Tuesday 30 July 2013

The referendum we had to have?

A referendum on whether to amend the Constitution to give financial recognition to local government is set down for 14 September 2013.

Why has it been called? And if it is so necessary, why are people now asking for it to be postponed?  

The legal impetus for this referendum came from the 2009 High Court decision Pape (yep, the fellow who tried to take away our tax bonuses).  Before then, the Commonwealth Government had assumed it could make direct payments on any subject matter, regardless of whether it had a head of power to do so. Pape brought this into doubt, including the ability of the Commonwealth to directly fund local government programs, many of which are beyond the Commonwealth’s sphere of constitutional responsibility.  In 2012, Williams (which struck down the National School Chaplaincy Program) perpetuated this doubt, the High Court insisting that the Commonwealth could only directly fund programs that were, amongst other things, within its legislative powers.  

An independent expert panel (in December 2011) and a federal parliamentary committee (in March 2013) both recommended that a referendum on financial recognition of local government be put to Australian voters.  

On 16 May 2013, the Federal Government released a Bill containing the proposed text of a referendum. The proposed amendment gives the Commonwealth power to bypass the States and make payments directly to local government. At the moment, the Commonwealth’s grants power (s 96 of the Constitution) allows it to make payments to the States on such terms and conditions as the Parliament thinks fit.  The amendment extends that power to local governments.

Some have called for the referendum to be delayed until the Federal Government has properly educated the public on why this change is necessary. Public consultation is always important in ensuring civic engagement with legislative change.  But it takes on additional significance given that s 128 of the Constitution requires a referendum by the people to effect constitutional change. People need to be given proper explanations of both sides of the debate if a referendum is to be in the true spirit of s 128 and if they are to have any confidence in any proposed change.  The two-week consultation period allowed for the draft Bill was arguably inadequate given the significance of the issues.   

Further, the education process has not been conducive to voters making an informed choice come September 14.  

Firstly, it has been sold as a referendum to ‘recognise local government’, which is not quite right.  The 2011 expert panel identified four types of local government constitutional recognition: symbolic recognition (e.g. in a preamble), financial recognition, democratic recognition (i.e. changing the Constitution to guarantee that local councils are elected bodies) and recognition through federal cooperation (i.e. changing the Constitution to explicitly encourage cooperation between governments).  This referendum only progresses one type of recognition – financial.  Is this a genuine recognition of local government as a legitimate third tier of government?

Secondly, this referendum has been presented to the public as the closing of a technical loophole. ‘We don’t want to bore the Australian electorate to death with something that is essentially housekeeping,’ the then Minister for Local Government said when he was asked about the short period between the introduction of the Bill and the referendum. Yet the proposed change is a significant restructuring of the federal power balance established by the Constitution and is neither simple nor essential for the continued existence of local government programs.

Arguments are being made both for and against the proposed amendment.  In the meantime, the Constitution already provides a mechanism for funding to local government to continue.  Under s 96, the Commonwealth has the power to make grants to the States on the condition that all the money is passed on to local government. This is the way that the Commonwealth has provided funding to local government since the 1920s and it is constitutionally valid. 

It is still possible for the Federal Government to include in the pamphlet distributed to voters YES and NO cases that genuinely and comprehensively represent the true nature of this proposed amendment.  It is also possible for it to fund an education campaign that properly explains both cases to the public.  But only then can people genuinely engage in the process contemplated by s 128 of the Constitution.  And that is why people are calling for the September 14 referendum to be postponed.

What do you think about the timing of this referendum? About referenda in Australia generally?

If you are in the Victorian Government and would like advice about this referendum or on how your program fares as a result of the funding uncertainty caused by the Williams case, please contact:

Alison O'Brien
Assistant Victorian Government Solicitor
t  8684 0416