With three levels of government in Australia-local, state and federal-it is evident that PPPs operate in a complex and confusing context set by different governing rules and expectations (English & Guthrie, 2003). This makes auditing and evaluation of PPPs even more difficult for the players involved especially in the case of private companies.
In Australia PPPs operate within some or all of the following constitutional, legal and regulatory frameworks: two levels of government (federal government and state government), National Competition Policy, Australian Taxation Law and the overriding commitment to NPM. The main steering medium on federal level is, of course, the federal government with other steering groups also reporting including the Loan Council, the Federal Department of Finance and Administration, and the Australian Accounting Standards Board. These produce legislation, regulations, reports, policies and guidelines that are categorised as steering mechanisms on a state level (English & Guthrie, 2003). In addition, state governments are steering PPPs at state level, usually represented by departments of treasury. At both federal and state levels, auditor-generals and parliamentary committees are also classified as steering media. They produce reports that are classified as ex post steering mechanisms. All these have contributed to the establishment of different steering mechanisms such as (English & Guthrie, 2003): macro-economic mechanisms, procurement steering mechanisms, mechanisms to achieve VFM (Public Sector Comparator and Public Interest Test) and monitoring mechanisms.
The PPPs' steering media and mechanisms listed above have been established only recently. Keating (2004) finds that the New South Wales and Victorian Governments, which are the most adventurous in engaging PPPs, lacked specific PPP policies and guidelines until 2001-2. According to English and Guthrie (2003) only the federal and state governments have the power and responsibility to enter into PPPs. Local governments do not have specific guidelines or experience in relation to establishment of PPPs. As a result, some state governments could be reluctant to allow local governments to undertake PPPs (Jones, 2003), and may need to amend the requisite legislation. Nevertheless, Keating (2004) provides evidence that local governments are also commencing PPP establishment-a view supported by Jones (2005) and Teicher et al. (2006).