Local Government referendum set to fail

Vote to bypass states doomed

• by: Adam Creighton and Christian Kerr
• From: The Australian
• May 15, 2013 12:00AM

A REFERENDUM to recognise local government in the Constitution is poised to fail as at least two states, key Liberal MPs and leading academics voice strident opposition to the proposal.

Hopes of bipartisanship -- considered crucial to the referendum's chances of success -- are crumbling and the NSW and Victorian state governments have announced their opposition to the referendum, which is designed to allow the federal government to bypass the states and fund local councils directly. Tony Abbott told the Coalition party room yesterday the referendum process had been mismanaged by the government and would almost certainly fail.

Local Government Minister Anthony Albanese announced on Friday that the referendum question would be put to a vote at the same time as the federal election, but the form of words for the question has not been revealed. The Australian learned yesterday that following advice from leading constitutional lawyer George Williams the wording will attempt to guarantee that the proposed change will not represent a federal takeover of the regulation of local government, ensuring local government bodies can only accept direct federal assistance when permitted to by state law.

But constitutional lawyer Greg Craven, deputy chairman of the COAG reform council, said the "dishonest" referendum was more about boosting commonwealth government power than supporting councils. "It will be sold as a modest change that will boost funding for local governments, but it's really about expanding commonwealth power," Professor Craven said. "It's like a scorpion, small but lethal."

The Coalition's position supports -- in principle -- ensuring the constitutional validity of payments to local government, attacks the government for not preparing the ground for the referendum and commits the opposition to campaigning for a change of government on September 14, not for a change to the Constitution. It is expected that at least four Coalition backbenchers will vote against the bill to establish the referendum. This will trigger a formal mechanism for putting a "No" case at the referendum, which will significantly reduce its chances of being carried.

Outspoken MP Cory Bernardi said he would be crossing the floor to vote against it, as he was opposed on principle to centralising more power in Canberra. "I hate the thought of a future Labor administration being able to determine what local governments can and cannot do," he said. Some Liberal Party state branches have been opposed to the idea, as well as it being voted down at the Liberal Party's federal council.

Former Treasury secretary and National Party senator John Stone said it was "an attack on the constitutional responsibilities of the states and yet another attempt to enhance the power of Canberra". He called it an attempt to distract voters and said: "As for the opposition, it passes belief that it would even consider drinking from this poisoned chalice."

Professor Craven, who campaigned for a "yes" in the failed 1999 referendum to make Australia a republic, said recognising local government would be an excuse for councils or the federal government to raise taxes.
"State governments will and should campaign stridently for a 'no' vote," the vice-chancellor of Australian Catholic University said. A spokesman for the Victorian Local Government Minister, Jeanette Powell, said they did not support the referendum and warned Victorian councils could be worse off with direct federal funding. "It could even lead to a funding formula put in pace, a bit like the GST, which would see Victorian councils, which are pretty well run and sustained, being punished by money being directed to other places."

WA Premier Colin Barnett said he was opposed to any move that would increase the Commonwealth's control of local government, though his government does not object to constitutional recognition on certain terms. "We would be prepared to support constitutional recognition of local government as long as it is recognised as a function of the state and does not give new powers over local government to the Commonwealth," he said. "We are yet to see the wording of the referendum question and will not be in a position to make any further comment until then."

NSW said the referendum was unnecessary, despite a High Court ruling which cast doubt on direct federal payments to local councils.But Queensland Local Government Minister David Crisafulli said the federal government should be able to fund local government directly. "Our number one priority is to make sure constitutional recognition allows councils to be funded directly by the federal government, rather than giving Canberra the ability to dictate to them from a place far, far away," he said.

Despite their opposition, it is unclear how vigorously NSW and Victoria will campaign against the referendum, if at all.John Wanna, professor of public administration at Australian National University, said the change would be constitutional "dynamite", representing a "substantial erosion of state power". "The Commonwealth could start running the health system or the forthcoming NDIS through councils and bypass the states altogether," he said. "The states will find it harder to sack corrupt councils or forcibly amalgamate them," he said, suggesting recognition would be implied in the constitution however modest the actual wording of the change.

Supporters want better recognition of local government and more secure access to Commonwealth funding. But Anne Twomey, a constitutional law professor at Sydney University, said:"I find it hard to believe a single councillor will get one iota more respect after such a constitutional change." She said the referendum's success would "permit the Commonwealth to engage in pork-barrelling before elections through local councils, where such action might otherwise be unconstitutional," and prompt growth in bureaucracy in Canberra."The Commonwealth can already give as much money as it wants to the states through section 96 of the constitution". The professor said Victoria and NSW stood to lose the most, as federal funding for councils was based on states' populations. "Ultimately, the Commonwealth could come up with a different funding formula that broke that link" she said.
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