2019-06-11 Services & Organisation Committee Agenda

SERVICES & ORGANISATION COMMITTEE MEETING AGENDA                                                  11 JUNE 2019


15                       APPLICATION OF NATIONAL COMPETITION POLICY REFORM FOR 2019-20
                         BUDGET
DOCUMENT INFORM AT ION




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 11 June 2019 and:
A.                       Continue to apply the Full Cost Pricing reform option to the Waste Management business
                         activity for the 2019/20 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 2019/20 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 Council 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 Local
Government, Racing and Multicultural Affairs. 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 2019/20 financial year have increased from 2018/19 levels in line
with the Consumer Price Index and are as follows:

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