Extract from Hansard [COUNCIL — Thursday, 17 October 2024]

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LOCAL GOVERNMENT AMENDMENT BILL 2024 Receipt and First Reading

Bill received from the Assembly; and, on motion by Hon Jackie Jarvis (Minister for Agriculture and Food), read a first time.

Second Reading HON JACKIE JARVIS (South West — Minister for Agriculture and Food) [5.05 pm]: I move —

That the bill be now read a second time. I am pleased to introduce the Local Government Amendment Bill 2024, which continues with the delivery of the Cook government’s local government reforms, the most significant changes to the system of local government in Western Australia in more than 25 years. Like last year’s first tranche of local government reforms, this bill is based on a substantial body of prior work and significant consultation that has been undertaken by our government since 2017, including the findings of the Local Government Review Panel: Final report of 2020, the Report of the inquiry into the City of Perth of 2020 and the Select Committee into Local Government’s Final Report—Inquiry into local government of 2020. Following the first tranche of legislation delivered this year, this bill will deliver on five of the main reform themes. The first of these is early intervention. This bill responds to the significant public interest in, and demand for, a stronger system of oversight and early intervention to respond to emergent dysfunction in local government in line with the reform theme of “Early intervention, effective regulation and stronger penalties”. Although the vast majority of local governments across our state operate in ways that reflect the values of respect, integrity and professionalism, there have been high-profile examples of local governments falling into division, dysfunction and chaos. Dysfunction in local government can reflect adversely on people involved in that local government and on the sector more broadly. That is why the sector has been so strongly supportive of an improved model for identifying and addressing emergent problems within local governments at the earliest possible stage. This bill will provide for the creation of the position of Local Government Inspector. The Local Government Inspector will be appointed by the Governor as a separate full-time statutory position. The inspector will be supported by staff as part of the Office of the Local Government Inspector. The inspector and their office will be responsible for receiving, investigating and resolving complaints about local governments, council members, local government CEOs and other local government employees. The complaints the inspector receives will be split into two types: breach complaints, which are complaints about a council member committing a behavioural breach, a conduct breach or a specified breach; and general complaints, which are complaints about noncompliance with the Local Government Act 1995 or its regulations. The inspector will have broad powers to investigate complaints and dismiss complaints that are frivolous, trivial, vexatious, misconceived or without substance. The bill will provide a much wider range of tools to deal with complaints when a breach or contravention may have occurred. The bill includes a new system of adjudication for conduct breaches, which are currently known as minor breaches. Adjudicators will replace the current Local Government Standards Panel and will have the power to make findings and issue sanctions for alleged conduct breaches. Adjudicators will be experienced legal practitioners who are not involved in the operation of the Office of the Local Government Inspector. Among the sanctions adjudicators will be able to issue in response to conduct breaches is the power to suspend a council member from office for up to three months, with decisions able to be reviewed by the State Administrative Tribunal. When a council member commits a prescribed offence known as a specified breach, the inspector may refer the complaint to the State Administrative Tribunal for determination of a finding and potential sanction. These sanctions may include a suspension for up to six months or a disqualification from office for up to five years.

This new system of breaches is complemented by other reforms in this bill that focus on deterring those involved in local government from breaching the act. This will include the doubling of financial penalties for most offences and the introduction of an infringement scheme for certain offences. In the case of other general complaints, the inspector may assess and determine the best way to deal with the complaint. This may include referring the complaint back to the local government, issuing a notice to comply with the act, appointing a monitor to the local government or initiating an inquiry into the local government.

The introduction of local government monitors is a key aspect of this bill. A monitor is a suitably qualified and experienced person who is appointed by the inspector to assist a local government in resolving issues early, before they escalate. The purpose of monitors is to proactively assist in the resolution of a problem at an early stage. This may include assisting with interpersonal issues, recommending changes to governance practices or advising on financial management or human resources issues. If a monitor is unable to resolve an issue, the monitor may report back to the inspector recommending the inspector take further action.

