2014-09-16 Planning & Organisation Committee Agenda

PLANNING & ORGANISATION COMMITTEE MEETING AGENDA                                    16 September 2014


1. Business Activity Classification

Expenditure thresholds are published each financial year by the Department of Local
Government, Community Recovery and Resilience, and 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 published expenditure thresholds applicable for the 2013/14 financial year are
as follows:

•     $8.9 million for significant business activities; and
•     $312,000 for Code of Competitive Conduct business activities.


2. Application to Noosa Identified Activities for 2014/15

Two of Council’s activities have been identified as competitive in nature that meet the criteria
and relevant threshold levels for identification as business activities. The activities that have
been identified and reform levels to apply (based on the estimated annualised budgeted
expenditure) are:

    Business Activity        Expenditure              Reform Level
    Waste Management         $9.5 million             Significant
    Holiday Parks            $1.5 million             Code of Competitive Conduct


3. Public Benefit Assessments

Section 46 of the Local Government Act 2009 requires that a public benefit assessment
(PBA) be undertaken for a new significant business activity. A PBA is an assessment of
whether the benefit to the public (in terms of service quality and cost) of applying competitive
neutrality in relation to a significant business activity outweighs the costs.

A number of PBAs were undertaken when NCP reforms were first introduced prior to 2000,
with a further round of PBAs undertaken following the amalgamations in 2008 as a result of
the creation of consolidated financially significant business activities for regional Councils.
There has been a trend with recent PBAs to apply the minimum level of reform (i.e. Full Cost
Pricing) as the benefits of applying Commercialisation have generally not been realised.

Council has contacted the department regarding the need to undertake a PBA for the waste
management activity, given a PBA was recently undertaken for the regional waste
management activity in 2010. Advice received from the department is that Council is still
required to undertake a PBA in the 2015/16 financial year. The PBA will be undertaken ‘in
house’ to save ratepayer funds rather than using consultants at significant cost (generally
$30,000 - $50,000), given there is sufficient experience and expertise internally to undertake
the exercise.

Previous Council Consideration

Council previously adopted NCP reforms to the Waste Management and Holiday Parks
business activities consistent with those recommended in this report at its meeting on 6
March 2014.




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