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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2009-09-24 Daily Xml
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STATUTES AMENDMENT (COUNCIL ALLOWANCES) BILL

Second Reading

Adjourned debate on second reading.

(Continued from 8 September 2009. Page 3075.)

The Hon. D.W. RIDGWAY (Leader of the Opposition) (11:04): I rise on behalf of the opposition to speak to this bill. Members would be aware that this bill establishes a mechanism by which the Remuneration Tribunal will now set allowances for councillors and for mayors. Currently, councils determine on an annual basis the allowances for councillors; and it can be a figure up to $15,000 and a mayor may receive up to $60,000. I think that most members in this place have had some contact with local government; it may be through family members and some members have been on local government.

This bill does reflect genuine concern in the community about the need to recompense people who serve their community at the local government level. From my personal experience, my father spent 20 years as a councillor and then as chairman of the Tatiara District Council. He often made the comment that he was able to do that only because he had two sons who were able to carry on the farm work while he was away.

Often a council meeting would be on when we were shearing, so we would all be working twice as hard to cover him for the day that he was not there. It is interesting because a senior regional bank manager who once came through Bordertown made the comment to me that you could tell that the people in a rural community with the biggest overdrafts—often without looking at their bank accounts—were the people most active in community activities and on councils because of their personal sacrifice. Obviously, it was a passion they had for serving their community, but clearly it came at a personal cost to them.

The opposition supports the general thrust of this bill, which does suggest that the Remuneration Tribunal will look at council allowances as they are today and, when this is proclaimed, set appropriate allowances for councils. The bill proposes to offer a CPI increase every three years and once every four years. Therefore, once every term the Remuneration Tribunal will review its initial decisions.

While we support the general thrust of the bill (and the opposition has some amendments on file that it will move), we think it is reasonable for the Remuneration Tribunal to set the allowances at what we will call the base rate, or the new starting point, and then not have a CPI increase but allow councils to apply to the Remuneration Tribunal on an annual basis, for instance, or once every two years or every four years (or maybe a different time frame). Obviously, one would hope that a council would not be going back every six months to do so, and our amendments indicate that the Remuneration Tribunal is not obliged to consider a request from a council if, in the opinion of the Remuneration Tribunal, it has come back in too short a time.

I have a question for the minister that I wish to put on the record. Is it envisaged that the councils will apply individually or is it envisaged that they will group together as councils of a certain size (say, in land area, rate revenue or the number of ratepayers) so that the tribunal is not deliberating over all 69 councils? I would like some clarification on that. Also, with respect to the cost, I note that in the minister's second reading explanation she said:

From the opposition's point of view there remain some concerns about the advertising activities undertaken by the tribunal and the cost which would be recovered from the LGA.

We would like some details of the expected cost and also of the deliberations of the Remuneration Tribunal and its services. I do not think it has been outlined by the minister at this point how they will be apportioned. New section 76(13) of the bill provides:

...the reasonable costs of the Remuneration Tribunal in making a determination under this section are to be paid by the LGA under an arrangement established by the Minister from time to time after consultation with the President of the LGA and the President of the Tribunal.

I would like the minister to offer some clarification of that, because I think that we as the legislators, and also councils and the community, have a right to know what the costs will be and how they will be apportioned. I am also interested in new section 76(3), which talks about allowances (I look forward to the Hon. David Winderlich's amendments) and which provides:

The Remuneration Tribunal must, in making a determination under this section, have regard to the following:

(a) the role of members of the council as members of the council's governing body and as representatives of their area;

(b) the size, population and revenue of the council, and any economic relevant factors for that council area;

(c) the fact that an allowance under this section is not intended to amount to a salary for a member;

(d) the fact that an allowance under this section should not reflect the nature of a member's office;

(e) the provisions of this act providing for the reimbursement of expenses of members.

I use the example of a small rural regional council with a relatively low rate revenue and I think most members would say a capacity not to pay particularly high allowances. The members who represent their community may make a greater personal sacrifice to serve the community than someone in let us say the Adelaide City Council or one of the large metropolitan councils who may be a business person with an office two blocks from the council chamber and can stroll to a council meeting and then get back to their business. It may be a bigger business but its size is not significant enough to influence the personal wellbeing of the owner or the councillor because they are not there.

I am a little intrigued, because it appears that this bill will value the contribution to the community on the basis of the size of the council and not on the length of service that the person gives. As I said, I have had personal experience of this. I am very happy for my father (and, I think, the Ridgway family), in that it has been only about 20 years since approximately 1920 that a Ridgway has not served on the local council at Bordertown or on the Tatiara council.

