Local government referendum

Bad in the short term, worse in the long term

In the Australian Financial Review today, IPA Executive Director John Roskam talks about the short and long term consequences of the local government referendum:

The referendum should be receiving more attention than it has so far. As soon as the Prime Minister said the proposal was “modest” (as she said twice), warning bells should have started ringing. Whenever a politician talks about a modest change the chances are the change is anything but.

Read the whole thing here.


Referendum disaster for democracy in Australia


The text of the Gillard government’s referendum proposal confirms the worst held fears that Canberra is intent on controlling local government, according to free market think tank the Institute of Public Affairs.

‘The proposed seemingly minor changes to the Constitution would lead to an upheaval of Australian democracy through a massive power grab of local communities,’ said IPA Senior Fellow Dr Julie Novak.

‘Federal dollars tend to come with strings attached, so this plan is really about centralising more power in Canberra, and further away from local communities.’

‘Anything from local planning applications to welfare services for those in need will be affected by federal bureaucratic conditions attached to funding, and not in line with local community preferences.’

‘People living in regional and rural areas will be hurt the most by Canberra infiltrating every town hall, because their shires have a lower capacity to raise their own funds than metropolitan councils,’ said Dr Novak.

The latest proposal to include local government in the Constitution is at odds with the will of the Australian community, expressed in two previous referendums.

‘The Gillard government’s proposal only confirms what average Australians find frustrating about this government, and that it doesn’t pay heed to the will of the people,’ said Dr Novak.

‘In 1974, and again in 1988, the Australian people voted against local government recognition, but this government is outrageously forcing taxpayers to fork out $12 million to fund a campaign for yet another referendum.’

‘It is essential that the Liberal National Coalition, which philosophically supports federalism and our constitutional fabric, doesn’t side with the Labor elites and strongly oppose the proposed Canberra takeover of local government.’

‘If this referendum is successful, that level of government closest to Australians will become the puppet of the most distant and disconnected government, a prospect which should be rejected in September,’ said Dr Novak.


Canberra uses taxes to end meddlesome Constitutional restraints

Beyond the nearly $20 billion deficit and other headline programs, there was a bitter pill of democracy in last night’s Budget. According to the Budget papers the government is going to spend $55.6 million in the lead up to the September 14 referendum to Constitutionally recognise local government, of which $11.6 million will be a backdoor advertising push for the ‘yes’ case. According to page 246 of Budget Paper 2:

The Government will provide $55.6 million over two years to conduct a referendum on the financial recognition of local government in the Australian Constitution … The Australian Electoral Commission will receive $44.0 million over two years to conduct the referendum and the Department of Regional Australia, Local Government, the Arts and Sport will receive $11.6 million to undertake a national civics education campaign to provide information to the general public on the referendum and reform process.

Education on civics is fine. But I seriously doubt ‘a national civics education campaign’ will be anything other than the importance of three levels of government which is a dodgy way of saying – shouldn’t we include local government in the Constitution as well?

Some have speculated that this referendum is a sop to the Greens and Independents. But it is clear that the Gillard government wants it to be successful. More disturbingly the so-called Federalist Liberal Party also wants it to get up. Should we be surprised that politicians want to undermine the rules that limit the excesses of their power? Probably not.

In a democracy they are free to make that argument. But unless there is clear oversight of how this $11.6 million is spent it is highly likely to be an abuse of taxpayer’s money that should be challenged in the High Court.


The tyranny of Constitutional recognition of local government

I have an article today in The Australian ($) about the forthcoming Canberra grab for power over local communities through the Constitutional referendum to recognise local government. I argue:

Different levels of government are given, rightly, different responsibilities.

Federal government is responsible for foreign affairs and those responsibilities that require national consistency, and has little service delivery capacity because it is so distant from Australians.

States are responsible for matters that marry local responsiveness with scale.

Local government delivers services that require direct relationships because of their closeness to Australians.

Constitutional recognition will turn our democracy on its head and perpetuate centralisation.


Canberra freely will be able to direct local government by attaching policy strings to funding.

But there’s a reason Federal MPs love it:

Part of the reason Labor and some Coalition MPs support the referendum is because it enables them to become kingmakers in their communities by tying federal government largesse to their preferred local outcomes.

It’s worrying how significant a hatchet job this plan is on our democracy and how many MPs are prepared to support it.

I’m not the only one who has written about this important subject. My colleague Chris Berg recently wrote about it in the Fairfax press.


