STATUTES AMENDMENT (COUNCIL ALLOWANCES) BILL

Introduction and First Reading

Received from the Legislative Council and read a first time.

Second Reading

The Hon. J.D. HILL (Kaurna—Minister for Health, Minister for the Southern Suburbs, Minister Assisting the Premier in the Arts) (15:39): On behalf of the relevant minister, I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation inserted in Hansard without my reading it.

Leave granted.

For some time, the Government has recognised the difficulty that elected members of local government face every year, when considering the question of their own schedule of allowances and benefits.

Section 76 of the Local Government Act 1999 requires each council to revisit the question of allowances every year. Therefore, once in every 12 month period, members of each council must determine what they should pay themselves, subject of course to limits imposed by the regulations.

The Local Government (Members Allowances and Benefits) Regulations 1999 set upper and lower limits within which councils can fix allowances. The maximum allowance limits were last adjusted in November 2006, by doubling and then rounding up the previous maxima.

Therefore, councillors may now receive a base rate of allowance of up to $15,000 and a Mayor may receive up to $60,000. Many councils set allowances that are less than these maximums.

The Local Government Association has long been pursuing legislative change under which allowances for elected members of councils would be set by an independent body or mechanism.

The Government is also of the view that it is no longer appropriate for local government elected members to continue to directly determine their own allowances. On the one hand, some might argue that councillors have an obvious incentive to overpay themselves. On the other hand, it is indisputable that few, if any councillors would view serving their local communities as a money-making proposition. It is a part-time and mostly honorary position. As such, it is obvious that most councillors are unwilling to vote themselves payment of amounts that would properly compensate them for the long hours involved in performing their duties. Having to make this decision, and review it annually, puts councillors in a no-win situation.

There is no obvious public policy reason why councillors should be placed in such a situation, and be required to revisit their decision every 12 months. Members of Parliament (either State Parliament or the Commonwealth Parliament) are not placed in this invidious position. MPs have their remuneration set by an independent body. So too, should local government.

Recognising this, in 2007 the Government undertook research into a number of proposals, to explore the details of independent mechanisms existing in other jurisdictions, and held discussions with the Local Government Association.

Discussions were also held with the President of the Remuneration Tribunal to inform the deliberation on various options. A number of options were explored in order to identify a preferred option that would:

remove the Minister and State Government from the process;

remove individual councils and local government from the process; and

establish and provide for a truly independent mechanism for determining elected member allowances.

The preferred option was to utilise an existing independent body. To that end, the Remuneration Tribunal was identified as an appropriate body to determine allowances for Local Government elected members. The Remuneration Tribunal is indisputably independent and already established and resourced.

This Bill requires the Remuneration Tribunal to determine local government allowances only once in every four-year local government term. The Tribunal itself suggested that determinations might be made annually. However the Government wishes to limit the cost impact of this process upon ratepayers.

The Bill therefore, proposes a determination be made in a local government election year, and that allowances would be varied in the next three years only by movements in the Consumer Price Index.

The process of making this determination must conclude no later than the day on which nominations open for local government elections. The purpose of having this timetable is so that a person considering nominating as a local government election candidate will be aware of the level of allowances associated with the position. This is only fair to potential candidates.

The Bill includes some provisions to guide the Tribunal in making its determinations; and to ensure that the cost of its deliberations is recovered from local government, rather than the State Government. The Bill also prevents the Tribunal from applying its determinations with retrospective effect.

Finally, the Bill makes corresponding amendments to the City of Adelaide Act 1998.

I commend the Bill to Honourable Members.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

3—Amendment provisions

These clauses are formal.

Part 2—Amendment of Local Government Act 1999

4—Substitution of section 76

This clause substitutes section 76 of the Local Government Act 1999

76—Allowances

Allowances for council members are currently fixed by councils. Proposed section 76 provides that the setting of allowances for members of council is to be determined by the Remuneration Tribunal.

Proposed subsection (2) provides that the Remuneration Tribunal must make determinations for the setting of allowances on a 4 yearly basis before the designated day (the day that is 14 days before the day on which nominations close) in relation to each set of periodic elections held under the Local Government (Elections) Act 1999.

The provision requires the Remuneration Tribunal to have regard to certain specified matters in making a determination. The Remuneration Tribunal must allow entitled persons and the LGA to make submissions to the tribunal in relation to a determination that relates to council members.

The proposed section makes provision for the variation of allowances from office to office and council to council and the adjustment of allowances on anniversary dates according to the Consumer Price Index under a scheme prescribed by the regulations.

Proposed subsection (13) provides that despite any other Act or law, the reasonable costs of the Remuneration Tribunal in making a determination are to be paid by the LGA under an arrangement established by the Minister from time to time after consultation with the President of the LGA and the President of the Tribunal.

Part 3—Amendment of City of Adelaide Act 1998

5—Substitution of section 24

This clause substitutes section 24 of the City of Adelaide Act 1998

24—Allowances

Allowances for council members are currently fixed by the Council. Proposed section 24 provides that the setting of allowances for members of council is to be determined by the Remuneration Tribunal.

Proposed subsection (2) provides that the Remuneration Tribunal must make determinations for the setting of allowances on a 4 yearly basis before the designated day (the day that is 14 days before the day on which nominations close) in relation to each periodic election for the City of Adelaide held under the Local Government (Elections) Act 1999.

The provision requires the Remuneration Tribunal to have regard to certain specified matters in making a determination. The Remuneration Tribunal must allow entitled persons and the LGA to make submissions to the tribunal in relation to a determination that relates to council members.

The proposed section makes provision for the variation of allowances from office to office and the adjustment of allowances on anniversary dates according to the Consumer Price Index under a scheme prescribed by the regulations.

Proposed subsection (13) provides that despite any other Act or law, the reasonable costs of the Remuneration Tribunal in making a determination are to be paid by the LGA under an arrangement established by the Minister from time to time after consultation with the President of the LGA and the President of the Tribunal.

Debate adjourned on motion of Dr McFetridge.