Competitive neutrality

Land Development Corporation operates in a commercial manner and, as a Government Business Division, is subject to the Northern Territory Government’s Competitive Neutrality Policy. This framework is designed to ensure government businesses do not receive a net competitive advantage over private sector competitors simply because of public ownership.

LDC applies competitive neutrality through its commercial settings, transaction processes, financial reporting and policy framework.

In practice, this means LDC applies market-based pricing and independent valuations, accounts for full costs in decision-making, applies lending margins to reflect commercial borrowing conditions, and is required to earn a return on equity. Where LDC undertakes non-commercial activities through ministerial direction or community service obligations, these are treated transparently and reported appropriately.

LDC’s performance against competitive neutrality is considered across the areas below.

LDC uses independent market valuations for land transactions, including land it sells, leases and licenses.

In making business decisions, LDC considers direct project costs and indirect costs associated with operating as a business, including employee costs, accommodation, operating expenses, vehicles, insurance, and legal and audit services. LDC also purchases certain corporate and information technology services from government, and these costs are factored into decision-making.

LDC borrows from Northern Territory Treasury Corporation (NTTC). To reflect differences between government and private sector borrowing costs, a lending margin is applied so that LDC’s interest rates are comparable to commercial rates.

LDC is required to earn a return on equity. This includes:

a minimum hurdle rate based on the risk-free rate (government bonds) plus a margin to compensate for business and financial risk, and
a target rate of return intended to align with returns sought by private sector strategic land developers.

From time to time, LDC may receive a ministerial direction to undertake a non-commercial activity. For example, In January 2026, LDC was directed to enter a non-commercial transaction with the Northern Territory Livestock Exporters Association to enable address of environmental issues within their existing site at Wishart.

In limited circumstances, LDC may seek Community Service Obligation support where government requires LDC to provide services that are non-commercial.

LDC reports annually on its financial position and performance, including commercial performance and any non-commercial activities.

Taxes and tax equivalents

LDC is required to pay:
local government rates on land holdings
payroll tax and stamp duty to the Northern Territory Government
GST and Fringe Benefits Tax to the Australian Taxation Office
a tax equivalent payment to the Northern Territory Government (in lieu of company tax), calculated at 30% of profit
Equivalent regulation

LDC is subject to the same local, Territory and Australian Government regulations as private sector businesses, including the same planning, development and environmental regulations faced by any land developer.

Dividend policy

Each year, LDC pays the Territory Government a dividend equal to 50% of after-tax profit. LDC paid $1,648,949.25 in dividends in December 2025.

Capital structure

LDC’s capital structure was established in 2011 to broadly reflect private sector firms delivering strategic land, including LDC inheriting $25 million of debt. LDC’s capital structure is reviewed from time to time by the Department of Treasury and Finance.

The following LDC policies provide further detail on how we meet our obligation to act commercially and apply competitive neutrality principles:

Competitive neutrality