LOCAL GOVERNMENT (ACCOUNTABILITY FRAMEWORK) AMENDMENT BILL

Introduction and First Reading

The Hon. G.E. GAGO (Minister for State/Local Government Relations, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister Assisting the Minister for Transport, Infrastructure and Energy) (15:23): Obtained leave and introduced a bill for an act to amend the Local Government Act 1999. Read a first time.

Second Reading

The Hon. G.E. GAGO (Minister for State/Local Government Relations, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister Assisting the Minister for Transport, Infrastructure and Energy) (15:23): I move:

That this bill be now read a second time.

Councils have a significant role in people's lives. They are an important sphere of government and, like other governments, have responsibilities and powers which enable them to provide services to support the smooth running of their communities. To carry out their duties they have the ability to impose rates, power to make and enforce laws, and to issue orders binding landowners.

However, the authority entrusted to councils as local governments must be exercised in the public interest, and councils must be accountable for its exercise. As councils receive moneys from the public through rates and expiation fees, they must meet the standards of accountability applicable to public administration and management of public funds. Likewise, the elected council members and their appointed officers must maintain the high standards of probity that apply to holders of public office. In recent times, concerns have been raised about:

aspects of the legislative framework to ensure that councils meet those standards; and

specific instances of failure to meet those standards that may indicate systemic operational problems in some councils.

In December last year, a proposals paper 'Reforms to Improve the Accountability Framework for Local Government in South Australia' was distributed.

This paper outlined proposals to amend the legislative framework for internal and external review of council administration and financial management. These proposals, in turn, built upon earlier legislative amendments (enacted in 2005, and took effect in 2007). These changes aimed to improve council financial management and accountability, and included the introduction of compulsory audit committees, long-term financial plans and infrastructure and asset management plans, and consultation requirements for a council's annual business plan.

Many helpful submissions were received in response to this proposals paper, and the government thanks all those who contributed their comments. This bill, developed as a result of that process, deals with a number of matters that fall under the general umbrella of the local government accountability framework.

The bill also contains unrelated miscellaneous measures, most of which were the subject of consultation in a draft local government (miscellaneous) bill. The content of that earlier draft bill has been included in this bill. As a result, this bill contains a number of technical amendments. This speech outlines, first, the accountability framework measures before turning to the miscellaneous measures.

In addition to the fundamental obligation to act lawfully, there are established standards of good public administration which the public is entitled to expect of governments and public officers. These are based on administrative law principles and the work of the Ombudsman and review bodies. This bill seeks to amend section 8 of the act to emphasise that a council must achieve and maintain standards of good public administration.

The matters in section 8, currently described as objectives of a council, are expressed as principles that a council must observe in performing its roles and functions, and a new principle relating to good public administration is added. Another principle included in section 9—and I thank the Local Government Association for this suggestion—is ensuring the sustainability of a council's long-term financial performance. This principle is expected to reinforce the work that is being done in the local government sector to educate and support councils in this area.

Proposed amendments to section 59 place responsibility on the council's elected members, as the governing body, to ensure, as far as is practicable, that the principles in section 8 are observed by the council.

Proposed amendments to section 132A require councils to ensure that appropriate policies, practices and procedures are in place in order to achieve and maintain standards of good public administration.

One of the main reforms sought by this bill is a widening of the scope of an auditor's duties. The former Auditor-General drew attention to the fact that the scope of council audits is narrower than that of state government departments and instrumentalities under the Public Finance and Audit Act 1987.

The bill therefore deals with this matter by providing that a council auditor must, in future, perform two separate functions. In addition to the existing audit of a council's financial statements, proposed amendments to section 129 provide that the auditor must now also examine 'the controls exercised by the council in relation to the receipt, expenditure and investment of money, the acquisition and disposal of property and the incurring of liabilities' and provide an audit opinion as to whether the controls are sufficient to provide reasonable assurance that the financial transactions of the council have been conducted properly and in accordance with law.

In layman's terms, this means that the auditor is not just examining where the money went, but also how a council controls public money; whether its management systems are sufficiently robust and prudent to prevent or detect fraud, wastage, inefficiencies and so on. The purpose of auditing controls is to increase confidence in the way public finances are managed. It is not sufficient that public money is managed well—it must also be seen to be managed well. Therefore, the auditor will be required to check not only the use of public money but also the systems of control that a council uses to manage public money.

Transitional provisions in this bill seek to introduce this reform as soon as possible for metropolitan councils, bearing in mind the fact that each council already has a contract with an auditor. Councils outside the metropolitan area will be given an additional three years to comply with this provision. Both the audit opinion with respect to the financial statements and the audit opinion relating to the sufficiency of internal controls will accompany the council's financial statements. Further, even the customary audit management letter that provides technical advice to the council management is also to become a public document after the council has had 60 days to consider and respond to it.

The amendments to section 129 would also expand the matters on which a council's auditor must report to the minister, to include the reasons for any adverse or qualified audit opinion and any matter that, in the auditor's opinion, ought to be reported to the minister. The act already provides that the minister may, on the basis of a report of an auditor, appoint an investigator to carry out an investigation under section 272, and the investigator may be the Auditor-General.

To support councils to meet standards of good public administration, the existing requirements for councils to have policies in key areas have been reviewed to ensure that objectives for those policies are clear. Therefore, three clauses of this bill insert overarching principles into the relevant section of the Local Government Act. Proposed amendments to section 48 would create new requirements for councils to have prudential management policies, practices and procedures for assessment of the projects and would also insert the reasons for these requirements. These ensure that the council acts with due care, diligence and foresight, identifies and manages risks associated with the project, makes informed decisions and is accountable for the use of council and other public resources.

