David Crisafulli
Local Government Minister
David Crisafulli

June 6, 2013

The State Government will back a proposed change to the Constitution to recognise local Councils but has suggested changes to the referendum question to “protect Local Government from Federal control”.

Local Government Minister David Crisafulli said the State Government had taken legal advice and as the question currently stands, the Federal Government could make funding dependent on whatever conditions it liked.

“As bizarre as it sounds, it could offer to fund a local government road contingent on the council installing pink batts or solar panels on every council roof,” Mr Crisafulli said.

“Perhaps they’d want the local weir declared a marine park before council could get a new bridge.”

Mr Crisafulli said the State Government recognised the need of local governments to be funded directly by the Federal Government, but not controlled by it.

“When the Gillard Government rushed to put the issue to a vote, my immediate concern was how the question was phrased or if it would open council funding to a new set of Federal conditions,” Mr Crisafulli said.

“Unfortunately, our suspicions have been proved right.”

In a bid to ensure the referendum is passed, Premier Campbell Newman and Mr Crisafulli have sent a letter to Federal Local Government Minister Anthony Albanese requesting changes to the referendum question.

Their suggested change involves the inclusion of two more sentences:

“The terms and conditions of a grant of financial assistance to a State or to a local government body formed by a law of a State are subject to the laws of the State. An entity formed by a law of a State is a local government body for the purposes of subsection (1) if, and only if, the State’s law so provides.”

Mr Crisafulli said he wanted to find a way to get the referendum passed, as it had already been rejected in two previous votes in 1974 and 1988.

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Some background information courtesy of the Constitutional Reform Unit, Sydney Law School:

What is the 2013 referendum about?

The 2013 referendum is about changing the Constitution to permit the Commonwealth Government to give funds directly to local government, rather than passing those funds to local government via the States.

What is the proposed change?

The proposal is to add certain words to Section 96 of the Constitution. Section 96 is known as the “grants power”.

It currently says:

‘During a period of ten years after the establishment of the Commonwealth and thereafter until the Parliament otherwise provides, the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit’.

This means that the Commonwealth government can give money to the States on terms and conditions. For example, it permits the Commonwealth to make grants to the States on the condition that they pass all the money on to local government. This is the method by which local government has received Commonwealth funds since the 1920s.

However, Section 96 does not permit the Commonwealth to give that money directly to local government, by-passing the States. This amendment would allow the Commonwealth to fund local government directly without the consent of the States.

The referendum, if successful, would change Section 96 to read:

“During a period of ten years after the establishment of the Commonwealth and thereafter until the Parliament otherwise provides, the Parliament may grant financial assistance to any State, or to any local government body formed by a law of a State, on such terms and conditions as the Parliament thinks fit.”

This would enable the Commonwealth Government to fund State and local governments directly on such terms and conditions as the Commonwealth Parliament determines.