So, certainly, from a family point of view, we have had first-hand experience of this. Those family members did it out of a sense of service and duty to their community. However, I know that we need to attract good quality people into local government (and, I think, all levels of government). I think it is a serious issue that we need to confront. It always raises issues in the wider community when we talk about council allowances and the salaries of MPs and the like; it always tends to raise some debate within the community.

I would hope that this legislation will not have different classes of service to the community. The person who gives up their time in the Far West of the state to serve their local community may travel a long way to do so. They make a bigger personal sacrifice. I will use the example of a football club. Some people who moved into our community lived about 60 kilometres north of the football oval, but the three boys always attended training twice a week and went to the matches. They travelled about 10,000 kilometres a year just to play footy, yet the guys who lived right next to the footy oval spent no time there. Those boys were happy to play and they enjoyed their footy, but if those sorts of community-minded people live further away from the community they wish to serve there is a bigger cost. Of course, there are also other issues when it comes to people representing their local community at a higher level within the LGA.

The opposition is happy to support the thrust of the bill, but I would like some answers from the minister in relation to the costs. I look forward to the support of other members for the bill. We feel that it is a sensible way forward. We also look forward to receiving support for the amendments that I will move during the committee stage of the bill.

The Hon. R.P. WORTLEY (11:14): I am pleased to have the opportunity to contribute some brief remarks in relation to the Statutes Amendment (Council Allowances) Bill 2009. Local government is an essential component of our community's democratic framework. Local government provides people with the opportunity to actively participate in grass roots public affairs and put their views about issues that are of concern to them, either personally or at a community-wide level. It is also a major employer and plays a significant role in keeping often sizeable local communities functional.

Our 68 South Australian councils possess an enormous depth of knowledge about local issues and the characteristics that make their municipalities unique and worthy of enhancement and protection. Clearly, our local government representatives work hard and give generously of their time for the benefit of their communities. The 68 councils, between them, manage more than $8 billion worth of community infrastructure as well as about $1 billion a year in service provision. That means a high level of commitment and responsibility on the part of all councillors.

To add to this, our local government areas vary enormously in size. On Saturday 19 September, the Adelaide Advertiser listed the 2008-09 budgets and ratepayer numbers for all the 19 metropolitan councils. With more than 72,000 ratepayers, the budget for Onkaparinga council is $104.5 million. Salisbury has nearly 55,000 ratepayers and the budget is $81 million. By contrast, Prospect council has 9,486 ratepayers and a budget of $16.6 million, and Walkerville has 3,383 ratepayers and a budget of $5.7 million.

Differences in council size, budget, population, demography, geography and environmental factors are all good reasons why it is important that local government issues are reviewed, scrutinised and, where necessary, improved. These issues include: voter participation, representation, election processes, rates and expenditure, and allowances and benefits. That is what the government is doing with this bill and with the Local Government (Elections) (Miscellaneous) Amendment Bill.

For some years now, councils have been obligated by the Local Government Act 1999 to consider on an annual basis the matter of allowances for elected members. Section 76 of the regulations under that act sets out the allowance limits, minimum and maximum, and each council then determines what the amount will be. Theoretically, a mayor may receive up to $60,000 and a councillor up to $15,000, but I believe that many councils set amounts that are much lower than these limits. The situation is clearly inequitable. Just as we and our federal counterparts have our remuneration set by an independent tribunal, so, too, should councillors. The Local Government Association agrees. This bill determines the Remuneration Tribunal as the body best placed to determine local government allowances. The tribunal will set the allowance rates—not annually, but in conjunction with each local government election. For the three ensuing years, allowances will vary according to the CPI.

The bill contains provisions aimed at making the administration of the scheme fairer and more efficient, and also contains relevant amendments to the City of Adelaide Act. These are commonsense reforms. The provisions are timely and promote transparency in local government and equity for its elected representatives. They enhance our democratic process at the level of government which has the capacity to touch people's lives perhaps more directly than the others. For these reasons, I support the bill and commend its terms to honourable members.

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) (11:18): I thank all those honourable members who have contributed to the second reading debate and who have indicated support generally for this bill. A number of amendments have been proposed, and I look forward to dealing with those during the committee stage.

The Hon. David Ridgway has put a number of questions on notice and I am happy to provide the answers to those where information is available. However, I ask that we do that as part of clause 1 of the committee stage because I have sought some clarification and have not been able to talk to advisers about that, but I will be able to do that during clause 1.

