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House of Assembly - Fifty-First Parliament, Third Session (51-3)
2009-12-02 Daily Xml
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STATUTES AMENDMENT (COUNCIL ALLOWANCES) BILL

Second Reading

Adjourned debate on second reading.

(Continued from 24 September 2009. Page 4140.)

Mr GOLDSWORTHY (Kavel) (11:59): I indicate that I am the lead speaker on behalf of the state opposition in relation to this legislation, and I do not intend unnecessarily to hold the house today. The bill is relatively straightforward in its intent, and it concerns transferring the responsibility for setting the allowances paid to mayors and councillors, as the responsibility of those office-holders, onto the Remuneration Tribunal.

This issue has been a matter of concern for a number of years. I had dealt with it previously when I had the responsibility for local government relations. After the last election this issue was being debated and canvassed, and proposals had been put forward by the Local Government Association in relation to it, but the minister at the time, for whatever reason (which is best known to that person), did not deal with it several years ago. However, the current Minister for State/Local Government Relations has made the decision to have it dealt with, and we on this side of the house are certainly supportive of the intent of the legislation, although we will move an amendment during the committee stage with respect to the process in relation to the review of the allowances.

As I stated, the allowances currently paid to mayors and councillors are set by those officeholders; those elected representatives. Those people have been quite uncomfortable (I do not think that is indicating an incorrect view of the situation) for quite an extensive period about being responsible for setting their own allowances. This proposal within the bill obviously takes that responsibility away from them and passes it to an independent body, the Remuneration Tribunal. It is very similar to what occurs with state members of parliament: the Remuneration Tribunal reviews and sets some specific allowances of which we are able to avail ourselves. I think it is certainly a step in the right direction.

As I indicated, we will be moving an amendment. The bill states that the allowances are to be reviewed once every four years, with an annual CPI increase for the other three years. We have some issues in relation to that. We do not believe that the allowance should be reviewed automatically every four years. I do not think that the allowances of state MPs are reviewed every four years: I believe the way it works is that, when an application is made to the Remuneration Tribunal on behalf of MPs, our allowances are reviewed. We are looking to move an amendment to mirror that operation (if I can describe it in that way). Council allowances are obviously set by the Remuneration Tribunal, but our amendment will be that the reviews occur at a time when each individual council within the total of 69 councils (because the City of Adelaide is included in this bill) makes an application for a review, and that it does not automatically occur every four years. So, the council has to make an application to the Remuneration Tribunal for a review.

That is fairly straightforward proposal, I think, and when we reach the committee stage we will look to address that issue. I understand that the bill has been amended: the Hon. David Winderlich moved an amendment, which was relatively uncontroversial, and I do not think the government would have too much of an issue in supporting that amendment.

As I said, this issue goes back many years and has been an area of concern within the sphere of local government, and we on this side of the house are happy to support the legislation with the amendment that I have flagged. I am waiting for the amendment to be tabled in the house.

The Hon. J.M. Rankine interjecting:

Mr GOLDSWORTHY: We have got it. Good. It should be out here at the front, should it not?

The Hon. J.M. Rankine interjecting:

Mr GOLDSWORTHY: All right.

The Hon. J.M. Rankine: He's cranky this morning.

Mr GOLDSWORTHY: I am not cranky. As I indicated only five minutes ago, I am not prepared to hold the house unnecessarily. We have other important business to deal with that is as important as this legislation. Her Majesty's Opposition is pleased to support the bill.

The Hon. R.B. SUCH (Fisher) (12:06): I welcome this bill. In fact, I have a bill, as far as I know, that is still before the parliament—it has been here so long that one loses track, due to Alzheimer's and a few other factors. I have been advocating this for a long time, and it was and should still be in the bill that is before the parliament in relation to allowances for council members and also state MPs. It is happening. It should have happened earlier but at least the government is moving on this matter now. The independent tribunal is the appropriate body to decide council allowances. It takes away any suggestion of self-interest and feather bedding, all those sorts of things.

I must say that allowances paid to local government members are very small in comparison to the time and effort they all put in. I have said before, and I will say it again: I am impressed by the amount of time, effort and commitment put in by people in local government. Any allowance they get is a drop in the ocean compared to what it costs them in sacrificing their family time and other personal time, in addition to the expenses incurred in being an elected member of local government.

I am sure that the allowances that the independent tribunal may provide will never compensate fully what is contributed by council members. At the end of the day they are doing it not simply for financial reward but, rather, to serve the community. The mechanism which the bill will provide—an independent tribunal looking at the allowances—is sensible and should be welcomed by everyone.

