David Bushby (Tasmania, Liberal Party) Share this | Link to 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)

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Well, there goes another coalition no—to the proposition that we should have a referendum to recognise local government in the Constitution. What a shame that is. There was so much hope when the Greens signed the agreement with the Labor government in 2010. One of the key parts of the agreement was that there be would be constitutional recognition for Australia's Indigenous people and constitutional recognition for local government. I am very proud of the work that has been done towards constitutional recognition of Australia's Indigenous people and I congratulate my colleague Senator Rachel Siewert, who has played a key role in advancing that, as a member of the expert panel that worked on the issue. We have respected the recommendation from that expert group to not proceed with a referendum on that matter at this time but to keep on working towards it—to delay it and in the meantime have the Recognise legislation. It is a really proud time, because it means that we have got one step further down the track towards Indigenous recognition.

The local government referendum is something that local governments have been campaigning for for a long time, and quite rightly. It is important that we recognise local government in the Constitution. The federal government provides grants to local councils to fund many programs. The one that the community is probably most familiar with is the Roads to Recovery program. Councils have warned that, without federal funding, residents will face either fewer services or higher rates. That is undoubted. Ratepayers are concerned and want to make sure that the federal government can work directly with local government and not have to mediate constantly through state governments. I will come to that a bit later.

The Australian Greens have listened carefully to those arguments and we are now standing with local government and the community to secure this important reform. Unlike the coalition, the Australian Greens are 100 per cent behind the yes campaign for the recognition of local government and will be campaigning for that. A yes vote in September, or whenever the election is held, would guarantee the federal government's ability to directly fund local government projects. As I mentioned before, everyone is well aware of the upgrade and repair work that Roads to Recovery has enabled to around 16,000 sites across the country. The federal government also helps to fund services like child care, sporting facilities, community facilities, swimming pools and libraries. The Australian Greens have pledged support for $10 million to fund and facilitate regional arts, many of those dollars to go towards assisting local government to employ cultural officers in their communities. A yes vote will guarantee those services, from which all Australians will benefit.

Why do we need this constitutional recognition? The 2009 High Court case Pape v Commissioner of Taxation, followed by the 2012 Williams v Commonwealth case, known as the school chaplains case, have created uncertainty around the ability of the federal government to directly fund local councils. Pape involved a challenge to the Rudd government's payment of bonuses to taxpayers in an attempt to stimulate the economy at a time of global financial downturn. As the Commonwealth has no express or implied power in the Constitution to directly fund local governments, the implication of Pape is that each instance of funding must be linked to a specific Commonwealth head of power. The Pape decision has cast sufficient doubt and restrictions on the ability of the Commonwealth to directly fund local government that a response to the High Court decision is needed. This bill, the Constitution Alteration (Local Government) 2013, makes a simple amendment to section 96 of the Constitution of the Commonwealth of Australia to make specific provision in relation to the granting of financial assistance to local government bodies. The change was recommended by the expert panel, on which my former colleague former Senator Bob Brown was a member, and was also recommended by the parliamentary Joint Select Committee on Constitutional Recognition of Local Government. It is based on extensive consultation with the community, with the states and with local councils.

There is absolutely no doubt in my mind that direct access to Commonwealth cash for ratepayers is what ratepayers want and is what the community wants. I have looked right around the country at the level of concern about the cost-shifting that goes on when the Commonwealth tries to fund things at the local government level and state governments get involved and the local council gets squeezed. One classic example is the Northern Territory, where the Commonwealth moved to try and provide money to Indigenous communities after the shire amalgamations. The Northern Territory government intervened and the result was that local government was left to fund the services that are necessary in those Indigenous communities, because no-one can sort out who is going to take responsibility and, while they are still arguing over it, local government has to actually deliver the services. This has to be sorted out, and the best way of sorting this out is not to leave local government having to explain which Commonwealth head of power the money relates to and therefore organise it in that way. Why don't we just make this straightforward and clear up this mess, get the state governments out of the way and directly fund what the Commonwealth chooses to fund or what local government and the Commonwealth negotiate? It is clear to me that that is what needs to happen.

This is a minimalist change to section 96 of the Constitution. But we all know that agreement from all sides of government is essential if a referendum in Australia is to succeed. The two previous referenda held on recognition of local government failed, in 1974 and 1988, in part due to a lack of bipartisan support at that time. As I have indicated, the Greens are 100 per cent committed to securing financial recognition of local government in the Constitution, but it is pretty apparent now that there is not going to be tripartite support. It is clear that the coalition is not going to support the yes case. I think it is totally irresponsible for the Leader of the Opposition, Mr Abbott, to play politics with the local government referendum. As he knows, as we know, referenda are notoriously difficult to pass and we need cross-party support to have the best chance of getting this up in the community and explaining the case.

