2017-03-07 Services & Organisation Committee Agenda

SERVICES & ORGANISATION COMMITTEE MEETING AGENDA                                                   7 MARCH 2017


8                        2017/18 NATIONAL COMPETITION POLICY REFORM APPLICATION
DOCUMENT INFORM AT ION




Author                              Director Corporate Services, Michael Shave
                                    Corporate Services Department

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

Attachments                         Nil


EXECUTIVE SUMMARY
Not Applicable

RECOMMENDATION
That Council note the report by the Director Corporate Services to the Services & Organisation
Committee Meeting dated 7 March 2017 and
A.                       Apply the Full Cost Pricing reform option to the Waste Management business activity for
                         the 2017/18 financial year in accordance with section 44(1)(b) of the Local Government Act
                         2009; and
B.                       Apply the Code of Competitive Conduct to the Holiday Parks business activity for the
                         2017/18 financial year in accordance with section 47 of the Local Government Act 2009.


REPORT
The Local Government Act 2009 requires Council to decide each financial year whether to apply
National Competition Policy (NCP) reform to its identified business activities.

Certain activities of Council are required to be identified as business activities if they trade in
goods and services that could potentially be delivered by a private sector firm for the purposes of
earning profits in the absence of Council’s involvement. They do not include the non-business,
non-profit activities of Council such as the libraries, aquatic centre, parks maintenance etc.

The primary purpose for Councils to apply NCP reforms to its business activities is to assist in
removing anti-competitive conduct, encourage greater transparency in the operation of its
competitive activities and improve the allocation of Council’s limited resources.

A number of different reform options are provided under legislation for application to identified
business activities. Commercialisation or Full Cost pricing reforms are generally applied to larger
or financially significant business activities, whereas the Code of Competitive Conduct is applied
to the smaller or prescribed business activities.

The general premise to consider is that the larger the Council business activity the larger the
potential financial impact on the local economy and potential competitors, and hence greater
level of reform applied to ensure ongoing competitive neutrality.

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

                                                                                                    Page 28 of 55