Statutes Amendment (Local Government Review) Bill

Second Reading

Adjourned debate on second reading.

(Continued from 16 February 2021.)

The Hon. F. PANGALLO (15:34): I rise to speak on the Statutes Amendment (Local Government Review) Bill 2020. Reform of local government is a long time coming and I commend the government, the minister and the previous minister, along with other stakeholders like the LGA, its member councils and various community groups for their input to create this extensive overhaul of our third tier of government.

I am a strong supporter of local government because of its links to representing and assisting the grassroots of our community: the ratepayers, the local small and large business, local schools, service groups, the sporting clubs and senior citizens. Local councils have come a long way from the days when their elected members were mostly service-minded resident ratepayers giving their time voluntarily. The fundamentals have for so long been the three r's: rates, roads and rubbish.

Today, local government is far more complex and challenging. Most of the larger councils need to manage very large budgets and carry out various infrastructure and development tasks as well as provide a high level of service delivery in their district. That requires a high level of expertise and professional organisation within their staff structure.

Then there are the responsibilities of the elected representatives themselves, from the mayor down to the ward members. Some of them now seem to think and conduct themselves as quasi members of parliament, many with egos and their own political agendas, even though we like to think the influence of political parties in local government is minimal. When you have so many elected individuals from different walks of life with differing views and opinions, combustible confrontations are inevitable.

Dealing with these situations has become a prevalent problem in recent years, from factionalism to conflicts of interest, appalling behaviour like bullying and sexual harassment, and meetings degenerating into a rabble of insults and accusations. Lack of probity and proper governance and accountability of the administration of councils by their highly paid chief executives have in recent times also cast local government in a poor light and only serve to undermine the community's faith and trust.

Things need to change and, generally, this bill comes with a big broom to clean it up, ranging from the closest scrutiny of spending of ratepayers' funds and the remuneration and performance reviews of chief executives through to disclosure and acceptable standards of conduct by elected members and the staff.

One section I found objectionable is giving a CEO the discretion to suspend a member. While we have seen many instances of poor behaviour and friction between elected members and the staff, often resulting in costly litigation and stress claims, this provision can also be viewed as a blunt instrument allowing an unelected official to interfere with the democratically elected chamber.

I was astounded to learn there was one CEO who conducted a performance review on himself. I strongly endorse the requirement for an independent annual performance review of CEOs. This will assist in improving an individual's professional development by having that two-way engagement and providing feedback while at the same time lifting standards, improving working relationships and efficiencies in workplaces.

There are measures in here that will most likely add to the costs of councils, like provision of annual business plans to an independent regulator agency, the Essential Services Commission of South Australia, while receiving and considering advice from this body every three years on their financial plans and revenue decisions. In effect, it is a backdoor attempt on rate capping, that contentious sledgehammer election promise that had to be ditched because it would have severely hurt the bottom line of councils, just as it has in other states. This new approach ostensibly keeps an eye on council spending and revenue raising; however, most councils have kept their rates well below CPI in recent years.

As we know, local government has long been burdened with cost-shifting from the state government, namely the huge impost of the waste levy. Councils must also bear the brunt of rate exemptions and rebates. For instance, in 2020-21 the City of Adelaide will wipe off $35.5 million in rates revenue because of exemptions and another $7.5 million in rebates. It is a lot of money to write off when we know its finances are in a mess. The reforms will require councils to wear their own auditing costs. There will be a requirement for council audit committees consisting of most independent members to provide specialist advice. Who is going to pay for that advice? This needs to be clarified.

Another key area of these reforms focuses on the election process and a big shake-up of council numbers. The Electoral Commission will play a bigger role in receiving nominations and overseeing the obligations of candidates. I have long advocated for the full disclosure by candidates of any political or organisational affiliations, as well as donations and gifts, and I am pleased this is being addressed, but it should go a lot further. There should be a cap on donations and, as I had proposed, a ban on gifts and donations by any persons connected to the building and development industry. This would be a move to deter corruption, bearing in mind much of the work carried out by councils centres on developments, from commercial to domestic dwellings.

Changes to the supplementary voting process and the filling of casual vacancies are also covered in this bill. It is now proposed that, if there is a vacancy created less than 12 months following a periodic election, based on the proportional representation method, to avoid another costly election the vacancy is to be filled on countback with a runner-up from that previous election. The bill also proposes that if a vacancy occurs 12 months out from an election it does not need to be filled. Currently, it is seven months and perhaps should stay that way. A year is quite a long time for a ward to be under-represented.

The Electoral Reform Society wrote to me in 2018 concerned the countback process was 'crude, lazy and undemocratic' in that it was at odds with proportional representation. It argued that if a group of voters elected a councillor who decided to vacate his or her position before an election, that group would be left without a representative. I am unsure how that would apply when we still like to think that candidates at local government elections are not openly aligned with political parties or special interest groups.

The bill is also proposing to cap the numbers of councillors to 12 with a new amendment coming, I believe, now adding the mayor to avoid voting deadlocks. Not surprisingly, nobody likes it; neither do I. This move will require a review by councils before 2022 to apply it to the 2022 elections; otherwise, it will be implemented in 2026. It also removes the current representation review where the community decides on the level of representation it gets from local members.

