Local Government (Administration of Councils) Amendment Bill

Second Reading

The Hon. D.W. RIDGWAY (Minister for Trade, Tourism and Investment) (12:03): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation and the detailed explanation of clauses inserted in Hansard without my reading them.

The Local Government (Administration of Councils) Amendment Bill 2019 (the Bill) will amend the Local Government Act 1999 (the Act) to address three issues relating to the administration of councils under the Act.

Firstly, the Bill will amend the Act to address an issue highlighted by the administration of the District Council of Coober Pedy in relation to the maximum period a council may be under administration.

As Members will be aware, on 24 January 2019, His Excellency the Governor, the Hon Hieu Van Le AC, issued a proclamation declaring the District Council of Coober Pedy (the Council) to be a defaulting council pursuant to section 273(5) of the Act and appointed Mr Timothy Robert Sandford Jackson to be the administrator of the affairs of the Council.

This proclamation was made on the Minister for Transport, Infrastructure and Local Government's recommendation on the basis of an extensive report by the South Australian Ombudsman, finalised in July 2018, which demonstrated serious failings and irregularities in the conduct of affairs at the Council.

The Ombudsman's Report was in response to two referrals from the Independent Commissioner Against Corruption (the Commissioner) pursuant to sections 24(2)(a) and 24(3) of the Independent Commissioner Against Corruption Act 2012 (the ICAC Act) in relation to the Council.

As Members will recall, the Ombudsman was of the view that this was 'one of the most serious examples of maladministration in public administration' that he had observed since the relevant provisions of the ICAC Act were enacted.

Subsequently, the Ombudsman's findings were supported by a lengthy examination of the Council by the Auditor-General that was released on 4 December 2018. The Auditor-General also identified significant failings and deficiencies in the Council's financial management and position.

The District Council of Coober Pedy was the first council to be declared a defaulting council under the Act, and the first council in almost 30 years to be declared a defaulting council since the Local Government Act 1934 (the 1934 Act). The last time that a council had been declared a defaulting council and an administrator was appointed was in 1990—the District Council of Stirling, under the 1934 Act.

The Act currently allows for a council to be a defaulting council (under administration) for a maximum period of 12 months.

This Bill proposes that this maximum period be extended to 24 months, following feedback from the Administrator currently appointed to the District Council of Coober Pedy that 12 months is an insufficient amount of time to allow for an administrator to address significant council issues, as administrators are only able to utilise one annual budget cycle to implement significant and difficult decisions, such as large rate increases.

Secondly, the Bill includes a special provision to extend the maximum period of administration for the District Council of Coober Pedy until the conclusion of the next local government periodic elections of 2022. This enables an administrator to be in place for the remainder of the current Council term, should this be considered necessary.

This reflects the very serious nature of the Council's failings that resulted in the appointment of the Administrator, the Council's deep-seated financial issues, and also the strong division within the township that the Administrator has reported. More time is needed to enable the Administrator to address these serious and complex issues.

A recent poll undertaken by the Administrator has indicated the Coober Pedy community's support for this proposal.

However, it is not certain that the Council will be in administration until November 2022. Under the Act, a council's period as a defaulting council ceases if the Governor issues a proclamation, any time prior to the expiration of the maximum period, that either revokes the proclamation by which the council was declared to be a defaulting council (thus resulting in suspended council members being reinstated), or declares the offices of all members of the defaulting council to be vacant (and elections are held to elect a new council). These provisions are unaffected by the Bill.

Finally, the Bill includes an amendment to correct an anomaly in the Act by clarifying that suspended members of a defaulting council will not be entitled to receive their respective allowances during the period of suspension, that is, while a council is a defaulting council. This is in line with community expectations that suspended council members should not receive allowances while not performing official functions and duties.

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 273—Action on report

This clause inserts new subsection (8a) into section 273 of the principal Act to provide that members of a defaulting council are not entitled to their respective allowances under section 76 during the period of suspension under subsection (8).

The clause also amends section 273(16)(c) to make special provision for the District Council of Coober Pedy, which was declared to be a defaulting council in January 2019, to cease to be a defaulting council on the conclusion of the next periodic elections and to extend when a council ceases to be a defaulting council in other cases from 12 months after it was declared to be a defaulting council to 24 months after the declaration, except where the other circumstances in subsection (16) arise.

5—Transitional provision

This clause is a transitional provision which clarifies that new subsection (8a) in section 273 of the principal Act applies to a member of a defaulting council regardless of whether the council was declared to be a defaulting council before or after the commencement of the relevant provision of this Bill.

Debate adjourned on motion of Hon. R.P. Wortley.