Jane Prentice (Ryan, Liberal Party) Share this | Hansard source

Tonight I speak on the Prime Minister’s commitment to hold a referendum during this term to recognise local government in the Australian Constitution. This matter has been discussed across Australia for almost half a century. On the eve of the Council of Capital City Lord Mayors meeting here in Canberra, there is no better time to commence a formal dialogue.

Recognition is essential to ensure that local governments can continue to deliver their vital services to each and every community across Australia. Local governments in Australia are dynamic and exceptionally diverse. Councils range in size from the Brisbane City Council, one of the largest in the world and which works hard for a population of close to one million and has expenditures in excess of $2.8 billon, to the Jerilderie Shire in southern New South Wales, which has a population of approximately 2,000 and an expenditure of roughly $7 million.

It is local governments that provide, operate and maintain community infrastructure, and that care for the environment and provide critical waste management services. Furthermore, local governments work hard for the communities they serve by ensuring that regional development, tourism, and economic and social advancement are appropriate and tailored to meet the needs of the communities they represent.

It is clear that Australians feel a greater connection and sense of community with local governments than with any other tier of government. This claim has been supported in the Department of Finance and Deregulation’s Interacting with government report which recognised that local government is often said to be the level of government closest to the people. The Australian Local Government Association’s submission to the Senate Select Committee on the Reform of the Australian Federation provides further supporting evidence of the high regard the community has for the services provided by local councils, municipalities and shires.

As many of our urban areas face the challenges of unprecedented population growth, it is local governments which are forced to ensure the maintenance of day-to-day services. Indeed, in south-east Queensland, where one in seven Australians now live, all citizens rely significantly on local government for their basic community services and they trust that local governments will be able to match services with record demand.

Whilst there has been informal discussion for some time over the need to enshrine the place of local government in Australia’s Constitution, a recent decision of the High Court has called directly into question the Commonwealth’s power to finance areas for which it does not have an express constitutional power. Indeed, the pink batts disaster may have even been averted if local governments had the authority to deliver this program.

The legal provision of services by local governments in Australia has been put directly into question by the recent High Court decision of Pape v Commissioner of Taxation. While local governments have worked hard and made tough decisions to generate a significant portion of independent revenue, they also rely on Commonwealth Financial Assistance Grants. The Pape case was a clear rejection of the view that the Commonwealth had wide discretionary spending power when funding the vital work of local governments. In short, the future of Commonwealth financial assistance has been called directly into question.

In advice prepared by constitutional law expert Professor George Williams, a succinct legal argument has been made to support the view that a referendum is vital to ensure the capacity of the national government to fund local programs directly, especially regional and remote local government bodies. In his analysis, the implications for local government were made clear with the following observations:

The Court found that the Commonwealth can spend money in areas that are listed in the Constitution as being a federal responsibility, but not in other areas in which the Commonwealth has no constitutional mandate.

He went on to say:

There is no express or implied provision in the Constitution that grants the Commonwealth responsibility over local government. The consequence is that the Commonwealth has no general power to directly fund local government bodies or activities under section 81 of the Constitution.

In the court’s decision, Chief Justice French made it clear that section 81, as it presently exists, does not confer a substantive spending power upon those in this place. Consequently, as the Chief Justice himself observed, ‘The relevant power to expend public moneys must be found elsewhere in the Constitution or statutes made under it.’ At present this power does not exist. Further, local government today is mature enough that it should be properly and formally recognised in the Constitution. It should not be subject to the whim of state governments because their interference is often driven by political motives rather than sensible outcomes. This is particularly the case in the town-planning field.

It is for this reason that recognition of local government in the Constitution is essential. Recognition that is tokenistic will not suffice. I call upon the government to move forward and engage with local governments to provide financial protection under our Constitution. Most importantly, I call upon the government to make it a genuine priority to take the real action necessary to enable a referendum on constitutional recognition of local government. There has been enough talk. This is a matter of critical importance to all Australians. I call upon the Prime Minister to ensure that, during this parliament, Australians are given the opportunity to constitutionally validate the work of local government.

See this speech in context