This Circular is a summary of a new governance framework that agencies will need to apply to all new major transactions. This framework has been developed to ensure that major government transactions are managed to deliver the best financial result alongside desired service outcomes.
ERC is responsible for overseeing all major transactions involving government assets on behalf of Cabinet. Under the new framework, any major transaction will be managed by a separate oversight committee that is chaired by Treasury and reports to the ERC through the Treasurer.
Alongside Treasury, the oversight committee for a specific transaction is to include representatives from DPC, DFS and relevant portfolio agency/ies. This committee will be responsible for delivery of the transaction as well as ensuring that the transaction aligns with the government's strategic priorities. Treasury will provide secretariat functions for the committee, with input from other members as required.
All major transactions (excluding real property transactions) that involve the sale/lease/licencing of physical or financial assets must comply with this circular. This includes the sale of major physical or financial assets, as well as proposals to outsource, and/or provide exclusive or limited rights for external organisations to deliver a major service or function on behalf of the government. It does not apply in situations where the transaction solely involves government investment in the procurement or purchase of services from third-parties.
Any transaction with a non-government entity that results in either of the following conditions would be considered major:
That is, the new governance framework applies to all transactions where a financial benefit or payment is received by government and either of the above conditions are met.
If agencies are unclear if their transaction is covered by this circular, they should seek clarification from the ERC.
The primary exception to this framework is the sale of government real property unless as part of a more complex refinancing or a public-private ownership proposal. Similarly, projects being progressed in accordance with the Guide for Submission and Assessment of Unsolicited Proposals are not bound by this framework.
Any other exceptions to the framework will need to be submitted for approval by ERC and supported by clear reasons for variance.