Australia: Queensland local government de-amalgamation polls regulation and other recent developments

Key Points:

Some of the practical details of de-amalgamation have been finalised, but more reforms are to be expected for Queensland local government.

The LNP Government's vision for more autonomous local governments in Queensland has advanced with the release of new regulations.

While the new regulations answer some questions about the de-amalgamation process and the ways in which proceeds of sale of debtors' property must be applied, it seems that more changes are inevitable.

Process for the polls to determine de-amalgamation

On 8 February 2013, the Local Government (De-amalgamation Polls) Regulation 2013 was notified in the Queensland Government Gazette. This sets out the requirements for conducting, by ballot, the four de-amalgamation polls announced by the Minister for Local Government on 6December 2012 for the former Douglas, Livingstone, Mareeba and Noosa local government areas.

The Regulation prescribes the requirements for the running of the polls, including matters in relation to electoral officers, voter rolls, polling booths, ballot papers, casting and counting of votes and notification of poll results. Voting will be compulsory and failure to vote subject to a fine.

The crucial part is section 5, which sets out the question for voters. For voters in the former Noosa Shire Council local government area, for example, the question will be: "Should a [Noosa Shire Council] be created by the de-amalgamation of the Sunshine Coast Regional Council local government area, with the costs to be met by the Noosa Shire Council?"

The date of each of the de-amalgamation polls is Saturday 9 March 2013, but the Electoral Commission of Queensland can fix a later polling date if this day is likely to be affected by an emergency.

Depending on the outcome of the polls, further regulations could be on the way. Under section 260F of the Local Government Act 2009 (Qld), there is a broad regulation-making power to deal with the practicalities of implementing a de-amalgamation. A regulation may, for example, provide for the holding, postponing or cancelling of a local government election, the transfer of assets and liabilities from a local government to another local government, the recovery of the costs of the de-amalgamation of the local government area or the temporary continuation of a local law for the affected part of a local government area.

Application of proceeds of sale

The Local Government Legislation Amendment Regulation (No. 2) 2013 (Qld), also notified on 8 February 2013, changes the way local governments can exercise a power of sale over land in satisfaction of overdue rates and charges.

The Local Government Regulation 2012 (Qld) and the City of Brisbane Regulation 2012 (Qld) set out items to which sale proceeds must be applied (eg. to pay any registered encumbrances, to pay the person who owned the land immediately before the sale etc.). The new regulations will allow local governments to apply the proceeds to pay "land tax owing on the day of sale" and "body corporate fees that the owner of the land owned immediately before sale" as well as the existing items.

Transition from Wide Bay Water Corporation to Fraser Coast Regional Council

As we noted two weeks ago, Queensland local governments (including Brisbane City Council) no longer have the ability to corporatise a business activity under the Local Government Act (or in the case of Brisbane City Council, under the City of Brisbane Act 2010 (Qld)).

Local governments wishing to corporatise a local government business must now do so in accordance with the ordinary corporatisation provisions under the Corporations Act 2001 (Cth).

As part of this process, the Queensland Government is facilitating the transition from Wide Bay Water Corporation to its local government shareholder, Fraser Coast Regional Council, through changes to the Local Government Regulation 2012.

Wide Bay Water's assets, liabilities, instruments, contracts and employees will be transferred back to the Fraser Coast Regional Council from the transfer day, which is yet to be declared by the Minister. Immediately following the transfer, the amending regulation dissolves Wide Bay Water Corporation and Fraser Coast Regional Council will become its successor in law. The water and wastewater business currently conducted by Wide Bay Water Corporation is to become a commercialised business unit of the Fraser Coast Regional Council.

The dissolution of Wide Bay Water Corporation will leave the Gladstone Airport Corporation as the only corporate entity established under the Local Government Act.

What's in the pipeline for Queensland local government?

In the six months from July to December 2012, we saw the Queensland Government revamp the Local Government Act and the City of Brisbane Act in an attempt to give more power to Queensland local governments.

Likewise, the process of conducting the de-amalgamation polls is a key action in the Queensland Government's plan for the six months from January to June 2013.

It seems that more changes are inevitable for Queensland local governments, particularly given:

  • the Queensland Government's proposal to work with the unsuccessful de-amalgamation proponents and communities to improve representativeness and effectiveness of their councils; and
  • the prospect of further council restructures and reforms (necessitating regulatory and operational changes) following the de-amalgamation polls.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

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