When the Leader of the Opposition, Mr Tony Abbott, addressed the general assembly of the Local Government Association in 2011, he made a solemn pledge to back constitutional recognition for local government, provided it was minimalist and practical change which secured future federal funding without undermining a state's ability to create and sack councils. That is exactly what is happening. This could not be made more minimalist if you tried. This is yet another example of the Leader of the Opposition going out and giving false hope to a peak body. Everyone knew getting constitutional recognition for local government was part of the agreement between the Greens and the government. The Leader of the Opposition went to speak to ALGA and said yes—but now he is backing off at a great rate. Why is he backing off? Because he cannot get unity in his team. That is why—because there is a rump in the coalition which does not support constitutional recognition.

This is a very interesting point and reflects what happened with the Tea Party and the Republicans in the US. When the Tea Party got control of some states, they had moved so far to the right that they could not maintain unity and there was massive infighting. We are already seeing that happening now in the coalition over this local government issue. Barnaby Joyce, the National Party senator, is telling the Local Government Association right now that, were it not for him, the coalition would be out opposing the referendum. In fact they are out there opposing the referendum in spite of him—or with him, who knows? But they are opposing it.

We saw that very clearly yesterday when Senator Brandis stood up in here and said they 'would not oppose the question being put'. That is a vastly different proposition. Do you support the referendum being held and the people being allowed to vote on it? That is one question. The second question is: do you support the proposition which is being put? Just lamely saying, 'Yes, we will support the question being put,' but not committing to actively going out and supporting the yes case is absolutely sabotaging the yes case. That is exactly what the coalition are currently doing. They are sabotaging the yes case.

I turn now to the fearmongering being done by Liberal state governments, supported by members of the coalition in some cases.

Opposition Senators:

Opposition senators interjecting—

Claire Moore (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Order! Senators on my left, we have just had a full speech from Senator Bushby with no interruption at all. I ask that the same courtesy be shown to Senator Milne.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

The fearmongering is putting the proposal in jeopardy. It is simply not true that the bill diminishes the role of the states—which is what is being claimed. Recognition in the Constitution does not alter the fact that local governments are created by and accountable to state governments. This is in the documentation. It shows quite clearly that the law continues to apply. If a state government wishes to sack a council because of malfeasance, corruption or whatever, they will still be entitled to do so. State governments under the law are able to do that and what is being proposed does not put that in jeopardy.

As I said, what is being proposed meets exactly the criteria for support the coalition leader, Tony Abbott, set out. He said he would support the proposal if it were minimalist practical change which secured future federal funding without undermining a state's ability to create and sack councils. That is exactly what is on the table.

The allocation of funding for the yes and no campaigns reflects the overwhelming bipartisan support for the referendum in the House of Representatives. We understand that the Local Government Association will be driving the yes campaign and I look forward to getting out and engaging with the community to support that campaign.

Clearly it is time for the Leader of the Opposition, Mr Abbott, to get out there and make a very clear statement. If he does not intend to support the yes case, he should get out there and tell local government and the community that he is not going to and he should explain why. He should not allow this murky mess—people hearing them say that they will not oppose the question being put. That is a very interesting way of putting their position. It will confuse people into thinking it means that they are backing the proposition—when clearly they are not. It is, in my view, sneaky language. We want clear language from the coalition on this matter.

The coalition have been talking about the proposed funding model as if there were some longstanding precedent for how referenda are funded. That is not the case. For the referendum on Australia becoming a republic, $7½ million was provided for each of the yes and no campaigns and $4½ million was provided for a neutral general education campaign. Before that, referenda had been funded by the Australian Electoral Commission. For the 1988 referendum on local government, parliamentary terms et cetera, the government of then Prime Minister Hawke tried to run a government funded advertising campaign, but the High Court found that this meant that the government was, in effect, running the yes campaign, so the advertising was stopped. There is a long history and various ways of managing the funding issue have been tried.

In this case, the expert panel had a look at all the ways previous referenda had been funded—or not funded, noting that there is not a long history of Commonwealth government funding of referenda. The expert panel recommended the funding model which is before the Senate. They did so on the basis of advice from submissions that, without a strong campaign, the risk of the referendum failing is high. The expert panel, on page 2 of their report:

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.

We also know that the Local Government Association proposed that the Commonwealth apportion the funds for the yes and no cases for each referendum based on those parliamentarians voting for and against the bill, and that this funding be equivalent to that provided for elections. That is the basis on which this funding has been determined; it is the recommendation by both the expert panel and the Local Government Association.

In my view it is critical that we clarify that this is not an excuse for state governments to beat up all these fake arguments. There is a lot of discussion around Australia about what a mess Commonwealth-state relations are in. There is a lot of criticism of the COAG process, and rightly so. I have said a million times that the COAG process is the big black hole that government shoves issues into to have them disappear off the political agenda. They stay in COAG forever and if they emerge, years later, they are nothing like what was put in there.

Around the country people are asking why is there such a poor relationship between the federal and state governments on a whole range of matters. That has come up recently in relation to fixing the mining tax, and many people said it was time we had a rewrite of Commonwealth-state relations, particularly in terms of financial engagement and relationships. State governments are panicking that, if local government gets recognition in the Constitution and local government and the federal government can negotiate directly and on their own terms for particular programs, state governments will be sidelined—they will have less of an ability to cost-shift and less of an ability to muddy the waters so that local government has to pick up the remnants of whatever programs are on offer. The states are feeling quite threatened by this process because it is going to put into the minds of people the question: what is it that state governments actually do in their constituencies? Rather than beat up scare campaigns, state governments have to prove their worth to their local constituencies, and that is a good thing.

