Local government: the road to Constitutional recognition

Parliament house flag post

Local government: the road to Constitutional recognition

Posted 11/01/2012 by Sophia Fernandes

As part of the agreements to form government in September 2010, the ALP committed to advancing constitutional recognition of local government, including holding a referendum during the 43rd Parliament or at the next election.

An independent Expert Panel on Constitutional Recognition of Local Government was appointed in April 2011 by the federal government. Headed by NSW Chief Justice the Hon. James Spigelman AC QC, the panel circulated a discussion paper and conducted community consultation releasing their final report on 22 December 2011. This post will discuss findings and conclusions from the panel's final report.

The panel considered four types of recognition; symbolic recognition, democratic recognition, financial recognition and recognition through federal cooperation. The panel noted that both symbolic recognition (via an insertion of a preamble to the Constitution) and recognition through federal cooperation gave rise to issues that extended beyond local government and therefore were beyond its scope.

The panel commissioned Newspoll to conduct polling research on public sentiment including the level and nature of support for constitutional recognition of local government (available at Appendix C). The research revealed strong in-principle support for recognition but when faced with challenges to the proposal, public support decreased significantly. The report pointed out that while polling showed high initial support, the reality when faced with a referendum question could be far different.

In context, out of the forty-four referenda put to the Australian people, only eight have passed. The expert panel report acknowledges the general historical reluctance of Australians to change the Constitution. The panel took this into consideration in recommending support for a referendum in 2013 on financial recognition, placing two conditions on the proposal:

...first, that the Commonwealth negotiate with the States to achieve their support for the financial recognition option; and second, that the Commonwealth adopt steps suggested by ALGA necessary to achieve informed and positive public engagement with the issue, as set out in the section of this report on the concerns about a failed referendum. (p.2)

In submissions made to the panel, out of the four proposed forms of recognition, financial recognition received the most support both at federal and state levels, although conditional upon the wording of any referendum question. Currently, the federal government does provide direct funding to local government for example through the National Building Roads to Recovery program and through the Regional Development Australia Fund. The constitutional validity of funding is often debated, citing the High Court decision in Pape vs Commissioner of Taxation (2009). The panel notes that in submissions, the argument of constitutional validity is most commonly made in support of recognition as local governments assert that they depend on Commonwealth funding to ensure financial stability. While the ALP is known for long-standing support of constitutional recognition of local government, stated Coalition policy is to support financial recognition with both the Opposition leader and Leader of the Nationals expressing in-principle support. At a State level, most governments expressed in their submissions that they would reserve judgement until release of the wording of the referendum, some stating in-principle support while others (Vic, WA) were against any of the proposals and questioned whether maintaining the status quo would adversely affect current Commonwealth-local government funding arrangements. Overall the panel points out:

...there is a very real doubt about the constitutional validity of direct grant programs that do not fall under a head of Commonwealth legislative power. (p.4)
The report does not provide a concrete definition of the manner in which financial recognition would be included in the Constitution. Broadly, financial recognition would remove doubts as to the validity of the Commonwealth providing direct funds to local government.

Although the report points out that financial recognition is the most viable type of change to the Constitution, as long as it meets the conditions as discussed above, it does caution about the inclusion of the term 'local government' in the Constitution and the potential effect this might have as a 'constitutional expression'. The manner in which the term is included in the Constitution could mean that 'local government' would be subject to interpretation by the High Court and would create the possibility of the High Court determining the legal definition of local government. As a starting point for the consideration of the wording of the referendum, the report summarises the manner in which the term 'local government' is currently characterised in Commonwealth, State and Territory legislation (Appendix E).

Two previous referenda on the issue, one in 1974 and one in 1988 had previously failed largely due to lack of bi-partisan support for constitutional recognition, a lack of urgency to reform the system, the manner in which the question was worded, and multiple questions being put to Australians that drew attention away from the issue. The Parliamentary Library publication, Local government and the Commonwealth: an evolving relationship, provides a historical overview of the development of local governments and details on the two previous referenda.

The Minister for Regional Australia, Regional Development and Local Government
Minister for the Arts, the Hon. Simon Crean announced that the government is expected to respond to the report in early 2012.

The Australian Local Government Association (ALGA) welcomed the report and recommendation for financial recognition of local government in the Constitution. ALGA announced that they would respond to the report in early 2012.


  • 21/01/2014 3:35 PM
    Parliamentary Library said:

    Thank you for your comment. We have amended the post to clarify this point.

  • 21/01/2014 3:35 PM
    Martin Butterfield said:

    It would be useful if the exact meaning of "financial recognition" was clearly spelt out in this post. From reading the summary of the report it appears to mean a provision in the Constitution recognising the right of the Commonwealth to provide funds directly to Local Governments. However that isn't clear in the Summary nor in this post.

Thank you for your comment. If it does not require moderation, it will appear shortly.
Facebook LinkedIn Twitter Add | Email Print


Flagpost is a blog on current issues of interest to members of the Australian Parliament

