Bit of an old thread however I was at a local govt meeting and the reason that the State Govt is clamping down on this is as follows.
The Federal Govt demanded that the States, to receive their funding, must comply with the productivity commission rulings and the impact of free or subsidised camping on fair competition was one of the factors involved.
If they wanted the money they were the conditions.
Not sure if it was the GST or just normal federal funds they were talking about.
So there ya go.
cheers