Let us have the debate about Commonwealth-state relations, but do not let us mix that up with getting rid of the uncertainty that is already there about the Commonwealth and local government relationship. I am sure that, around the country, people are making it absolutely clear that into the future they want the Commonwealth to continue to be able to fund a number of services that local government regard as critical in the community. The community need to get the right information about the minimalist nature of the change and be reassured that it is not going to change a state government's ability to oversee how local government is being managed and they can sack a council if there is corruption or malfeasance. We can then have a vigorous debate around Australia.

If the coalition come out and sabotage this by running a no case, they will destroy this and the next federal government, of whatever colour, will be dealing with this very uncertainty and is likely to be facing the outcome of High Court challenges in relation to funding. Frankly, their actions are totally irresponsible and they show yet again that when the Leader of the Opposition says something, even when he writes it down in a speech, you cannot believe it—a couple of years later he will be back and changing that undertaking or abandoning it altogether. I urge the coalition to come out and be clear and front up with the Australian people. The Australian Greens are going to support the yes case. What is the coalition going to do?

Alan Eggleston (WA, Liberal Party) Share this | Link to this | Hansard source

I wish to speak in support of the no case for the referendum for recognition of local government in the Australian Constitution. Senator Milne has just talked about a rump in the Liberal Party which opposes the constitutional recognition of local government. Last year at the federal council of the Liberal Party in Melbourne a motion was passed almost unanimously opposing the constitutional recognition of local government. That involved most state divisions of the Liberal Party; it was far from a rump of the Liberal Party opposing the constitutional recognition of local government.

I am against the constitutional recognition of local government because I believe such an amendment is unnecessary as Commonwealth government funding can be provided to the states for any purposes including under section 96 of the Constitution. This referendum, while portrayed as involving a simple amendment to the Constitution, could seriously undermine our federalist system. It is claimed that a 12-word addition to section 96 of the Constitution is required to preserve, for example, Roads to Recovery. I do not think they are necessary, but the additional words proposed are 'to any local government body formed by a law of a state.'

These 12 words may seem simple but the implications of their incorporation in the federal Constitution are not. In fact, the incorporation of these words could completely alter our federalist system of government, which has served Australia well since 1901, by leading to a complete change in the relationship between the central government—the Commonwealth—and the state governments, with an increase in the role of local governments in governance at the expense of the state governments. While some people may think this is a good idea, I point out that Australia is a vast country with widely differing regions and small communities whose needs are much more completely understood by their state government than by a government in distant Canberra.

The concept of federalism was, and I understand still is, that the Commonwealth has certain designated powers while the state governments, which are effectively regional governments, look after all the other matters such as health, regional development and education. With the states ceding the taxing power to the Commonwealth as an emergency measure during World War II, and the Commonwealth since then retaining that role, the financial relationship between the states and the Commonwealth has changed since Federation so that some Commonwealth funding is provided through the states to local government for many of the services which affect our lives.

It is important to remember that local government was deliberately left out of the Constitution by our founding fathers because local government was regarded as an administrative extension of state governments not having a relationship with the Commonwealth, and so it remains today, in effect. Also, let us remember that it was the states which formed the Federation and that the states, as the governments of the differing regions of Australia, remain the cornerstone of our system of government.

Why, one must ask, is this question being put again when it has been defeated three times already under ALP governments? Firstly, in 1944 under Curtin; again, specifically on local government, under Whitlam in 1974; and more recently, under the Hawke government. What is behind this, one might well ask? It has been ALP policy since the 1920s to effectively replace the state governments with a series of regional councils directly funded from Canberra, even though it is patently obvious that the existing state governments are best placed to have the resources to service their regions. In January this year, former Prime Minister Bob Hawke called for the abolition of the states, so demonstrating that the ALP policy on the abolition of the states has not changed since 1920.

This 2013 referendum proposal is based on the view that the so-called Pape case raises doubt about the Commonwealth's ability to provide funding to local government. However, the Hon. Michael Mischin, Attorney General of Western Australia, has written that, in his view, the Pape case does not preclude the Commonwealth from providing direct funding to local governments for two reasons. Firstly, the Commonwealth can directly appropriate money for local government 'where the expenditure is for purposes within existing Commonwealth powers, which have been expansively interpreted by the High Court'. Secondly, Attorney General Mischin states:

Pape does not limit other avenues of funding such as section 96 grants of financial assistance.

He further states that 'the Commonwealth's ability to fund local government by this mechanism is effectively unlimited'. Attorney General Mischin goes on to state that 'the Pape decision, especially in constitutional law matters, is open to varying and different interpretations' and this highlights the potential problem of adding what ALGA describes as '12 simple words to the Constitution'—namely, that the High Court may find unexpected references, intentions and meanings in additional words added to the Constitution which may take years of litigation to clarify and the outcome of course may not be what was expected.

