David Bushby (Tasmania, Liberal Party) Share this | Hansard source

I rise to speak to the Constitution Alteration (Local Government) 2013 bill. Local government, councils, shires and municipalities right across Australia are an extremely important part of our national governance framework. Despite the fact that there are clear examples of major problems with councils being run by bad or just incompetent people, on the whole local government has delivered good grassroots local solutions to local problems and will continue to do so regardless of the outcome of this bill or the consequent referendum.

Like all of levels of government, sometimes the solutions can be worse than the problems, and my role as deputy chair of the Coalition Deregulation Taskforce has certainly seen plenty examples of that thrown up at the local government level. But tackling red and green tape is to the most extent a separate issue to that we are looking at in this place today. So let me make it clear: I am a supporter of local government and the good work done by its elected representatives and employees right across the country, but particularly in regional and rural Australia. It is important that local decisions are made by local bodies that understand the issues from a local perspective. However, it is for that very reason that I am opposed to the change to Australia's Constitution that this bill proposes to put to the people.

Despite my opposition to that change, I would not necessarily, in principle, be opposed to the passing of this bill if the consequent question had been treated appropriately to ensure the likelihood that the Australian people were as best prepared as possible to make a fully informed decision. But this clearly will not be the case. As deputy chair of the Joint Select Committee on Constitutional Recognition of Local Government, I enjoyed the opportunity to hear from constitutional experts, bureaucrats, local governments and other interested parties throughout the inquiry process, which ended earlier this year. What was patently obvious to me from that inquiry was that the government has seriously mishandled the process leading up to the announcement of this referendum. Putting aside the subject matter of this proposed referendum for a minute, it is my view that no proposed change to our constitution should be put to the people unless all practical and reasonable steps have been taken to ensure that the Australian people are best equipped to make its decision on that question on a fully informed basis.

Our constitution is a core pillar, providing support for the robust and stable democracy that is Australia, which is now one of the oldest democracies in the world. Stability of government, combined with strong adherence to the rule of law, is a rare thing, and the fact that we as a nation have achieved that for so long, at least in large measure, is because our constitution works. Although I recognise change may from time to time be desirable or even necessary, I firmly believe we should not promote change to our constitution lightly and certainly not on an uninformed basis. I suspect Australians inherently agree, and this is why referenda questions have so often failed to get up. The evidence also suggests that where people do not have the benefit of a full understanding of the question, their tendency is to vote no, and this possibly also reflects the inherent understanding of Australians that the document does work for Australia and they are not going to agree to change it unless they are absolutely convinced that there is very good reason.

The question of some form of recognition of local government in our constitution has been in the public discourse for decades. Indeed, the question has been put in referenda in 1974 and 1989—both times failing. However, in recent times two factors have driven the renewal of this debate and have ultimately led to this bill being before this place today. The first is the impact of the Pape and Williams High Court cases, the decisions in which cast serious doubt over the constitutionality of some forms of direct funding of local government programs by the Commonwealth. The issues raised by these cases are real and not disputed by any mainstream constitutional experts, including those who do not support this proposed change. However, as I will touch on later, their impact does not, in my view, pose any threat to ongoing funding of local government programs by the Commonwealth, as constitutionally valid methods of doing so continue to exist.

The second driver is the deal done by the Independents and the Greens with the government in order to obtain confidence on the floor of the other place following the last election, which included the government agreeing to put the question we are looking at today to the people during the term of this parliament. As mentioned, I have a view of the advisability of agreeing to that question and will be voting accordingly, if required to, on referendum day. As such, that view also informs my decision that this bill should not be passed. But, as I firmly believe in democracy, I would be far less stridently opposed to the passage of this bill and the posing of the question if, indeed, the process leading up to today had been properly handled. As it has not, I have far less confidence that the Australian people will have the necessary exposure to and understanding of the arguments for and against to make a fully informed decision. My lack of confidence is only enhanced by the fact that the government has taken the unprecedented step of grossly, disproportionately funding the yes case compared to the tiny amount made available for the no campaign. Precedent, indeed the law as it stood, required equal public funding on issues of constitutional change, reflecting the very serious nature of asking people to consider changing the document at the foundation of our democracy.

It is bad enough that the government has decided to fund it disproportionately, but it is a real snub to the Senate that it has chosen to set that proportionality only on the basis of the vote on the floor of the other place. The other place and this place are treated equally in terms of constitutional change. Deciding to ignore the result of the coming vote in this place when setting the proportions exposes the contempt Labor has for the Senate and the vital role it plays in our democracy.

