Steve Irons (Swan, Liberal Party) Share this | Hansard source

It is always a pleasure to follow the member for Parkes. When I serve on committees with him he always makes a positive input and I know that in this inquiry he also had a positive input. He comes from a regional area that relies heavily on the council and on funding from both state and federal government and he works hard for anything that would assist his council areas with more streamlined funding. If you have ever been to Parkes you will know that it is also now known as 'Coultontown'. He has a high presence there and I know he is enthusiastic to see that this referendum, if it goes ahead, is successful. This whole debate has been like that: everyone wants to see a successful referendum proceed.

However, I feel that, because of the lack of time we are faced with to run a successful campaign, there might not be success. During the inquiry I questioned one of the witnesses giving evidence around the earliest time any legislation could be introduced to proceed with a referendum. Under the current time line, the earliest time it could be introduced would be about budget week in May. That would leave a very short period of time for a successful information campaign about this referendum to be made public so that people could be informed. The witnesses said they did think that short-term propositions had been successfully advocated for, but I cannot think of any. At this point in time, we think that maybe we need more time to have a successful referendum.

The government has demonstrated extraordinary lack of action to put in place the preconditions that were recommended by the expert panel and other stakeholders such as the Australian Local Government Association. As a direct consequence, the time remaining between now and 14 September is likely to be insufficient to put in place the necessary mechanics, education campaigns and other measures highlighted by expert witnesses as necessary to ensure an informed outcome of the referendum question.

Coalition members are of the opinion that the referendum should only be considered once the preconditions identified by the expert panel have been met. The coalition acknowledges the constitutional uncertainty that recent High Court cases have created with respect to direct funding of local government programs by the Commonwealth. The coalition is committed to restoring funding certainty to local programs and has indicated support for the appropriate limited financial recognition of local government in the Australian Constitution as a way to achieve this. Coalition members of the committee also note that the evidence received by the committee highlighting that the program's specific funding, which is currently provided directly to local government, may still be provided in full via existing avenues that are constitutionally valid. Coalition members consider that the existence of valid alternative funding pathways to address the funding uncertainty introduced by the recent High Court cases reduces the imperative to pursue constitutional change in the face of the fact that preconditions for success highlighted by the expert panel and other stakeholders such as ALGA have not yet been met. The coalition members are mindful of the inquiry terms of reference, which called for an assessment of the likelihood of success of the referendum. They remain of the view that the recommendation of the main report, to proceed with a 2013 referendum, despite the preconditions for success not being established, places at risk many millions of taxpayers' dollars. This risk, together with the risk of a lack of informed and positive public engagement with the issue, appears to be unnecessary given the alternative pathways to ensure ongoing local government program funding should the direct model in fact be successfully challenged in the courts prior to the referendum question being put.

Regarding the lack of action by the government, the coalition's support for action to address funding issues through constitutional change has been provided subject to consideration of the specific change to be proposed by the government and the change being limited to remove the question of constitutional validity in relation to direct Commonwealth funding of local government. Similarly, it was offered in the expectation that the government would approach the consideration of any such referendum question on the basis that all practical and reasonable steps were taken to ensure the Australian population made its decision on a fully informed basis.

The government formed the Expert Panel on Constitutional Recognition of Local Government—the expert panel—to identify options for the constitutional recognition of local government and to report on the level of support for such recognition amongst stakeholders in the general community. The expert panel's final report stated:

The majority of panel members support a referendum in 2013 subject to two conditions: first, that the Commonwealth negotiate with the States to achieve their support for the financial recognition option; and second, that the Commonwealth adopt steps suggested by ALGA necessary to achieve informed and positive public engagement with the issue, as set out in the section of this report on the concerns about a failed referendum (see page 16). Steps include allocating substantial resources to a major public awareness campaign and making changes to the referendum process.

As such, the expert panel was supportive of the 2013 referendum on financial recognition of local government through a change to section 96 of the Constitution, provided two conditions were met. The first condition was negotiation with the states to achieve their support for the government's proposed question, and the second was to take steps, as recommended by ALGA, to achieve informed and positive public engagement with the issue.