In my opinion, it is extremely naive to think that the addition of any words to the Constitution is a simple matter. A great example of this has been the High Court's interpretations of the external affairs powers of the Constitution, which has enabled the Commonwealth to greatly expand its jurisdiction within Australian society. I repeat that, according to the WA Attorney General, no doubt on the advice of the crown law department, there is no impediment under section 96 to the Commonwealth providing funds to the states for local government purposes. So if there is no restriction to the provision of funds by the Commonwealth to the states, what is the point of a third referendum from the ALP to write local government into the Constitution unless it is to progress the long-term ALP policy of sidelining the states?

Attorney General Mischin's views on this are supported by a number of eminent constitutional lawyers, including Professor Greg Craven, who has argued:

It will be sold as a modest change that will boost funding for local governments, but it's really about expanding commonwealth power.

It's like a scorpion, small but lethal.

Professor Anne Twomey has argued:

The sting is in the tail—the 'terms and conditions'. This means that the Commonwealth can intervene in any area of state responsibility, such as health or education, by placing conditions on its funding to the state.

Further, Professor Cheryl Saunders has argued:

We should think again on the terms of 'recognition' of local government by constitutional referendum in September … This is not a good idea. It is correct, as several premiers have argued, that it undermines the authority of the states in areas of state responsibility. The muddle that is Commonwealth-state relations, which urgently needs sorting, should not be further complicated by a measure of this kind.

There are a few other points which need to be referred to and which already have been to some extent in this debate. Firstly, referendum information will not be posted to the registered addresses of an elector but will go as 'to the householder' mail, where in my opinion it is likely to be thrown out unread. One must ask, if that is the case, could it be that the proponents of the legislation do not acknowledge that electors have a right to be informed before voting and they simply hope that people will go along and donkey-vote, and perhaps enough will vote yes for this to get through? I think it is a very real and severe criticism of the government that they are not proposing to post the material to the electors' official addresses.

Some question whether equal funding will be provided to the yes and no cases. Again, I think that if there is not equal funding, as it appears there will not be, that is a very a severe criticism of the government and clearly shows their bias for the yes case, in that the yes case funding will run into millions of dollars whereas I believe there is barely half a million dollars for official material for the no case.

In conclusion, it is my view as a committed federalist that the states remain the best-equipped entities to look after the diverse interests of the many and diverse regions of Australia precisely because they are the regional governments across this huge continent of ours, not bureaucrats based in Canberra. Accordingly, I hope this referendum will be defeated. I think the old aphorism 'if it ain't broke, don't fix it' very much applies to this case.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Our Constitution must be treated with respect. From the way the Gillard Labor government has handled this proposal to conduct a referendum on the recognition of local government in the Constitution, it is treating our Constitution with contempt. No government should initiate any change to our Constitution lightly. Any change to our Constitution should be based on broad community consensus; it should be based on strong bipartisan support; it should be conducted in a way that is consistent with one of our greatest democratic values, procedural fairness; and, where a proposed constitutional change has implications for the states, it should be based on a broad consensus with the state governments.

No government should try to buy a change to our Constitution or stack the decks in favour of one argument over another, using taxpayers' money to fund its side of the argument while effectively ignoring, deliberately disadvantaging and discriminating against the alternative case. Typically, and true to form, the Gillard Labor government has completely mismanaged the process leading to the proposal before the Senate today. Typically, its handling has been divisive, ham fisted and mostly focused on the pursuit of base political objectives in the lead-up to a difficult election for the government rather than on the genuine pursuit of the national interest and genuine constitutional reform. No change to our Constitution should be pursued on that basis. No change to our Constitution should be pursued like this.

This proposal for a change to our Constitution, to be put at the next election, has of course been put twice to the Australian people before over the past few decades. The Australian people have defeated this proposal twice before. The Gillard government, in the way it has approached this proposal for constitutional change, has not made a case to the Australian people that they should change their minds. In seeking to legislate this referendum at this late stage, as the Gillard government is seeking to do, and in seeking to favour the yes case at taxpayers' expense along the way, without having made the case for change, there is no doubt in my mind that the Australian people will return the same verdict as they have to such Labor proposals in the past.

There is no broad community consensus. There is no strong bipartisan support. There is no consensus with state governments. And, contrary to Senator Milne's inaccurate and misleading assertions earlier, there is not even consensus with the Labor-Greens state government in Tasmania. There is not even total support for this change across local government. The Gillard government, by pursuing this proposal now and in this way, is also ignoring the advice of its own Expert Panel on Constitutional Recognition of Local Government. The government's own panel made this referendum subject to two key conditions. No. 1 is:

… that the Commonwealth negotiate with the States to achieve their support …

The Gillard Labor government has not. No. 2 is:

… that the Commonwealth adopt steps … to achieve informed and positive public engagement with the issue …

The Gillard Labor government has not. Even those who strongly support this referendum, including the government's own expert panel, made the point that certain things should happen first. But they did not happen. That is of course why this referendum legislation should not be pursued at this time—certainly not now and certainly not in this way. On the best available interpretation, the Gillard government has left it too late to put the case for changing our Constitution to the Australian people properly and in time, because of its characteristic incompetence. It is more likely that the recommendations of the expert panel were deliberately and consciously ignored.