Mr GRIFFITHS (Goyder—Deputy Leader of the Opposition) (12:09): I wish to make a brief contribution and reflect upon what occurred in the 27 years I worked in local government, the last 13 years as a CE at several councils. One of my responsibilities was to present reports to council at appropriate times on the need to review allowances, so I have had some engagement in this practice. I have heard about it from the elected members' perspective and also the community perspective.

It is fair to say that people I met in local government—and I have worked with probably 200 elected members in my time—were good people who wanted to improve the community in which they lived. They had honourable intentions and did not do it for financial recompense. In the majority of cases they were glad of some level of recovery of the costs associated with becoming an elected member of council.

It is time consuming if it is done properly. They would acknowledge that not all of them commit themselves totally to it. Some do it because they have a particular interest. They all try to focus on positive outcomes, but the degree of commitment does vary between people involved in any role in life, and it varies amongst elected members in local government.

It is interesting that allowances paid to elected members—unless one is the mayor, deputy mayor or chair of a committee where an additional amount is paid—is a common figure. My overwhelming experience in resolving to pursue a particular level of remuneration or accept a nomination or recommendation from a council CEO is that it was based on their perception of the willingness of the community to accept that level of payment and agree that the people were worthy of it. That itself creates problems because there are always people in a community who support councillors and others who, because of a particular decision that has been made, are aggrieved by councillors and do not like the things they do. Differences of opinion always occur.

It is important to ensure that we achieve an independent system of reviewing allowances, and it is pleasing that the shadow minister has indicated support for the bill, while reserving the right to introduce some amendments in relation to the ability of council to seek a review. That will occur in the committee stage. It is a progressive step to take it directly from the hands of the councillors themselves and give it to an independent group.

Of course, there will be debate about the different levels of councils. Councils have different responsibilities in relation to population and financial commitments and budgets, and I understand that the minister will provide wise words on how that will be done. No two councils are identical—and they do not want to be identical. They want to remain independent, have particular areas on which to focus and commitments to communities at various levels. I think they all do a great job.

It is a step forward to put the allowances process into a truly independent body, away from local and state governments. It ensures that any decision is fair and just. The amendment to be moved by the shadow minister—which I hope will have some level of consideration by the government—is a progressive step forward. It is not just an assumption that a council may choose to pursue a level of review within the short term. It might be the case that a council considers that, rather than the regulated four year cycle upon which a review will be undertaken, what members are being paid is a fair remuneration for their effort and they do not wish to pursue a review at that time. That is a counterbalance argument and it is hard to know how the argument will be pursued by individual councils, and I appreciate that.

The Hon. J.M. Rankine interjecting:

Mr GRIFFITHS: I have a bit of an idea. I note that the Local Government Association supports this bill. The LGA, which has provided representation over decades to the 68 councils—down from 118 councils, and many more before that, as reviews have taken place—has tried to work towards an option that provides for some outside control of this matter. The bill has enormous merit. I commend the shadow minister for his contribution and I look forward to the committee stage.

Mr PENGILLY (Finniss) (12:13): The shadow minister has adequately covered the points in this bill and I do not need to elaborate on them. The issue of councillor and mayoral allowances has been agonised over at local government level for many years. I am sure we all are well aware of it.

I know one of the great concerns has been that there are very small councils and there are quite large councils and one size does not fit all. In country South Australia it is very much the feeling that as a member of council you are a volunteer. Some members are uncomfortable about taking anything at all, so that presents a problem. I also have concerns that there are some people across the state in higher roles as either chairman, councillor or mayors that seek to get the maximum allowance possible and everything that goes with it and make it a full-time job. With the best intent sometimes and sometimes without the best intent, that is fine.

It is very difficult to cater for a council such as Elliston where I think the entire staff runs to five or six people and the CEO does other things as well as his CEO role. Then you go to some other councils where they are getting large amounts, as I said. I know, for example, that the mayor on Kangaroo Island only receives—and I will stand corrected—$14,000 a year, and she puts in seven days a week on it. How they are going to work through this, I do not know. It will be a balancing act for the Remuneration Tribunal to work out.

Local government is anxiously waiting to see what we are going to do with this. It will take it out of their hands, and I hope the outcome is successful, but I suggest that it might not be that long before we discover that it is not working properly and that it could be back in this place for review. Yes, we support the bill. I know there are amendments forthcoming from our side of the house, so I wait with interest to see what the minister's and government's response is to those.

