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National Competition Policy - New threshold amounts for significant business activities and the Competitive Code of Conduct for 2014-15

Purpose

This bulletin is to advise councils of the new thresholds to be used to determine if an activity is a 'Significant Business Activity' based on the definition under the Local Government Regulation 2012 and the City of Brisbane Regulation 2012, or a prescribed business activity when implementing the Competitive Code of Conduct.

Background

New Significant Business Activities

Under the Local Government Regulation 2012 and the City of Brisbane Regulation 2012, a council must assess, as soon as possible after the budget meeting for the year, whether any businesses are a new significant businesses activity.

Councils are required to make this assessment using the financial information for the previous financial year that was presented at council's budget meeting. The Regulations no longer distinguish between Type 1 or Type 2 business activities.

Threshold amounts are stated in section 19 of the Local Government Regulation 2012 and section 16 of the City of Brisbane Regulation 2012.

To change these thresholds the Minister must consult with the LGAQ.

Competitive Code of Conduct

Under the Local Government Regulation 2012 and the City of Brisbane Regulation 2012, a council must apply the Competitive Code of Conduct to a building certifying activity, a road activity, a prescribed business activity (an activity that exceeds the threshold), or any other activity it decides too.

New 2014-15 Thresholds

New Significant Business Activities

Section 19 of the Local Government Regulation 2012 was recently amended to increase the thresholds. The thresholds for the 2014-15 financial year are therefore as follows:

  • for water and sewerage combined activities - $13,300,000; and
  • for any other business activity - $8,900,000.

The threshold amount in section 16 of the City of Brisbane Regulation 2012 has also changed. For the 2014-15 financial year the threshold is as follows:

  • for any business activity - $8,900,000.

In deciding whether an activity should be a significant business activity for the 2014-15 financial year, local governments must consider the operating expenditure for the 2013-14 financial year less any depreciation included therein and any expenditure included therein to achieve competitive neutrality which is not actually incurred by the local government plus any loan redemption payments in that year.

Competitive Code of Conduct

The threshold for determining whether an activity is a prescribed business activity is now $312,000.

Further information

Any further enquiries on this matter should be addressed to:

Ms Samantha Cieslar
Principal Project Officer
Department of Local Government, Community Recovery and Resilience
PO Box 15009
City East
Brisbane Qld 4002