After rejecting similar proposals in 1974 and 1988, the Australian people are once again being asked to approve the recognition of local government in the Constitution. [i] This mirrors the attitude famously attributed to the EU nomenklatura: “The people must keep on voting until they get it right.”
The Constitution is an agreement between the people of the several states to establish a new federal entity with limited powers. Local government, established by the colonial parliaments, was not involved. If, 113 years later, local government is now to be included, the details must be put to the people, who will have to agree nationally and federally, that is in a majority of states.[ii]
Although changes have been made to the Australian Constitution at about the same rate as the American, the political class constantly complains that the Constitution has proved far too difficult to change. They should blame themselves—the power to initiate change is reserved to the Canberra politicians. [iii] And most proposals for change have been to take more powers or to manipulate the checks and balances in the Constitution. That is no doubt the reason why the people have rejected them.
These safeguards were not put there to prevent change. Rather, the founders designed them, as Sir John Quick and Sir Robert Garran explained, “to prevent change being made in haste or by stealth, to encourage public discussion and to delay change until there is strong evidence that it is desirable, irresistible and inevitable”. [iv]
“Local government” now joins “trade and commerce” and “simultaneous elections” as subjects which have been submitted to the people on three occasions. “Local government” also joins eight other subjects which have been submitted to the people on more than one occasion. All have failed. Regrettably there is no need to re-submit six of these—the High Court has effectively overruled the people’s decisions on them and granted access to what were intended to be powers reserved to the states to Canberra.[v] As a result Canberra now has the power to take these powers over even to the exclusion of the states. The lesson from this is not to amend the Constitution in any way which would allow the High Court to grant even more power to Canberra.
The current proposal is to authorise financial grants by Canberra direct to local government bodies.[vi] Further, the federal government may attach any conditions as they wish, however irrelevant. This will give Canberra enormous control over local government. The fact is that the Commonwealth presently provides about $2.8 billion to local government, mainly through the states, indicating no obvious reason why the Constitution should be changed. [vii]
Unduly favouring the YES case
No Labor politicians are expected to vote against the proposal because of the caucus pledge, probably the most authoritarian example of party control among similar democracies. But because the Liberal Party has authorised certain parliamentarians to cross the floor, an official Yes/No Case pamphlet is at least assured.[viii]
Applying standards more appropriate to a banana republic, it seems the politicians are determined that the No case have minimal impact. Through legislation rushed through Parliament without opposition, the Yes/No Case pamphlet will no longer be posted to every elector. [ix] Instead, it will go to each address on the roll. This will mean that in many households, some voters will not be even aware of the pamphlet. The ostensible reason is to save costs, somewhat curious for a government celebrated for its profligacy.
In the same legislation Parliament has failed to require, as it did for the 1999 Republic referendum, that there be equal funding of the Yes and No cases. The government— again with opposition support—is now able to spend taxpayers’ funds on the referendum as it likes.
Campaigners for the No case fear that the well-funded government information campaign will be biased towards the Yes case. Meanwhile the Local Government Association has built up a war chest of $10 million. While the source is the ratepayers of Australia, it is planned that this money will only be used to argue the Yes case.
It is even being suggested that the Australian electoral commission may depart from the practice of publishing the Yes and No cases on opposite pages. The Yes case might appear at the front of the booklet and the No case at the back.
It has often been said that, as a matter of courtesy and dignity, the third level of government deserves constitutional recognition, for example, in the preamble.[x]
But on this occasion the major parties are proposing a change in the federal financing of local government. This relates to the power in section 81 to make appropriations for the “purposes of the Commonwealth”. There used to be a strong view in government that these purposes were to be determined by Parliament. But in 2009, a barrister and law academic, Bryan Pape, challenged the validity of the payment of $900 to a large number of people under the Tax Bonus for Working Australians Act (No 2) introduced by the Rudd government as a response to the Global Financial Crisis.
Although Mr Pape lost his case, he won on a very important point. The court trimmed Parliament’s sails by indicating that the appropriations power is not a separate power. It is not for the politicians to decide what the “purposes of the Commonwealth” are; these are under the powers of the Commonwealth to be found in the Constitution.
So it is doubtful whether the Commonwealth can now directly fund bodies for purposes outside its powers. The Commonwealth can easily overcome this obstacle by making grants to the states under section 96. Under this section the grounds can be conditional.
He who pays the piper calls the tune
We now come to five potential consequences of the change.