Past objections to Canberra in every town hall relevant today

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.


Local government constitutional recognition: the elites versus the rest of us

In a week marked by numerous diversions from the looming federal budget mess, Prime Minister Julia Gillard has announced that the question of financial recognition of local government will be put to the people in a constitutional referendum at the September election.

The Gillard government is acutely aware that Australians are rightly suspicious of proposals to change the Constitution, the basic rulebook of our national political life.

But for Gillard to suggest this proposal as a ‘modest’ change not only begs the question ‘why pursue it in the first place?,’ especially given the federal government already shuffles billions of taxpayers’ dollars to councils and shires, but fits awkwardly with the general profile of supporters for local government constitutional recognition, who in policy aspiration terms typically don’t do modesty well.

Early indications suggest that this latest agenda for constitutional change is most fervently supported by a quadrangle of political and associated elites:

  • Labor Party: Contrary to Local Government Minister Anthony Albanese’s statement that local government constitutional recognition is about ‘investing in our future’, for Labor this proposal is about investing in its Whitlamite past in attempts to sideline the states.
  • Greens Party: Financial recognition for local government in the Constitution will serve Green politicians nicely, as this would give greater confidence to federal balance‑of‑power Greens to secure top tax dollars for their Green political brethren at the local government level.
  • Local government lobbies: The Australian Local Government Association (ALGA), which already has an observer seat at the COAG table, state‑based local government associations, mayors and shire presidents can weaken local financial scrutiny by ratepayers, once they permanently live on the drip‑feed of federal funding.
  • Lawyers: If this referendum succeeds it would provide another nice ‘make‑work’ opportunity for government solicitors to entrench Canberra control over local finances and services, and referendum success here will stoke hopes by progressive lawyers for further, radical constitutional amendments in the future.

The eagerness of the elites to support local government constitutional recognition should serve as a warning for voters against supporting an immodest tinkering to a Constitution that has generally served our country well.


Canberra council grab a disaster for democracy and rates


“Constitutional recognition of local government will lead to a federal takeover of local laws, lead to rate increases, expansion of bad and petty laws and corrode Australian democracy,” said Tim Wilson, policy director at free market think tank, the Institute of Public Affairs.

The Institute of Public Affairs is strongly opposed to constitutional recognition, because it will:

  • lead to creeping Canberra control of local services through funding agreements.
  • undermine the role of the states and their oversight of local government.
  • stop states from removing corrupt councils and amalgamating inefficient ones.
  • lead to rate rises from councils without state government oversight.
  • increase the volume of petty and intrusive laws into people’s lives and businesses.

“Australia should be governed from local communities-up, not Canberra-down,” Mr Wilson said.

“This referendum is about governing bin collections for Broome, Buderim and Burnie from the Prime Minister’s Canberra office.”

“With every single federal dollar comes strings attached, this plan is about centralising more power in Canberra and further away from local communities. Local government rules and regulations, from planning applications to caring for local parks, will be driven by Canberra.”

“The referendum is a rehashing of Gough Whitlam’s failed attempt to bypass the states and promote a level of government that is easier to control from the Prime Minister’s office.”

“Scrapping state government oversight of local government will create fiefdoms for local kingmakers and petty bureaucrats.”

“Often state government restraints stop significant rate rises, once local government sits separately they will raise rates and increase costs to families.”

“Local governments are already the source of the most intrusive rules and regulations into people’s lives from stopping kite flying in parks, to tying community street parties up in red tape and destroying community festivals through excessive food handling regulations. Constitutional recognition will make it worse.”

“If this referendum is successful the level of government closest to Australian families will be taken over by the one most distant and disconnected. It will be a disaster for Australian democracy,” Mr Wilson said.

For media and comment: Tim Wilson, policy director, 0417 356 165


The local government referendum is worse than you think

My Sunday Age column this week discusses what’s really going on with the local government referendum:

Don’t listen to what Canberra says. The local government referendum has nothing to do with local communities or anything like that. It’s a power play – part of a long-running campaign by the Commonwealth to free its spending decisions from parliamentary scrutiny and undermine the states.

The real story is the terrible Financial Framework Legislation Amendment Bill (No 3) 2012, passed by parliament in June. Read the whole column to find out why. The IPA is the only organisation talking about how bad this obscurely titled bill is. Legal Rights Project Director Simon Breheny wrote this piece about the bill when it was first passed.


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