With those remarks, again I thank honourable members for their support and look forward to expediting the bill through the committee stage.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

The Hon. G.E. GAGO: I will address some of the questions asked by the Hon. David Ridgway. In relation to the costs of the tribunal, we are not able to specify these costs as yet. Although the tribunal hears similar sorts of cases, the particular matters, cases and research required around investigating local government issues would be quite unique and the tribunal will be exposed to that for the first time. We are not able to be specific about costs, but we know that it would involve things such as advertising; research relating to demographic, social and economic factors; calls for written submissions and inviting oral submissions; public hearings; time to consider submissions; and making multiple determinations. Those are some of the things we would expect to be part of the work the tribunal would need to conduct.

The Hon. David Ridgway asked whether it is envisaged that the councils will apply individually to the tribunal. I have been advised that councils will not apply at all. They will not need to do so; there will be an automatic trigger. The tribunal will make determinations, as required by this bill, every four years. I have been advised that those deliberations will be made at the same time across all councils. The Hon. David Ridgway was concerned that this would entrench classes of councillors. That currently already occurs. There are already a number of categories; for instance, the mayor, the deputy mayor, ordinary councillors, the chair and committee members.

So, there are already a number of categories of allowance payment considerations. I am advised that it is likely that these will also be able to be considered by the tribunal. So, they are not necessarily going to be removed. Just to clarify the point, I advise that the tribunal will be setting classes of allowances, not looking at individual councillor rates. One ordinary councillor would not be receiving a different allowance from another ordinary councillor. They might be receiving different allowances from the mayor or the deputy mayor but, within the classes, they would all be receiving similar payments.

So, if an ordinary councillor has to travel 10 kilometres and another ordinary councillor lives around the corner from the council chambers, the tribunal would not consider that one individual is required to travel 10 kilometres. However, what the tribunal would be able to consider is the general imposts on groups of councillors. Obviously, on average, the requirement on councillors who are members of a remote council area would be much greater than on, say, those councillors who are members of the Adelaide City Council. So, those matters of distance would be considered in that way.

The Hon. David Ridgway asked how the costs of the tribunal will be distributed between councils. Again, I have been advised that this has not been decided, but we anticipate that it will be a fairly simple matter, probably reflecting the relative population of the council areas. Obviously, I will be discussing that matter with members of the tribunal and also with the LGA closer to the time.

The Hon. D.W. RIDGWAY: I think the minister has sort of covered what I was asking about, but it appears that, under the provisions of the bill, the tribunal will be able to determine the level of allowance for a particular councillor, based on the capacity of that council to pay—the size of the council. What I was exploring is the fact that this bill potentially values to a greater level the community service and personal sacrifice made by someone in a council that can pay a higher allowance than someone who serves a community somewhere else in the state where the council does not have the same capacity to pay.

Some would argue that in the bigger councils they have more work to do and that it is a greater role. I would also argue that some of our great community leaders involved in the Local Government Association come from some of the far-flung parts of the state where rate revenue is not huge, which reflects on the council's capacity to pay. That was the issue I was exploring. I think this sets up a mechanism whereby the wealthy councils can pay quite generous allowances. So, in those councils the service of those councillors to their community is being valued at a far higher level than in the case of someone in a council which does not have as great a capacity to pay.

The Hon. G.E. GAGO: Indeed, they are vexed issues for councils, and they have been for a long time. As we know, council allowances are currently paid within a particular range. However, that range is broad and, under the current arrangements, those wealthier councils are obviously able to set their allowances at the upper end and those less wealthy councils tend to set their allowances at the lower end. That is indeed unfair because it does not reflect the level of commitment or the level of contribution or work done by particular individuals, and that has always been an inequity in that system. This particular system does not necessarily remove that inequity, but I think that overall it is a fairer system because the tribunal is required to consider a much broader scope of contribution. It relates to the role of members of council, the size, population, revenue and any other relevant economic factors, including that it should reflect the nature of the member's office and provide reimbursement for expenses. So the bill does outline a much broader scope.

Individual councils—and, for that matter, individual councillors—will be able to make submissions to the tribunal; there is nothing to stop even individuals putting a submission to the tribunal. So if a council, or a group in the council, or a particular individual in a council, believes that a particular aspect of the council needs to be highlighted, they will have the opportunity to do that, with the tribunal. Again, I think that adds strength to the fact that this provides much broader scope and allows greater input of a wider range of matters to be considered when weighing up where to set a particular allowance.

The Hon. D.W. RIDGWAY: This may be in the bill, but I could not see it. Once the Remuneration Tribunal has made a determination, is there capacity for that to be vetoed? I will give an example. We all know that our salaries are linked to the federal parliamentary Remuneration Tribunal deliberations, and I think last year Prime Minister Rudd intervened and said that there would not be any increase in salaries due to circumstances at the time (the global financial crisis).