Importantly, the proposed amendments provide that, when a council seeks a prudential report on a major proposed undertaking, that report must be provided by someone who is independent of the council and has no personal interest in that undertaking. In a similar vein, the bill proposes to amend section 49, which requires the council to have policies on contracting and tendering. The amendment clearly sets out that a council must have procurement policies, practices and procedures directed to obtaining value in the expenditure of public money, providing for ethical and fair treatment of participants, and ensuring probity, accountability and transparency in procurement operations.

Proposed amendments to sections 270 of the act are aimed to improve council/customer service and complaint handling. These amendments would require a council to have policies, practices and procedures for dealing with requests for service and complaints about the actions of council, whose policies must be directed to dealing with those requests and complaints in a timely, effective and fair way using information for continuous improvement.

Internal review of decisions is an important part of good public administration in each sphere of government. The Ombudsman has previously drawn attention to the need to improve internal review practices within some councils. The bill makes provisions for regulations to support these important policies and procedures. For example, in relation to a council's internal review procedures, it is proposed to produce a code that can be adopted by regulation to give councils more guidance on matters that should be taken into account in reviewing decisions.

A regulation-making power is also proposed for section 110 of the act relating to the code of conduct which a council adopts for its employees to provide the capacity to mandate minimum provisions that must be included in codes of conduct for council employees. This would match the regulation-making power that already exists in relation to codes of conduct for council members.

Where there is a reason to believe that a council has failed to comply with the act or an irregularity has occurred in the conduct of the affairs of the council, there is a capacity under section 272 of the act for the minister, where appropriate, to formally investigate the matter. This power has been exercised recently in connection with the City of Burnside, although the need for this sort of intervention is rare, and it is relatively common questions and complaints are to be made about the operations of council.

Dealing with this type of correspondence frequently requires the minister to obtain information from the relevant council about how a particular matter has been or is being handled. For the most part, councils are usually very cooperative and helpful (I should put that on record) especially when the subject matter is routine or uncontroversial.

However, if a query raises doubts about the propriety of an individual's actions, or calls into question the legality of a council decision, a council may be reluctant to provide the minister with information that is needed to determine a proper response.

The bill proposes to insert into the act two new sections, 271A and 271B. The proposed new section 271A provides the minister with power to ask a council, in writing, for specific information. This provision is not intended to hinder the regular and informal free flow of information between councils and the minister. Rather, it provides a specific mechanism that may be relied upon where the information being sought might be regarded as sensitive. Proposed new section 271A also protects a council if it divulges information to the minister that might be confidential or relevant to contractual matters.

Proposed new section 271B provides the minister with power to ask a council to obtain an independent assessment of its probity or statutory compliance in a matter, or to take specified action (or actions) to meet standards in its conduct or administration consistent with the objects, principles or requirements of the act. Again, this provision is not intended to formalise the normal cooperation that occurs between councils and the minister—for which I have to commend councils, generally. However, it provides a mechanism that can be used where necessary to ensure that a council gives due weight to a request for remedial action.

These two new sections are complemented by proposed amendments to section 272 and 273, under which a council's decision not to comply with the minister's requests under section 271A or 271B might prompt a formal investigation, and an investigation, in turn, might provide a basis for the minister to give directions to the council.

Changes are made to the provisions for formal ministerial investigation to update powers available to an investigator and to broaden the minister's powers of direction following a formal investigation. For example, these would ensure the minister can direct a council if a council fails to respond appropriately to any recommendation of the Ombudsman contained in a report under the Ombudsman Act. Complementary changes are proposed to section 274, which deals with the investigation of a council subsidiary.

In response to a report by the former acting ombudsman, the bill proposes to re-write section 237, which deals with a council's powers to remove a vehicle apparently abandoned on a road. The proposed changes give greater protection to the owner of vehicle in these circumstances.

When the act commenced in 1999, the internet was not as widely used as it is today. Therefore, the act has provided, until now, that council documents should be on the internet only 'so far as is reasonably practicable'. Today, as we prepare to enter the second decade of the 21^st century, there is no longer any argument that providing access to documents on the internet could be considered impracticable. Indeed, frequently the internet provides the easiest and most convenient ready access to documents without the limitations of business hours.

Amendments to section 132 will now mandate the use of the internet and also widen the list of the council's public documents to include audited financial statements, the council's annual report and FOI statement that are within the scope of the section. I seek leave to insert the remainder of the second reading explanation in Hansard without my reading it.

Leave granted.

Miscellaneous provisions

Fixed charges and minimum rates

Council rating policies are intended to reflect, in large part, a system of progressive taxation generally based on the value of land. It is widely understood in the community that within a council area, applying the rate in the dollar fixed by a council means that high-value land will be subject to a higher rate payment than low-value land. However it is not widely understood that rating policies are only partly progressive. Every SA council (except the City of Adelaide) chooses to include in its rating policy a regressive or 'flat-tax'-type component.

This means that currently 67 councils have a mixed rating policy, attempting to strike a balance between:

spreading the burden according to the relative values of land; and

spreading the burden more evenly between all ratepayers.

To strike this balance, the Local Government Act permits each council to choose between one of two tools:

a minimum rate, requiring owners of the lowest-value assessed land (capped at no more than 35% of all assessments in the council area) to pay at least a specified minimum; or

a fixed charge (i.e. a sum that applies to all assessed land; regardless of the land value).

