Christopher Back (WA, Liberal Party) Share this | Hansard source

I rise to oppose the Constitution Alteration (Local Government) Bill 2013. I wish to put into the record the effect of the proposed change to section 96 of the Constitution should the referendum succeed. It would read:

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.

If thinking people around Australia, people associated with local government, and communities—particularly in the small-population states of Tasmania, Western Australia and especially South Australia—do not understand the statement 'on such terms and conditions as the parliament thinks fit' then I recommend very, very strongly that they examine it in more detail. That is because there could not be a more dangerous change to this Constitution for the people of the smaller states. In fact, it flies in the face of many of the aspects of the Constitution and, indeed, this chamber in which we sit—it being the states house.

As was presented by the professor of constitutional law at the University of Sydney, Professor Anne Twomey, there are four obstacles to the success of this referendum. They are firstly the need for popular support; secondly the unintended consequences that may emanate from it, thirdly the obvious question of whether it is necessary, and fourthly the question of whether it is for symbolic recognition only. As has been put by those who are interested in this subject, there are two benefit tests that must be applied: it must be demonstrated that there is a problem and it must be demonstrated that any change be seen as a benefit to solving that problem.

This referendum fails on both counts. There is no problem to solve, so by definition—ipso facto—there would be no benefit. So what are the proponents, particularly in local government associations around Australia, putting to their ratepayers as validation and justification for taking money out of ratepayers' pockets and putting it into the yes vote for this constitutional change? The first is that they believe in security of funding under section 96. But there is absolutely and utterly nothing that requires change. There is no guarantee that there would be any difference in the funding from the Commonwealth to local government should this amendment be passed, simply because of those words 'on such terms and conditions as the parliament thinks fit'. There is nothing in section 96 now that precludes the Commonwealth government from continuing to fund local governments as they have been funding them for many years.

The second justification is the argument about the High Court challenge in the Pape case. What the ratepayers of Australia need to understand is that Pape swung not on section 96 of the Constitution but on section 81. I was privileged to be a member of the Select Committee on the Reform of the Australian Federation, which reported to the Senate in June 2011. A lot of discussion took place around Pape. We had before us officers of the Department of the Prime Minister and Cabinet and also of Treasury. The department concluded:

Taking into account the implications of the Pape decision, the Commonwealth remains able to make grants under its general powers in the Constitution as well as make payments to the states for purposes relevant to their responsibilities, which do include local government currently.

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The Treasury and the Department of the Prime Minister and Cabinet reviewed the constitutionality of Commonwealth payments in the wake of the Pape case and, based on advice from the Attorney-General, found that payments could continue. A similar position was reached by the Western Australian Government and the Council for the Australian Federation.

So Elgar had got it wrong. Section 96 guarantees nothing, and Pape was never determined under section 96. The other case that they quote is, of course, Williams in the High Court. When Senator Brandis spoke so eloquently earlier in the chamber today on this matter, he made the observation that Williams did not turn on section 96. In fact, it was the opinion of the judges of the High Court that there was no legislative basis at all for the allocation of funds in Williams. I make the point in terms of road funding, because this is critically important funding. Roads to Recovery was commenced by the Howard government, continued by the Rudd and Gillard governments is paid under section 96. Those payments commenced in 1923 under section 96, and 90 years later the same payments are being made. Therefore, it is clearly obvious that there is no argument based on those from the Australian Local Government Association.

I now turn to my own state and the Western Australian Local Government Association. Documentation that was presented recently made the observation by WALGA of what they are or are not seeking. The first thing they said was that they are not asking for Commonwealth takeover. The simple fact is that, under the Constitution at the moment, the Commonwealth has no powers over local governments—no powers at all; absolutely none. Yet what the government are proposing in this referendum is that they will accord to the Commonwealth, to the federal government, the opportunity to provide financial assistance to any local government on such terms and conditions as the parliament sees fit. They are unwittingly passing over to the Commonwealth powers that it currently does not have. Not only would it give Commonwealth some powers; it would give the Commonwealth exhaustive powers. As time develops in this particular contribution, I will make that point more obviously.

The second thing they said was that they are not seeking exemption from state control. They need only go to section 109 of the Constitution, which speaks the title 'Inconsistency of laws', and I quote:

When a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid.

The local government in WA are saying here that they are not seeking exemption from state control, yet they are passing a circumstance into fact where the Commonwealth would actually have power over the states.

The third thing that WALGA said is that they are not pursuing symbolic recognition. It has been said in the past that local government is the foundation of democracy and 'if it fails, democracy will fail'—to quote Robert W Flack. Whether they intend it or whether they do not, the very thing that they are doing with this move, according to symbolic recognition or not, is that they are placing at severe risk local government as we know it in this country today. They are also saying that they do not want to interfere in any way with the Commonwealth Financial Assistance Grants. Once again, I come back to the words of the proposed changes to the Constitution and I warn WALGA and those who are the ratepayers around Western Australia that it is the very thing that they are doing. They are putting at risk the possibility of the Commonwealth in its Financial Assistance Grants.

They claim it would only lead to minimal expansion of Commonwealth powers. The simple fact at the moment is that, under the Constitution, because local government does not exist, the Commonwealth has no powers. If they think that all they are doing is giving minimal powers, I will in continuation of this debate speak about the relationship between Mr Rudd and Premier Barnett and Ms Gillard and Premier Barnett on health and education.