Is this bill such that individual members can refuse to take an allowance but, overall, if the Remuneration Tribunal determines a 2 per cent (or whatever it happens to be) increase, everyone has to take it and there is no opt out mechanism? Alternatively, is there the capacity, for example (and I suppose the chairman of the LGA might like to be referred to as the prime minister), in these circumstances, which we experience from a parliamentary point of view, for someone else to veto it and everyone has to wear that decision? Is that a possibility under this piece of legislation?

The Hon. G.E. GAGO: I have been advised that there is no power of veto from any body or authority to overturn the decision of the tribunal. However, individual councillors will have the right to refuse an allowance—as is currently the case.

The Hon. DAVID WINDERLICH: On a point of clarification, I believe the minister said, in response to an earlier question, that this bill makes the setting of allowances fairer because of the range of criteria she outlined—in subclause (3)(b), essentially. My understanding is that those criteria are not new; they are already in the act to guide councils in setting their allowances. What is new in this bill is that the Remuneration Tribunal will do this rather than the council; so I do not believe that the criteria have changed. Could the minister clarify that?

The Hon. G.E. GAGO: Yes; that is quite right. However, I guess the point I was trying to make is that for the first time we have an independent body—at arm's length from local government and from state government—that is required to assess those criteria and apply a particular allowance. Previously, local councils were required to consider criteria but with an upper and lower limit. Local councils were also in the unenviable position of being under political attack each time they increased their allowances. There was a range of public perceptions regarding whether or not they were worthy of that; some members of the public felt it should be doubled whereas other ratepayers (and we have seen many of them in the paper) complained bitterly. I believe councils were under considerable pressure to keep undervaluing their allowance, and I think having an independent tribunal to do that is a much fairer, open and transparent system.

The Hon. DAVID WINDERLICH: I have a further question relating to the setting of allowances. Metropolitan councils often use a formula of, say, not more than 1 per cent of rate revenue (or a similar formula) to be allocated for the setting of councillor allowances; they can do that, and set the maximum allowance, because of their larger budgets. That would not apply with a smaller regional council with a smaller budget. What would prevent the Remuneration Tribunal from setting an allowance that, although it might be fair to the councillors, would be more than the council could afford?

The Hon. G.E. GAGO: The answer lies in subsection (3), which outlines the matters to which the tribunal has regard. That includes the economic factors of a council area: the size, population and also the revenue of the council. So, the tribunal is required to take those matters into consideration. As members would be aware, the bill also allows for those public submissions, so individual councillors are able to put forward submissions that outline a particular point of view in relation to that. We note that the tribunal will take into consideration those matters presented to it as well.

The Hon. D.W. RIDGWAY: A question of clarification: does the tribunal take into consideration any benefits that the councillors or mayors get as part of holding their office, which may be a car, mobile phone, expense accounts—a whole range of other benefits that may be available to mayors or councillors?

The Hon. G.E. GAGO: In relation to the question about what is included as an expense, under subsection (3), the tribunal must take into consideration paragraph (e), which provides for the reimbursement of expenses of members. It is required to do that, and that includes things like travel and child care. However, I am advised that it does not include matters that relate to section 78 which are provisions of facilities and support which would cover things like phones, cars and suchlike.

Clause passed.

Clauses 2 and 3 passed.

Clause 4.

The Hon. D.W. RIDGWAY: I move:

Page 2, line 15—Delete 'and indexed in accordance with this section'

I thank parliamentary counsel for picking up the fact that we need to move these amendments that are standing in my name in this way, and I guess this will be a test for the other main amendments. I will speak to this and, therefore, to the others all at once.

The opposition believes that—and I think we have seen some evidence this morning in the questioning during debate—rather than just having a CPI increase every year and then every four years, the tribunal could automatically review it. As the minister says, nobody has the power of veto over that and maybe they should not have the power of veto, but certainly it is an automatic process for CPI every year, and then the tribunal looks at it and may or may not increase.

A question the minister might like to answer is: in what the government is proposing, would it be possible that the CPI increase could happen each year and then the Remuneration Tribunal would determine that it should have a lesser amount after four years for whatever reason? I suspect that is unlikely but is it possible? Is the Remuneration Tribunal only to review and increase, not to review and to decrease?

However, in speaking to this amendment, the opposition supports council allowances for councillors and mayors, and any other allowances deemed fit under this legislation. We think it is an appropriate way to set the level where the Remuneration Tribunal will look at it, in the first instance, and then set that level. It appears that then councils themselves can apply subsequent years for a review.

