Australia

Committee releases interim report on constitutional recognition of local government

THE Joint Select Committee on Constitutional Recognition of Local Government last week released its interim report on the proposal, timing and likely success of a referendum to amend Section 96 of the Australian Constitution to effect financial recognition of local government.

The interim report contains the Committee's major conclusions and recommendations about the majority finding of the Expert Panel on Constitutional Recognition of Local Government, with the final report expected in March.

Among its recommendations are that a referendum on financial recognition of local government be held at the same time as the 2013 federal election and for the Australian Government to begin all necessary preparatory activities to ensure a successful outcome.

The Expert Panel on Constitutional Recognition of Local Government was appointed by the Australian Government in August 2011 and tasked with identifying options for the constitutional recognition of local government and the level of support for such recognition.

Its December 2011 final report stated that the majority of the Panel members believed financial recognition is the only option with a reasonable chance to succeed at a referendum, provided steps are taken to secure the support of the States and achieve broader public awareness and engagement.

The Committee's interim report states that evidence it received has emphasised the uncertainty around programs delivered by local governments that the Commonwealth Government funds directly and says there is an urgency to address this situation.

"The urgency of addressing the present situation comes from two sources. Firstly, there is an imperative to address potential unconstitutionality and the threat to funding it represents ahead of a possible High Court Challenge," the report writes.

"Secondly… Commonwealth funding to local government could be impacted even in the absence of a pending High Court challenge because of the uncertainty surrounding the ultimate constitutional status of such funding."

While the Committee noted that some advocates have expressed concerns that there is not enough time between now and the next federal election to build the necessary support, it said the recent Pape (2009) and Williams (2012) High Court cases have created "a moment for action."

The Committee said it believes "there is ample time to build community support and ensure that the necessary legislation and arrangements are in place."

The Committee's interim report makes four recommendations, summarised as:

  • The Committee recommends that a referendum on financial recognition of local government be held in 2013 and that the Australian Government immediately commence negotiations with state and territory governments to secure their support for the referendum proposal.
  • The Committee recommends that the referendum propose an amendment to Section 96 of the Constitution:

…the Parliament may grant financial assistance to any State or to any local government body formed by State or Territory legislation on such terms and conditions as the Parliament thinks fit.

  • The Committee recommends that a referendum on financial recognition of local government be held at the same time as the 2013 federal election.
  • The Committee recommends that the Commonwealth Government begin all necessary preparatory activities to ensure a successful outcome for a referendum on financial recognition in 2013.

Local Government Minister Simon Crean welcomed the release of the interim report, saying the Australian Government is clear on its commitment to achieve constitutional recognition of local government.

However, Mr Crean said the referendum will require support from both political parties and all states, if it is to be successful.

"The Federal Government has been engaging with the states, local governments and bodies on its commitment to achieving constitutional recognition for local government… We acknowledge further work needs to be done with the states to secure the necessary support for a successful referendum," Mr Crean said.

The Minister also said the government does not accept the evidence presented to the Committee in relation to the federal financial framework, stating that the Commonwealth continues to have constitutional support to make grants or payments directly to local government bodies.

"It is in interests of the nation for the Commonwealth to directly fund local government. Local government is the conduit of communities, and today more so than ever local government is called upon to deliver and facilitate services to meet the needs of their communities," Mr Crean said.

"The interim report demonstrates a successful outcome is possible if governments work together. The Federal Government will await the release of the final report before responding."

The Australian Local Government Association (ALGA), which has long been campaigning for constitutional recognition of local government, also welcomed the release of the interim report.

"ALGA welcomes the preliminary report's recognition of the constitutional vulnerability of direct payments to local government through programs such as Roads to Recovery, which are essential for all local communities," ALGA President, Felicity-ann Lewis said.

"We welcome the Committee's acknowledgment that the suggested words for a change to Section 96 of the Constitution to resolve financial uncertainty will not have implications for the state governments and their relationship with local government.

"ALGA has been strongly supportive of the need for constitutional change as soon as possible to secure the continuation of direct federal funding to local government.  This can only be achieved through a successful referendum," Cr Lewis said.

"Our concern is that delays in obtaining strong commitment from across the political spectrum at both the state and federal level, to a change to Section 96, have hampered efforts to finalise the requirements necessary for a successful referendum in 2013."

The interim report is available from the Parliament of Australia website at <http://www.aph.gov.au/Parliamentary_Business/Committees/House_of_Representatives_Committees?url=jsclg/localgovt/preliminaryreport.htm>.

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