Leadership and Good Governance - Reports

6.

92

Ordinary Meeting - 16 December 2015

LEADERSHIP AND GOOD GOVERNANCE

6.1

REVIEW OF THE LOCAL GOVERNMENT ACT 1989

Document Information
Author

Peter Davies, Manager Executive Services

Responsible Craig Niemann, Chief Executive Officer

Officer

Summary/Purpose
The purpose of this report is to ask Council to adopt the attached draft submission to the
Local Government Act review discussion paper.
Policy Context
Council demonstrates leadership in its decision to meet future needs and challenges.
Background Information
On August 11 2015, the Minister for Local Government announced a review of the Local
Government Act 1989.
The purpose of the review is to revise the current legislation governing local government
in Victoria to create a more contemporary, accessible, and easier to understand Act that
meets the current and future needs of the community and local government sector.
The terms of reference provide for a comprehensive examination that will consider all
aspects of the current Act with a view to more accurately and consistently reflecting
policy intent and improving clarity, including provisions setting out objectives, roles,
functions and powers of councils; roles and responsibilities of councillors, mayors, CEOs
and council staff; directions about governance and administrative processes required to
be followed by councils; and the system of electoral representation.
To this end, a discussion paper was released to start a conversation between councils,
the community and the state government which identifies the key issues that reflect the
terms of reference for the review.
Submissions to the review discussion paper were invited and close on December 18
2015.

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Report
On November 12 2015, Councillors gathered for a workshop on the review, the purpose
of which was to identify a general position on the key issues distilled from the discussion
paper itself, but also from the issues, questions and concerns raised by the councillors
during the past 18 months, particularly in governance meetings.
The general position of the councillors has been expressed in the draft submission.
In addition to submissions from the sector, other contributions will be provided to the
review through technical working groups established by Local Government Victoria to
identify and prioritise key issues as identified in the discussion paper and by the group,
and provide options for addressing those issues; operational issues raised by chief
executive officers in separate correspondence; and community submissions.
Councillors have the opportunity to make individual submissions.
There will be a further opportunity to make a submission to a discussion paper which will
be developed in 2016 on the basis of responses to this discussion paper.
Resource Implications
There are no resource implications for Council
Attachments
1.

Draft submission to the Local Government Act Review

RECOMMENDATION
That Council(1) adopt the attached draft submission to the Local Government Act Review; and
(2) send the submission to the Local Government Act Review Secretariat.

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REVIEW OF THE LOCAL GOVERNMENT ACT 1989

SUBMISSION BY GREATER BENDIGO CITY COUNCIL
INTRODUCTION
The overarching principle
Based firmly on its constitutional status as a distinct and essential tier of
democratically elected government1, the overarching principle of the Councils
submission is the right of a democratically elected body to make decisions
suitable for and answerable to the community that elects it, with state intervention
limited to extreme circumstances.
To this end, the Council submits that the review of the Local Government Act
1989 (Act) should ensure that the functions and powers conferred on a council
are given full, practical and consistent expression in the revised provisions, and do
not remain theoretically aspirational only.
ROLES AND FUNCTIONS
Role of Council
The Council acknowledges the constitutional framework which legitimises its
existence and purpose as a tier of government responsible for the governance of
the area designated by its municipal boundaries, and constituted by
democratically elected councillors as the governing body which is accountable for
its decisions and actions, and is responsible for ensuring good governance.2
The Council also acknowledges that this governing body includes an
administration which implements the decisions of the Council and facilitates the
performance of the duties and functions of the Council.3
The Council submits the existing functions of a council identified in Part 1A of the
Act are appropriately broad for the purpose of achieving its objectives in setting
the overall direction for the municipality through long-term planning, and adopting
a strategic view of the future, and the plans and policies to achieve this.
The review may wish to consider the current disparity between larger regional
councils and smaller district councils in terms of resources and the provision of
services, and whether different tiers of local government would provide a more
viable future framework to address this.

