Client: Rural City of Wangaratta
Under the National Competition Policy, local government owned significant businesses must ensure that they do not enjoy any competitive advantage simply because they are publicly owned. Significant businesses are ones that are large in comparison to the market in which they operate or have the ability to influence or competitively impact the market. Examples can include Livestock Exchanges, Child Care Centres, Aquatic and Leisure Centres in fact any business activity that charges a fee for use.
If a business activity is deemed to be a significant business, full cost pricing principles must be applied. Complaints about unfair pricing are common and can be made against local government owned businesses, potentially resulting in action being taken by State Governments.
A review of the Wangaratta Livestock Exchange identified that while the activity is a business activity for the purposes of competitive neutrality legislation, it was not a significant business due to its share of the market and its inability to influence and impact that market. The findings of the review were reviewed by Better Regulation Victoria and found to be logical based on the evidence gathered.