2021-10-12 P&E Agenda - Item 2 - Attachment 6 - Cost Benefit Analysis

COST BENEFIT ASSESSMENT – PROPOSED LOCAL LAW AMENDMENT: SHORT STAY
LETTING & HOME HOSTED ACCOMMODATION


5.             COST-BENEFIT ANALYSIS FINDINGS
5.1            QUANTITATIVE ASSESSMENT
A quantitative assessment has been undertaken, with costs and benefits discounted to present value terms to
estimate the net present value and benefit cost ratio of the proposed local law over a 30-year period. Sensitivity
analysis has been conducted at real discount rates at 0%, 4%, 7% and 10%.

When considering all impacts irrespective of location, the value of identified benefits exceeds the value of identified
costs.

Table 5.1. Quantitative Assessment – All Impacts Irrespective of Location
All Impacts                               Discount Rate
Impact                           0%          4%             7%        10%
Costs
Council Administration   $     13.0   $      7.9   $       5.9   $     4.6
Property Management      $    183.6   $    110.1   $      81.3   $    63.5
Total Costs              $    196.6   $    117.9   $      87.1   $    68.1
Benefits
Health and Amenity       $    286.9   $    172.0   $   127.0     $    99.2
Total Benefits           $    286.9   $    172.0   $   127.0     $    99.2
Net Present Value        $     90.2   $     54.1   $    39.8     $    31.1
Benefit Cost Ratio             1.46         1.46        1.46          1.46
Source: AEC.

When considering impacts only within Queensland, the value of identified benefits exceeds the value of identified
costs by an even greater extent.

Table 5.2. Quantitative Assessment – All Impacts in Queensland
Queensland Impacts                        Discount Rate
Impact                           0%          4%             7%        10%
Costs
Council Administration   $      6.4   $      3.8   $       2.9   $     2.3
Property Management      $     26.5   $     15.9   $      11.7   $     9.1
Total Costs              $     32.8   $     19.7   $      14.6   $    11.4
Benefits
Health and Amenity       $    286.9   $    172.0   $   127.0     $    99.2
Total Benefits           $    286.9   $    172.0   $   127.0     $    99.2
Net Present Value        $    254.0   $    152.3   $   112.4     $    87.7
Benefit Cost Ratio             8.73         8.72        8.71          8.68
Source: AEC.

When considering impacts only within Noosa Shire, the value of identified benefits exceeds the value of identified
costs by an enormous margin.

Table 5.3. Quantitative Assessment – All Impacts in Noosa Shire
Noosa Impacts                             Discount Rate
Impact                           0%          4%             7%        10%
Costs
Council Administration   $      1.8   $      1.1   $       0.8   $     0.7
Property Management      $      7.6   $      4.5   $       3.3   $     2.6
Total Costs              $      9.4   $      5.6   $       4.2   $     3.3
Benefits
Health and Amenity       $    286.9   $    172.0   $   127.0     $    99.2
Total Benefits           $    286.9   $    172.0   $   127.0     $    99.2
Net Present Value        $    277.5   $    166.3   $   122.8     $    95.9
Benefit Cost Ratio            30.57        30.54       30.47         30.38
Source: AEC.




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