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Wednesday, 29 May 2013
Page: 4221

Mr DREYFUS (IsaacsAttorney-General, Minister for Emergency Management, Minister for the Public Service and Integrity and Special Minister of State) (09:33): I move:

That this bill be now read a second time.

The Constitution Alteration (Local Government) 2013 is a bill to amend section 96 of the Australian Constitution to make specific provision in relation to the granting of financial assistance to local government bodies.

It will make a small but important change to the Constitution to reflect the modern structure of government in Australia.

Our Constitution has served Australia well for over 100 years. But many people would be unaware that the role of local government is not specifically referred to in the document—even though most Australians have daily contact with the services provided by their local council, through child care, sporting fields, swimming pools, libraries, local roads and more.

When our Constitution was drafted, Australia was a very different place. A local council's responsibilities covered only basic services like keeping streets clear of rubbish and the roads well graded for horses and carriages.

In 2013, local councils provide an enormous range of services. There are childcare and employment services, aged-care hostels, disability programs, arts festivals and galleries, business incentive schemes, tourist centres—the list goes on and on.

Many of these council services are provided in partnership with the Commonwealth government, which has been common practice for a long time.

In just the last five years, the Commonwealth has partnered with local government to deliver over 6,000 community projects such as libraries, indoor and outdoor sporting facilities, pools, walking trails, roads and bridges, in every single community.

This is in addition to the repair and upgrade work that has taken place on many thousands of roads across the country under the Roads to Recovery program.

In this Constitution Alteration Bill, we are proposing a modest and common sense change to our Constitution to reflect this modern reality.

This is about saying ‘yes’ to important community benefits from the partnership between federal and local spheres of government.

The change will not diminish the role of the states with regard to the administration of local government. Recognition in the Constitution does not alter the fact that local governments are created by and are accountable to state governments.

The modest change that we are putting forward to the Australian people is based on advice that the government has received from the expert panel led by the Hon. James Spigelman AC QC, and subsequently endorsed by a parliamentary joint select committee chaired by the member for Greenway, and former Deputy Mayor of Blacktown City Council, Michelle Rowland.

Local government would be recognised in the Constitution by inclusion of an express statement that the Commonwealth can grant financial assistance to local government. This would include assistance for community and other services.

Through this proposed alteration, the government and this parliament will ask the Australian people to support a change to our Constitution so that the existing practice of federal government support for local communities is formally recognised in our Constitution.

The constitutional amendment mechanism established by section 128 of the Constitution requires majority support nationally, and majority support in a majority of states. States and territories have been consulted on the wording of the draft bill and explanatory memorandum, as has the federal opposition. The explanatory memorandum addresses in detail the issues that have been raised through this process, including some elaboration of points in the draft released publicly on 16 May 2013.

In their authoritative commentary on the newly enacted Australian Constitution in 1901, John Quick and Robert Garran were alive to the constitutional balance that needs to be struck between stability and development.

They observed that a constitution should not be lightly or inconsiderately altered. However, they also recognised that a constitution which does not contain 'provision for its amendment with the development, growth, and expansion of the community which it is intended to govern, would be a most inadequate and imperfect deed of partnership'.

From this statement, it seems clear that Quick and Garran would be surprised that the Australian Constitution has only been amended eight times in the intervening 112 years.

To remain relevant, the Constitution must be a living document that reflects the realities of modern Australia.

The Australian Constitution, and our system of federal relations, has supported one of the world’s most stable, prosperous and longstanding democracies.

But the fact we have a durable system is not a reason to stop considering reasonable, sensible reform. Local governments play an increasingly important role in Australian government relations and our daily lives. The fact they receive no constitutional mention, and that there is no express provision for local government bodies to receive financial assistance directly from the Commonwealth, is increasingly difficult to reconcile with the very document guiding government scope and powers.

The government recognises that proposals to recognise local government as a third sphere of government in the Constitution have twice been rejected at a referendum, in 1974 and 1988.

The Constitution Alteration (Local Government Bodies) 1974 sought to give the Commonwealth parliament powers to borrow money for, and to make financial assistance grants directly to, any local government. The Constitution Alteration (Local Government) 1988 sought to give constitutional recognition to the institution of local government. However, the current proposal is different in important respects from those which preceded it.

In August 2011 the Australian government appointed an Expert Panel on Constitutional Recognition of Local Government to identify options for the constitutional recognition of local government. The expert panel was chaired by the former Chief Justice of the Supreme Court of New South Wales the Hon. James Spigelman AC QC.

In December 2011 the expert panel presented its final report to the Australian government. A majority of panel members concluded that financial recognition by amendment of section 96 of the Constitution was a viable option within the 2013 time frame indicated by the panel's terms of reference.

On 1 November 2012 the Commonwealth parliament established a Joint Select Committee on Constitutional Recognition of Local Government, chaired by the member for Greenway, to inquire into and report on the majority finding of the expert panel. The joint select committee presented a preliminary report on 24 January 2013 and a final report on 7 March 2013. In both reports the committee recommended, consistent with the findings of the expert panel, that a referendum on financial recognition of local government be held at the 2013 federal election.

This follows the government's commitment to hold a referendum on constitutional recognition of local government in the 43rd Parliament.

The proposed constitutional alteration would amend section 96 of the Australian Constitution to make specific provision in relation to the granting of financial assistance to local government bodies. It involves changes to the existing wording of the heading and of the section itself. It would add four words to the heading and 13 to the section.

Clause 1 of the bill states that the proposed law to alter the Constitution may be cited as the Constitution Alteration (Local Government) 2013.

Clause 2 states that the alteration would come into force on the date the act receives the royal assent.

Clause 3 would alter the Constitution in accordance with schedule 1.

Item 1 of schedule 1 would alter the heading to section 96 of the Constitution by including at the end the words 'and local government bodies'.

Item 2 would alter section 96 by inserting, after 'to any State', the text set out in the schedule. As amended, section 96 would state that the 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.

As the alteration of section 96 would specifically state that the Commonwealth may grant financial assistance to local government bodies formed by a law of a state, the Commonwealth would no longer need to rely on other sources of power for that purpose.

The amendment would not enable the Commonwealth to interfere with the creation or regulation of local government bodies by the states. It would form part of an existing provision—section 96. Section 96 does not involve any grant of power to the Commonwealth beyond the ability to provide financial assistance on terms and conditions. The financial assistance must be optional. Recipients have the option of rejecting the proposed financial assistance and the terms and conditions.

The alteration has been designed specifically to avoid any suggestion that it might permit interference by the Commonwealth with the creation or regulation of local government bodies by states. It has also been designed specifically to avoid any suggestion that the Commonwealth could compel local government bodies to accept funding, or terms and conditions.

The Commonwealth could not provide financial assistance on terms or conditions that local government bodies could not meet under state law. This reflects the way in which section 96 grants to the states currently operate. Currently, financial assistance cannot be provided to states on terms and conditions which they cannot meet.

Further, states would not be prevented from changing their systems of local government should they wish to do so. States could change their systems of local government to prevent expenditure by local government bodies, or other activities, in particular areas.

No reference to bodies formed by a law of a territory has been included. Such a reference is unnecessary because grants of financial assistance to the territories and bodies formed by territory laws may be made under section 122 of the Constitution, a provision which the expert panel was not called on to consider.

This bill is part of a truly democratic process. It will give the people of Australia the opportunity to decide whether 17 words should be added to our Constitution. These 17 words will recognise the modern reality that the Commonwealth grants financial assistance to local government for a variety of important community and other services. I commend this constitution alteration bill to the House.

Debate adjourned.