Is local MP Don Page the minister for, or against, local government?
That’s the question posed by the peak body representing NSW councils after Mr Page refused to support the inclusion of local government or councils in the Australian Constitution.
It comes in response to the upcoming referendum on the topic, to be included with the September election.
Currently councils are an operational arm of state governments and only two tiers of government are recognised in our Constitution.
Councils currently receive the majority of their funding from municipal rates and council fees, but also receive grants and subsidies from state and territory governments.
There is also direct federal funding via initiatives such as the Roads to Recovery program, the Regional Development Fund and Low Carbon Communities, but the legality of some of these grants has been challenged in the High Court.
The court cases have prompted the referendum in a deal brokered by the Greens/independents and Labor at the last election.
Mr Page told ABC radio last week, ‘You could easily envisage a situation where a couple of marginal seats in a federal election would be benefited by large cash injections from the Commonwealth on the eve of the election to fund a particular piece of infrastructure.
‘So you would have a large amount of money going to a project that was for political reasons but wasn’t actually part of the state plan,’ Mr Page said.’
Those comments prompted an outraged response from Local Government NSW’s joint presidents Cr Ray Donald and Cr Keith Rhoades, who accused Mr Page of ‘scaremongering and ill-informed information’ that is ‘misleading the people of NSW’.
Lismore mayor Jenny Dowell also criticised the minister over his comments along the same lines.
Cr Donald said that ‘given the recent TCorp report into NSW council finances, it’s astounding the NSW coalition government won’t support a practical change to the Constitution securing tens of millions of dollars each year for NSW communities and their
Cr Rhoades added that ‘it seems a tad contradictory for the NSW coalition government to trumpet criticism of councils’ financial sustainability, then fail to support a referendum that would protect federal grants for the most basic community needs, like local roads.’
But in a letter from NSW premier Barry O’Farrell to then federal minister for local government, Simon Crean, Mr O’Farrell outlines his reasoning for objecting to recognition.
‘The NSW government is of the view that amendments to the Constitution should not be made in the absence of clear evidence that existing funding arrangements are deficient,’ Mr O’Farrell said.
‘While the government acknowledged that the High Court’s decision in Pape and Williams may have cast some doubt on the appropriateness of
the direct funding of local government by the Commonwealth, it is noted that neither the Expert Panel’s report nor the Joint Select Committee interim report have identified any new significant issues with the financial arrangements that currently exist between all three tiers of government.’
Mr O’Farrell also says the amendment, as proposed in the committee’s interim report, will allow the federal government to grant funds directly to local government, ‘which could result in NSW 2021 and other major state policies being sidetracked or not given due regard.
‘This could also raise expectations that the Commonwealth could intervene in local government administration, thereby creating confusion about all tiers of government and responsibilities… it blurs the line of accountability.’
Instead, Mr O’Farrell says he supports ‘symbolic recognition as a way of enhancing the status of local governments’.
Meanwhile, Mr Page hit back at the LGNSW joint presidents, telling Echonetdaily they have known about the letter for months and, with an election for the LGNSW presidency coming up in October, that ‘might explain Keith Rhoads’s behaviour’.
He added that local government is already recognised in the NSW Constitution.
Unsurprisingly it’s sparked
divided opinions across state and federal parties; however, Victoria, along with NSW, has rejected it so far.
Federal Nationals MP Barnaby Joyce said last Thursday that his party will support it, and that a caveat in the amendment to section 96 ensures that authorisation from the state is required for councils to collect money from the federal government.
‘It is the lowest-taxing level of government and rates go straight back into the facilities and services used by that community.’
And Greens MLC and former Byron Shire mayor Jan Barham told Echonetdaily she supports inclusion as it ‘plays a crucial role
in the democracy of Australia’.
She says direct transfers from a federal level have been very successful, and that ‘other funding
programs that are directed via the state governments result in a loss of direct funding to councils with the state administration costs of approximately 22 per cent without genuine benefit to the community.’
As for the two amendments, or alterations, it’s just 17 words and can be found at http://regional.gov.au.
Section 96’s heading is ‘Financial assistance to states’ and it is proposed to be changed to ‘Financial assistance to states and local government bodies.’
Additionally, section 96 itself would be altered to read, ‘During a period of ten 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.’
Cr Dowell told Echonetdaily, ‘we need to secure our grant funding from the federal government without that risk of High Court hanging over our heads’.
‘It would also improve the relationship between the three spheres of government, for local government to be recognised in the Constitution,’ she said.
‘The change is the minimalist model… just really allowing that financial situation where grants come directly from the federal government to local government.
‘It’s a minor change but it means a lot.
‘I think the fact we are only recognised via the states does not bode well for the way three spheres of government relate to each other.
‘The federal government already gives us millions and millions of dollars every year with Roads to Recovery and Financial Assistance grants, but they’re at risk of challenge in the High Court every time because there’s no mechanism in the Constitution to allow it,’ she said.