2021-06-08 Services & Organisation Committee Meeting Agenda

SERVICES & ORGANISATION COMMITTEE MEETING AGENDA                                          8 JUNE 2021


3     APPLICATION OF NATIONAL COMPETITION POLICY REFORM FOR 2021-22 BUDGET

Author            Manager Financial Services, Trent Grauf
                  Corporate Services Department

Index             ECM/ 22.11 National Competition Policy

Attachments       Nil

EXECUTIVE SUMMARY
Not applicable.

RECOMMENDATION
That Council note the report by the Manager Financial Services to the Services and Organisation
Committee Meeting dated 8 June 2021 and:
A.    Continue to apply the Full Cost Pricing reform option to the Waste Management business
      activity for the 2021/22 financial year in accordance with section 44(1)(b) of the Local
      Government Act 2009; and
B.    Continue to apply the Code of Competitive Conduct to the Holiday Parks business activity
      for the 2021/22 financial year in accordance with section 47 of the Local Government Act
      2009.

REPORT
The Local Government Act 2009 requires Council to decide each financial year whether to apply
National Competition Policy (NCP) reform to its identified business activities.
Certain activities of Council are required to be identified as business activities if they trade in goods
and services that could potentially be delivered by a private sector firm for the purposes of earning
profits in the absence of Council’s involvement. They do not include the non-business, non-profit
activities of Council such as the libraries, aquatic centre, parks maintenance etc.
The primary purpose for Councils to apply NCP reforms to its business activities is to assist in
removing anti-competitive conduct, encourage greater transparency in the operation of its
competitive activities and improve the allocation of Council’s limited resources.
A number of different reform options are provided under legislation for application to identified
business activities. Commercialisation or Full Cost pricing reforms are generally applied to larger
or financially significant business activities, whereas the Code of Competitive Conduct is applied
to the smaller or prescribed business activities.
The general premise to consider is that the larger the Council business activity the larger the
potential financial impact on the local economy and potential competitors, and hence greater level
of reform applied to ensure ongoing competitive neutrality.
1.    Business Activity Classification
Expenditure thresholds are published each financial year by the Department of State Development,
Infrastructure, Local Government & Planning. Councils are required to determine if any of their
activities deemed competitive in nature are classified as either a significant business activity based
on the definition under the Local Government Regulation 2012, or a prescribed or smaller business
activity when implementing the Competitive Code of Conduct. The expenditure thresholds
applicable for the 2021/22 financial year are as follows:
     $9.7 million for significant business activities; and
     $340,000 for Code of Competitive Conduct business activities.


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