Parliamentary Library Logo showing Information Analysis & Advice




refugees asylum immigration Australian foreign policy Parliament elections climate change social security women welfare reform taxation Indigenous Australians Australian Defence Force welfare policy school education higher education private health insurance health financing emissions trading Senate Australian Bureau of Statistics employment people trafficking Asia statistics Middle East illicit drugs gambling health reform federal election 2010 Australian Public Service income management Medicare disability Sport United Nations environment industrial relations constitution transport politics criminal law Afghanistan health forced labour food public service reform aged care aid Australian Sports Anti-Doping Agency World Anti-Doping Agency United States federal budget Carbon Pricing Mechanism dental health international relations governance regulation Fair Work Act voting law enforcement electoral reform OECD Australian Electoral Commission WADA child protection poker machines Australia in the Asian Century steroids National Disability Insurance Scheme detention 43rd Parliament slavery health system leadership domestic violence parliamentary procedure International Women's Day accountability defence capability multiculturalism ASADA Australian Federal Police labour force people smuggling debt New Zealand Australian Crime Commission pharmaceutical benefits scheme political parties coal seam gas Human rights crime China Census election results UK Parliament Papua New Guinea banking corruption pensions children's health Aviation federal election 2013 foreign debt gross debt net debt Senators and Members ALP Newstart Parenting Payment Youth Allowance sea farers United Kingdom energy food labelling Australian economy violence against women vocational education and training military history by-election High Court skilled migration mental health Federal Court terrorist groups science social media Higher Education Loan Program HECS federal state relations youth paid parental leave same sex relationships customs planning doping health risks Gonski Review of Funding for Schooling sex slavery Special Rapporteur Northern Territory Emergency Response social policy ANZUS Rural and regional trade unions Foreign affairs election timetable Indigenous royal commission Productivity firearms public policy Population ADRV terrorism transparency research and development welfare ASIO intelligence community Australian Security Intelligence Organisation carbon tax mining employer employee renewable energy regional unemployment fishing European Union family assistance United Nations Security Council forestry Drugs welfare systems Indonesia children Constitutional reform local government codes of conduct terrorist financing homelessness Parliamentary remuneration money laundering Trafficking in Persons Report social inclusion paternalism environmental law US presidential election nutrition ODA Defence sitting days electoral divisions Southeast Asia administrative law universities TAFE Ireland citizenship asylum seekers early childhood education Canada Financial sector national security fuel disability employment Tasmania integrity standards NATO Australian Secret Intelligence Service sexual abuse World Trade Organization Australia public health housing affordability bulk billing water health policy Governor-General US economy export liquefied natural gas foreign bribery question time speaker superannuation public housing expertise climate Intergovernmental Panel on Climate Change Department of Agriculture Fisheries and Forestry Pacific Islands reserved seats new psychoactive substances synthetic drugs UNODC carbon markets animal health middle class welfare constitutional recognition of local government referendum consumer laws PISA competition policy US politics language education baby bonus Leaders of the Opposition citizen engagement policymaking Australia Greens servitude Trafficking Protocol forced marriage alcohol entitlements ministries Hung Parliament social citizenship maritime Iran regional students school chaplains federal budget 2011-12 salary Medicare Locals primary care Building the Education Revolution marine pollution sustainability prisons police deaths in custody electoral margins electoral pendulum electoral redistribution redistribution NSW redistribution WA redistribution ACT electoral boundaries ASEAN Sustainable Development Goals Double dissolution Senators safety vehicles MYEFO Pathology tertiary education Taiwan Xi Ma meeting family violence government financial advisers financial planners Financial System Inquiry Murray Inquiry China; Economic policy; Southeast Asia; Africa housing Speaker; House of Representatives; Parliament High Court; Indigenous; Indigenous Australians; Native Title ACT Indigenous education Norfolk Island External Territories emissions reduction fund; climate change child care funding refugees immigration asylum procurement Indigenous health e-voting internet voting nsw state elections 44th Parliament 2015 ABS Age Pension Death penalty capital punishment execution Bali nine Bali bombings Trade EU China soft power education Fiji India Disability Support Pension Antarctica Diplomacy by-elections state and territories Bills anti-corruption fraud bribery corporate ownership whistleblower G20 economic reform innovation Members of Parliament Scottish referendum Middle East; national security; terrorism social services Criminal Code Amendment (Misrepresentation of Age to a Minor) Bill 2013 online grooming sexual assault of minors ACT Assembly smoking plain packaging tobacco cigarettes Asia; Japan; international relations Work Health and Safety Migration; asylum seekers; regional processing China; United States; international relations fiscal policy Racial Discrimination Act; social policy; human rights; indigenous Australians Foreign policy Israel Palestine asylum refugees immigration political finance donations foreign aid Economics efficiency human rights; Racial Discrimination Act employment law bullying Animal law; food copyright Australian Law Reform Commission industry peace keeping contracts workplace policies same-sex marriage disorderly conduct retirement Parliament House standing orders prime ministers First speech defence budget submarines workers Somalia GDP world heritage political engagement leave loading Trade; tariffs; safeguards; Anti-dumping public interest disclosure whistleblowing Productivity Commission limitation period cancer gene patents genetic testing suspension of standing and sessional orders live exports infant mortality honorary citizen railways disciplinary tribunals standard of proof World Health Organisation arts international students skilled graduate visas temporary employment visas apologies roads Italy national heritage NHMRC anti-dumping Rent Assistance obesity evidence law sacrament of confession international days DFAT UN General Assembly deregulation Regulation Impact Statements small business Breaker Morant regional engagement social determinants of health abortion Members suspension workplace health and safety marine reserves hearing Victoria astronomy resources sector YMCA youth parliament Korea rebate Australian Greens presidential nomination Racial Discrimination Act political parties preselection solar hot water Financial Action Taskforce Horn of Africa peacekeeping piracy Great Barrier Reef Stronger futures political financing political education Social Inclusion Board early childhood National Quality Framework for Early Childhood Education and Care Murray-Darling Basin sanctions Norway hospitals republic President Barack Obama Presidential visits qantas counselling Korean peninsula Work Choices biosecurity hendra federalism federation preselection therapeutic goods Therapeutic Goods Administration plebiscites computer games pests suicide nuclear COAG Ministerial Councils floods ADHD stimulant medication advertising electricity extradition conscience votes poverty preventative health rural health coastal erosion Parliamentary Budget Office work-life balance

Show all
Show less
Back to top