". The Credit Union later operated as
1122-542: The term "corporations" is frequently used instead. Thus, SOEs are known under many other terms: state-owned company, state-owned entity, state enterprise, publicly owned corporation, government business enterprise, government-owned company, government controlled company, government controlled enterprise, government-owned corporation, government-sponsored enterprise , commercial government agency, state-privatised industry public sector undertaking, or parastatal, among others. In some Commonwealth realms , ownership by The Crown
1156-643: Was implemented on 1 January 1980, with the Mackellar, St George, and Brisbane Water county councils being amalgamated with the Sydney County Council . Soon after the Council's establishment, the councillors resolved to commission a 'Common Seal' to be the primary visual identifier for the council. The Council asked the eminent local historian and President of the Manly and Warringah District Historical Society, Percy Walter Gledhill FRAHS to draw up
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