Section 152 deals with fixed charges, but it does not prevent a council from levying a fixed charge against every piece of land subject to separate occupation. Nor does it limit the proportion of a council's revenue that can be obtained from a fixed charge, provided the proportion is less than 100%. Therefore, a council could chose to set a fixed charge to raise more than 90% of its revenue, and levy this fixed charge against every piece of land subject to separate occupation, including each separate site in a caravan park or residential park. Obviously if such a rating policy was applied it would impact heavily on low-income persons, such as retirees who have chosen to move into caravan parks or residential parks to reduce costs.

Where several parcels of land make up a single farm enterprise, the Act prevents councils imposing a fixed charge on each one of those parcels of land. However, the single farm enterprise concession is not mirrored in the minimum rate provisions, presumably because of an expectation that viable farming properties would be valued higher than the cut-off valuation for the minimum rate to be applied. There has been instances where this is not the case. To ensure equity, this long standing concession should apply to all farming properties that are subject to either a fixed charge or a minimum rate.

Accordingly, the Bill would amend sections 151, 152 and 158 of the Act to:

prevent councils raising any more than 50% of their general rates through a fixed charge. This will protect the owners of lower-valued land should a council adopt a regressive rating policy;

prohibit the imposition of a fixed charge or a minimum rate against each site in a caravan park or a residential park; and

to exclude any 'single farm enterprise' from being charged more than one minimum rate.

Prescribed services

'Prescribed services' under section 155 of the Local Government Act are those few services that are made available to all land in a defined area, and hence benefit the land. These services are:

waste collection and recycling;

wastewater removal;

and in a few rural council areas:

provision of water; and

TV re-transmission services.

Charges for these services may be imposed irrespective of whether a landowner chooses to use the service or not. The reason is that these services cost money to make available and distribute over a geographical area. Even if a person chooses not to put out a bin for collection, that person's property potentially benefits from the service being available in that area, and so it is fair that the landowner should contribute to the cost of providing the service in that area.

Proposed amendments to section 155 are intended to deal with three separate matters:

The proposed changes to subsections (5), (6) and (7) deal with accounting matters, including the depreciation of assets.

The intent of proposed new subsection (2a) is to deal with circumstances where service charges have been applied to Crown land. It is appropriate that the Crown pay for services it receives in the same way as residents and commercial property owners. However, it is expected that regulations made under this proposed new subsection will exempt land such as National Parks or unalienated Crown land from being levied service charges.

Proposed new subsection (11) is intended to deal with circumstances where waste collection services are provided, but are not directly accessible at the relevant land. I intend to consult with the LGA to devise a scheme, to be prescribed in regulations, under which a sliding scale of waste collection charges may be imposed, depending upon the level of service provided.

Community service rate rebates

Section 161 of the Act requires a council to grant a rebate of at least 75% to land 'predominantly used for service delivery and administration by a community service organisation.'

There have been two problems identified with the operation of section 161. First, on the basis of legal advice, some councils have been rejecting applications from community service organisations unless the land the organisation occupies is used for both service delivery and administration. Clearly, the intent of the legislation would best be served by an amendment to grant the rebate to land predominantly used for either service delivery or administration, or both.

Secondly, again on the basis of legal advice, some councils have taken a narrow interpretation of 'supported accommodation' in section 161(4) to deny applications for rebates from community housing organisations. The term 'supported accommodation' is defined in section 4 of the Act, but the definition does not indicate what type of 'support' must be received in order for the accommodation to be classified as 'supported' accommodation. This interpretation has been the subject of discussions since mid-2007 with the Office for Community Housing, the Community Housing Council of SA, the SA Institute of Rate Administrators and the LGA.

Community housing associations are community managed non-government organisations providing housing for those with special housing needs. They are not-for-profit organisations, generally managed by volunteers. These associations meet the eligibility criteria for rebates applicable to other community service organisations but a small number of councils have excluded them from receiving rebates under section 161 based on legal opinion that 'support' should be interpreted only to mean intensive personal services care. This Bill would remove the uncertainty by amending the section 4 definition of 'supported accommodation' to specifically include a reference to housing associations registered with the Office for Community Housing; and amends section 161(1) to remove doubt that each parcel of land must be used predominantly to administer or provide a community service.

Community land

The Bill proposes amendments to deal with three minor issues concerning community land. First, under section 194 of the Act, a council proposing to revoke the status of community land, must prepare a report on the proposal, and must consult the public. However the Act does not say that the council's report should be made available to the public. The Bill proposes that it must do so.

Secondly, if a council wishes to transfer community land to the State Government, but continue to undertake the 'care control and management' of the land as community land, then section 201 places an unreasonable obstacle in the council's path, by requiring the council to first revoke the land's classification as community land. In these circumstances, the required revocation is nonsensical and contrary to the council's intentions. The Bill provides that if land is to remain community land, then there is no need to revoke this status when transferring its ownership.

Third, section 202 of the Act permits a council to issue a lease or licence over community land for a term of up to 21 years. Although the policy intent of this provision is to provide a maximum term of 21 years (i.e. for the total term(s) of the grant and renewal), there has been some confusion in the past that it could be interpreted as allowing a 21-year lease to be renewed for a further 21 years without any requirement for further community consultation. The Bill provides that the maximum term of a lease or licence is to be 21 years. This does not prevent a new lease being granted after such a term, but any such new lease must be subject to a fresh round of community consultation.

Procedural requirements for council orders

A council has many powers to make orders to private land owners. For example, orders can be made to landowners under section 254 (hazards, nuisances, unsightly land) or under section 299 (remove or cut back encroaching vegetation).

The process for making these orders carries some protection for the landowner. Orders under section 254 or 299 may be made only if the relevant person has first received a notice, warning of the proposed order, the reasons for it, and inviting that person to show cause why the order should not be made. A person who receives an order under section 254 or section 299 may appeal to the District Court.