There are 14 councils that have more than 12 members; one has 18. This proposal, according to the government, is designed to reduce costs. However, I am inclined to back the LGA and other councils saying it would actually add costs in that fewer members would need to take on a heavier workload in representing their wards and, with it, additional resources would need to be given to them.

To justify her position on this, in a letter to the hardworking and popular Mayor of the City of Salisbury, Gillian Aldridge, the minister in the other place bizarrely draws the analogy of the size of councils with Australian Securities Exchange guides on the structure of corporate boards. Equating the example of corporate boards voted by shareholders with that of democratically elected representatives from wards and council districts of varying size makes no sense to me. She goes on to say that the Remuneration Tribunal would consider the ratio of council members to ratepayers when determining allowances.

In other words, allowances are likely to be increased to match the increased workload. How is that going to reduce costs? She also claims the cap has been welcomed positively by the community. I have yet to see tangible evidence of that. Ms Aldridge rightly points to the large discrepancies that would occur across councils; for instance, compare the City of Prospect, with a population of 21,000 ratepayers, with Salisbury council's 138,000 ratepayers. Under the proposed changes, a councillor in Prospect would represent around 2,000 ratepayers, while one in Salisbury would be responsible for 12,500.

It would, says Mayor Aldridge, reduce the opportunity for a diversity of voices to be heard and represented in council chambers across the state. I could not agree more. Numbers should be based on the need and benefit to the community. Therefore, we will be opposing this measure in new section 11A.

This brings me to my own amendments that I will be moving. I want to thank the venerable long serving councillor from Naracoorte, Ken Grundy, for drawing my attention a couple of years ago to the staggering fact regarding eligibility to vote in local government elections. Unlike state and federal elections, non-Australian citizens are permitted to vote in local government elections in South Australia. Surely the same law needs to apply at local government level as it does elsewhere. There is only one other state where this happens: Victoria. Elsewhere you must be an Australian citizen, albeit with some very minor exceptions for some British subjects in some jurisdictions.

In South Australia you can be eligible to be on the local council voters' roll if you are a resident or a non-Australian citizen who has lived at your residential address for one month or more—one month. Technically, you can come here for an extended holiday, like backpackers, and be eligible to determine who will be the Lord Mayor of our fair city. Would I be able to do that in London, New York, Berlin, Rome, Oslo, Timbuktu? Not on your life. If we were to use the minister's analogy of corporate boards where members are voted by their shareholders and members of sporting clubs voting for boards, then being an Australian citizen should surely apply in the selection of council candidates and mayors in our important third tier of government, should it not?

Let's take the City of Adelaide, where there are or have been more than 13,000 international students and residents, along with backpackers and seasonal workers. They really have no skin in the game when it comes to property ownership, paying rates or running commercial businesses. They are predominantly temporary visa holders, here for a short time. What possible interest would they have in the governance and operations of city hall? Yet, they can make it onto the council electoral roll merely by proving to the council CEO they have lived at an address for the required 30 days or more.

Much like vote stacking in branches of political parties and unions, this glaring anomaly opens the door to corruption and rorting by opportunistic individuals and groups seeking a presence on councils. It only takes a resourceful person to rustle up a few hundred votes and, bang, you have a seat in local government. It needs to be changed. As for those permanent residents without citizenship who do have a stake in the game, they need to be encouraged to take up Australian citizenship. I encourage members in this chamber to support my amendment regarding enrolment so that it is consistent with state and federal voting requirements.

That brings me to the voting process itself. It is time we lifted the rate of voter participation in local government by doing away with voluntary voting and introducing compulsory voting. As I have stated, local government is an important piece in our democratic administration and processes. Communities and individuals have become more engaged and opinionated regarding what happens in their neighbourhoods, but they also need to express their views at the ballot box rather than whinge from a distance when they see and hear things they do not like about their local council and their members.

At the 2018 election, about 400,000 people cast their votes out of an eligible 1.2 million; that represents 32 per cent. That figure is only slightly up from 2014, which means that 68 per cent just do not care. We need to get these figures much higher and promote greater participation. Critics of compulsory voting, and I think the LGA is among them, point to the increase in costs and oversight by the Electoral Commission. However, this can be overcome by trialling online voting in tandem with the current postal ballots, which the LGA does support.

How can you put a price on creating proper and healthy democratic processes? Just see what happened in the recent presidential poll in the US, where voting is not compulsory. Less than 150 million people, out of a country with a population of around 350 million, voted. It was followed by howls of protests and unsubstantiated claims of fraud. We need to start to care about what happens in our local community, how and where money is spent and compelling voters in council elections to take the time to assess the suitability of their candidates. Another 68 per cent need to do their homework.

This bill could have presented us with an opportunity to test the water for a new way to lodge ballots: electronic voting. This is the modern digital age and we should be examining ways to streamline the voting process, whereby there is greater participation while at the same time lowering the costs of conducting them. Cybersecurity covering these votes must of course be considered, that is why we should start looking at trialling it, perhaps with the elections of the Adelaide City Council, which I note has made several submissions in the past for both compulsory and online voting.

While this bill could have been far more innovative than it is, I am confident that much good will come from this legislation and the proposed amendments. I look forward to it progressing to the committee stage.

Debate adjourned on motion of Hon. J.E. Hanson.