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Should local government be in the Australian constitution?

By Don Aitkin - posted Tuesday, 14 May 2013


Almost as an afterthought, the Prime Minister has announced that there is to be a referendum, as well as an election, on September 14th. We are to decide whether or not 'local government' should be recognised in the Constitution. No doubt you have been discussing the finer points of this issue with your family and friends. Not yet? Oh. Well, we haven't either.

Julia Gillard called this proposal 'small but important', and said it had bi-partisan support.. Whether or not it is small will be determined by exactly what it is we are asked to vote on. There have been two previous referendums on local government, in 1974 (Whitlam) and in 1988 (Hawke). Both failed, the first rather narrowly, the second hopelessly. There is a problem with the funding of local government, and the Commonwealth Government has begun to support local councils through its grants process. The Rudd Government's stimulus package pushed a lot of money into the economy through councils.

Why then is Constitutional recognition necessary? Well, depending on exactly how such a Constitutional inclusion would be worded, it would be neater than moving through tied grants. The Commonwealth came into recent legal battles over its funding of school chaplains, and while it has recently passed legislation that would allow it to make such payments in the future without fear of another High Court challenge, local government presents a wider problem.

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Australia is unlike both the UK and the USA in that local government came after the establishment of central government, and is a creation of it. In New South Wales, for example, the core piece of legislation is the Local Government Act (1919), amended in almost every Parliament, which sets out in great detail what local government councils are for, how many there are, how they are to behave, and what they can and cannot do. And what they do is no longer just collecting the garbage. The sphere of local government has grown and grown, partly because as the powers of central government have increased there has been a corresponding feeling within the community that many important facets of life are local and should be kept local.Yet the main financial weapon available to councils is the setting of rates, a sort of property tax, and their capacity to do that is also controlled by state governments, which can dismiss a council if the government thinks it has behaved badly.

Local government councils have appealed to the Commonwealth to help them in their hour of need, which is every hour, and the Commonwealth, especially when Labor is in power, has been happy to assist when it suits it to do so. The States object, because as they see it, there is no Constitutional power available to the Commonwealth to interfere with local government, and they're right. So the Commonwealth has to make great use of specific grants to the States. It would all be much easier, says the Commonwealth, if its right to make payments to local government bodies independently of the States was enshrined in the Constitution.

That's the broad picture. The recent history goes like this. In 2006 the Commonwealth Parliament carried a motion recognising local government as an integral part of Australia's system of government. The then Labor Opposition tried, but failed, to add a clause requiring another referendum on the question. In September 2010 the Gillard Government made a commitment to hold a referendum on the issue, and in June 2011 it set up an 'Expert Panel' to determine the level of support for constitutional recognition and to identify some possible forms this might take. At the end of 2011 the Panel reported that the referendum might pass if there were support by the States and the broader community (surprise, surprise!). Simon Crean, then the Minister, said he would consider community views before acting. Simon Crean has passed from the scene and - oops! - we had better do something about this, said the PM.

To put it simply, this is no way to bring on a referendum. There has been no community consultation that I am aware of. There is a good deal of public sympathy for the problems of local government, but, I would think, no awareness of the best way forward. What the Opposition will think about it, when it has an opportunity to do so next week, is anyone's guess. It is likely that at least a couple of States will campaign actively against it. To succeed, a referendum requires a majority in the whole of the nation and a majority in a majority of States. At the moment, in my opinion, this one has Buckley's.

And it will cost around $80 million, on one estimate.To bring this forward, in the final months of its existence, is another sign of the basic general weakness of the Rudd and Gillard Governments. They talk too much, they promise too much, they don't do things - the ordinary things that governments have to do - in a businesslike and competent way, they take far too much notice of the 24-hour news cycle, and they don't do their homework, on almost anything.

It is a vexatious outcome. Local government is important, and it has real problems, many more than simply the financial ones. Another failed referendum, set up for us in this lackadaisical way, is the last thing it needs.

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This article was first published in Don Aitkin on May 10, 2013.



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About the Author

Don Aitkin has been an academic and vice-chancellor. His latest book, Moving On, was published in 2016.

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