Even the Australian Electoral Commission, the objective and independent statutory arbiter when it comes to the proper conduct of contested elections and referenda, warned the Gillard government not to pursue a change to our Constitution at this election if it were initiated after 1 March this year. The Australian Electoral Commission pointed out that if it started referendum related preparations after 1 March, it would leave:

Of course, it is now 19 June 2013, more than three months after that date, and the election, on the current timetable, is less than three months away. The Australian Electoral Commission also pointed out that in rushing the process, by initiating it so late in the piece, the government has exposed itself to an elevated level of criticism from stakeholders of the way that voters have not been effectively informed that the advertising campaign is biased. Since then we have found out that the government is doing even more to inappropriately and unfairly stack the decks in favour of its own argument and against the alternative point of view.

Indeed, the Australian Electoral Commission said in its submission in relation to the expert panel inquiry that a truncated time frame like the one we have now will 'jeopardise the AEC election preparations'. That is pretty damning advice from the independent objective umpire, yet still the Gillard Labor government is pressing ahead—with a change to our Constitution no less—regardless. That is why the coalition's official position is that this referendum should not be proceeding at this time. It is too late to change the Constitution in an appropriate and respectable way. What we have said is that if, despite our objections, the government insists and persists with putting this legislation to a vote now, we will not oppose it, leaving the judgment and the merits and the question on changing the Constitution to the Australian people. But, of course, the government should not be pursuing a change to the Constitution in the way that they are doing now. It is not right.

We do support the principle of putting beyond doubt the capacity of the Commonwealth to provide direct financial assistance to local government. I am not convinced that this is the best way to do that. Importantly though, our position is that the next election should be a referendum on the world's largest carbon tax, Labor's failed mining tax and the incompetent Gillard Labor government—not on local government. We have made very clear that at this next election the coalition will be campaigning for a change of government, not for a change to the Constitution.

If this legislation passes, it will again be up to the Australian people to decide how they want to respond to the referendum question on local government, as they have before. I, along with my coalition colleagues, will be campaigning for a change of government that Australia so desperately needs, not for a change to the Constitution. As part of this second-reading debate the coalition is moving a very important amendment to force the government to provide equal funding for both the yes and the no cases. This should really be a no-brainer. There should not even be any argument about this. If the government does want to pursue this proposed change to our Constitution of course there should be equal funding for both the yes and the no cases. That is the established convention; that is the well-established precedent; that is what has happened in the past; that is what the Australian people would expect to happen.

If the Gillard government were truly interested in a genuine expression of the public will on this, that is what it would do. In fact, if our Prime Minister had any political judgment, even from her point of view, from the point of view of somebody who wants to achieve a successful yes vote, quite frankly the best thing she could have done would have been to ensure equal funding to both sides of the argument. In acting the way she has, the Prime Minister is offending Australians' highly developed sense of fair play. She is feeding people's natural distrust of government by pursuing change to the Constitution in this way. In acting the way she has, the Prime Minister has further undermined her own cause and, again, divided the nation.

As well as treating our Constitution with contempt by basing its decision on how much funding to allocate to each case only on the vote in the House of Representatives, the government is also treating the Senate with contempt. No senator in this chamber should allow themselves to be complicit in this. No self-respecting senator would allow themselves to be complicit in this.

To summarise, a change to our Constitution should not be pursued in the way the Gillard government is pursuing. We do not approve of the way the Gillard government has handled this. Given how late we are in the electoral cycle, this should not be happening. If the government insists on pressing ahead with this legislation, we have said that the coalition will not oppose it. However, we will be putting our trust in the Australian people to get this judgment right again, because at the next election we will not be campaigning for a change in our Constitution; we will be campaigning for a change of government. The next election should be a referendum not on a very bad government which has well and truly lost its way, but on local government.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Following Senator Cormann, I am reminded that in politics adherence to principle is just about everything in public life. You can respect someone you disagree with if they have a principled position. It enables those who have strong views to frame the answers to very difficult questions, making them actually easier to resolve and satisfy.

I am one who will not compromise principles that I brought to this place, and that I believe are at the very heart of my political life—my political commitment—and my political party. They include a commitment to faith, stronger families, free enterprise, general freedom, our flag, our Federation and our Constitution. This bill, and I believe, the referendum and the question that is going to be put, undermines our Constitution. I think it undermines the principle of federalism. It is worth reflecting on the words of a Mr Holder from the 1898 debate at the Australasian Federal Convention:

… we have harmonized the interests of several states where they differed, and we have provided a Constitution sufficient to provide for the fullest and the most self-reliant government of a free people. We have created an instrument of partnership between us which, I believe, secures the independence of the several states, will provide for the joint control of certain matters, at the same time as it also leaves free and complete self-government on all matters not committed to the central authority.