However, there are other order-making powers under sections 216 and 218 which do not detail any process to be followed by the council in making such orders. The Bill deals with this inconsistency by applying the same procedural protections to orders made under sections 216 and 218.

The Bill also standardises the penalty and expiation fee for contravention of any order under sections 216, 218, 254 or 299.

Roads and house numbers

Section 210 of the Act prescribes the process that a council must follow if it wishes to convert a private road into a public road. This process, not surprisingly, requires the council to contact the owner of the road, or at least make reasonable inquiries to find the owner. However, the section is silent about any legal rights to the road that might be held by persons other than the owner. The Bill provides that other persons holding registered legal interests should be subject to the same procedural requirements as the owner of the land. This would include persons with the benefit of a right-of-way, a mortgagee or a registered lessee.

Section 219 of the Act gives a council the power to name a road. Likewise, under section 220, a council may adopt a numbering system. Two separate problems have been identified with these sections. First, in new land divisions, councils sometimes do not assign house numbers or street names until well after houses are built and occupied. This has the potential to cause problems, for example making it difficult for emergency services to locate the appropriate house until the house number is actually assigned. It is also administratively inefficient because identifiers for each house must be entered into databases twice. (For example, even if a street name is unchanged, a house first identified as Lot 13 Smith Street might later need to be changed, for example, to No. 37 Smith Street.)

Second, under sections 219 and 220, assigning a name for a new road, and 'a numbering system for a particular road' cannot be adopted by council officers using delegated authority, but must be a 'resolution' of a council. New roads are occasionally created within new subdivisions. It creates unnecessary delays to have the council formally required to consider adoption of a separate resolution for the name of every new road, and potentially, later, a numbering system for that road. The requirement, in each case, for a 'resolution' also means that the elected council cannot delegate decisions on these matters to the Chief Executive or any staff member.

Accordingly, the Bill proposes to delete references to a council 'resolution' for these purposes. This will enable councils to delegate these decisions to staff. Any delegation to staff, to assign road names would need to be consistent with a council policy on street names. The Bill also requires house numbers to be allocated at the first opportunity in the land division process.

By-laws that apply in only part of the council district.

A council may determine, from time to time, that a by-law applies in only part of the council area. This occurs by a council 'determination' under section 246(3)(e).

However, the Act lacks directions to councils to ensure that the making of such a determination is transparent and accessible to the community.

Accordingly, the Bill contains several amendments to ensure that a relevant determination cannot be delegated by the council, and must be published on the internet, in the Gazette, and in a local newspaper in the same way as a by-law.

Entering private land to carry out work

An employee or contractor of a council may enter and occupy land 'insofar as may be reasonably necessary for carrying out a function or responsibility of the council'. This might involve, for example, depositing tonnes of gravel or sand prior to using the material for adjacent road works. When it enters and occupies land, the council is liable to pay the landowner rent, and to compensate the landowner for any nuisance or damage caused.

However, the Act does not refer to remediation—that is restoring the land to its former state. Nor does it contain any detail of the process required to gain access and occupation; for example a requirement to provide written notice of the council's intention to enter or occupy the land, and any rights of appeal for the landowner.

The Bill therefore inserts amendments to section 294, which would:

require the council to undertake remediation of the land, to the extent reasonably practicable;

require the council to pay compensation for any other loss or damage caused; and

prescribe a process that must be followed by the council in order to gain access and occupation, except when:

there is an emergency; or

the owner or occupier cannot be located; or

the occupation is less than 24 hours and causes no material nuisance or damage.

The amendments to section 294 effectively render section 295 redundant, so that section is to be repealed.

Strict liability when exercising emergency powers

Under section 298, a council has power to take action 'as it thinks fit' in the event of a flooding emergency. This action may be taken irrespective of whether any emergency declaration has been made under the Emergency Management Act 2004.

However, a council that does take action in reliance on the powers in section 298 is liable—under subsection (3)—to 'compensate any person who suffers loss in consequence' of the council's action.

This liability applies even if the council has acted entirely reasonably and without negligence. It is a strict liability. For example, if a council were to divert rising floodwaters, in order to save lives and/or multiple properties, the council would nevertheless be liable to compensate a single property owner for any damage caused to land onto which the floodwaters had been diverted.

A similar strict liability that was formerly imposed on the State Emergency Service was repealed with the commencement of the Fire and Emergency Services Commission Act 2005. There is no similar strict liability imposed on SA Police, the Metropolitan Fire Service, or the Country Fire Service.

Repealing the compensation provisions in section 298 would not prevent a council from being held liable in common law over the use or misuse of its powers. Such repeal would merely leave councils in the same situation as other emergency organisations, exposed to liability in tort, i.e. to claimants alleging negligence, nuisance or trespass.

In these situations a council would be able to rely on a defence of 'statutory authority' or 'necessity'. To succeed in a claim for negligence, for example, a claimant would presumably need to establish that the council 'had not exercised reasonable care' in the exercise of its statutory power.

Section 298 is restricted to actual or imminent flooding. It does not cover any other emergencies. There are reasons to consider additional powers for councils to respond to other emergencies. However, the State Emergency Management Committee (SEMC) is conducting a review of the Emergency Management Act, and it is likely that further legislative reforms will be considered as part of that review. This Bill merely proposes to repeal subsections 298(3) and (4) to remove a council's strict liability for the exercise of its emergency powers.

Electronic attendance at committee meetings

In regional areas, council committee members often have to travel long distances to attend meetings that may be quite brief. There would be considerable gains in efficiency if council committees could exercise discretion to permit members to participate by teleconference or webcam.