The Hon. J.M. RANKINE (Wright—Minister for Families and Communities, Minister for Northern Suburbs, Minister for Housing, Minister for Ageing, Minister for Disability) (12:17): I thank members for their contribution and I thank the opposition for its support for this bill that has been keenly sought by local government here in South Australia. I will correct one of the assertions made by the member for Kavel in his opening statement that various ministers have looked at this but did not proceed with it. I was very pleased to advise the President of the Local Government Association that one of my last tasks as minister for local government was to get approval through cabinet for this bill to be worked on.

Mr Goldsworthy: You sat on it for a long time.

The Hon. J.M. RANKINE: No, I did not sit on it at all; we actually worked with local government about what the appropriate process might be.

Mr Goldsworthy: It took a long time.

The Hon. J.M. RANKINE: Unlike you, we talk to people and consult, and I would be interested to know—

Mr Goldsworthy interjecting:

The DEPUTY SPEAKER: Order! The member for Kavel will restrain himself and treat this place with respect.

The Hon. J.M. RANKINE: I would be interested to know what consultation was undertaken in relation to your amendments. In any case, this bill recognises that the tribunal will take into account, as members have said, a range of factors that impacts on councils in determining and setting their allowances. The fact is that councils do that themselves anyway. They have an understanding of their budget pressures and what their communities are prepared to accept as far as an allowance goes. They determined their allowances but the government was responsible for the minimum and maximum amounts that councils could receive.

A range of options was put to the government. Initially, it was about the government determining financial bands and where the councils might fit in those bands. Again, the argument could be that a large budget and a large population means someone gets paid more money than someone with a small budget and a smaller number of constituents. But those smaller councils would also argue that very often they are much more well known by their communities and have a great deal more pressure placed on them than someone in a large city council who may not be so well known by their community and not necessarily have the same level of personal responsibility placed on them.

So, there are a lot of factors that need to be taken into account, I dare say, by the Remuneration Tribunal when it does this. What this bill does is set up an independent process. Again, some people may be happy or not happy with the outcomes but at least they have the opportunity now to put their case to someone who is quite independent to determine the appropriate payment for councillors in the range of our councils across South Australia.

Bill read a second time.

Committee Stage

In committee.

Clauses 1 to 3 passed.

Clause 4.

Mr GOLDSWORTHY: I move:

Page 3, lines 41 to 44 [clause 4, inserted section 76(9)]—Delete subsection (9) and substitute:

(9) A council may, at any time, apply to the Remuneration Tribunal for a review and adjustment of an allowance determined under this section.

(9a) The Remuneration Tribunal may—

(a) after conducting a review of an allowance pursuant to an application under subsection (9) in accordance with procedures determined by the Tribunal—adjust the allowance if the Tribunal considers it appropriate to do so; or

(b) refuse to consider the application if the period since the allowance was last reviewed or determined by the Tribunal has, in the opinion of the Tribunal, been insufficient.

My other amendments Nos 2, 3 and 4 will be regarded as consequential; I wanted to flag that to the committee. The reason why we are looking to move this amendment—and I outlined this in my second reading contribution—is that the bill stipulates that a review of the allowances is to take place every four years. That is a fairly prescriptive process to our way of thinking. If we are looking at modelling what occurs at a local government level in relation to perhaps what occurs at our level, and the Remuneration Tribunal obviously reviews and sets allowances for state MPs, that does not occur on a specific time frame. My understanding is that it does not occur at prescribed time intervals; that perhaps outlines it better.

It is our belief that a council should be given the ability to make its own decision about when it may apply to the Remuneration Tribunal for review, and then, obviously, the Remuneration Tribunal can make those considerations and bring down a deliberate decision. We believe that the legislation is too prescriptive as it currently stands, that it should take place automatically every four years.

Also, another issue is that it places an unnecessary workload on the Remuneration Tribunal for it to look at each of the 69 councils after that four-year period. If you have councils making applications when they believe it is time to review their allowances, it also assists in spreading the workload and reducing the pressure on the Remuneration Tribunal office. We think the amendment is quite a sensible proposal. We are not saying that councils are not allowed to have their allowances reviewed; we just believe that it is unnecessarily prescriptive that they be reviewed on a four-year cyclical basis.

The Hon. J.M. RANKINE: The government is not supporting this amendment whereby councils can apply on an annual basis. The amendment provides that the council can apply 'at any time'; so, not necessarily annually—any time. They could go in six monthly or three monthly to have their allowances reviewed. It is highly unlikely that any council would apply to the tribunal to have its allowances reduced. What we are talking about here is open slather, any time, for councils to be able to apply to have their allowances increased.

This legislation currently allows for a four-year independent review prior to council elections, and in the intervening period those allowances will have CPI adjustments to ensure that they maintain their value. To say that it is an unreasonable burden on the tribunal, let me assure the committee that the tribunal has made it very clear that it can manage this workload and is quite keen to take it on.