Circumstances will change in councils. We think that provides a more transparent approach that councils can apply and then ask the tribunal to look at their particular set of circumstances. We think that the CPI increase is probably a mechanism that is not that prevalent in our communities—certainly, when you think about ratepayers. The ratepayers get annual rate increases that sometimes reflect CPI, sometimes a bit more; but most of them are not guaranteed of a business income increase to the CPI whether they are rural ratepayers, small business operators or even wage earners. Some of those do not receive CPI increases. Our view is that we think the tribunal should set the level at whatever it deems to be reasonable and then councils apply, as they see fit, to increase their allowances.

It is unusual to assume that every year you will receive an increase. The electorate allowances that members of the Legislative Council receive have not changed in the eight years that I have been a member of parliament. Possibly there have been some other factors, but the tribunal has determined that we can do our job as members of parliament and that allowance is at a satisfactory level.

I know there has always been a bit of debate as to whether the tribunal has got it right or wrong, but it has made the decision and that has not changed. I urge members to support the opposition's amendment. We think it provides a better mechanism, rather than just automatic increases, and lets councils determine for themselves when they think it is fit and proper for their community to pay their councillors a higher allowance.

The Hon. G.E. GAGO: I have a couple of questions, if I may. In terms of the costing impacts of your amendment, have you spoken with the president or anyone else in the Remuneration Tribunal to attempt to indicate what the effect of the cost of your amendment would be, and have you consulted with the LGA on this amendment and, if so, what is its view?

The Hon. D.W. RIDGWAY: First, in respect of the cost, I am intrigued that the minister has asked this question, because we have asked questions about the cost and she has been unable to give us a cost. So, no, I do not have a cost, but, clearly, you do not have a cost, either.

The Hon. G.E. Gago: At least I rang the tribunal. At least the tribunal was contacted and we got some indicative—

The Hon. D.W. RIDGWAY: Well, what is the indicative—

The Hon. G.E. Gago interjecting:

The Hon. D.W. RIDGWAY: Mr Chairman—

The Hon. G.E. Gago: You put forward an amendment and you don't even bother to try to cost it. You are lazy.

The CHAIRMAN: Order!

The Hon. D.W. RIDGWAY: Thank you, Mr Chairman.

The Hon. G.E. Gago: You are lazy.

The Hon. D.W. RIDGWAY: Talk about being lazy, you are the minister with a whole department and you cannot even tell us what it will cost. You said you have to work it out. You do not even know. I discussed it with some council members at the LGA's president's dinner last Thursday night. When you left early and went home, I stayed and spoke to some of them about it.

You call me lazy, minister. You are lazy because you are not prepared to give us the cost and you have a whole government department. We have not costed it. We think it is reasonable. Councils may apply only once every four years. The Remuneration Tribunal may not have to meet particularly often. We think it is a better, fairer and more transparent way. I have had discussions with members of the LGA. I have not sat down with Wendy Campana, personally, in her office.

The Hon. G.E. Gago: So, you have not discussed it, have you?

The Hon. D.W. RIDGWAY: I am not the shadow minister with carriage of—

The Hon. G.E. Gago: Lazy.

The Hon. D.W. RIDGWAY: The minister says we are lazy. I think—

The Hon. G.E. Gago interjecting:

The Hon. D.W. RIDGWAY: Mr Chairman, can you please keep her in order.

The CHAIRMAN: Order!

The Hon. G.E. GAGO: In relation to all four of the honourable member's amendments, they are directed to a single purpose. These amendments would delete the automatic CPI adjustment of councillors' allowances and replace it, instead, with a variable regime under which councils could apply to have their allowances reviewed by the Remuneration Tribunal at any time and as many times as they choose within a four year election cycle.

It is not clear from the honourable member's amendment whether an application to the tribunal from a single council would lead to a tribunal review of allowances paid only at that one council, or whether a single council application would have possible repercussions across a range of councils, because members of an entire category of councils might be paid at the same level of allowance. So, I would seek clarification of that from the Hon. David Ridgway.

I suspect, however, that the honourable member intended only the first interpretation but, as I point out, the wider interpretation is also possible. On that basis alone, the ambiguity of the words of this amendment should be rejected. However, even assuming, for the purposes of this debate, that the first interpretation is the only one possible, the government will not support the amendment.

The application by a single council for the tribunal to review its allowances would not be made for the purpose of reducing allowances. If any councillor thinks that he or she is paid too much then that councillor may decline to accept the allowance, or part of it, or donate a portion to charity. It is obvious, therefore, that an application by a single council for a tribunal to review its allowances would be made only for the purpose of seeking an increase.