There are those—some of my colleagues for whom I have tremendous respect—who have a view that times have changed since 1898, and indeed they have. But the principle that was applied at the formation of our Constitution to create a Commonwealth of Australia built upon the independence and success of the states was very, very clear, and I do not believe it should be undermined. I do not believe we should be centralising more power in Canberra, because, quite frankly, I think that political organisations that are closer to the people, like state governments and local councils, are often better connected about the needs and wants of a local community than a Canberra based politician or bureaucrat, or even the politicians here who assiduously stay in touch with their communities. They work together hand in hand, and each has a distinct and unique role.

I would also like to reflect on a submission to the Senate Select Committee on the Reform of the Australian Federation from the Council for the Australian Federation. They said:

Australia’s federal structure provides for a number of significant benefits that in fact outweigh [the] perceived costs:

They went on:

Importantly, the benefits of federalism do not preclude the development of national approaches to common problems. In addition, the federal structure allows for new ideas to be pioneered by one jurisdiction and, if successful, to be adopted by others.

As I mentioned before, I am opposed to the centralisation of power in Canberra. The writers of our Constitution recognised, during a critical time in the founding of our country, that the division and separation of powers was needed to help prevent the centralisation of power in any one place. This referendum seeks to change that system of checks and balances. It undermines the principles of federation. It undermines the principle of states' rights. The states, quite frankly, need to be accountable for how they conduct themselves in accordance with our constitutional road map, and they need to stop passing the buck to Canberra. But what concerns me about this constitutional amendment is that Canberra will now be dealing, supposedly, directly with local councils. That gives another arm of our government authorities around the country an opportunity not so much to be held to account but to pass the buck to Canberra.

I say to the Australian people that if you think Canberra can resolve all of your problems then you are not asking the right question, because more limited government is in our national interest. More trust in local authorities and communities to determine their own direction and self-direction and more responsibility and accountability from state governments will result in the better governance of your state. I simply have not bought the idea that a bureaucrat or an idea formulated in Canberra is somehow better than one formulated in your local community, because the Commonwealth does not know more about what is necessary in local council areas than local councils themselves.

I raise the issue because, with funding from any government—they are not benevolent institutions, let me tell you—there are always conditions. Conditions that the Commonwealth could impose could indeed override aspects of a council's self-determination. We have already have complaints in parts of South Australia that the state government is overriding or insisting upon changes to planning laws or regulations in some local council areas as a condition of funding. Let me tell you that the Commonwealth could intervene and interfere in issues such as that to a much greater and more substantive extent. Any number of strings could be attached to direct federal government funding to local councils, and this has all sorts of implications for local government decisions. Decision making can then be taken out of the hands of locals and passed up the line to someone sitting behind a desk in Canberra. That means Canberra's priorities will come first, rather than the local communities'.

As I said, there is a potential for even more buck passing between the three tiers of government. Of course, increased funding and promised efficiencies often do not appear. Extra funding agreements often mean extra regulations. The regulations increase costs and red tape. If there is one thing that this country needs less of it is red tape, quite frankly. The question is, who is ultimately going to end up footing the bill for higher costs and more bureaucracy? It is going to be the taxpayers and the ratepayers of Australia.

The other aspect of this referendum is that the current system actually works. It is not broken. There is nothing that stops the federal government from funding local councils through the traditional means that have always been available to it since the 1920s, and that is through the states. In fact, about 80 per cent of federal funding to local governments is provided through the states in this manner. In the last financial year, about $2 billion dollars was provided to local government by the Commonwealth using section 96 of the Constitution. There was also additional, direct funding to local government that bypassed the states but, nonetheless, that is not necessary to achieve outcomes. And why would we risk—or deliberately want to remove—the checks and balances that are inbuilt in our current system simply for political convenience and for an ideological agenda that is driven essentially by the left of the political spectrum, which seeks to impose its decisions and dominate the power-sharing arrangements, because it has not always used that system appropriately.

Mr Deputy President, let me make this point: if you want a more egregious example of the misuse and abuse of the power of the Commonwealth, then the bill before us today and the announcement by Mr Albanese about the inequitable funding for the yes/no case demonstrate the point entirely. There has been a consultation about a change to the Constitution, and yet what is being put by this government—and the wording—has changed significantly and substantively from what has been discussed, what has been researched, what has been workshopped and what we have had expert advice on. Constitutional experts have indicated that that has widespread implications for our constitution that have not been robustly tested. But—on a more base note—if we are trusting in the altruism of our Commonwealth and in the benevolence of acting the national interest, there are many examples I could give you where that has not been the case. But in every previous referendum where public funding has been provided, there has been equal funding for the yes case and the no case. You do not have to be on one side of the fence to think that that gives the Australian people a reasonable and fair shot at making the right decision. Let the advocates for either side put their case into the public arena on an equal footing and allow the Australian people to decide. Yet, somehow, fairness, equity, convention, tradition and decency have escaped this Labor government.