Let us take a look at what has occurred since September 2010 when the government agreed with the Greens and Independents to hold a referendum on this issue. In August 2011 the government formed the Expert Panel on Constitutional Recognition of Local Government to identify options for the constitutional recognition of that level of government and to report on the level of support for such recognition among stakeholders and across the broader general community. The expert panel's final report in December 2011 stated that:

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 … 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 a 2013 referendum on financial recognition of local government through a change to section 96 of the Constitution provided those two conditions were met. The first condition was negotiation with the states to achieve their support for the government's proposed question. 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 that it took that blueprint, put it in place and proceeded to put the question to a voting public that had been properly equipped with the benefit of a full public education campaign on all the issues. Interestingly, at the first hearing of the select committee in mid-January 2013, evidence was received that even given the latest possible date for an election, then being late November 2013, the prospects of meeting the preconditions set by the government's own expert panel in time to hold the referendum at the same time as the election were not high. This was back in January. Given the nominated date of the election and the time that has since elapsed, the prospect of those preconditions being fully met by 14 September this year is nigh on impossible. As such, a referendum held in conjunction with this year's federal election will almost certainly be held in an environment where potential conditions of stakeholders, including the states, have not been met and where the opportunity to fully inform the voting public through public education and other avenues has not been fully realised.

The independent Expert Panel on Constitutional Recognition of Local Government was appointed in August 2011 by the Labor government. It is important to note here the delay of some 12 months or one-third of the current term of the parliament before the government got around to the first stage of addressing the issue. The panel, however, did its job expeditiously, consulted nationally and considered feedback it received from Australians before handing its report to the government in December 2011, some three months later.

As mentioned, amongst other findings, the expert panel recommended a number of preconditions be met before proceeding and that the government get busy on ensuring that they were met as quickly as possible. As far as anyone can tell, no action took place towards satisfying those conditions for almost 12 months. One of the recommendations of the panel was the establishment of a joint select parliamentary committee to examine certain issues. The government dragged its heels, not establishing this committee until 1 November 2012, some 11 months after the delivery of the final report of its expert panel. The timing necessarily meant that, once members were appointed and preliminaries taken care of, the work of the select committee would not be completed until well into 2013. This is in fact what occurred with the final report not being delivered until March of this year. As such, the government has demonstrated an extraordinary lack of action to advance the case and cause of this question in a responsible and considered manner. In particular, even recognising the delay in getting up the expert panel, it failed then to follow the panel's recommendations and put in place the preconditions for success it highlighted and that were strongly and publicly supported by other stakeholders, such as the Australian Local Government Association.

It was some months after the March 2013 delivery of the joint select committee's final report which urged specific activities be undertaken—again, they were not acted upon—before the government acted to bring legislation before this parliament. 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 and bureaucrats as necessary to ensure a fully informed outcome for the referendum question. I am strongly of the opinion that this, like any referendum, should only be considered once a full and proper public education campaign has been conducted.

There is strong conclusive evidence that program-specific funding which the Commonwealth currently provides directly to local government may still be provided in full via existing avenues that are constitutionally valid. As such, it is my view that this backs the argument of the existence of valid alternative funding pathways to address the funding uncertainty introduced by the recent High Court cases. This then supports the argument for a reduced imperative to pursue constitutional change. The public should be aware of all such arguments before making their decision.

Of course, the great irony is that history shows that when Australians are not fully informed on referendum questions and feel they do not really know enough to make an informed decision they vote no. This is a rational approach and, as mentioned, reflects an inherent and desirable conservatism when it comes to changing a document that is so fundamental to our nation's democratic success. So in their failure to address the issue in a timely manner, the government may well be assisting those of us who do not think this is the answer to the issue raised by the High Court cases. Indeed, it is my view that the failure of the government to take timely action to seek to satisfy the expert panel's recommendations severely undermines the prospects of success and raises questions about the advisability of spending some $50-odd million of taxpayers' funds on posing the question when the timing is now so clearly wrong. This financial expenditure, 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 ensuring ongoing local government program funding should the direct model in fact be successfully challenged in the courts.

I will now go to another of the expert panel's conditions that was considered vital to be met before any referendum on this issue was put to the people. Australia is a federation of states and, as the evidence placed before the joint committee attests, the support of state governments can make or break referenda. If state governments have been largely opposed to the change, history proves it has been very difficult for referenda of the past.

The expert panel made it clear in December 2011—a long time ago—that negotiations with the states were required to develop a proposal that would attract their support. The committee was told, however, that the government position was that negotiation could not occur with the states until a proposal was developed. But the reality is that the government failed to make best use of the time available to it since December 2011 by failing to undertake such negotiations and that this delay has potentially undermined the prospect of a full and informed referendum proposition being put in 2013. In any event, the expert panel put forward a proposed set of words in its final report in December 2011, and this could and should have formed a starting point for such negotiations at that time. ALGA further refined those words in an attempt to allay concerns voiced by some states. Yet the government again failed to use the refined words as a starting point. We are now less than three months from the nominated date for the election, with neither of the two conditions recommended by the expert panel having been satisfied, despite great opportunity for real and determined attempts to deliver them.