The Bill proposes to amend section 90 to permit council committee meetings to be held using electronic communication, provided that members of the public can still hear the discussion between all committee members. This proposed amendment does not apply to full council meetings; only to committees.

Scheduling representation reviews by regulation

Under section 12 of the Act each council must conduct a review, into its 'composition and ward structure' at least once in every eight years.

Such a representation requires a council to consider:

how many elected members it needs to adequately represent its community;

how many, if any, wards there should be within the council area, and their boundaries; and

the method of electing the council's principal member.

The process can take up to nine to ten months to complete. In 2009, there are about 48 out of South Australia's 68 councils that are (or have been) undertaking representation reviews; their second since the commencement of the Act on 1 January 2000.

All of these reviews must be completed no later than 31 December 2009. This date is less than three months before the scheduled State election, and certifying so many representation reviews in such a short time, whilst simultaneously preparing for a State election, places undue pressure on the resources of the Electoral Commission.

If no action is taken, the same logjam of multiple representation reviews will occur again, in another eight years. Rather than have so many reviews conducted all in the same year, it is more appropriate, for logistical reasons, to have representation reviews for SA's 68 councils scheduled on an evenly spaced and rolling basis, over the entirety of two four year electoral cycles.

Therefore, the Bill would amend section 12 to provide that representation reviews for each council may be scheduled by regulation.

Conflict of interest

A recent case in the District Court required the court to interpret and apply sections 73 and 74 of the Act, that deal with councillors (and members of council committees and the Boards of any subsidiaries) who may have a conflict of interest in a matter for decision. These sections define when members have an interest in a matter before the council, and provide that they must disclose such an interest. Unless specified qualifications apply, they must not then take part in debate or vote on the matter and must leave the meeting while that is occurring.

In Adelaide Parklands Preservation Assoc v The City Of Adelaide His Honour Judge Barrett found that two councillors, who had an interest as defined by the Act because of their membership of the South Australian Motor Sport Board, should not have taken part in debate or voted on a motion.

The decision raised doubts about the proper role of councillors appointed or nominated by their council to that Board or the governing body of other, various non-profit associations. His Honour in interpreting section 74 found that the two councillors did not fall within the qualifications in subsection 74(4) as they were not 'appointed by the council' to the South Australian Motor Sport Board, but nominated by the Council with the appointment was made by the Governor.

The Bill would clarify section 74 and restore the interpretation that was previously relied upon by local government and its legal advisors. It provides that a councillor must declare their interest but is not required to abstain from taking part in debate or voting—as otherwise would be required by subsection 74(4)—in either or both of the following circumstances:

(a) the member or a person closely associated with the member is a member of, or director or member of the governing body of, a non-profit association;

(b) the member or a person closely associated with the member is a member of a body (whether incorporated or unincorporated) comprised of or including, or having a governing body comprised of or including, a person or persons appointed or nominated by the council.

Frew Park, Mount Gambier

The City of Mount Gambier holds a reserve named Frew Park, under a Trust established in 1896. The only uses that the trust has permitted for the land are 'walks, recreation, military or other exercises'. The City of Mount Gambier wishes to permit other activities at Frew Park, albeit uses that would be consistent with its classification as community land.

Schedule 8 of the Act includes specific provisions about other identified named reserves. It is appropriate to deal with the limitations of the Frew Park Trust by inserting a new clause in Schedule 8 so that Frew Park is confirmed as community land, freed of the restrictions in the existing trust, but still subject to the protections that the Act provides to all community land.

As indicated, the Bill includes both technical and more broadbased policy measures—the latter directed to improving the transparency and accountability of the 68 councils in the State. I am confident that the proposed amendments will support local government to develop and strengthen its policies and procedures and introduce high standards of governance and probity. These reforms will enable local government to continue to improve its accountability to the community and ratepayers of SA and provide a strong basis for councils to move into the future.

I commend the Bill to 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—Amendment of section 4—Interpretation

This clause amends the definition of supported accommodation.

5—Amendment of section 8—Principles to be observed by a council

This clause establishes principles to be observed by a council.

6—Amendment of section 12—Composition and wards

This clause amends section 12 by substituting the requirement to conduct a review under the section at least once in every 8 years with a review at least once in each relevant period that is prescribed by the regulations.

The clause deletes subsection (4a) of section 12.

7—Amendment of section 44—Delegations

This clause deletes and substitutes paragraph (a) of subsection (2) so that a council may not delegate power to make a by-law or to determine that a by-law applies only within a part of parts of the area of the council.

8—Amendment of section 48—Prudential requirements for certain activities

This clause inserts proposed subsection (aa1) into section 48 to provide that a council develop and maintain prudential management policies, practices and procedures for the assessment of projects to ensure that the council maintains certain specified standards. The policies practices and procedures must be consistent with any regulations made under the section.

Subclause (4) amends subsection (1) by extending the basis on which a council must obtain and consider a report that addresses certain prudential issues to include where the council considers that it is necessary or appropriate.

Proposed subsection (4a) provides that a report under subsection (1) must not be prepared by a person who is an employee of the council or who has an interest in the relevant project.

Proposed subsections (6a) to (6d) deal with conflict of interest issues and identify the circumstances in which members are held to have an interest in a project.

9—Amendment of section 49—Contracts and tenders policies

Proposed subsection (a1) provides that a council must develop and maintain procurement policies, practices and procedures directed towards—

obtaining value in the expenditure of public money; and

providing for ethical and fair treatment of participants; and

ensuring probity, accountability and transparency in procurement operations.

Provision is made for the requirement that policies on contracts and tenders must be consistent with any requirement prescribed by the regulations.