The first is that as a practical matter, local government politicians will then follow the principle that he who pays the piper calls the tune, and no longer feel much or any responsibility to their ratepayers. This has already happened to the nation’s universities ever since the Whitlam government took over their funding, briefly abolishing fees. Although students now pay a substantial part of their education, funding comes through Canberra. Universities are subject to the most detailed regulation by a large federal bureaucracy, and as a result, have become more and more uniform. Had the constitutional intention prevailed and had they remained under the states, there would have been greater innovation and diversity in research, teaching, administration funding and fees and thus greater choice.
A second likely consequence is that it will contribute to the downgrading of the states and the greater centralisation of power in Canberra. We already live in the most fiscally centralised federation in the world, with the Commonwealth grabbing about 80 per cent of the taxes and giving about half of that to the states, much of it with directions on how to spend it.
This was exacerbated by the High Court finding decades after federation that the states’ direct taxes were beyond their power. The partial solution through the GST is a byway of a federal and not a state tax. Thus the Commonwealth has unfairly burdened the states with its obligations to the territories though the equalisation formula. And on at least one occasion, the Commonwealth through the Rudd government threatened to take back a portion of the GST.
This unhealthy dependency of the states on the Commonwealth neutralises that elementary principle of good government in a federation enunciated at the formation of the United States, that politicians must explain to their electors how they propose to spend their taxes.[xii] The result is that politicians indulge in buck passing and in the blame game, and electors are confused as to which level of government has responsibility in many areas.
Although state politicians today are far more obedient than their predecessors, Canberra still finds them to be occasionally troublesome. Knowing that the people will never agree to the abolition of the states, the centralist strategy now is to bypass them.
By upgrading and amalgamating the councils, the Whitlam government agenda to do this and create regional governments will be realised, thus delivering both more obedient agents for the Commonwealth and an even greater opportunity for buck-passing.
Increased taxes and rates.
The third danger is that if Canberra takes over local government, all precedents indicate that this will be effected through a vast and costly bureaucracy. There would inevitably be a swathe of complicated rules, agreements, protocols, directions and procedures, endless meetings and the usual sort of time-wasting and politically correct measures that Canberra politicians and bureaucrats indulge in.
History suggests that part of the process will involve moving funds to politically favoured local government areas from other areas under some incomprehensible “equalisation” formula. This is likely to take into account rates which have already been collected. It is likely that well-managed local government areas will be required to subsidise the poorly managed. The incentive to run councils well will disappear.
Local government politicians are also likely to demand support and standards similar to those of politicians at state and federal levels, with teams of political advisers and large staffs, cars, travel, including overseas travel, and new buildings to reflect their new importance. No doubt they will expect similar rewards to other politicians, including a level of superannuation substantially more generous than that available to ordinary Australians. Regional government politicians will no doubt expect superannuation and compensation to be available on losing election or early retirement and also expect access to government positions, consultancies and lobbying. Former heads will expect offices and travel benefits for life. Local politicians will no doubt also expect substantial election funding.
All of this largesse will have to be funded by increased taxes and rates.
Agenda without a mandate
As local politicians engage in the more grandiose activities resulting from constitutional recognition, the danger will be that they will increasingly neglect their core functions such as garbage collections, local roads, planning approvals and the like. Already garbage collections, once done twice a week in our warm country, are down to an unhealthy once a week. Some local governments have proposed reducing these to once a fortnight.[xiii]
Even without recognition, some councils are already moving into areas far beyond their competence. One Sydney council plastered the streets with signs welcoming visitors to a nuclear-free municipality. Another recently announced its foreign policy on Palestine, deciding on a boycott of Israel. In the 1999 Republic referendum, the Sydney City Council filled the streets with banners calling for a Yes vote, all at ratepayers’ expense. There was no reprimand by the auditors.
Some local politicians already see themselves having an international role, and not only in building relationships with “sister” cities across the seas, necessitating much international travel. Some councils are influenced by international “soft law” contained, for example, in the UN’s Agenda 21.[xiv] Although soft law is not formally binding, the work of over seventy-five Australian councils is being co-ordinated through the German-based International Council for Local Environmental Initiatives (ICLEI).
The application of this can be seen in the attacks on landholders’ rights to use their land. In a recent case in New South Wales land was rezoned as what would be in effect a wilderness. [xv] However, existing activities were to be allowed so that farming could continue. One farmer found that after he left a field fallow for a year, when he wished to resume growing the usual crops he had to put in a development application to the council.
