2020-07-10 Special Meeting Agenda

SPECIAL MEETING AGENDA                                                                              10 JULY 2020


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
2020/21 financial year are as follows:

       $9.7 million for significant business activities; and
       $340,000 for Code of Competitive Conduct business activities.


2.      Application to Identified Business Activities for the 2020/21 Financial Year

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           $12.6 million               Significant
    Holiday Parks              $1.3 million                Code of Competitive Conduct

Note: annualised expenditure for significant activities includes total operating expenses less depreciation less
competitive neutrality costs plus interest and loan redemption. Expenditure for code of competitive conduct activities
includes total operating expenses plus interest.



Previous Council Consideration
Council has adopted NCP reforms to the Waste Management and Holiday Parks business activities
since de-amalgamation in 2014.

Finance
The financial implications of NCP reforms primarily revolve around pricing strategies for full cost
recovery, which includes a return on investment component. In addition, there is an administrative
effort in ensuring ongoing competitive neutrality compliance (i.e. budget preparation, reporting,
specific full cost pricing modelling).

Risks & Opportunities
Failure to appropriately review and apply competition reforms annually is a breach of the Local
Government Act 2009, and could also potentially result in competitive neutrality complaints should
appropriate adjustments not be incorporated into business activity pricing decisions.

Consultation
External Consultation - Community & Stakeholder
Council has referenced the latest advice received from by the Department of Local Government,
Racing and Multicultural Affairs in relation to expenditure thresholds.

Internal Consultation
Nil.


                                                                                                    Page 43 of 59