s.74A(1) Constitution Act 1975

s.74(1A) Constitution Act 1975
3
s.74(1A)(c)(i) and (ii) Constitution Act 1975
2

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New tiers of local government could have larger regional councils with the
resources to provide key facilities and services to a broader region, and smaller
district councils, sitting within a larger regional area, continue to provide more
localised decision-making and representation.
Council submits that a new tier of local government with a regional emphasis may
serve to create a better environment for collaboration between larger regional
councils and smaller district councils for the provision of shared services not
hitherto available or affordable.
Role of a councillor
The Council agrees with the current role of a councillor as recently amended4.
A councillor is a constituent member of the Council 5 which exercises its power
through collective resolution, not individually.
The Council acknowledges that the interface between individual councillors and
the administrative arm is one of support through information and advice to enable
a councillor to perform his or her decision-making function in the context of
formally constituted meetings of the Council. It is not an executive function which
resides solely with the Chief Executive Officer6. In this regard, the Council
acknowledges the recent amendment to the Act which specifically delineates the
two functions7, and the Council submits that revised provisions should also make
the specific delineation to avoid confusion or doubt as to the respective functions.
The Council acknowledges that the only way it can state its opinion is by
resolution8, and submits that revised provisions could affirm this principle, not
with the view to stymie or contain legitimate debate, but rather support the
governance role and the unity of the Council after a decision has been made and
thereby avoid misunderstanding or confusion as to the opinion of the Council, as
opposed to the opinion of an individual. In this regard, the Council agrees with the
recent amendment to the Act which states that, in performing the role of a
councillor, a councillor must provide civic leadership in relation to the exercise of
the various functions and responsibilities of the Council under [the] Act and other
Acts9.
Independent of a formally constituted meeting of the Council, a councillor may
advocate on behalf of a constituent. The Council, however, acknowledges that in
exercising the role of councillor, a councillor represents the interests of the local
4

s.65 Local Government Act 1989 specifying the role of a councillor.

s.5B(1) Local Government Act 1989
6
s.94A Local Government Act 1989.
7
s.65(3) Local Government Act 1989.
8
Lillydale S.C. v Gainey (1930) V.L.R. 73, at p.80; Gifford, K.H. The Victorian Council Meetings Handbook, The Law
Book Company, Melbourne, p.51.
9
s.65(2)(c) Local Government Act 1989.
5

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community as a whole and must consider the diversity of interests and needs of
the local community,10 not just a portion of it. In this regard, the Council agrees
with the recent amendments to the Act clarifying the role of a councillor and
submits that the revised provisions should also contain this important distinction.
Role of a mayor
In addition to the current four specified statutory functions of a mayor 11, the
Council supports the four new functions in the recent amendment to the Act 12 to
include providing guidance to councillors about what is expected of a councillor,
acting as the principal spokesperson for the Council, supporting good working
relations between councillors, and carrying out the civic and ceremonial duties of
the office of Mayor.
Traditionally, many of the functions of the mayoral office have relied on convention
or the personality of individual incumbents. This situation may lead, in practice, to
confusion and inconsistency as to the relationship between a mayor and
councillors and a mayor and the administrative arm of the Council. It may also
potentially lead to conflict and an unreasonable diversion of Council resources.
The recent amendments add further clarity to the function which will serve to add
consistency to the role and avoid misunderstanding or confusion as to its
exercise. The Council submits that revised provisions could specifically affirm the
mayor is, and remains during the mayoral term, one constituent member of the
Council as a whole, and that, as a councillor, the role does not include the
performance of any functions that are specified as functions of the Chief Executive
Officer under section 94A of the Act.
Election of a Mayor
The Council agrees with the status quo in relation to the election of a mayor: that
a mayor be elected by the serving councillors for a term decided by the councillors
in accordance with the current provisions of the Act.
RELATIONSHIP WITH THE STATE
While local government in its current form is a creature of statute, with its distinct
status defined by Parliament13, this does not mean local government is an arm of
the State in the same way as a government department is, and councils should
not, therefore, be treated as such.

10

s.65(1)(b) and (2)(a) Local Government Act 1989.