In considering this proposal, the government has regard to proposed subsection (13), which provides:

Despite any other act or law, the reasonable costs of the remuneration tribunal in making a determination under this section are to be paid by the LGA under an arrangement established by the minister from time to time after consultation with the president of the LGA and the president of the Tribunal.

This means that the costs of the tribunal's deliberations will be recovered in due course from ratepayers. The cost has not been quantified, even though the government has, at least, contacted the tribunal and attempted to ascertain indicative cost pressures associated with that, which is more than the opposition has done.

Nevertheless, because the tribunal will not have its hands tied in this matter, it will be, as it should be, independent in making its inquiries and doing its research, and this research would, obviously, include reference to all of the matters listed in proposed subsection (3) and must include an opportunity for public submissions, both written and oral.

It is apparent, therefore, that the tribunal processes are not likely to be brief; nevertheless, it is obvious that the cost will be kept to a minimum if the task is done only once every four years, rather than whenever the applications are submitted.

However, there is real concern that, if this amendment were to pass, many councils could seize upon this opportunity to make regular applications once a year (or more often) to request re-examination of members' allowances. We know that councils often are very sensitive to the relativity of allowances paid to their council versus others, and we would not want leapfrogging to occur. One council puts in for and gets an increase and its neighbouring council thinks it should have that too, so it puts in another claim, and then the next one puts in another claim, and so it leapfrogs year after year.

I acknowledge that under these amendments the Remuneration Tribunal would have the discretion to refuse to consider such applications; however, it is also plainly foreseeable that, consistent with its expressed views, the tribunal would wish to undertake this additional role. I suggest that there is a real risk that this amendment would encourage many councils to seek regular reviews annually and that the councils that make such a suggestion might consider that they have nothing to lose by continually trying for more.

The tribunal itself is obviously willing to take on the extra work and to charge councils for doing it, so the tribunal does not mind, because it is passing on the cost impost to the LGA and, in turn, the LGA is passing on the cost impost to individual councils. This is something of which we need to be mindful.

Obviously, ratepayers might not agree with this system being put in place, and they are the ones who, in the end, will be out of pocket. The risk to ratepayers is not only the risk of having to pay increased allowances but also the cost of the tribunal's service in examining such council applications on a regular basis. I am advised that even refusing an application before the tribunal still requires some administrative work to be done to enable the tribunal to come to the position that it is not worthy of further consideration. So, they would all be cost imposts.

In short, the honourable member's amendments may be directed towards the perceived welfare of elected council members, but these amendments are not looking out for the interests of ratepayers. It is important that we balance both these interests. We know that it is tricky to get the balance right. It is not easy, there are complex issues, but we think that we have got the balance right in the particular model that is before us.

I am advised that the LGA does not support these amendments. The opposition did not even bother to check this out; I would have thought that at least a phone call to the peak body would have been a wise thing to do. However, the LGA does not support these amendments, because this legislation was structured to provide for an independent process using the tribunal four yearly. This efficiency would be lost by more frequent reviews, and the cost of those reviews would need to be recovered by the council applying for the review. The current CPI adjustments also recognise the fact that allowances are not remuneration.

The Hon. A. BRESSINGTON: I rise to indicate that I will not be supporting these amendments. I have indication from the LGA that it is also not supporting the amendments. Correct me if I am wrong, minister, but the point of this bill was to take out of the hands of councils their remuneration rates so that the process was completely independent. It was probably to save some councillors the embarrassment of having to hold out their hand and say, 'Please, sir, can I have more?' Now it is to be left up to the same mechanism as the Hon. Mr Ridgway said that sets our allowances and payments, and I think that was quite appealing to the LGA. So, for those reasons I will not be supporting the amendment.

The Hon. DAVID WINDERLICH: I will not be supporting the amendment, either. I think it makes the process of setting allowances more complicated and less consistent. That might be justified if there was a clear gain, but I do not think there is a clear gain in doing it this way.

The other problem is that the capacity to go more than once every four years to seek to adjust your allowance raises questions around the basis on which you might do that. Someone might argue, for example, that in their council there is a development boom, the developers are coming in, they are engaging in all sorts of high level negotiations, life has got much more complicated, and they need a higher allowance.

On the other hand, the global financial crisis hits, the developers all go away, and what do they do then? Go back and adjust the allowance downwards? It makes more sense to me to have an approach to setting allowances that involves everyone at the same time at regular intervals, rather than a less certain process which would give councils the opportunity and almost the incentive to go back at different points of time during the process.

