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Threshold amounts for significant business activities for 2012-13

Purpose

This bulletin is to advise local governments of the new threshold amounts for new significant business activities which are to be employed to determine new type one or type two business activities for 2012-13 based on current expenditure for the 2011-12 financial year.

Background

Under the Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 and the City of Brisbane (Business Enterprises and Business Activities) Regulation 2010 a local government must assess, as soon as possible after the budget meeting for the year, whether any businesses are type one or type two businesses. These are based on the expenditure for those businesses in the preceding financial year.

Under section nine of the Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 and the City of Brisbane (Business Enterprises and Business Activities) Regulation 2010, the Minister for Local Government must set the threshold amounts for current expenditure of that financial year to determine whether an activity is to be identified as a new type one or type two business activity.

The threshold amounts are based on values set at 30 June adjusted each year for cost of living movements since that date as recorded by the Consumer Price Index.

2012-13 thresholds

The following threshold amounts for the purposes of section nine of the Local Government (Business Enterprises and Business Activities) Regulation 2010 for the 2012-13 financial year have been gazetted and are as follows:

  • (a) for type one Activities:
    • (i) for water and sewerage combined activities - $42,640,000
    • (ii) for other activities - $25,540,000
  • (b) for type two Activities:
    • (i) for water and sewerage combined activities - $12,770,000
    • (ii) for other activities - $8,550,000

The following threshold amounts for the purposes of section 9 of the City of Brisbane (Business Enterprises and Business Activities) Regulation 2010 for the 2012-13 financial year have been gazetted and are as follows:

  • (a) for type one activities - $25,540,000
  • (b) for type two activities - $8,550,000

In deciding whether an activity should be a type one or type two business activity for the 2012-13 financial year, local governments must consider the operating expenditure for the 2011-12 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.