Chair a meeting of a council: s.73(2) Local Government Act 1989; call a special meeting of a council: s.84(1) Local
Government Act 1989; casting (or second) vote: s.90(1)(e) Local Government Act 1989; precedence at all municipal
proceedings within the municipal district: s.73(1) Local Government Act 1989.
12
s.73AA Local Government Act 1989
13
s.74A(1) Constitution Act 1975; Part 2 Local Government Act 1989.
11

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Although created by statute for a public purpose, councils do not represent the
Crown. Councils are separate legal entities charged to ensure the peace, order
and good government of each municipal district.
It is submitted that revised provisions respect the integrity of local government as
a distinct tier of government and give practical expression to the overarching
principle that councils be answerable to those who elect it with minimal state
government intervention.
To this end, and mindful of practical realities, the Council submits that a new
charter reflect a renegotiated partnership with the state government in accordance
with the role and function of local government intended by the Act.
Revised provisions should regard intervention as a last resort and employ
prescription only where necessary and not as a matter of course given the direct
relationship between a council and the local community. In this regard, a council is
distinct from other statutory bodies whose public functions are discharged or
overseen by officers appointed or employed by the state.
COUNCIL INCOME
Arguably, local governments revenue base is contracting due to fiscal constraints
including reduced stated and federal funding, the impending rate cap and
mandated efficiency savings. Significantly, all of these factors are either external
impositions or reliance.
In this context, the issue of raising revenue to meet the cost of providing services
is an important one and in respect of which the status of councils should be taken
into consideration when identifying either alternative or additional income streams.
Council submits that the issue of revenue should be determined by the local
community who elect the Council. Applying this principle, a council should
determine its own budget and rates and charges suitable for, and answerable to,
the community that elect it. The state should only intervene in extreme
circumstances. This is consistent with the overarching principle recognising the
distinct and essential tier of government. It recognises local government in a real,
practical and responsible way rather than mere theory, however well-intentioned.
Council acknowledges grants available through the state and federal governments
to fund services, facilities and programs that align with local, state and national
strategies. The level of funding allocated to these grant programs need to reflect
community needs. Council accepts its obligation to articulate community priorities
in seeking funding from various programs.
While the Council does not advocate local government receiving a share of GST,
it does, nevertheless consider it worthwhile revisiting current exemptions which
serve to inhibit or restrict available revenue streams as an alternative. Removing
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the exemption from tax on land used for mining is an example. Another would be
removing the exemption of paying rates for public bodies occupying non-Crown
land. Consistent with the overarching principle is the removal of unreasonable
impediments against special charges and allowing councils to set statutory fees
based on cost recovery rather than fixed by the state and applied generally.
COST SHIFTING
In addition to the powers and responsibilities conferred under its own Act, councils
are responsible for functions expected of it under more than 40 other Acts of the
Victorian Parliament, including building control, planning, domestic animal control,
roads and traffic management, and some public health functions.
The practical consequence of transferring state functions to local government is
both the transfer of cost and responsibility. One follows the other, and the
suggestion that remaining impediments to further transfers be removed means
this burden will only increase.
While recognising there is no legal impediment to the state transferring
responsibilities to councils under Acts other than the Local Government Act, the
Council submits that the transfer be accompanied by an appropriate fee by way of
funding or an exemption from the imminent rate cap for any rate increase on an
ongoing basis as needed to offset the shift in cost.
Council submits the consideration and use of a local government impact
statement prior to any transfer of responsibility and cost to local government
should be reinforced.
COUNCILLOR CONDUCT
Codifying behaviour
Council submits that, consistent with the principle of upholding the integrity of this
distinct tier of government, councils should be allowed to draft their respective
codes of conduct to be adopted by the Council and signed by all councillors. To
impose a standardised code of conduct would serve as another example of
unnecessary prescription and intervention.
Behaviour enforcement
The revised provisions and the role of independent arbiter is supported by the
Council as it serves to both expedite resolution of matters, currently victim to an
unwieldy and protracted process, and also enables the Council itself to deal with
the matter and impose a sanction on the recommendation of the arbiter.