The point made by the Hon. Ann Bressington is also sound in that, in a way, this kind of undermines the fundamental intent of the bill, which is to create a greater distance between individual councils and the setting of allowances. This, in a way, muddies that intent, so I will not be supporting it.

The Hon. R.L. BROKENSHIRE: Family First will not be supporting the Liberals' amendments, either. The process that the government has set up under the direct management of the tribunal is the best way to go.

I, personally, have family involved in a small rural council. They are already way under what their neighbouring councils are. There is the risk of intimidation when you have small tight knit communities expecting things to be done for virtually nothing; yet these councillors have proportionately just as much responsibility. I do not think one council should go in by itself, so we will not be supporting this amendment.

Amendment negatived.

The Hon. DAVID WINDERLICH: I move:

Page 3, line 6 [inserted section 76(3)(b)]—After 'relevant economic' insert:

, social, demographic and regional

The reason for this amendment is partly to address some of the matters referred to by the Hon. David Ridgway in his remarks earlier. There is a fundamental and inequitable bias towards larger, wealthier and usually metropolitan councils in the setting of allowances. This bias comes from two sources: first, that larger councils with greater revenues and greater populations can afford to pay more. That is an injustice and it occurs now. This bill will not change that and, in fact, my amendment will not change that.

The only way to solve that would be to cross-subsidise councils so that smaller councils with smaller revenue bases could afford to pay an allowance that recognises the amount of work and the complexity of the role of their councillors. For us to make any progress there we probably need the local government sector through the LGA to start to debate that and get a unified position. My amendment is directed at the second source of that inequity, that is, that the difference in allowances between generally metropolitan councils and smaller rural councils in particular is given respectability by the pretence that somehow the job of the larger metropolitan councils, the higher population metropolitan councils, is intrinsically more complex. I do not believe that is the case.

The complexity of a councillor's job depends on a range of factors, and you can have larger metropolitan councils that are easier to run than smaller rural councils. The range of factors that come into play include social factors (which is one of the terms I am proposing to add), demographic factors and regional factors; and 'regional factors' is a catchall for some of the different land form use. A council with a complexity of land forms which is regulating—say, urban, coastal, rural, or perhaps wilderness/national parks—and managing that variety of land forms is more complicated than, say, a larger metropolitan council without such a wide range of land forms to manage.

In terms of managing some of the politics and the social relationships within councils, it is not necessarily more difficult than in a larger council. In fact, in some ways there seems to be an inverse rule that the smaller the population the more complicated the political relationships between its members (and I see the Hon. Robert Brokenshire nodding); so, that is not straightforward either. My amendment simply seeks to broaden the range of criteria which must be considered by the Remuneration Tribunal in recognition of the fact that complexity is not related to just population size and revenue alone.

As I said, it does not deal with the fundamental problem. The fundamental problem is that the wealthier councils can afford to pay their councillors more. They will pay near the maximum or at the maximum rate of the allowance. Many rural councils will pay right at the minimum. When I was a councillor on Norwood Payneham St Peters we were close to the maximum; I think it was about $8,000 then. I was talking to someone from, I think, the Coorong District Council and they were receiving, I think, $1,500. I do not know whether our council was any more complicated but I know that it was not four times more complicated than the Coorong District Council.

Those kinds of inequities are built in. I do think that we need to pay some attention to solving them because they are a fundamental inequity; and I think that that kind of disparity for the same work, or even under payment for work of greater complexity, works against good governance. What I am seeking to do here is to provide a broader range of criteria which at least means there is recognition of the role and the complexity of the smaller rural councils. I guess that all it does in a sense is at least remove the pretence that somehow the worth of councillors in larger metropolitan councils is greater than it is in smaller councils, generally rural councils.

In terms of this possibly leading to the Remuneration Tribunal awarding increases that are beyond the capacity of a council to pay, I directed a question to the minister earlier about that, and members would have heard her answer. It appears that the interpretation of 'economic' and 'revenue' means that the Remuneration Tribunal will also take into account the ability of councils to pay the determined allowances. That does not address the lack of fairness of the disparity between allowances but it does address the affordability.

The Hon. D.W. RIDGWAY: I indicate that the opposition will be supporting the Hon. David Winderlich's amendment. In my second reading contribution and during committee, I tried to explore those inequities in terms of what is being proposed. I think that the example of the Coorong councillor and the honourable members' position on the Norwood Payneham St Peters council is exactly right. They might not have had the capacity to pay but the honourable member's job was not four times more difficult than the Coorong councillor's, or the councillor's job four times easier or the sacrifice they make to service their community four times less than the Hon. Mr Winderlich's would have been. For those reasons, we are happy to support the amendment.

