CONSTITUTION ALTERATION (LOCAL GOVERNMENT) 2013 Explanatory Memorandum
CONSTITUTION ALTERATION (LOCAL GOVERNMENT) 2013
2010-2011-2012-2013
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
CONSTITUTION ALTERATION (LOCAL GOVERNMENT) 2013
EXPLANATORY MEMORANDUM
(Circulated by authority of the
Attorney-General, the Hon Mark Dreyfus QC MP)
CONSTITUTION ALTERATION (LOCAL GOVERNMENT) 2013
GENERAL OUTLINE
In August 2011 the Australian Government appointed an Expert Panel on Constitutional
Recognition of Local Government (the Expert Panel) 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 NSW, 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 s 96 of
the Constitution was a viable option within the 2013 timeframe 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 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.
OVERVIEW OF PROPOSED CONSTITUTIONAL ALTERATION
The proposed constitutional alteration would amend s 96 of the Constitution of the
Commonwealth of Australia to make specific provision in relation to the granting of financial
assistance to local government bodies.
FINANCIAL IMPACT STATEMENT
The proposed constitutional alteration would have no financial impact.
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STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
The Constitution Alteration (Local Government) 2013 is not within the scope of the Human
Rights (Parliamentary Scrutiny) Act 2011 and therefore does not require a Statement of
Compatibility under that Act.
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NOTES ON CLAUSES
Preliminary
Clause 1 - Short title
1. Clause 1 states that the proposed law to alter the Constitution in relation to financial
assistance to local government may be cited as the Constitution Alteration (Local
Government) 2013.
Clause 2 - Commencement
2. Clause 2 brings the Constitution Alteration (Local Government) 2013 into force on
the date the Act receives the Royal Assent.
Clause 3 - Schedule 1
3. Clause 3 alters the Constitution in accordance with Schedule 1.
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Schedule 1
4. Item 1 of Schedule 1 alters the heading to s 96 of the Constitution by including the
words `and local government bodies' at the end.
5. Item 2 alters the Constitution by inserting in s 96, after `to any State', the text `or
local government body formed by a law of a State'. As amended, s 96 would be as follows:
96 Financial assistance to States and local government bodies
During a period of ten years after the establishment of the Commonwealth and
thereafter until the Parliament otherwise provides, 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.
6. The alteration of s 96 would establish specifically that the Commonwealth may grant
financial assistance to local government bodies formed by a law of a State. This financial
assistance can be for a wide range of services and facilities and, without limiting the
generality of the specific provision, the long title to the Act refers to grants of financial
assistance for community and other services typically provided by local government bodies.
The Commonwealth would thus no longer need to rely on other, less specific sources of
power to provide financial assistance to local government bodies.
7. However, 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 - s 96 - which does not involve any grant of power to the Commonwealth
beyond the ability to provide financial assistance on terms and conditions. This financial
assistance must be optional; that is, recipients must have the option of rejecting the proposed
financial assistance and the terms and conditions. The alteration has thus 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, or enable the
Commonwealth to compel local government bodies to accept funding or terms and
conditions.
8. In particular, the Commonwealth could not provide financial assistance on terms or
conditions that local government bodies could not meet under State law (just as currently
financial assistance cannot be provided to States on terms and conditions which they cannot
meet).
9. Further, States would not be prevented from changing their systems of local
government should they wish to do so. The amendment would not prevent a State abolishing
any local government body, or curtailing the activities or expenditure of a local government
body.
10. In providing that financial assistance may be granted to any local government body
`formed by a law of a State', the amendment would cover any body formed by or in
accordance with primary, delegated or subordinate State legislation.
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11. No reference to bodies formed by a law of a Territory (as suggested by the Expert
Panel) 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 s 122 of
the Constitution, a provision which the Expert Panel was not called on to consider.
12. While the alteration would provide a specific foundation for grants of financial
assistance to local government bodies formed by a law of a State, it would not prevent the
continuation of grants to States in relation to local government, whether under the Federal
Financial Relations Act 2009 or otherwise. For example, it would not affect the continued
payment by the Commonwealth to States of grants under the Local Government (Financial
Assistance) Act 1995, which provides for Financial Assistance Grants to States for local
government purposes.
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