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Penalties
The Council supports the current range of available penalties that could apply for
a breach of a code of conduct and submits that directing and completing retraining
might also be considered a penalty where appropriate. This option may also serve
a practical benefit in addressing aberrant or challenging behaviour, at least in the
first instance.
Dismissal of a councillor(s)
Council submits that the current provisions dealing with councillor misconduct that
may adversely impact on the ability of a council to function or the health and
wellbeing of other councillors or council staff is inadequate and, arguably, unfair in
terms of addressing the source of the problem where it is identified not to be
systemic or widespread but limited to an individual or small group.
Currently, there is no power for the Minister to dismiss a councillor or councillors
identified as the cause of dysfunction or adverse impact following investigation,
there is only power to recommend to the Governor-in-Council that all the
councillors be suspended14. This may be a disproportionate response to the
problem and unfairly punishes councillors whose behaviour is not questionable or
subject to investigation.
Council acknowledges that a council cannot be dismissed except by an Act of
Parliament relating specifically to the Council 15. In order to proportionately
respond to the aberrant behaviour of an individual councillor or small group of
councillors, Council submits that statutory provision be made for individual
councillors to be dismissed in circumstances specified by the Act.
Providing for a dismissal mechanism does not violate the overarching principle.
Rather, it supports it because it ensures responsible functionality and the
continuity of a democratically elected body. Intervention through singular removal
in these extreme circumstances upholds the integrity of the council as a whole.
The Council acknowledges the recent amendments allowing the Governor-inCouncil to stand down a councillor on the recommendation of the Minister16,
however this standing down is only for the duration of an application to a
councillor conduct panel or VCAT alleging serious misconduct or gross
misconduct. It is a temporary measure, not a fix.
Councillor Conduct Panels
Council supports the new provisions relating to the appointment of a Principal
Conduct Panel Registrar with powers to strike-out any applications that are
frivolous or vexatious.
14

s.219(1) Local Government Act 1989

s. 74B(2) Constitution Act 1975
16
s. 36 Local Government Amendment (Improved Governance) Act 2015 (to be proclaimed) which inserts a new
Division 1A in Part 10 of the Local Government Act and s.219AF
15

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Council submits that conduct panel procedures need to be clarified so that

evidence provided or statements made are done so under oath. It should also be
clear that, other than material that is required to be published in the Council
minutes, all documents associated with a panel hearing are confidential.
Council submits that greater clarity should be given to the role of a councillor
conduct panel after a decision has been handed down if an application for review
at VCAT has been filed. There is currently confusion and inconsistency in who are
parties to a review and the role of a council, if any.
Conflict of interest
The Council submits the current six pages of overly complicated conflict of interest
provisions are incomprehensible and should be distilled or simplified into
something more manageable. It is not surprising the Inspectorate has identified
these provisions as the highest for investigation for non-compliance.
COUNCILLOR REMUNERATION
Council supports the status quo and submits an allowance is an appropriate form
of remuneration, although different categories of allowance reflecting the size of
the municipality and commensurate work load for councillors might be a more
equitable refinement of the current form. Metropolitan and regional city categories
are two examples.
WARDS, ELECTIONS, VOTING AND COUNTING
The number of wards for each municipal district should be based on a number of
factors including population, budget, geographic size and the category or type of
council. Council submits that the number set should be determined by the relevant
council itself having taken all these factors into consideration. This allows the local
community to have ownership over communities of interest and the structure of its
democratically elected governing body.
The same principle applies to determining the number of councillors, with a
maximum set at perhaps nine.
Similarly, the ideal ward structure should be determined by the relevant council:
that is, whether unsubdivided, single member or multi-member, or wards divided
into different numbers. Again, this supports local community ownership of its
governing structure in accordance with its own needs, rather than having a
structure imposed on it. This is a practical recognition of self-determination with
minimal intervention or prescription.
Proportional representation
In the case of unsubdivided or multi-member wards, the Council does not support
proportional representation.

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Voting
In regard to voting, the Council supports the status quo: that voting is compulsory
with exemptions for the elderly and non-resident ratepayers.
Entitlement
The Council supports the status quo in regard to the entitlement to vote.
COMMUNITY ENGAGEMENT
Council submits it should be left to each municipality to determine the extent to
which it engages with the community it represents and be answerable for it. This
is consistent with the principle of minimal prescription in the business of
governing. Were a community engagement policy and plan mandated, the Council
submits the content of it should be determined by each municipality in accordance
with its own needs or expectations, and a standard not imposed and prescribed.

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