One of the NCP Agreements, the Competition Principles Agreement (CPA) requires that government businesses are not to enjoy any net competitive advantage in the market place simply as a result of their public ownership. This is the principle of 'competitive neutrality'.

The CPA also requires that each State and Territory set up a complaints mechanism to oversee the application of this principle. The Government Prices Oversight Commission has been given this role in Tasmania.

Essentially the competitive neutrality principles require that all government businesses should be corporatised and pay all taxes and be subject to all regulations that the private sector are subject to. The principles also require that government businesses pay debt guarantee fees to offset the competitive advantage of government guarantees.

If full corporatisation of a government business is not feasible, then a 'full costing' model must be applied which takes into account all direct and indirect costs as well as taxes, guarantee fees and costs of government regulations.

The Government Prices Oversight Commission has prepared guidelines in relation to competitive neutrality complaints. These Guidelines set out an overview of the processes for the review of complaints from businesses or persons about alleged breaches of, and non-compliance with, competitive neutrality principles under the National Competition Policy (NCP). These Guidelines should be read in conjunction with the Competitive Neutrality Principles Application Statements Guidelines issued by the Department of Treasury and Finance. Current versions of the Competitive Neutrality Principles Application Statements Guidelines can be accessed on the Economic Reform Page of the Department of Treasury and Finance's website. Other Competitive Neutrality Principles related documents can be found by searching the Publications pages of the Department of Treasury and Finance's website.

The Commissioner has written to all Tasmanian Local Government Councils outlining the Commission's approach to determining what business activities are significant when investigating CNP complaints.