10—Amendment of section 59—Roles of members of councils

This clause inserts new subparagraph (iv) into subsection (1)(a) to provide that the role of a member of a council is, as a member of the governing body of the council, to ensure, as far as practicable, that the principles set out in section 8 are observed.

11—Amendment of section 74—Members to disclose interests

This clause deletes paragraph (c) of subsection (4a) and inserts new subsection (4a), which identifies the circumstances in which members are held to have a conflict of interest.

12—Amendment of section 90—Meetings to be held in public except in special circumstances

This clause inserts new subsection (7a), which sets out the circumstances in which a council committee meeting will be taken to be conducted in a place open to the public for the purposes of section 90.

13—Amendment of section 110—Code of conduct

This clause inserts new subsections (3a) and (3b).

Proposed subsection (3a) provides that a code of conduct must be consistent with any principle or requirement prescribed by the regulations and include any mandatory provision prescribed by the regulations.

Proposed subsection (3b) provides that the Minister should take reasonable steps to consult with any registered association that represents the interests of employees of councils before a regulation is made under proposed subsection (3a).

14—Amendment of section 123—Annual business plans and budgets

This clause amends subsection (5) of section 123 by extending the number of days by which copies of the draft annual business plan must be available before the date of the meeting from 7 to 21 days.

This clause inserts subsection (5a), which requires the council to ensure that provision is made for a facility for answering questions and the receipt of submissions on its website during the public consultation period.

15—Amendment of section 127—Financial statements

This clause deletes paragraphs (a) to (e) of subsection (1) and inserts new paragraph (a) to ensure that a council must prepare for each financial year, financial statements and notes in accordance with standards prescribed by the regulations.

16—Amendment of section 129—Conduct of audit

This clause deletes and substitutes subsection (1) to ensure that the auditor of a council must undertake an audit of—

the council's financial statements within a reasonable time after the statements are referred to the auditor for the audit (and, in any event, unless there is good reason for a longer period, within 2 months after the referral); and

the controls exercised by the council during the relevant financial year in relation to the receipt, expenditure and investment of money, the acquisition and disposal of property and the incurring of liabilities.

Clause 16 deletes and substitutes subsection (3) to ensure that the auditor provides to the council—

an audit opinion with respect to the financial statements; and

an audit opinion as to whether the controls audited under subsection (1)(b) are sufficient to provide reasonable assurance that the financial transactions of the council have been conducted properly and in accordance with law.

This clause deletes subsection (5a) and inserts new subsections (5a) to (5e) (inclusive).

Proposed subsection (5a) sets out the basis on which the auditor will provide the report under subsection (3) and the advice under subsection (4).

Proposed subsection (5b) sets out the manner in which the report and advice must be placed on the agenda for consideration (unless proposed subsection (5c) applies).

Proposed subsection (5c) provides that the report and advice may be the subject of a special meeting of the council called in accordance with the requirements of the Act (and held before the ordinary meeting of the council that would otherwise apply under subsection (5b).

Proposed subsection (5d) makes provision for the confidentiality of the report under subsection (3) and proposed subsection (5e) sets out the basis on which the advice under subsection (4) may be kept confidential.

Subclause (9) inserts new paragraphs (d) to (h) (inclusive) into section 129(6) to expand upon the matters that the auditor must report to the Minister.

Subclause (10) inserts new subsection (9) to provide that a report under subsection (3), provided to a council under the section, must accompany the financial statements of the council.

17—Amendment of section 132—Access to documents

This clause substitutes paragraph (f) and inserts new paragraphs (h) to (j) (inclusive) of section 132(3) to expand on the list of documents that a council should make available for inspection on the Internet within a reasonable time after they are available at the principal office of the council.

Subclause (4) provides that the Governor may by regulation amend the list of documents contained in subsection (3) from time to time.

18—Amendment of section 132A—Related administrative standards

This clause substitutes paragraph (b) of section 132A so that a council must ensure that appropriate policies, practices and procedures are implemented and maintained in order to achieve and maintain standards of good public administration.

19—Amendment of section 133—Sources of funds

This clause deletes paragraph (b) from the Examples set out in section 133.

20—Variation of section 151—Basis of rating

This clause inserts new subsections (10) and (11) into section 151 of the Act to provide that a council must not, in relation to any financial year, seek to set fixed charges as a component of general rates at levels that will raise a combined amount from such charges that exceeds 50% of all revenue raised by the council from general rates. Proposed subsection (11) provides that a charge is not invalid because fixed charges imposed in relation to any financial year raise more than the amount referred to in proposed subsection (10).

21—Amendment of section 152—General rates

This clause amends section 152 by expanding on the range of exceptions to the requirement imposed under the section to apply a fix charge equally to each separate piece of rateable land in the area so that a fix charge cannot be imposed against each site in a caravan park or each site in a residential park within the meaning of the Residential Parks Act 2007.

22—Amendment of section 155—Service rates and service charges

This clause inserts new subsection (2a) to provide that a council's ability to impose service rates and annual service charges on rateable and non-rateable land under subsection (2) does not apply in prescribed circumstances.

Subclause (4) inserts new subsections (6) and (7).

Proposed subsection (6) provides that, subject to subsection (7), any amounts held in a reserve established in connection with the operation of subsection (5) must be applied for purposes associated with improving or replacing council assets for the purposes of the relevant prescribed service.

Proposed subsection (7) provides that if a prescribed service under subsection (6), is, or is to be, discontinued, any excess of funds held by the council for the purposes of the service (after taking into account any expenses incurred or to be incurred in connection with the prescribed service) may be applied for another purpose specifically identified in the council's annual business plan as being the purpose for which the funds will now be applied.