The Hon. R.L. BROKENSHIRE: We will be supporting the Hon. David Winderlich's amendment. He has really summed it up. Again, the size of the council does not necessarily relate to the workload and the input of the councillor. My experience in my own home area is that you get a councillor in a smaller rural council on an absolute minimum amount of money and they are driving all over their ward—which can sometimes be 100 kilometres—to inspect roads and serve their ratepayers, yet you see someone from a smaller inner city council ward claiming money for everything—they go to conferences and everything else. Often councillors in the rural areas in the small councils do not claim at all. They receive just small amounts. The key point that I would like to put on the public record, because I am sure it will be reflected upon by the tribunal at some time when it tries to look at the thrust of this bill, is that we want to see fair and reasonable equity for councillors and mayors when it comes to receiving financial compensation for the efforts that they put into their community.

The Hon. G.E. GAGO: The government will be supporting the Hon. David Winderlich's amendment, which will increase the range of matters to which the tribunal must have regard in setting allowances by adding the words 'social, demographic and regional'.

The government does not wish to increase the burden of the task of the Remuneration Tribunal, and increasing the scope could increase the cost of the exercise on local government and its ratepayers. The government has sought the advice of the President of the Remuneration Tribunal to ascertain to what extent, if at all, the inclusion of these words might expand the scope of the tribunal's duty. The President has advised that he has no objection to the wording, and the view is that it is likely to have only a marginal type of impact. Obviously, that is sight unseen, so to speak. We recommend the amendment to the committee.

Amendment carried.

The Hon. DAVID WINDERLICH: I move:

Page 3, after line 10 [inserted section 76(3)]—After paragraph (d) insert:

(da) in the case of members of non-metropolitan councils—the travel and accommodation costs incurred by members in fulfilling their responsibilities as members of council;

This amendment simply relates to the setting of allowances for the City of Adelaide. It inserts one word under new section 24(3)(b). Where it currently reads 'the size, population and revenue of the council, and any relevant economic factors in the council area', it would simply insert 'social' after 'economic'. The reason why it is just one word rather than the broader range I outlined before is to do with the fairly compact and relatively uniform nature of the City of Adelaide. It does not span a vast range of land uses and so forth. Some of those other factors do not come into play, but it just broadens it beyond the simple 'economic', which I believe is inadequate.

The Hon. G.E. GAGO: This amendment is largely consequential.

The Hon. D.W. RIDGWAY: The opposition supports the amendment.

Amendment carried.

The CHAIRMAN: The next amendment to be moved is that of the Hon. Mr Winderlich, clause 4, page 4, after line 23.

The Hon. DAVID WINDERLICH: Is it consequential?

The CHAIRMAN: It is amendment No. 2.

The Hon. DAVID WINDERLICH: I have moved it.

The CHAIRMAN: No, you have not moved this. It is clause 4, page 4, after line 23.

The Hon. DAVID WINDERLICH: I think that one should have been withdrawn. I think that is the issue.

The CHAIRMAN: It refers to 'Non-metropolitan councils means a council', and so on.

The Hon. DAVID WINDERLICH: Yes; that is to be withdrawn. That is already covered under existing legislation. I apologise for that confusion.

Clause as amended passed.

The CHAIRMAN: I advise members that when they put in later amendments they should make sure that the table staff knows that other amendments are to be withdrawn. It certainly makes it easier. When those amendments are put, they must recognise that they are amendments that should be withdrawn, because now it will have to be recommitted.

Clause 5.

The Hon. DAVID WINDERLICH: I move:

Page 4, line 41 [inserted section 24(3)(b)]—After 'relevant economic' insert 'and social'

This is an amendment to section 24 of the act which relates to the City of Adelaide Act. It simply inserts the words 'and social' after 'economic' in section 24(3)(b), as I outlined in my earlier remarks but, obviously, in relation to the incorrect amendment. I urge support for it. As the minister said, it is probably not hugely consequential: it is simply to broaden it beyond economic considerations.

The Hon. D.W. RIDGWAY: The opposition supports it.

The Hon. G.E. GAGO: The government supports it.

Amendment carried; clause as amended passed.

Title passed.

Bill recommitted.

Clause 4.

The Hon. DAVID WINDERLICH: I withdraw my amendment No. 1 and ask that it be struck out.

Amendment withdrawn.

Bill reported with amendments.

Third Reading

Bill read a third time and passed.

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