General government sector
3.39. The general government sector comprises all government units (as defined in paragraph 2.24) of the Commonwealth Government, each state and territory government, each local government authority, and all resident non-market NPIs that are controlled and mainly financed by those governments.
3.40. Included in the sector are government-controlled unincorporated enterprises that engage in market production but do not qualify as quasi-corporations because their operations are too closely integrated with the operations of other government units and are not the subject of a separate full set of accounts.
3.41. Each of Australia's public universities is established by legislation which gives it the capacity to own assets, incur liabilities and engage in economic activity in its own right. Each university therefore clearly qualifies as a separate institutional unit.
3.42. Although these universities are funded indirectly from taxation, they each have a high degree of independent revenue-raising capacity and authority to decide how funds are expended. For these reasons, they are not considered to be government units as defined in paragraph 2.24. The universities are treated as NPIs because they cannot distribute surpluses. The question of the institutional sector classification of the universities therefore rests on whether they are controlled and mainly financed by government.
3.43. As discussed in paragraph 3.49, SNA93 defines government control of a NPI as the ability to determine policy by having the authority to appoint officers managing the NPI. Legislation establishing each of the universities vests responsibility for their management in senates or councils, which include appointees of the establishing government but also include elected and non-elected representatives of other stakeholders. The degree of government control exercised through appointment of officers varies from university to university. Also, other forms of government control are exercised. For example, the fact that the universities are mainly financed by the Commonwealth Government gives that government a significant degree of control.
3.44. Taking into account the combined degree of control of universities exercised in various forms by the Commonwealth Government and state governments, and the high degree of government financing, the universities are considered to be mainly controlled and financed by government. Strict application of the rules to each public university individually might result in a minority of them falling outside the general government sector. However, uniform sector classification of all public universities is regarded as an overriding consideration and all have been classified to the general government sector.
3.45. Further discussion relevant to the delineation of the general government sector is included in paragraphs 4.4-4.15.