Subclause (5) inserts proposed subsection (11) to provide that if a prescribed service, in relation to a particular piece of land, is not provided at the land and cannot be accessed at the land, a council may not impose in respect of the prescribed service a service rate or annual service charge (or a combination of both) in relation to the land unless the imposition of the rate or charge (or combination of both)—

is authorised by the regulations; and

complies with any scheme prescribed by the regulations (including regulations that limit the amount that may be imposed or that require the adoption of a sliding or other scale established according to any factor, prescribed by the regulations, for rates or charges (or a combination of both) imposed under this section).

23—Amendment of section 158—Minimum rates and special adjustments for specified values

This clause amends section 158(2) of the Act by inserting new paragraph (ba) into subsection (2) to add, each site in a caravan park or each site in a residential park within the meaning of the Residential Parks Act 2007, to the list of matters that a council cannot impose a minimum rate against. The clause adds new paragraph (bb) into subsection (2) to provide that if 2 or more pieces of rateable land within the area of a council constitute a single farm enterprise, a minimum amount may only be imposed against 1 of the pieces of land.

New paragraph (da) is inserted into subsection (2) so that a council may not apply section 158 so as to affect or alter a separate rate that would be otherwise payable under section 154 in relation to more than 35% of the total number of properties in the area that should be subject to the separate rate.

Paragraph (e) of subsection (2) is substituted and replaced with new paragraph (e) so that a council cannot apply section 158 in respect of a general rate or a separate rate if the council has included a fixed charge as a component of that rate.

24—Amendment of section 161—Rebate of rates—community services

This clause amends section 161(1) to ensure that rates on land apply to land being predominantly used for service delivery or administration (or both).

25—Amendment of section 194—Revocation of classification of land as community land

This clause amends section 194(2) to ensure that a report prepared by a council on the proposal is made publicly available.

26—Amendment of section 201—Sale or disposal of local government land

This clause deletes and substitutes paragraph (a) of section 201(2) to provide that a council may only dispose of community land if the land is to be amalgamated with 1 or more other parcels of land and the amalgamated land is to be (or to continue to be) community land or, in any other case, after revocation of its classification as community land.

27—Amendment of section 202—Alienation of community land by lease or licence

This clause deletes and substitutes subsection (4) of section 202 with proposed subsection (4) to provide that a lease or licence is to be granted for a term not exceeding 21 years and the term of the lease or licence may be extended but not so that the term extends beyond a total of 21 years.

The clause inserts new subsection (4a) into section 202 to provide that subsection (4) does not prevent a new lease or licence being granted at the expiration of 21 years (subject to the other requirements of this Act or any other law).

28—Amendment of section 210—Conversion of private road to public road

This clause inserts new paragraph (ab) into subsection (2) of section 210 of the Act. Proposed paragraph (ab) ensures that if a person has some other form of registered legal interest over the private road and the identity and whereabouts of that person are known to the council—the council must give written notice to the person of the proposed declaration at least 3 months before it makes a declaration under section 210.

This clause deletes and substitutes subsection (3) to provide that the following applications may be made to the Land and Valuation Court in connection with a declaration under section 210:

an owner of the private road may apply to the court for compensation for the loss of the owner's interest in the road;

a person who has some other form of registered legal interest over the private road may apply to the court for compensation for the affect of the discharge of that interest.

29—Amendment of section 216—Power to order owner of private road to carry out specified roadwork

This clause deletes and substitutes subsection (2) of section 216 of the Act to ensure that the requirements imposed under Division 2 and 3 of Part 2 of Chapter 12 apply with respect to any proposal to make an order and if an order is made, any order, under subsection (1) of section 216.

30—Amendment of section 218—Power to require owner of adjoining land to carry out specified work

This clause deletes and substitutes subsection (2) of section 218 to ensure that the requirements imposed under Division 2 and 3 of Part 2 of Chapter 12 apply with respect to any proposal to make an order and if an order is made, any order, under subsection (1) of section 218.

31—Amendment of section 219—Power to assign a name, or change the name, of a road or public place

This clause inserts new subsection (1a) into section 219 of the Act to require a council to assign a name to a public road created after the commencement of this subsection by land division.

Subclause (2) amends subsection (4) so that Public notice must be given of the assigning or changing of a name under subsection (1) rather than of a resolution assigning or changing a name.

Subclause (3) inserts new subsections (5) to (8) (inclusive) to—

require a council to adopt a policy relating to the assigning of names; and

allow a council to alter its policy, or substitute a new policy; and

require public notice to be given of any alterations to a policy or adoption of a policy.

32—Amendment of section 220—Numbering of premises and allotments

This clause inserts new subsections (1a) and (1b) into section 220 of the Act.

Proposed subsection (1a) requires that a council must assign a number (as part of its primary street address) to all buildings or allotments adjoining a public road created after the commencement of this subsection by land division.

Proposed subsection (1b) requires that a council must ensure that an assignment under proposed subsection (1a) occurs within 30 days after the issue of certificate of title in relation to the relevant land division in accordance with any requirements prescribed by regulations made for the purposes of this subsection.

33—Substitution of section 237

This clause substitutes section 237 of the Act.

237—Removal of vehicles

The proposed section provides that if a vehicle has been left on a public road or place, or on local government land for at least 24 hours, an authorised person may place a prescribed warning notice on the vehicle. After 24 hours has expired since the placement of a prescribed warning notice, an authorised person may have the vehicle removed to an appropriate place.

The proposed section makes provision for the sale of the vehicle if the owner of the vehicle does not take possession of the vehicle and pay expenses associated with the removal of the vehicle.