What we know is that increased allowances for council members means increased costs for ratepayers, and the cost of the Remuneration Tribunal's assessment of these applications will be passed on to council. You are again talking about ultimately putting more burden on ratepayers. So, not only are they paying increased council allowances, they are paying for the cost of having them reviewed whenever a council sees fit. I think these amendments are ill thought out by the opposition and will just create more angst in the community than we have seen in the past in relation to the setting of these allowances.

Mr GOLDSWORTHY: I understand what the minister is saying, but she is not reading the whole amendment. Proposed new subsection (9a)(b) provides that:

The Remuneration Tribunal may—

(b) refuse to consider the application if the period since the allowance was last reviewed or determined by the Tribunal has, in the opinion of the Tribunal, been insufficient.

Do you really think, minister, that mayors and councillors would go to the Remuneration Tribunal every three months or six months and, in practical application, look to have their allowances reviewed? If you read the amendment properly in its entirety you will see that those issues are being dealt with. I think you are being a little bit disparaging of local government representatives in your assertion that they would seek a review of their allowances when, perhaps, they were not warranted. The amendment is quite clear that the tribunal has the power to reject or refuse the application.

I imagine that, if the issue of making an application for review came up before the council, it would consider how long ago it had asked for a review, and, if that was refused, what were its chances of making another application for review. These people are sensible; they will not make an application that is unreasonable just for the sake of it. You have to give the elected representatives of local government credit for understanding the ramifications of their decisions. I think the minister is drawing a bit of a long bow with her remarks.

The Hon. R.B. SUCH: I do not support this amendment. I think there is adequate opportunity, as has been outlined by the minister, for the allowances to be reviewed at not too great an interval of time. I cannot see why a council would want or need to have a review that is outside what is provided for in the bill. I just make a couple of other quick points. I think the minister indicated that councils were supportive of having this. I do not believe that they were supportive at all because in my understanding they were resisting anything that took away what they saw as their right to set their allowances, just as they fight strongly to resist the Auditor-General having any oversight of their finances.

Mr Goldsworthy: That's not right.

The Hon. R.B. SUCH: The member for Kavel says, 'That's not right.' I am not sure whether he is referring to the Auditor-General but councils and the LGA, in particular, do not like anyone having any say or any oversight of what they do even though they are owned by the community. We now have this fancy term 'customer' instead of 'ratepayer'. The ratepayer is the owner of the council. It is not a customer: it is the owner.

I am not advocating the Brisbane model but I just point out that Brisbane, in paying its allowance to full-time councillors, pays less than the amount paid to the 300 elected members that we have in the metropolitan area of Adelaide alone who are on councils. That is in the Brisbane council which has a budget in excess of $2 billion and is responsible for buses, water, sewerage and planning. It does all that and yet the cost of the allowances it pays or the money it pays to its full-time councillors is less than we pay here to our part-time and, as I say, dedicated volunteers, 300 of whom are in the metropolitan area alone.

The Hon. J.M. RANKINE: I would be interested to know what consultation the opposition undertook in relation to these amendments. Did it discuss this with the Local Government Association? Does it have Local Government Association endorsement or any specific council endorsement? Our understanding is that it has not and, by the sheepish look on the member for Kavel's face, I suspect that information is probably correct.

Mr Goldsworthy interjecting:

The Hon. J.M. RANKINE: Sheepish, it is. The other thing about this amendment is that it is not clear whether it is only one council that may apply 'at any time' or whether it would be a category of councils in relation to applying for an increase in these allowances 'at any time'—as I said, not annually, as the member for Kavel tried to assert, but at any time.

When you are drafting legislation, it is probably wise, in simple things like this, to be a bit more specific about what you mean. In fact, if a council applied and then the allowance increase applied to a range of councils, it could have quite unintended repercussions for a number of councils. I think it is very ill thought out and I would be interested to hear the consultation process that has been undertaken in relation to it.

Amendment negatived; clause passed.

Remaining clause (5) and title passed.

Bill reported without amendment.

Third Reading

The Hon. J.M. RANKINE (Wright—Minister for Families and Communities, Minister for Northern Suburbs, Minister for Housing, Minister for Ageing, Minister for Disability) (12:35): I move:

That this bill be now read a third time.

I thank members for their contribution and support for this legislation. I know it will be very welcomed by local government across South Australia. I thank all those people involved in the preparation and consultation process that has been undertaken to ensure we get this legislation passed before the next council elections.

Bill read a third time and passed.

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