The objectives of the Australian Government's policy of competitive neutrality (CN) are:
- that significant Australian Government business activities do not enjoy net competitive advantages over their private sector competitors (or potential competitors) simply by virtue of their public sector ownership;
- to eliminate potential resource allocation distortions arising from the public ownership of significant business activities operating in contestable environments; and
- to encourage fair and effective competition in the supply of goods and services.
A Finance Circular and the Australian Government Competitive Neutrality Guidelines for Managers, February 2004 have been prepared to assist agencies to determine what their CN obligations may be and what adjustments may need to be made, including how those adjustments may be applied, and when a particular approach may be more suitable than another.