This item is now only of historical interest. With the nomination of 7 September 2013 as the date for the Federal Election, the statutory time requirements for the announcement of a referendum cannot be met, so the proposed referendum cannot be held at this time.
The referendum would have sought endorsement to amend the Australian Constitution to recognise the existence of local government.
As it currently stands, there is no reference to local government in the Constitution. To many, this may seem inconsequential, but recent decisions in the High Court have questioned the legality of Commonwealth funding to any entity that is not so recognised.
Local Government is an instrument of State Government. Councils are created and dismantled by the State, they carry out such functions as they are directed by the State, and to some extent they are funded by the State. Of course, Local Government raises some of its own revenue, through council rates and charges, but it also receives a significant level of funding from the Commonwealth. More specifically, a large proportion of the funding for the maintenance of community infrastructure, including local roads, bridges, swimming pools, sporting facilities and the like, is provided by the Commonwealth, either directly through programs like Roads to Recovery (R2R), or through agencies like Regional Development Australia (RDA).
As an example of how important this funding is to our community, in the 2012/13 financial year almost 30% of the funding for the maintenance of local road infrastructure came from the Commonwealth, through the R2R program. A similar situation exists with respect funding for community infrastructure such as community halls and sporting facilities. If these programs were to be abandoned, the only way to maintain service levels would be through direct increases in rates.
The change being sought to the Constitution seeks to avoid any challenge to the legitimacy of these funding programs. Section 96 of the Constitution would be amended to formalise the capacity of the Commonwealth to provide funds directly to local government bodies.
Specifically, Section 96 would be amended to read “…Parliament may grant financial assistance to any state or local government body formed by a law of a State on such terms and conditions as the Parliament thinks fit.” (amendment in bold).
This would not change the status of councils. Nor would it give the Federal Government any power over local government. It would simply remove the uncertainty that now surrounds direct funding programs such as R2R, which have been in place for many years, under both sides of politics.
The referendum has support from all political parties and independents, the bill passing through the lower house with only two dissenting votes. There is, nonetheless, resistance to the proposal at the State Government level, where it is seen as undermining their authority.
From the local government perspective, the change is simply seen as a means of ensuring that the development and mainenance of local infrastructure remains, as far as possible, under the control of local communities, and not left to the whim of the State or as yet another financial burden on ratepayers.