Australia: Local Government Bill 2008 Introduced Into Queensland Parliament

On Tuesday, 28 October 2008, the Local Government Bill 2008 was introduced into Queensland Parliament by the Honourable Warren Pitt MP, Minister for Main Roads and Local Government. The primary catalyst for the Bill was the Local Government Reform Program which was initiated in April 2007 and which has resulted in sweeping reforms to local government in Queensland. Once enacted, the Bill will repeal the Local Government Act 1993 and the Local Government (Community Government Areas) Act 2004.

In general terms, the Bill takes a significantly abbreviated form in contrast to the 1200 odd pages of the existing legislation. The intention is that the Bill will be supplemented by a number of Regulations that will now govern essential but subordinate operational and administrative issues. In the past, these issues have been dealt with in the body of the legislation. Accordingly, the Bill is far less prescriptive than the current legislation and is seen by the State Government as a contemporary, principles-based framework which will be applicable to all local governments across Queensland.

The Bill is expressed to apply to the Brisbane City Council to the extent that the City of Brisbane Act 1924 does not. We understand that a review of the City of Brisbane Act will also be conducted during the course of 2009, presumably with amendments to that Act to also follow.

Key changes

Key differences between the Bill and the existing legislation for local governments in Queensland arise in the areas of local laws, business enterprises and procurement.

Local laws

The Bill provides for a simplified local law-making system insofar as each local government may decide its own process for making a local law provided that the process is consistent with the "local government principles" and certain provisions set out in the Bill. The "local government principles" underpin the Bill and are founded on matters such as transparency in decision-making, sustainable development and management of assets and infrastructure and good governance of, and by, local government. Anyone who is performing a responsibility under the Bill is required to do so in accordance with the local government principles. The Bill expressly states that a local law does not bind the State. This is a key change intended to reflect the legal relationship between the State and local government.

Business enterprises

The Bill's treatment of local government enterprise powers is one of the more significant departures from the current legislative framework. The intent behind the new enterprise provisions is to extend opportunities for local government viability and sustainability by widening investment in "own-source" revenue initiatives.

To that end, the Bill regulates local government enterprises in a less prescriptive manner. The Bill permits a local government to conduct a "beneficial enterprise". An "enterprise" includes a business activity, business endeavour or business venture, and a "beneficial enterprise" is an enterprise that a local government considers is directed to benefiting, and which can reasonably be expected to benefit, the whole or part of its local government area. The general categories of enterprises considered to be "beneficial enterprises" are almost identical to those provided for in the existing legislation.

However, the Bill does away with the "exempt enterprise" regime that is provided for in the current legislation and removes many of the current restrictions and limits on local government enterprise powers except where a beneficial enterprise is to be conducted with the private sector.

An interesting and potentially difficult requirement for local government is that in participating with an association (eg. a partnership or non-corporatised joint venture) a local government must ensure that the relevant agreement limits the local government liability to the amount of its commitment under the agreement.

Financial sustainability and accountability

The Bill consolidates local government obligations with respect to financial sustainability and accountability by requiring each local government to implement the "financial sustainability criteria". These criteria include managing financial risks prudently, formulating financial policies in a specified manner and making publicly available full, accurate and timely information about local government finances and infrastructure. The myriad of financial and corporate planning documents already required of local governments (together with some new requirements) are now dealt with in the Bill under two broad classes of documents being the "financial management documents" (eg. annual budget, financial forecast, asset register and revenue statement) and the "planning and accountability documents" (eg. annual report, corporate plan, operational plan and certain long-term plans).

Procurement

The Bill has also simplified the framework for local government contracting as, unlike the current legislation, it does not provide for a choice of contracting model (strategic or procedural) and does not expressly deal with the requirement to call for tenders. The Bill requires a local government to have regard to "sound contracting principles" when entering into a contract for the supply of goods or services, a contract for the carrying out of work or a contract for the disposal of assets.

Oversight and intervention powers

Finally, the Bill provides for an increased level of State oversight and intervention powers to ensure that local governments are performing responsibilities and complying with the relevant local government legislation. In circumstances where the local government is not performing properly or is not compliant with the relevant legislation, the Minister, on behalf of the State, may take "remedial action" and publish that action in a newspaper circulating in the local government area or on the local government's website.

Conclusion

Further consultation on the Bill is proposed prior to the Bill completing its passage through Parliament.

At first glance the Bill appears to be a very significant improvement on the current legislative framework. However, it is clear that much of the detail of the new legislative framework will be constituted by the new Regulations so in a sense it is still a bit uncertain how the new laws will ultimately work in practice.

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