2016-02-02 Planning & Organisation Committee Agenda

PLANNING & ORGANISATION COMMITTEE MEETING AGENDA                                           2 FEBRUARY 2016


7                        WASTE MANAGEMENT BUSINESS ACTIVITY PUBLIC BENEFIT ASSESSMENT
DOCUMENT INFORM AT ION




Author                              Director Corporate Services, Michael Shave
                                    Corporate Services Department

Index                               ECM/ Subject/ Financial        Management      /   Accounting/    National
                                    Competition Policy

Attachments                         1.   Public Benefit Assessment Draft Report
                                         (33 pages – provided separately to this agenda, 2 hard copies are
                                         available in the Councillors Room)



EXECUTIVE SUMMARY
Not applicable.

RECOMMENDATION
That Council note the report by the Director Corporate Services to the Planning &
Organisation Committee Meeting dated 2 February 2016 and
A.                       Approve the draft Public Benefit Assessment report for the purpose of public
                         consultation; and
B.                       Note that a report will be presented to a future Council meeting on the preferred
                         business model.


REPORT
Background
Following de-amalgamation Council resumed responsibility for the provision of waste
management services in the Noosa shire. The State Government de-amalgamation
legislation included provisions regarding Council businesses and the requirement to
undertake new public benefit assessments should they be considered financially significant.
Council’s waste management business meets the relevant expenditure threshold to be
considered financially significant (with full cost pricing reform still applied to the business
activity).
Whilst Council has questioned the cost benefit to the community of undertaking a further
PBA (given the recent PBA undertaken by the Sunshine Coast Regional Council in 2010),
the state government advised it was still required. As such Council was required to
undertake a PBA of the waste management business activity to determine the most
appropriate business structure under National Competition Policy (NCP) reforms. The reform
options under consideration include:
1.                       The business continues with Full Cost Pricing (FCP) reform; or
2.                       The business becomes a Commercialised Business Unit (CBU).
The objective of the PBA is to assess whether the benefit to the Noosa community (in terms
of service quality and cost) of applying the competitive neutrality principle outweighs the
associated costs. Under the competitive neutrality principle, an entity that is conducting a
business activity in competition with the private sector should not enjoy a net advantage over
competitors only because the entity is in the public sector.




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