The Local Government Legislation (Empowering Councils) Amendment Regulation 2025 (Amendment Regulation), which was made on 12 December 2025 and is now in effect, has resulted in two significant changes to the way in which Councils in Queensland can enter into contracts:
- The Amendment Regulation has replaced the Ministerial exemption to selling and leasing land with a “self-assessed” exemption; and
- The Amendment Regulation has increased the threshold for requiring tenders and quotes, and introduced CPI indexing of the threshold on a yearly basis.
These amendments are aimed at giving local governments more autonomy over business decisions and improving the efficiency of decision making.
The new exception for valuable non-current assets
All local governments are very familiar with the default contracting procedures under the Local Government Regulation 2012 (LG Reg), which require Councils to dispose of a valuable non-current asset (which includes the sale or lease of Council land) by tender or auction.
Section 236 of the LG Reg sets out exceptions to that requirement, and those exceptions may be applied by Council in specific circumstances, and subject to particular conditions.
Before the Amendment Regulation, one of the exceptions was a Ministerial approval exception. Councils across Queensland could apply to the Minister for an exemption to the requirement to invite tenders or call an auction to dispose of property, and the Minister had a broad discretion in those circumstances.
That exception is now gone, and it has been replaced with an exception that is essentially a “self-assessed” exception. The new exception allows Council to resolve that it is in the public interest, and otherwise in accordance with the sound contracting principles, to dispose of the asset without tenders or auction.
However, there are some mandatory requirements when applying this exception – specifically:
- the resolution must state:
- why the local government considers the disposal of the asset other than by tender or auction is in the public interest; and
- how the disposal is otherwise in accordance with the sound contracting principles; and
- Council must:
- within 5 business days after making the resolution, give a copy of the resolution to the Minister; and
- not dispose of the asset as permitted by the exception within 56 days after making the resolution.
The sound contracting principles are set out in section 104(3) of the Local Government Act 2009 (LG Act) and must guide all Council decision-making associated with contracting and procurement. The sound contracting principles are:
- value for money; and
- open and effective competition; and
- the development of competitive local business and industry; and
- environmental protection; and
- ethical behaviour and fair dealing.
Indexing the threshold for requiring tenders and quotes
The monetary thresholds for medium, large and valuable non-current asset contracts in the LG Reg, which have not changed for some time, have now been increased.
Monetary thresholds for each contractual arrangement will also be adjusted by CPI each year to account for inflation.
The amounts are all expressed to be exclusive of GST.
Medium-sized contractual arrangements
Under section 224(2) of the LG Reg the threshold for a medium-sized contractual arrangement entered into before 1 July 2026 has increased from $15,000 to $21,000.
Large-sized contractual arrangements
Pursuant to section 224(3) of the LG Reg, the threshold for a large-sized contractual arrangement entered into before 1 July 2026 has increased from $200,000 to $280,000.
Valuable non-current assets
Section 224(8) provides that a limit set by the local government for a valuable non-current asset, other than land, disposed of before 1 July 2026 cannot be more than the following amount:
- For plant and equipment – $7,000 (up from $5,000); and
- For another type of non-current asset; $14,000 (up from $10,000).
Adjustment of thresholds from 1 July 2026
Under new section 223E of the LG Reg, the threshold amounts will be adjusted on 1 July every year, with the next adjustment to occur on 1 July 2026.
The amounts will be adjusted according to the Consumer Price Index (CPI) formula for Brisbane (All Groups), rounded to the nearest multiple of $100 (or, for large-sized contractual arrangements, $1,000).
In a year where the CPI formula results in a reduction, there will be no change to the previous year’s threshold.
What does this mean for local governments?
The replacement of the Ministerial exception for the disposal of valuable non-current asset contracts with a self-assessed framework is a significant change.
Councils seeking to adopt this exception must ensure that the accompanying reports carefully set out the justification for the exception from a public interest perspective and in accordance with the sound contracting principles, and the mandatory requirements associated with the content of the resolution and the reporting of the decision to the Minister are met.
Councils should also ensure that, when applying this exception, the contract is not entered into before the minimum “delay” period expires – that period is presumably intended to give the Minister an opportunity to consider the merits of the decision and take action to set it aside if the Minister considers it to be unsound (as the Minister is entitled to do under section 121 of the LG Act).
The changes to the contractual arrangement thresholds are designed to ensure the legislation keeps pace with inflationary changes, and revise threshold figures that have not changed for some time.
Preston Law assists local governments throughout Queensland in contracting and procurement matters. If you have any further queries about this blog or local government law generally, please contact our team.