Government corruption and the local government referendum

Australians love to knock back a referendum. But if you're looking for a good reason to vote "no" in the September 14 referendum, you might want to consider this.

We're being asked to approve a change to section 96 of the Constitution, so the Commonwealth can provide direct financial assistance to local government authorities.

That sounds harmless enough, until you sit the amendment next to the Financial Management and Accountability Act 1997and realise that, together, they create the perfectpork barrel.

To understand why, it's helpful to know a little about the High Court's judgement in Williams v The Commonwealth

This judgement gave us a refresher in good governance by pointing out what every parliamentarian should know. There are three arms of government, and democracy depends on each doing its job properly.

The Executive (in practice the PM, Ministers and senior bureaucrats) manages the business of government. Parliament makes laws and stops the Executive becoming too authoritarian, while Courts interpret and apply laws.

As part of this separation of powers, the High Court ruled that the constitution prevents the Executive from spending public money on whatever it likes. Instead, spending must be authorised by a constitutional head of power and approved by Parliament through law.

The Court had to think about this because Williams objected to the Howard, Rudd and Gillard governments paying taxpayer's money to Scripture Union Queensland. And it turned out there was no law approving the payments, making them unlawful.

As a journalist might put it; Howard, Rudd and Gillard had been caught illegally funnelling money to religious fundamentalists.

On closer examination, it emerged that successive Executives had been spending quite a lot of our money improperly for a very long time. What's more, the Coalition and Labor were equally culpable.

This was a big problem, and fixing it would be difficult. So the Executive decided to do the irresponsible thing, it asked Parliament to pass the Financial Framework Legislation Amendment Bill (No3) (The final Act can be found here) .

In a truly Orwellian twist, this amended the Financial Management and Accountability Act to ensure the Executive was not accountable for its financial management by giving it authority to:

(1) make, vary or administer any arrangement by which public money is paid out by the Commonwealth;

(2) grant financial assistance to any person whatsoever; and

(3) enter into whatever future programs it wished.

So long as expenditure falls under one of a broad range of existing descriptions or a new regulation, the Executive could pay out vast amounts of our money without Parliamentary supervision.

This was legislation no democratically elected Parliament should pass, but ours did. What's more, politicians of all colours; red, blue, green and independent share responsibility.

If ever there was a time to run from the House, complain loudly about mismanagement or make a stand on principle this was it. But, despite some ineffectual protests from the opposition, there was just no one left to keep the bastards honest.

Normally reserved legal scholars have roundly condemned Parliament for agreeing to the Bill, so I won't revisit that issue. Suffice to say that, if actions speak louder than words, our elected representatives have told us they're not fit to wield the powers they already have. So why would we give them more?

Which brings us to the perfect pork barrel.

The risk of corruption, mismanagement and waste in government has increased sharply now the Executive can decide how to spend vast amounts of public money without effective Parliamentary scrutiny. But some restrictions do remain.

One of these is section 96 of the Constitution, the same section we're being asked to change. S 96 prevents the Commonwealth from directly funding local authorities by requiring it to provide funding to the States. That doesn't mean Commonwealth money can't go to local authorities. Only that States generally administer and negotiate grants, which limits the ability of both to misuse funds.

But even that control would vanish if the referendum succeeded, allowing the Executive to direct funding to local authorities on whatever terms it desired.

Should we believe that future Executives will all wield this power in the best interest of the nation? Or should we suspect it might be misused by self interested politicians to target marginal electorates and keep themselves in power? A financial gerrymander if you will.

Amending section 96 to "recognise local authorities" is an invitation to corruption and mismanagement because it will allow the Executive to determine on a street by street basis, if it wishes, what local authorities can and can't do. It will allow taxpayer's money to be misused to shore up marginal electorates, pay off political favours and generally pork barrel on a scale never before possible.

If that doesn't disturb you, keep in mind that NSW government corruption is largely the product of unchecked Executive power at state level. Do we really want to witness a similar spectacle at federal level?

It's in everyone's interests for the Executive to be held accountable. But if Parliament declines to do its job and if the Executive thinks it can treat the High Court with distain, then who's left? Certainly not the media, it's too busy with big issues like Tony's cycling or Julia's glasses.

All that's left is us, so vote "No".