Local Government Act 1995 Review

As the Local Government sector is aware the Minister for Local Government, Hon David Templeman in mid-2017 announced the commencement of the review of the Local Government Act 1995. 

Ministers Agenda

Due to the scope of the review the Minister has decided that the work will be undertaken in two phases.

The first will focus on modernising Local Government, with the policy work and consultation to be completed in late 2017/early 2018 with a Bill in mid to late 2018. 

The theme for the second phase is delivering for the community, with the policy work and consultation to be completed in mid to late 2018 with a Bill in mid-2019. 

The following are the issues that the Minister’s office has put forward:

Phase 1: ‘Modernising Local Government’ - 2017
  • Making information available online
  • Improving behaviour and relationships
  • Restoring public confidence (includes the gift provisions)
  • Regional Subsidiaries
  • Reducing red tape
Phase 2: ‘Services for the community’ - 2018
  • Increasing participation in Local Government elections
  • Strengthening public confidence in Local Government elections
  • Increasing community participation
  • Improving financial management
  • Reducing red tape

The Minister also expressed the Review’s Principles and Vision:

The vision for Local Government in Western Australia is: Agile, Smart, Inclusive.

The review will deliver on this through application of the following principles:
  • Transparent – providing easy access to meaningful, timely and accurate information about Local Governments
  • Participatory – strengthening local democracy through increased community engagement
  • Accountable – holding Local Governments accountable by strengthening integrity and good governance
  • Efficient – providing a framework for Local Governments to be more efficient by removing impediments to good practice), and
  • Modern – embracing contemporary models for governance and public sector management.
The Minister has invited WALGA and Local Government Professionals WA to participate in a reference group on the review. The Minister’s office has advised that there may be some flexibility as to what issues are to be considered in Phase 1 or Phase 2.

Sector Response

The Local Government sector was keen to have its own agenda and not just respond to the State Governments positions.
Based on this, WALGA distributed a discussion paper in July 2017, with the aim of obtaining the sectors issues for the Local Government Act review process. The final collated feedback was considered during the November/December 2017 round of Zone meetings and a decision made on sector positions at the 6 December 2017 WALGA State Council meeting. 

Local Government Principles

The Local Government sector has endorsed the following key principles that are considered fundamental to the sector’s response to the review of the Local Government Act:
  1. Uphold the General Competence Principle currently embodied in the Local Government Act
  2. Provide for a flexible, principles-based legislative framework; and
  3. Promote a size and scale compliance regime.

Local Government Priorities

The following key issues have been brought to the attention of WALGA and identified as priorities, and will form part of the consultation process with the sector on Act amendments:

a) Gifts 
​​The gift provisions urgently require a complete review to make them simple and modern.
Amendments need to consider the following:
  • exempt gifts received in a genuinely personal capacity
  • gift declarations threshold to commence at $500.00 with no upper limit, and
  • gift provisions to apply to Elected Members and CEO only.
b) Regional Subsidiaries 
WALGA and the Local Government sector have been advocating for many years for Local Governments to be able to establish Regional Subsidiaries in Western Australia. The Local Government Act 1995 was amended late in 2016 to enable Local Governments to establish Regional Subsidiaries.

The burden of accountability oversight for a Regional Subsidiary should primarily be contained in the Regional Subsidiary’s charter and not in Regulations. The charter is well-placed to address accountability matters such as procurement, financial and reporting requirements and other important matters. This approach would ensure that the Regional Subsidiary model benefits – flexibility and the ability to establish a subsidiary that is fit-for-purpose – are realised.

The Local Government (Regional Subsidiaries) Regulations 2017, which were enacted in January 2017, contain significant restrictions on regional subsidiaries.

The regulations require a complete review in order to achieve the simplified model Local Government was expecting. A specific review is required of the financial reporting requirements, the power to borrow money, and the ability to conduct commercial activities.

c) Rating 
  • charitable purposes provisions
  • rate equivalency payments of government trading entities, and
  • differential rating process.
d) Financial Management Issues: 
  • borrowings
  • investments
  • fees and charges, and
  • financial ratios.
e)    Administration:
  • electors’ general meetings to be optional
  • designated senior officer section to be reviewed, and
  • public notices (modernisation of the Act to acknowledge electronic means).
f)    Functions of Local Governments:
  • tender thresholds
  • establish Council controlled organisations (Local Government enterprises), and 
  • regional Council provisions (review of compliance requirements).
A thorough consultation process was carried out in September/October 2017 with the sector and an item presenting sector issues was considered as part of the November/December 2017 Zone process.

At the December 2017 State Council meeting, a range of policy positions were endorsed. You can view these here -  State Council resolution - Local Government Act 1995 Review.

Further to this process, the Department of Local Government, Sport and Cultural Industries released a consultation paper in November 2017 seeking views on the future of Local Government as public consultation for phase one of the review of the Local Government Act commenced.

The Department’s paper sought public comment on a range of issues including Councillor conduct, training, Local Government transparency and accountability and accessibility of public information through the use of technology.

WALGA requested Local Governments to provide feedback on the Department’s consultation paper by Thursday, 1 February. 
The Minister for Local Government granted WALGA an extension to Friday, 9 March to submit a response to allow for consideration during the February/March round of Zone and State Council meetings.

WALGA will keep the sector informed on developments as they take place in respect to the review process.