Aiming to redesign Australian federalism at the stroke of a pen, former Prime Minister Gough Whitlam in 1974 put to the people, in a referendum, the following proposals for constitutional amendment:
s.51(ivA.) [the Commonwealth Parliament has power to make laws with respect to] The borrowing of money by the Commonwealth for local government bodies.
s.96A. The Parliament may grant financial assistance to any local government body on such terms and conditions as the Parliament thinks fit.
Leading the referendum campaign for the then Liberal‑Country Party Opposition, against the proposed constitutional recognition of local government, Billy Snedden stated:
Once that centralism is achieved we will find that the grant of money will have a whole series of conditions attached to it which will deprive local government of its own freedom of action, and some bureaucrat in Canberra will decide the way in which local government ought to conduct its affairs.
In 1988, former Prime Minister Bob Hawke put to the public another referendum proposal for local government constitutional recognition:
s.119A Each State shall provide for the establishment and continuance of a system of local government, with local government bodies elected in accordance with the laws of a State and empowered to administer, and make by-laws for, their respective areas in accordance with the laws of the State.
In addition to pointing out the constitutional vagueness of this provision, the Liberal‑National Coalition Official ʻNoʼ case document indicated:
Labor is threatening the future of local government with this proposal. It will give Canberra an interfering foot in the door … [and] … give more power to the federal government at the expense of the states. It could pave the way to regional government responsible directly to Canberra, not the states.
Whilst the details of the latest referendum proposal will be released by the Gillard government shortly, it is possible it could look more like the Whitlam 1974 proposal than the Hawke 1988 proposal.
The arguments waged against the 1974 and 1988 referendum proposal were as relevant then as they are today. Giving Canberra the green light to flood town halls with Section 96 grants would further sideline constitutionally sovereign states, and impose unprecedented federal influence upon councils and shires throughout the country.