After a vote was taken in the House of Representatives, and after an agreement had been reached where the facilitation of this bill would go through and there would be registered but limited objection to it, simply so that the AEC, the Australian Electoral Commission, could prepare a case—a no case—Mr Albanese unilaterally announced that $10 million would be given to the no campaign. This is on top of other publicly funded propaganda, and funds that have been provided to external organisations to continue to prosecute the no case. Mr Albanese, in his benevolence, in his equity and in his compassion, gave $500,000—one-twentieth of the amount—to the people who are trying to protect and defend our constitution from those who seek to centralise power in Canberra and take it away from local communities. He said that this was based on the result of the vote. Well, Mr Albanese has ignored another fundamental principle of this place—that is, that the Senate is a very important part of our parliament. It is the states house. We should be sticking up for states' rights here, not undermining them. Yes, we have allegiance to our political parties; yes, we have allegiance to the national interest—but we are here because of the constituents in our states. For Mr Albanese to ignore the vote that is going to take place up here—to virtually say it does not matter—gives you an example of how those who have a flagrant disregard for the checks and balances built into our system, and those who have no respect for convention, for the traditions or for the institutions that have made this such a great country, will behave, should you give them virtually unfettered powers. No decent Australian can concede that there is somehow equity in a decision to fund a no case that benefits the government and, essentially, a decision not to fund to any substantive measure the counter-case, in dealing with our constitutional roadmap—our founding document. This is a document where the checks and balances were established because our forefathers knew exactly what could happen, should we allow power to concentrate in any one place.

I make the point for those who are on the yes side that there is no proof that local government would actually be any better off if this referendum passes. There is no proof whatsoever. There is no guarantee that they are going to receive any sort of special status or receive any more funding. According to the Constitutional Reform Unit at the Sydney Law School, overall, local government receives about 84 per cent of its funding from its own revenue sources—rates, service fees, investments and so on; about eight per cent is provided by the federal government; and a further eight per cent or thereabouts by the states. Yes, there are variations among different local councils; some are more reliant on the Commonwealth and state grants than others. However, councils that rely significantly on grants for more than 58 per cent of their revenue represent about 0.4 per cent of the population.

The other aspect of this, which I will touch on briefly in the time that I have left, is to reflect on the history of this particular issue in Australia. The Labor party have had a focused, consistent and diligent approach to trying to take power out of local communities and reinstate it in Canberra—they have been doing this since Gough Whitlam was Prime Minister. They have had two previous referendums on this very issue. The first was in 1974: it failed, with just 46 per cent of the vote, and only New South Wales voted in favour. The second referendum, in 1988, failed: it got just one-third of the vote and no states voted in favour of it. It seems as though now is to be 'third time lucky', except that the deck is stacked. The deck is stacked by the ideologues who are insistent upon grasping more power from local communities because they want to be able to tell them what is actually good for them. There has been no history of success of concentrating power in any country around the world.

We live in one of the best—if not the best—democracies anywhere in the world. That is because our Constitution has delivered strength and stability through the separation of powers. Whether that is by some quirk of fate, by grand design or by some inherent wisdom in our forefathers I cannot tell you.

Labor wants to overturn that. It thinks that the vessel of knowledge in the country resides somehow in this building. It does not. It resides in our communities; it resides in our local councils; it resides in our state governments; and it resides in every individual and family. They elect us to represent their interests. This is not in my community's interest and it is not in my state's interest. We cannot allow it to go through unchallenged. I am on the record as being opposed to this. If you were in any doubt, Mr Deputy President, I am opposed to this referendum. I accept that the question is going to be put. I feel deeply uncomfortable with the injustice that is being put upon the Australian people by the inequity of the decisions of Mr Albanese and the Labor Party.

I regret the haphazard, hasty and disingenuous manner in which this referendum question has been hustled through the parliament. As Senator Cormann said, the Australian people are not interested in rendering a verdict on giving more power to the people in here. They are interested in rendering a verdict on how the people in here have used, misused and abused the powers they already have. That is what we should be debating, discussing and advocating between now and 14 September. But, alas, a magnificent distraction to the tune of $10 million of public funding—plus many millions more—has been engineered.

I ask the Australian people to reflect upon their own interests. Are they happy with the way that our country has been governed over the last year, two years, three years, five years or six years? Ask yourself that question. Would it have been any different or any better if Canberra could make decisions about who was allowed to build a house in your community or in your street? Would it have been any better if, when you went to see your local councillor and asked them for advice or to get something done in your street, they had to refer it up the line to some bureaucrat in Canberra? Let me tell you: I do not think that it would be. I think the Australian people will emphatically reject this attempt to abuse and radically change our system of government in this country. I will be voting against it.

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

I rise to oppose the Constitution Alteration (Local Government) Bill 2013. I wish to put into the record the effect of the proposed change to section 96 of the Constitution should the referendum succeed. It would read:

During a period of 10 years after the establishment of the Commonwealth and thereafter until the Parliament otherwise provides, the Parliament may grant financial assistance to any State, or to any local government body formed by a law of a State, on such terms and conditions as the Parliament thinks fit.