34—Amendment of section 246—Power to make by-laws

This clause inserts new subsection (4a) into section 246 of the Act to provide that if a council makes a determination under subsection (3)(e) that a by-law, or a provision of a by-law, applies only within a part or parts of the area, the council must ensure that notice of the determination is published in the Gazette and in a newspaper circulating in the area of the council.

35—Amendment of section 258—Non-compliance with an order an offence

This clause deletes and substitutes the penalty and expiation fee provisions in section 258 to increase the maximum penalty to $2 500 and the expiation fee to $210.

36—Amendment of section 270—Procedures for review of decisions and requests for services

This clause inserts new subsections (a1) and (a2) to make provision for the development and maintenance of policies, practices and procedures in relation to requests for the provision of a service or for the improvement of a service provided by the council or complaints about the actions of the council, its employees or other persons. The policies, practices and procedures must be directed towards dealing with the relevant requests or complaints in a timely, effective and fair way and using information gained from the council's community to improve its services and operations.

Subclause (3) inserts new subsection (4a) to ensure that the policies, practices and procedures established under section 270 must be consistent with any requirement prescribed by the regulations.

37—Amendment of section 271—Mediation, conciliation and neutral evaluation

This clause amends section 271 to add conciliation proceedings to the range of possible dispute resolution schemes available to deal with disputes between a person and the council.

38—Insertion of sections 271A and 271B

This clause inserts sections 271A and 271B.

271A—Provision of information to Minister

Proposed section 271 compels a council to, at the request of the Minister, provide to the Minister specified information, or information of a specified kind, relating to the affairs or operations of the council.

271B—Minister may take steps to ensure reasonable standards are observed

The proposed section provides that the Minister may, after taking into account such matters as the Minister thinks fit, request a council to obtain an independent assessment of its probity or its compliance with any requirement placed on the council under this or any other Act or, without limiting paragraph (a), to take specified action to meet standards in the conduct or administration of the affairs of the council identified by the Minister as being consistent with the objects of this Act, or any principles or requirements applying under this Act.

39—Amendment of section 272—Investigation of a council

This clause inserts new paragraph (ab) into section 272(1) to enable the Minister to appoint an investigator to carry out an investigation if the Minister has reason to believe that a council has failed to comply with a request under proposed sections 271A or 271B.

The clause further provides that the requirement to give a council notice before making an appointment under subsection (1), is not required if the Minister considers that the notice would be likely to undermine the investigation.

An investigator appointed under subsection (1) may, for the purposes of an investigation—

require a person who has access to information that is, in the opinion of the investigator, relevant to the investigation, to provide that information to the investigator in a form determined by the investigator;

inspect—

any building or other premises occupied by the council;

the operations of the council conducted in or on any building or other premises;

Proposed subsection (6a) provides that if during the course of an investigation an investigator considers that other matters relating to the affairs or operations of the council should be subject to investigation or report, the investigator may, after consultation with the Minister, proceed to investigate (as necessary), and report on those matters.

40—Amendment of section 273—Action on a report

This clause expands the matters upon which the Minister may give directions to the council under the section to include if the Minister considers that a council has failed to respond appropriately to a recommendation of the Ombudsman or that a council has failed to address appropriately a matter that formed the basis of a request under proposed section 271B.

The clause expands the matters upon which the Minister may recommend to the Governor that the council be declared to be a defaulting council to include if the Minister considers that there has been a failure to comply with a direction under subsection (2)(b) or a failure to comply with a requirement to take specified action in respect of a subsidiary for the purposes of section 275.

The clause deletes subsection (4) of section 273.

41—Amendment of section 274—Investigation of a subsidiary

This clause makes amendments to the Minister's power to refer specified matters for investigation in respect of a subsidiary that correspond with those amendments made by clause 39 to the Minister's power to refer specified matters for investigation in respect of a council.

42—Amendment of section 294—Power to enter and occupy land in connection with an activity

This clause amends section 294 to allow a council to conduct surveys, inspections, examinations and tests, and carry out work.

43—Repeal of section 295

This clause repeals section 295 of the principal Act.

44—Amendment of section 298—Power of council to act in emergency

This clause deletes subsections (3) and (4) from section 298 of the Act.

45—Amendment of section 302—Application to Crown

This clause amends section 302 of the Act to expressly provide that the Crown is bound by Chapter 10 of the principal Act.

46—Amendment of Schedule 2—Provisions applicable to subsidiaries

(1) This clause amends subclause (2) of clause 13 of Schedule 2 to remove the ability of the council to exempt a subsidiary from the requirement to establish an audit committee.

(2) Subclause (2) makes it clear that an audit committee established by a subsidiary may include persons who are members of the council's audit committee.

(3) Subclause (3) amends subclause (2) of clause 30 of Schedule 2 to replace the ability of the charter of a regional subsidiary to exempt the regional subsidiary from the requirement to establish an audit committee with the ability of such exemption to be provided by regulation.

(4) Subclause (4) makes it clear that an audit committee established by a regional subsidiary may include persons who are members of a constituent council's audit committee.

47—Amendment of Schedule 4—Material to be included in the annual report of a council

This clause deletes paragraph (e) from clause 1 of Schedule 4.

48—Amendment of Schedule 8—Provisions relating to specific land

This clause inserts new clause 12 into Schedule 8 of the Act.

12—Frew Park

Proposed clause 12 classifies Frew Park as community land and makes that classification irrevocable. The clause also revokes the Frew Park trust.

Schedule 1—Transitional provision

1—Transitional provision—audit opinions

This clause sets out transitional provisions that apply to the various auditing arrangements imposed by the amendments made by this Act to section 129 of the principal Act.

Debate adjourned on motion of Hon. J.M.A. Lensink.