Reconsidering recognition

The Australian Constitution has served us well for over a century. It is our nation's blueprint; establishing our structures of government and setting out the relationships between institutions. Important and stabilising as it is, it is not, and should not, be etched in stone. As circumstances develop or society's views change, alterations, amendments and additions will be required.

Section 128 provides that any changes to the document cannot proceed without a referendum. The drafters deliberately set the bar very high for such amendments; requiring a double majority; an overall national majority and separate majorities in a majority of states. Of the 44 referendums held since federation, 36 have been rejected. There has not been a successful one since 1977. However, the difficulties in amending the document should not deter us from seeking to address deficiencies at the heart of our system of governance.

The complete lack of reference to local government in our Constitution is a stark deficiency in our model of federalism and one that is likely to cause difficulties as alluded to in the recent High Court decision of Williams and the earlier decision of Pape.

Constitutional change is required to adequately reflect Australia's system of government and to ensure funding sources for services. This would be a practical and effective change; not merely symbolic.

Since federation in 1901 the roles and responsibilities of local government have broadened significantly. Jurisdiction now encompasses areas such as planning, regional and economic development, human services, recreation and environmental management.

The first official local council in Australia was formed in October 1840 In Adelaide. The 564 councils across the country are extremely diverse, ranging in size from a square kilometre (Shire of Peppermint Grove, WA) to almost 380,000 square kilometres (Shire of East Pilbara, WA), a number have populations of a few hundred whilst Brisbane has more than a million.

In anticipation of a referendum on the issue, an expert panel, chaired by former NSW Chief Justice James Spigelman, was established by the Federal Government to consult with the community and report on options. The panel looked into four types of recognition; financial recognition, democratic recognition, symbolic recognition and recognition through federal cooperation. The most compelling case of these is for financial recognition which in itself also provides some level of symbolic and cooperative recognition.

This is also the most likely to achieve a successful outcome as the State Governments are largely against democratic recognition, valuing their power to dismiss poorly-performing or corrupt councils and install administrators and the Federal Opposition has limited its explicit support to financial recognition.

A number of programs have been created by the Federal Government through which grants are made directly to local councils. These include the Roads to Recovery Program, the Regional DevelopmentAustralia Fund, the Regional and Local Community Infrastructure program and the Low Carbon Communities program. The decisions in Pape and Williams have put the constitutional validity of these into question. In the absence of enabling legislation, the Commonwealth does not have the power to directly fund local governments. This is why financial recognition is important.

The Commonwealth is able to fund councils through grants, such as the Financial Assistance Grants, to the States under Section 96 of the Constitution. Rather than providing direct grants this is the route by which the majority of Commonwealth funds are provided to councils. Whilst this mechanism is constitutionally and administratively workable it is far from the ideal. It creates a bottleneck for funds, distances the Commonwealth from the programs it is seeking to implement, fails to recognise local government as a legitimate third tier of government, is potentially inefficient and is not as likely to develop a positive collarborative relationship. If this situation can be fixed through a referendum it should be.

The difficulty in getting a referendum passed in the absence of bipartisan support is well known. "If you don't know, vote no" is an enduring political adage where voting is compulsory but making an informed decision is not.

Whilst it has been assumed and confirmed in the recent past that there is cross party support for recognition, there are ominous signs emerging that the political culture in the federal arena may be hollowing out this bipartisanship. At the 2012 Federal Liberal Council a motion was passed opposing the referendum, and there are elements within the party room which are not enthusiastic about supporting the Government's stance on the issue.

It may seem odd that the referendum is being promulgated by a Labor Government when it is the conservative side of politics that is usually more associated with local government. However, it is consistent with the history of the issue.

There have been two previous referendums with proposals to refer to local government in the Constitution, both under Labor governments; firstly by Whitlam in 1974 and later by Hawke in 1988.

The Whitlam Government put four referendum proposals to the public in 1974 using the deadlock provisions which allow for a referendum to go to a vote without Senate authorisation. One proposal dealt with direct Commonwealth funding to local governments. Specifically it asked for support for:

• a new Section 51(ivA) allowing the Commonwealth to make laws with respect to "the borrowing of money by the Commonwealth for local government bodies." and
• a new Section 96A to enable that "the Parliament may grant financial assistance to any local govenrment body on such terms and conditions as the Parliament thinks fit.

As with the other three questions, the Yes vote got a slender majority in NSW but failed in all other states. The loss, at least in part, can be attributed to the strident campaign of the Opposition. This hostility was not surprising given the deadlock over the legislation. Indeed the Opposition Leader, Billy Sneddon, promised to "oppose this referendum violently" and "do all they can do to defeat the referendum if it is held." Channeling Sir Winston Churchill, the Nationals Leader, Doug Anthony, argued that the intention of the measures were to destroy the States, that they "would be like cut roses in a vase - fair to be-hold but doomed to die." In this way federal constitutional recognition of local government was characterised by opponents not as a decentralist proposition, but as one component of a centralist agenda towards a unitary system of government.

The defeat at the polls put the issue off the agenda, but not for long. In 1988 the Hawke Government put four proposals to referendum. One of which sought to provide democratic recognition for local government through a new Section 119A:

Each State shall provide for the establishment and continuance of a system of local government, with local government bodies elected in accordance with the laws of a State and empowered to administer, and make by-laws for, their respective areas in accordance with the laws of the State.

Such an amendment would have been largely symbolic, having no specific practical, functional or financial aspects. The proposal returned a high No vote and failed to carry in any state. The day prior to the poll the Australian's Paul Kelly described the Opposition's campaign, led by Peter Reith, as 'based on ignorance and distortion' and having 'obviously left many sincere and well-informed people wary and confused.'

The present danger is that the Opposition could oppose the issue to politicise it into a referendum on the Prime Minister. We need clear confirmation from the Opposition that they will support a referendum next year.

If we were drafting the Constitution now, it would seem quite odd to disregard one whole tier of government. It is a gaping hole at the heart of our governance blueprint. The lack of a general power to fund local government, long alluded to in constitunal law circles, and now confirmed and highlighted by recent High Court cases demonstrates the need for recognition.