With the budget mired in debt and deficit, fresh questions are being asked about whether governments and the companies they own are spending the public's money diligently.

Christine Holgate recently resigned as chief executive of Australia Post, conceding a decision to reward four senior employees with Cartier watches did not pass the "pub test".

Ms Holgate had earlier defended the purchase of the watches on a corporate credit card while giving evidence to a Senate committee.

"I have not used taxpayers' money," Ms Holgate said.

Is it correct that the purchase of the Cartier watches did not involve the use of taxpayers' money? RMIT ABC Fact Check investigates.

The question of whether the purchase of the watches involved the use of taxpayers' money is not cut and dried.

Australia Post — wholly owned by the Commonwealth — is required by law to operate commercially. And, as Ms Holgate pointed out during her Senate estimates appearance, it does not receive funding from the Federal Government.

As experts consulted by Fact Check noted, Australia Post has considerable flexibility and independence when it comes to its daily operations, including the ability to create incentives and to reward staff for hard work.

However, Australia Post also faces stringent public accountability rules and is ultimately answerable to the Parliament.

It is regulated as one of nine Government Business Enterprises under the Public Governance, Performance and Accountability Act (PGPA), and is sub-classified as a "Corporate Commonwealth Entity", along with one other government-owned business, Defence Housing Australia.

As the explanatory memorandum of the PGPA Act clearly states, money and property held by Government Business Enterprises "are still public resources".

It adds that the notion of taxpayer funds "cuts a broad sweep" in the sense that money and property managed by Commonwealth entities are "entrusted to them by the Parliament on behalf of the Australian people".

Australia Post is owned by the Commonwealth, pays the Commonwealth dividends, and it must manage its resources with the interests of the public in mind.

However, within these parameters it is also afforded significant flexibility to earn its own revenue and spend money in a bid to generate profits, unfettered by government.

Although not addressed explicitly, this would appear to include incentivising and rewarding staff with physical items such as a watch.

The extent to which Australia Post could go in offering such rewards in the normal course of operation remains unclear, although first and foremost such remunerative measures would likely be subject to the scrutiny of Australia Post's board.

The verdict: Not cut and dried