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Local government and the Commonwealth

A recent Parliamentary Library paper on Local government and the Commonwealth: an evolving relationship follows the historical development of this relationship and explores some contemporary issues such as constitutional recognition.

Local governments in Australia have been established since the nineteenth century. Each state and the Northern Territory has a system of local government established under their respective legislation. The growth in local government activity since 1945 has encouraged local authorities to seek increasing subsidies from the Commonwealth government. Because local government is not mentioned in the Australian Constitution the Commonwealth government has generally been compelled to provide subsidies to local government indirectly: that is through the states. The Commonwealth government’s involvement with local government has increased markedly since Prime Minister Gough Whitlam showed unprecedented interest during the 1970s.

In recent times there has been bipartisan Commonwealth support for local government as shown by the 2006 parliamentary resolution giving formal recognition to local government. The Howard government also moved to provide direct funding to local governments through the Roads to Recovery program. Both major parties condemned the amalgamation of local councils in Queensland during 2007. The Rudd Government created the Council of Australian local governments, which has provided a forum for Commonwealth-local government issues.

The paper discusses the two previous failed attempts to recognise local government in the Australian constitution: the 1974 referendum aimed to provide a direct financial link between the federal government and local government and the 1988 referendum providing for constitutional recognition. The Gillard Government in reaching agreement with the Independents has committed to initiating a further referendum on constitutional recognition. The final section of the paper canvasses options for constitutional recognition.