The committee's preliminary report was tabled on 24 January this year, and all members of that committee strongly recommended urgent action to engage state and territory governments. Yet nothing was done until sometime around mid-February, around three weeks later, with a request for responses by 4 March 2013. The three-week delay in getting these letters out, in the face of such short time lines and the work needed to be done to conduct a meaningful referendum, when combined with their previous lackadaisical approach to actioning this issue, raises questions in my mind about the government's commitment to meeting the preconditions set by the expert panel—and ALGA—and, hence, their commitment to success of the question. As the government now intend to proceed to hold the referendum together with the 2013 election, it would be open for one to conclude that they are setting the question up to fail or, at the very least, posing the question with a reckless disregard for its success, with their main objective being able to say that they kept their promise to hold the referendum—or maybe their gross imbalance in funding is their attempt to make up for their past failures in this process. Who knows?

Despite the inexplicable delays by the minister in seeking to meaningfully engage with the states on this issue, state governments are known to have made statements and comments that are, to some degree, indicative of their thoughts on the referendum question. It is unclear at this point whether any states will be campaigning actively in favour of the referendum, and there almost certainly will be states that will be campaigning actively against the referendum. On the whole, the state concerns seem mostly to relate to the potential impact of proposed constitutional change on state governments' relationships with local government. For example, one state which forwarded correspondence to the committee was concerned that the proposed amendment might later be found by the High Court to give rise to an implied constitutional obligation on the states to maintain particular systems of local government. Evidence received, particularly by constitutional experts at the first hearing, suggested that such concerns may hold some basis. But, if the concerns of some state governments are justified, the acceptance of the proposed constitutional change could have an impact that extended further than intended. This would be a concern to me and underlines why I do not support the proposition itself. Nevertheless, the abject failure of the government to implement detailed engagement with all the states and territories to address and negotiate through any concerns they may hold has undoubtedly contributed to the current level of opposition to or distrust of the proposed change.

As mentioned, decisions made by Australians in relation to potential changes to the Constitution should always be made on as fully informed a basis as possible. The desirability of the public being well informed regarding potential constitutional change is even more important given that all Australian citizens are required to vote in a referendum. As such, it is not just those who have taken an active interest in the question but those who are notably disinterested who are required to make the decision. I consider that prior to a change in the Constitution being put to the people, parliament should take all reasonable steps to maximise the likelihood that all voting Australians understand the question and have an opportunity to thoroughly consider the yes and the no arguments before making a decision, including those who would otherwise be disinterested.

The constitutional experts who appeared at the hearing provided support for the conclusion that inaction by the government has amplified risks. For example, Professor Williams stated at the hearing in mid-January:

But it is a risky course—I certainly agree with that—and not the most desirable course, either. The most desirable course would be that, by this point, more work would have been done over the past months to actually build the level of public recognition, to get the support on board. It is dreadfully late and that itself is a major problem.

Bear in mind that that statement was made five months ago. There were a number of other constitutional experts, including those who were actually supportive of the need for the change, who agreed that more time was needed. Professor Brown indicated that, in his view, you needed more than six months to actively and positively engage with the public, yet here we are with less than three months to go. As such, I remain to be convinced that the time left is sufficient to be able to do the proposed constitutional change justice by ensuring a fully informed decision is made. This outcome is even less likely given the announcement this week of the extraordinary decision to not fund the yes/no case equally.

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 some 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. I acknowledge that this may be a less clean avenue than direct payment but accept the evidence that options such as this are constitutional, are available, were the primary source of funding for most of the time since 1901 and that, accordingly, there is no potential risk of loss of funding to local government eventuating from further developments following the Pape and Williams cases. This risk is the argument that has been put forward by most stakeholders as the reason for the need for change. It is, with the greatest respect, clearly a furphy.

The threat of further High Court cases which undermine the constitutionality of some payments by the Commonwealth directly to local government are real and likely to succeed in certain circumstances. However, there is no dispute amongst constitutional experts that this in no way limits the ability of the Commonwealth to continue to fund local government through clearly constitutionally valid avenues, primarily through section 96 of the Constitution—that is, through the states—and would have no impact whatsoever on direct funding in areas of clear Commonwealth responsibility.

I consider this proposal is counter to the interests of local government local decision making, can certainly lead to the undermining of state powers and to a further centralisation of power in Canberra and that it should not be supported. (Time expired)