Local government run businesses (beneficial enterprises)

Local Government Act Review

As part of the State Government’s reform agenda, a new Local Government Act will be drafted.

Our vision is for the local government sector to be agile, smart and inclusive.

Our objective is to transform local government so that it is empowered to better deliver quality governance and services to their communities now and into the future.

We are looking at the opportunity for local governments to run businesses as an area of reform.

The current system

  • Local governments provide services which may have community benefit such as childcare facilities.
  • They cannot currently form independent corporations to provide these services.
  • They can form regional councils (entities formed by two or more local governments). 
  • They can form regional subsidiaries (councils delivering shared services). 


The department undertook consultation on the topic of beneficial enterprises during stage two of the Local Government Act review consultation.

Beneficial enterprises summary discussion paper

Beneficial enterprises discussion paper

The following sections outline what was heard during consultation and how feedback will inform a new Local Government Act.

What you’ve told us

  • Local governments are not legally permitted to create incorporated businesses, unlike in Queensland and Victoria. 
  • An independent corporation could be used to manage part of a local government’s existing business activity or pursue new commercial opportunities.
  • There is some community concern around privatisation of local government services and financial risk to ratepayers.
  • Concerns also exist about unfair competition with private businesses. 

Ideas for change

  • Modernise the legislation to provide local governments with the option to form beneficial enterprises. 
  • ​Local government to develop a business plan to address community expectations and ensure transparency of funding and viability arrangements.
  • Introduce eligibility criteria that a local government must meet before it can establish a beneficial enterprise.​


A summary paper which outlines what we heard from the consultation is now available. The contribution of community members, local governments and others who have supported the process to date will provide valuable input to the Local Government Review Panel and help transform local government in Western Australia.

Local Government Act Review Overview - agile

Local Government Act Review Overview: agile

In 2017 the State Government announced a review of the Local Government Act 1995 — the first significant review since the Act was introduced more than two decades ago.

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Page reviewed 26 February 2020