The federal government's commission of audit provides a unique opportunity to define what government should be doing and how it should do it, Assistant Treasurer Arthur Sinodinos says.
In an opinion piece for The Australian newspaper on Tuesday, Senator Sinodinos believes it is desirable to pursue privatisation, particularly where private sector competition is prevalent.
"It removes the conflict of interest between government being the regulator of, and a competitor-operator in, a particular market," he said.
He said contracting out government operations will work best when private suppliers are plentiful, and sees the the role of the public sector as actively monitoring performance to ensure key indicators are met.
"We also should examine how government procurement can drive the creation of competitive markets in providing services to government," he said.
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"This provides opportunities for small and medium-sized enterprises to grow and innovate, with benefits for the whole economy."
Treasurer Joe Hockey announced the terms of reference for the commission of audit that will be led by the president of the Business Council of Australia, Tony Shepherd.
The commission will deliver an interim report to government by the end of January and its final report by the end of March.
