Cinema ‘exempt’ as drive-in closes
CHARTERS Towers Regional Council has voted to apply the code of competitive conduct to its operations regarding cinema screenings at the World Theatre and more.
Council corporate and community services director Marnie Taylor recommended the code of competitive conduct be applied to road activity, water and sewerage, the Dalrymple Saleyards, fleet management, waste management and landfill, and World Theatre cinema screenings.
Under the Local Government Act 2009, councils are required to apply the code of competitive conduct in relation to business activities other than building certifying, roads or the provision of library services, thereby exempting the council from conditions requiring it to operate business activity on a competitive-neutral level.
Councillors Kate Hastie and Graham Lohmann queried the application of the code to the World Theatre’s cinema services, the former asking if a profitable cinema made any difference to the application of the code.
Ms Taylor told councillors whether or not there was competitive conduct was not determined by profit, but the operating expenditure.
She said cinema screenings were conducted in conjunction with live theatre and gallery activities and were therefore not considered in direct competition with other service providers, and did not meet the threshold of $340,000 as outlined by the regulation.
This month the council revealed that the operating expenses for the theatre in the 2019-20 financial year were $490,000, and $579,000 in 2018-19. Losses ranged from $240,000 to $258,000 during the same period.
Cr Lohmann asked about the requirement for the council to do a public benefit assessment report under the act, but was told the agenda item before them was about the community obligation services provided with the council’s facilities only.
Charters Towers Tors Drive In owners Steve and Deb Snell told the public in July they would not be reopening their cinema services while they continued to compete against the ratepayer-funded World Theatre cinemas.
The couple said if the council reversed its decision to run the cinema “to compete unfairly against us while billing the huge losses to the ratepayers, we would be very keen to reopen our drive-in cinemas for the region”.
Mayor Frank Beveridge said the council would continue to run the theatre and cinema complex at a loss to ratepayers, despite the 2014 Queensland Competition Authority report ruling the council was operating in competition with the drive-in.
The competitive neutrality principle in the Local Government Act 2009 says councils conducting a business activity in competition with the private sector should not enjoy a net advantage over competitors.
All councillors voted at this week’s meeting to apply the code.