By putting local government under the effective authority of Canberra, radical local politicians will become freer to follow international soft law, especially under a favourably inclined federal government and bureaucracy. And along with the states, the councils could be valuable tools for the federal politicians who wish to neutralise private property, but do not wish to pay compensation, as we saw in the Peter Spencer case.[xvi] In that example, the New South Wales government declared Mr Spencer’s farm a carbon sink, thus rendering it useless. This was done in agreement with the federal government, which wished to comply with the carbon dioxide targets set out in the Kyoto Protocol which it refused to ratify. Only the Commonwealth is bound to pay compensation on an acquisition of property, and the Commonwealth insisted in this case that it had not acquired any property.
If councils were to be constitutionally recognised, there could be unintended consequences. For example, lawyers for councillors accused of corrupt practices will no doubt consider arguing that they are constitutionally protected. How the High Court would respond to such an argument cannot be known.
Consider for example the GetUp! Case.[xvii] Handed down by the High Court just before the 2010 election, it resulted in about 100,000 extra names being added to the electoral rolls on questionable constitutional grounds.
The High Court urgently heard two people who claimed they were unfairly excluded from the rolls, which closed on the day the election writs were issued. But both were already in breach of the electoral law. The Court held that the law closing the rolls was invalid. It took about five months to release their judgments.
GetUp!, by the way, boasted that as a result of this ruling, 100,000 extra voters were enrolled in marginal seats, and that this had ensured the return of the Gillard government.
As everyone knows—except some High Court judges—there is always a tsunami of enrolments between the calling of the election and the closing of the rolls. There is no opportunity to check them.
In this referendum, the people are being invited to approve an amendment to the Constitution which fails, on all three counts, Quick and Garran’s “desirable, irresistible and inevitable”.
All the financing of local government the federal politicians supposedly wish to achieve can already be done through the state governments.
The potential consequences of passing the amendment—whether intended or unintended—constitute a sufficient warning to Australians of the danger of giving the Canberra politicians a blank cheque to proceed.
Add to this the sinister fact that, rather than encouraging public discussion as the founders indicated, the politicians from the major political parties are attempting to make it difficult for the Australian people to see, hear and read the No case.
[i] In 1974, the Whitlam government proposed two new sections be added:
• section 51(ivA) provided that the Commonwealth could make laws with respect to “[t]he borrowing of money by the Commonwealth for local government bodies”.
• section 96A provided that “[t]he Parliament may grant financial assistance to any local government body on such terms and conditions as the Parliament thinks fit.
[i] In 1988, the Hawke government proposed section 119A be added. Be added: Each State shall provide for the establishment and continuance of local government bodies elected in accordance with its laws and empowered to administer, and to make by-laws for, their respective areas in accordance with the laws of the State
[ii] This was a remarkable development. They could have proposed a blank cheque plebiscite – as used in 18th and 19th century France. Or they could have done what was customary, just reserve the power to change the Constitution to the politicians..
[iii] David Flint and Jai Martinkovits, Give Us Back our Country, 2013, Connor Court Melbourne, Part 3
[iv] John Quick and Robert Garran, The Annotated Constitution of the Australian Commonwealth, 19 and one, 1985 legal but of course 988[iv]
[v] Marketing schemes, possibly price control, trade and commerce, monopolies, corporations, and industrial matters
[vi] It is to add the italicised words to section 96: ”During a period of 10 years after the establishment of the Commonwealth and thereafter until the Parliament otherwise provides, the Parliament may grant financial assistance to any State, or to any local government body formed by a law of a State, on such terms and conditions as the Parliament thinks fit.”
[vii] This not unreasonably gives rise to the suspicion that there is a hidden agenda.
[viii]That Liberal MPs would need an authorisation would shock the founder of the Liberal Party, Sir Robert Gordon Menzies.
[ix] Referendum (Machinery Provisions) Amendment Act, 2013
[x] The preamble is to the Commonwealth of Australia Constitution Act, 1900 (UK). The Constitution itself is part of that Act. Note that it was drafted in Australia and approved by Australians. It was accepted by the British government with some minor changes, particularly in relation to the Privy Council. The objection to amend the preamble is that a preamble speaks from the time when the instrument was made and it is wrong in principle to amend them
[xi] Pape v Commissioner of Taxation  HCA 23 (7 July 2009); see also Williams v Commonwealth of Australia  HCA 23
[xii] Alexander Hamilton, Federalist Papers No. xxxii, 1788, reprinted 1979, The Eastern Press, Norwalk, Connecticut.
[xiv] Adopted at the UN Conference on Environment and Development (UNCED), the Earth Summit, held in Rio de Janeiro in 1992. Flint & Martinkovitch op.cit. chapter 6
[xvi] Spencer v Commonwealth of Australia  HCA 28
[xvii] Rowe v Electoral Commissioner  HCA 46