2016-02-02 Planning & Organisation Committee Agenda

PLANNING & ORGANISATION COMMITTEE MEETING AGENDA                                        2 FEBRUARY 2016


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 announced expenditure thresholds applicable for the 2015/16 financial year
are as follows:

     $9.2 million for significant business activities; and
     $325,000 for Code of Competitive Conduct business activities.

2. Application to Noosa Identified Activities for 2015/16

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              $10.0 million               Significant
 Holiday Parks                 $2.2 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.

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.

Council needs to undertake a PBA for the waste management business activity this financial
year. The PBA is currently in progress and is nearing finalisation.

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 25
September 2014.

Finance & Risk

Financing implications primarily revolve around administrative effort in ensuring ongoing
competitive neutrality compliance (i.e. budget preparation, reporting, full cost pricing
modelling).

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.




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