Snapshot guide to reforming Queensland local government ‘business activities’

Queensland local governments trading in goods or services (commonly including off‑street parking services, waste management services, holiday parks and festivals) are required by the Local Government Act 2009 (Qld) to assess those business activities against the competitive neutrality principle to ensure they are not enjoying a net advantage over their competitors simply because they are in the public sector.

The level of expenditure (not revenue) of the business activity will determine what competitive neutrality reforms must be applied.  This is summarised in the diagram below (which includes expenditure thresholds current as at the date of this publication):

A summary of the process for reforming significant business activities (those business activities with current expenditure exceeding $9.7 million for the previous financial year) is set out below:

A summary of the process for reforming prescribed business activities (those with current expenditure exceeding $340,000 for the previous financial year but below the threshold a significant business activity) is set out below:

It is important that Queensland local governments ensure that they understand and are applying the competitive neutrality regime under the Act correctly, and that their decisions regarding relevant activities as described in any resolution are clear, reasonable and defensible.  If the process is not conducted correctly, the prospect of complaints being made increases.  A summary of the complaints process is set out below:

In our experience, determining if and how the competitive neutrality principle or the code of competitive conduct should be applied to certain local government activities can be complex.  Councillors may have differing opinions about whether there are public benefits in conducting such an exercise.