If thinking people around Australia, people associated with local government, and communities—particularly in the small-population states of Tasmania, Western Australia and especially South Australia—do not understand the statement 'on such terms and conditions as the parliament thinks fit' then I recommend very, very strongly that they examine it in more detail. That is because there could not be a more dangerous change to this Constitution for the people of the smaller states. In fact, it flies in the face of many of the aspects of the Constitution and, indeed, this chamber in which we sit—it being the states house.

As was presented by the professor of constitutional law at the University of Sydney, Professor Anne Twomey, there are four obstacles to the success of this referendum. They are firstly the need for popular support; secondly the unintended consequences that may emanate from it, thirdly the obvious question of whether it is necessary, and fourthly the question of whether it is for symbolic recognition only. As has been put by those who are interested in this subject, there are two benefit tests that must be applied: it must be demonstrated that there is a problem and it must be demonstrated that any change be seen as a benefit to solving that problem.

This referendum fails on both counts. There is no problem to solve, so by definition—ipso facto—there would be no benefit. So what are the proponents, particularly in local government associations around Australia, putting to their ratepayers as validation and justification for taking money out of ratepayers' pockets and putting it into the yes vote for this constitutional change? The first is that they believe in security of funding under section 96. But there is absolutely and utterly nothing that requires change. There is no guarantee that there would be any difference in the funding from the Commonwealth to local government should this amendment be passed, simply because of those words 'on such terms and conditions as the parliament thinks fit'. There is nothing in section 96 now that precludes the Commonwealth government from continuing to fund local governments as they have been funding them for many years.

The second justification is the argument about the High Court challenge in the Pape case. What the ratepayers of Australia need to understand is that Pape swung not on section 96 of the Constitution but on section 81. I was privileged to be a member of the Select Committee on the Reform of the Australian Federation, which reported to the Senate in June 2011. A lot of discussion took place around Pape. We had before us officers of the Department of the Prime Minister and Cabinet and also of Treasury. The department concluded:

Taking into account the implications of the Pape decision, the Commonwealth remains able to make grants under its general powers in the Constitution as well as make payments to the states for purposes relevant to their responsibilities, which do include local government currently.

…   …   …   

The Treasury and the Department of the Prime Minister and Cabinet reviewed the constitutionality of Commonwealth payments in the wake of the Pape case and, based on advice from the Attorney-General, found that payments could continue. A similar position was reached by the Western Australian Government and the Council for the Australian Federation.

So Elgar had got it wrong. Section 96 guarantees nothing, and Pape was never determined under section 96. The other case that they quote is, of course, Williams in the High Court. When Senator Brandis spoke so eloquently earlier in the chamber today on this matter, he made the observation that Williams did not turn on section 96. In fact, it was the opinion of the judges of the High Court that there was no legislative basis at all for the allocation of funds in Williams. I make the point in terms of road funding, because this is critically important funding. Roads to Recovery was commenced by the Howard government, continued by the Rudd and Gillard governments is paid under section 96. Those payments commenced in 1923 under section 96, and 90 years later the same payments are being made. Therefore, it is clearly obvious that there is no argument based on those from the Australian Local Government Association.

I now turn to my own state and the Western Australian Local Government Association. Documentation that was presented recently made the observation by WALGA of what they are or are not seeking. The first thing they said was that they are not asking for Commonwealth takeover. The simple fact is that, under the Constitution at the moment, the Commonwealth has no powers over local governments—no powers at all; absolutely none. Yet what the government are proposing in this referendum is that they will accord to the Commonwealth, to the federal government, the opportunity to provide financial assistance to any local government on such terms and conditions as the parliament sees fit. They are unwittingly passing over to the Commonwealth powers that it currently does not have. Not only would it give Commonwealth some powers; it would give the Commonwealth exhaustive powers. As time develops in this particular contribution, I will make that point more obviously.

The second thing they said was that they are not seeking exemption from state control. They need only go to section 109 of the Constitution, which speaks the title 'Inconsistency of laws', and I quote:

When a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid.

The local government in WA are saying here that they are not seeking exemption from state control, yet they are passing a circumstance into fact where the Commonwealth would actually have power over the states.

The third thing that WALGA said is that they are not pursuing symbolic recognition. It has been said in the past that local government is the foundation of democracy and 'if it fails, democracy will fail'—to quote Robert W Flack. Whether they intend it or whether they do not, the very thing that they are doing with this move, according to symbolic recognition or not, is that they are placing at severe risk local government as we know it in this country today. They are also saying that they do not want to interfere in any way with the Commonwealth Financial Assistance Grants. Once again, I come back to the words of the proposed changes to the Constitution and I warn WALGA and those who are the ratepayers around Western Australia that it is the very thing that they are doing. They are putting at risk the possibility of the Commonwealth in its Financial Assistance Grants.

They claim it would only lead to minimal expansion of Commonwealth powers. The simple fact at the moment is that, under the Constitution, because local government does not exist, the Commonwealth has no powers. If they think that all they are doing is giving minimal powers, I will in continuation of this debate speak about the relationship between Mr Rudd and Premier Barnett and Ms Gillard and Premier Barnett on health and education.

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Order! The time for this debate has now expired. Senator Back, you are in continuation.