Speeches: 2005
Blot on the landscape
Local government's search for constitutional recognition in Australia
Address to the Commonwealth Local Government Conference
Cr Ann Bennison
Australian Local Government Association
16 March 2005, Aberdeen, Scotland
Thank you Chair
As the first nation to invent itself through the ballot box, Australia has a robust and sophisticated democracy. We have - if nothing else - been innovative. Australia was the first to use compulsory voting, the first to use preferential voting, one of the first to give women the vote, the first to set up permanent electoral offices and the first to have permanent and continuous electoral rolls, to name but a few.
Many of these reforms are now benchmarks of democracy around the world. But there continues to be one big blot on our democratic landscape - our failure to recognise local government in the Australian Constitution. We have a three 'tiered' structure with federal, state and local government providing services at the national, state and local level. But what we want is not three tiers of government - but three 'spheres' of government.
Our vision is for a cooperative system in which each sphere of government is an equal and valued partner within our federation. This vision is symbolised in the logo of the Australian Local Government Association, which features three rings of equal size interlocking and interacting in a symmetrical and harmonious fashion. That's the ideal. The reality is, however, somewhat different. We have - perhaps - a T-shaped federation - in which the states and federal governments are locked in a competition to see who is top dog.
But while the states and federal governments slug it out, we know for sure who's at the bottom of the pack - local government. Local government was created by state legislation and is often treated as little more than an extension of state government departments. As one Australian academic put it, local government is - constitutionally speaking - part of the 'residue' for which the states have administrative responsibility. Can we find salvation through constitutional recognition? Probably not. But it will provide us with much needed institutional security to pave the way forward.
We see constitutional recognition has part of a package of measures to enable local government to provide for the needs of our 21st century communities. The package needs three elements:
First, an intergovernmental agreement - or IGA - between state, federal and local government to define the way we work together, particularly the financial relationship with the other two spheres of government.
Second, we need to place local government on a solid financial footing. In Australia, both federal and state governments have access to growth taxes - only local government is left to languish on a mix of politically sensitive rates and flat-lining grants from state and federal governments. We seek to replace federal financial assistance grants with a fixed share - just one per cent - of national taxation revenue.
Third, we need constitutional recognition to provide us with institutional security and a proper legal standing within the Australian federation.
The need for reform is clear. Local government is the victim of cost shifting by state and - to a lesser extent - federal governments. They pass functions and tasks to local government without adequate - or in some cases, without any funding or access to additional revenue to cover the costs of providing those services. That practice costs local government between $500m and $1.1bn every year. Local government is taking on more and more functions but having to make do with existing, limited revenue sources. State governments continue to treat local government as a mere extension of their own bureaucracies. By and large, they impose decisions on local government, rather than negotiate. We still see forced amalgamations, often against the wishes of the communities concerned.
In summary, under current arrangements, local government in Australia continues to be under-resourced, under-funded and under-valued. We believe that constitutional recognition can afford Australia's 675 local government authorities with a level of security and independence that will enable it to play the full role expected by the communities we serve. On the positive side of the ledger, the relationship we enjoy with the federal government is evolving.
Local government sits on the Council of Australian Governments - a body that brings together the Prime Minister of Australia, the state premiers and the President of the Australian Local government Association to provide across government solutions to pressing issues of national importance. ALGA also participates at 13 other inter-government ministerial councils which cover issues of relevance to local government.
The federal government is also prepared to more closely engage local government in areas where it can achieve better outcomes than it may have done in the past by working through state governments. Some commentators claim that the role of the once all powerful states is in terminal decline and that this will give rise to a new federalism in which the federal government will increasingly be seen as the paymaster and state and local governments compete for federal dollars to roll out services at the state of local level.
We are, I think, on the cusp of some profound changes - changes which may well provide opportunities for local government in Australia to grow and evolve and to play a full and rightful role within our federation - a true sphere of government in its own right. I'm pleased to say that we are making some progress with the intergovernmental agreement. Federal, state and local government are now working together to nut out the shape and scope an IGA might take.
From ALGA's point of view, we are keen to see an agreement that has high level principles that will govern the relationship between the federal government and local government - and between state governments and local government. Specifically, this agreement should help put an end to the practice of cost shifting to local government by creating guidelines or principles that will govern the fiscal relationship with local government.
Inter-government agreements - of course - can take a number of forms. We seek an allocative IGA - a document containing:
- a set of principles guiding how roles and responsibilities should be divided between spheres, without itself determining rights and obligations
- identification of the body that will determine which sphere should deliver a particular service
- most importantly, a mechanism in place so the sphere of government given the responsibility to deliver services with federal money is properly funded - in particular, where a state transfers responsibility without funding, there should be a financial penalty raised against the sinning state.
We have developed a set of six principles that we want to see underpin the IGA. These include:
Nationhood: all governments recognise the social, political and economic imperatives of nationhood and will work co-operatively to ensure that national issues are resolved in the interest of Australia.
Mutual recognition: the status of all parties to the agreement is recognised.
Subsidiarity: responsibility for regulation and for allocation of public goods and services should be devolved to the maximum extent possible so that government is accessible and accountable to those affected by its decisions.
Structural efficiency: increased competitiveness and flexibility of the Australian economy requires continuing structural reform in the public sector to complement private sector reform.
Accountability: the structure of intergovernmental arrangements should promote democratic accountability and the transparency of government to the electorate.
Financial transparency: intergovernmental arrangements should also promote financial transparency within and between all levels of government.
The IGA will - we hope - go a long way to addressing our concerns. But it will be - as I've said - one part of the solution. Constitutional recognition will also play a critical part. Being a federation, we have to ensure that we recognise the fact that local government is the creation of state governments - not the federal government. Indeed, there is recognition of local government - fleeting though it may be - in some state constitutions. We don't seek to overturn this reality - rather, we seek to enhance the standing of local government within the federation, to provide for a more robust, cooperative federation with less duplication, more effective service delivery and greater connectivity with community aspirations.
There are differing views about what form a constitutional amendment should take. The ALGA is currently considering a form of words that ensures that an entity that has created a local government body should not dismiss, dissolve, reconstitute or amalgamate the body without due inquiry. These three words - without due inquiry - would underpin the institutional security of our sphere of government.
Now some constitutions are filled with fine words that - when push comes to shove - have little real meaning. Our advice is that these three words - without due inquiry - will provide very real protection where it matters most - and that's the interpretations that will in future be made by the Australian High Court, the body charged with constitutional interpretation. Now the task we face is a hard one. We have already lost two referenda on constitutional recognition, the most recent defeat came in 1988.
The Australian Constitution is actually a tough document to change. Amendments need to be agreed by the Australian Parliament and then put to the people, where they need to gain a majority of votes in a majority of states - a double jeopardy. Needless to say, relatively few changes have been made to our Constitution since we came together as a nation in 1901. So, to drive successful constitutional change, we need to mobilise popular support - and that is no easy task for local government. In fact it is a massive task that will require all councils to gain broad support within their respective communities. The road ahead may be tough, but we are developing a roadmap to recognition and we intend to keep our eyes and get the job done. Our communities deserve nothing less.
Cr Ann Bennison
16 March 2005
Aberdeen, Scotland