The expert panel's final report was delivered in December 2011, almost two years prior to the latest possible date for the next federal election. As at that date, the government had plenty of time to ensure it took the blueprint for a referendum on financial recognition of local government as provided by the expert panel, put it in place and proceed to put the question to a voting public equipped with the benefit of a full public education campaign on the issues. As noted in the majority decision Final report on the majority finding of the Expert Panel on Constitutional Recognition of Local Government: the case for financial recognition, the likelihood of success and lessons from the history of constitutional referenda, we now have the benefit of a nominated election date, 14 September 2013. This date is some 10 weeks earlier than the latest possible date the election could have been held.

At the first hearing of this committee, reservations were expressed by ALGA with regard to timing, were a referendum to be held in conjunction with the 2013 general election. They noted that they did not consider the question should be put to the people before a number of preconditions have been met. These preconditions reflected the conditions recommended by the expert panel in their report. Coalition members note the supplementary submissions by ALGA, received after the second hearing, in which ALGA indicate they will actively support the 2013 referendum, but accept wholly the argument put by ALGA in earlier evidence of their advisability of first meeting the stated preconditions.

As at the date of the first hearing in mid-January 2013, evidence was received that, even given the latest possible date for an election being late November 2013, the prospect of meeting those preconditions in time to hold the referendum at the same time as the election were not high. Given the nominated date for the election and the time that has since elapsed, the prospect of these preconditions being fully met by 14 September this year has only reduced. As such, the prospect of a referendum held in conjunction with this year's federal election raises serious risks that it will be held in an environment where potential consensus of stakeholders, including the states, has not been met and where the opportunity to fully inform the voting public through public education and other avenues has not been fully realised.

There has been a lack of engagement with the states and, as yet, I do not think some of the states have even responded to the minister in regard to where they stand or whether they will support this referendum. The coalition members of the committee were strongly of the view that the meeting of both of the expert panel's conditions is vital before any referendum on this issue is put to the people. Australia is a federation of states and, as the evidence attests, the support of state governments can make or break referenda. If state governments are largely opposed to change, history proves it is very difficult for referenda to pass. In the view of the coalition members, the recommendation by the expert panel that the government negotiate to achieve the states' support for financial recognition is an essential precursor to the committee being able to make a recommendation on the likelihood of the referendum being supported by the Australian people. A number of witnesses reinforced the view that, for the referendum to be successful, states either had to be actively supportive of the measure or at least run dead on the issue.

I quote the conclusion to our dissenting report to the report of the inquiry:

Coalition members noted that the Chair’s Preliminary Report recommended action be taken immediately to put in place the necessary steps to hold the referendum in conjunction with the 2013 Federal election.

We held concerns that the time was insufficient but remained open to the prospect that such immediate action may address those concerns. However, it is clear that such urgent and immediate action has not occurred and seven weeks has passed with little if any progress.

Coalition members are now of the opinion that the time remaining between now and the nominated election date of 14 September 2013 is insufficient to put in place all the necessary mechanics, formal, informal and partisan education campaigns and to otherwise ensure an informed outcome for the referendum question.

We acknowledge concerns regarding the impact of further High Court cases that may impact on the constitutionality of direct payments to local governments by the Commonwealth and that delays in granting constitutional financial recognition may come at a cost to the many valuable services provided at a local government level.

As noted, the Committee received constitutional evidence that clearly demonstrates that avenues exist for funding currently provided directly to local government, to still be provided in full, even in the face of (potential) judicial findings that direct payments are not constitutional.

The most obvious avenue is through grants through the states, tied on the basis that they must be both passed on in full and subject to use for the programs currently funded (or as directed under future Commonwealth-local government programs).

Coalition members acknowledge that this is a less clean avenue than direct payment, but accept the evidence that options such as this are available and that, accordingly, there is likely to be no potential risk of loss of funding to local government, eventuating from further developments following the Pape and Williams cases.

As such, we consider there to be little financial risk to local government in delaying the holding of a referendum on financial recognition of local government in the Constitution, until such time as the conditions previously discussed have been met.

As such, Coalition members of the Committee recommend that a referendum on the issue of financial recognition of local government only be held after the pre-conditions posed by the Expert Panel and those previously promoted by ALGA, have been met.

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