Local Government

The Queensland Competition Authority reported to Government on the implementation, where appropriate, of competition reform by local government businesses, including water supply businesses, from 1998 to 2006.

A key element in this process was $150 million in funding provided by the Government to local government to encourage reform.

The Authority has more recently been requested to review infrastructure charges schedules (ICSs) for certain councils.

Regulatory Framework

Local governments throughout Queensland have agreed to participate in the National Competition Policy reform initiative. Legislatively, the Authority had two broad roles which are relevant to local governments and their involvement. They related to:

• compliance with the principle of competitive neutrality; and
• making recommendations to the Queensland Government about financial incentive payments relating to progress in the implementation of agreed reforms.

Under the Integrated Planning Act 1997 (IPA), local governments may establish and levy infrastructure charges to fund trunk infrastructure networks identified in a priority infrastructure plan. The Authority has been requested to provide the Minister for Planning with advice regarding the infrastructure charges schedules proposed by certain councils.

Competitive Neutrality

Local government business activities in competition with the private sector must not have an advantage over their private sector competitors as a result of their local government ownership or control. If a business has been disadvantaged in this way, it may be able to lodge a complaint against the relevant local government business activity.

Complaints against businesses listed in the Guidelines for Complaints and Applications for Accreditations can be referred to the Authority.  Complaints against other businesses should be referred to the relevant council.

Further information on Competitive Neutrality is available under About the QCA.

Local Government Financial Incentive Payments Scheme (LGFIPS)

In July 1998, the Authority was directed to examine and report annually on the implementation of competition policy reforms by local governments, and to recommend the levels of payment to local governments under the Local Government Financial Incentive Payments Scheme (the Scheme). The Authority submitted its final report to the Government in June 2006 which included recommendations for the distribution of unexpended funds based on reforms that went beyond the requirements of the Scheme.

Final payments to councils under the Scheme were made in May 2007. Consistent with the Authority’s recommendations, payments to councils totalling $150.2 million have been made under the Scheme.

While the Scheme has expired, the States have recommitted to the application of the Competition Principles Agreement to local government, although detailed arrangements have not yet been finalised.

Given the Authority’s past involvement in monitoring councils’ compliance with competition reforms, the Authority anticipates a continued role in respect of the new arrangements.

Infrastructure Charges

The Authority has recently been requested to review the infrastructure charges schedules (ICSs) of certain councils.

Where requested by the Minister for Planning, the Authority reviews ICSs submitted by councils. While detailed arrangements are yet to be finalised, the Authority will be required to assess the appropriateness of the establishment costs of the trunk infrastructure and allocation of costs to developers of the assets identified in a priority infrastructure plan (PIP).

Under the IPA, the establishment cost of a trunk infrastructure network comprises the cost of:

• preparation and ongoing administration of the ICS;
• future infrastructure; and
• existing infrastructure.

The IPA and associated guidelines provide that the infrastructure charge must not be more than the proportion of the establishment cost of the network that reasonably can be apportioned to the development for which the charge is stated, taking into account the usage or capacity of the network.