Extract from Hansard [COUNCIL — Thursday, 17 October 2024]

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The bill provides for a legislative framework for monitors to have a range of powers to assist them in fulfilling their role. For example, these powers may include powers to require council members to attend meetings to discuss issues and the authority to temporarily pause or adjourn a council meeting to provide advice to the council and the CEO related to that matter. Aside from appointing monitors, the inspector will also be vested with the important powers to conduct inquiries, including inquiries to recommend whether a council or a council member should be dismissed. The inspector will inherit the current act’s powers of the director general to recommend that the Minister for Local Government suspend a council member or council. In addition, the minister will retain the power to establish an independent inquiry with the powers of a royal commission when the nature of the dysfunction or alleged misconduct requires it.

The bill will insert a regulation-making power to enable the prohibition on the use of local government resources, including the local government’s insurance policy, for certain legal matters. This regulation-making power is to ensure that the resources of a local government are not used for unreasonable purposes, such as for the payment of an infringement issued to a council member by an inspector. This is a commonsense measure to ensure that ratepayers’ funds are not used by councillors to avoid their personal liability for penalties or sanctions, or to fund a legal action that is intended to delay or frustrate the effective resolution of a complaint against the council member.

The government recognises that this is an inherently complex area of legislation and acknowledges that the development of these regulations will require careful consideration and consultation. The bill will deliver the reform proposal to empower local government CEOs to refuse to deal with unreasonable complaints. This is intended to prevent the diversion of the local government’s limited resources to dealing with a complaint that is vexatious, trivial or already dealt with. A complainant can seek a review of the CEO’s decision by the inspector, who can revoke it if the inspector identifies the CEO’s decision was contrary to the act or guidelines published by the minister.

Aside from the new oversight and early intervention system, several other important reforms in the bill reflect other reform themes. The bill will deliver on the reform theme of clearer roles and responsibilities by legislating clearer roles for the council, mayor, president, council members and the chief executive officer. This will provide greater clarity between the distinction of strategic and operational functions in local government.

These amendments emphasise the critical separation between the council as the governing body—responsible for establishing policies, making strategic decisions and appointing the chief executive officer—and the chief executive officer, who is responsible for managing the day-to-day business of local government. This separation will mean that council members must not seek to involve themselves in managing the local government’s administration, intervening in the service delivery by the local government or otherwise seeking to perform the role of the chief executive officer. Other reforms, including council communications agreements, aim to ensure that there are supporting frameworks to maintain this critical separation.

The bill will enable local governments to decide to pay superannuation to council members, on top of existing council member allowances. Responding to advocacy from the sector, the bill provides for regulations that can specify local governments, or classes of local governments, that will be required to pay superannuation contributions on a mandatory basis. However, individual council members will be able to opt out of receiving payments, for instance, if a council member has otherwise retired and cashed out their superannuation accounts.

The bill will deliver on the reform theme of reducing red tape and increasing consistency and simplicity by delivering measures to streamline the making of local laws. The bill will extend the interval for the review of local laws from eight to 15 years, with any local laws not being reviewed in that time lapsing. The bill includes new provisions to allow for shared CEOs or senior employees, which will be particularly beneficial and cost-effective for our smaller regional councils.

The bill contains reforms to improve the formation and capabilities of regional subsidiaries. The bill provides for much greater flexibility in the establishment of regional subsidiaries and contains provisions to establish that the principles for the employment of local government employees should extend to the employees of any regional subsidiary. Other administrative reforms will allow local governments to borrow money against their freehold property, including to fund the construction of improvements on that land, such as new housing. Local governments will also be able to facilitate building upgrade finance agreements, which have been used in other states to fund works such as energy efficiency investments and the restoration of heritage buildings. The bill will deliver on the reform theme of greater transparency and accountability by providing a stronger framework for the limited circumstances in which part of a council meeting can be closed to the public. The bill will narrow the discretionary scope to close part of a meeting and will introduce the requirement to minute the specific reasons why part of a meeting has been closed. These provisions aim to prohibit local governments from attempting to close a meeting simply to avoid public scrutiny of the merits of their decision.

Extract from Hansard [COUNCIL — Thursday, 17 October 2024]

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The bill includes a regulation-making power that can prescribe a requirement for council members to declare their completion of mandatory training. This provision will be able to be used to withhold fees and allowances from a council member who fails to complete and declare their completion of mandatory training within the prescribed period. This will deliver on our reform commitment to ensure that there is a suitable penalty for council members who defiantly refuse to complete mandatory training.

The bill includes a power for the minister to recommend that the Governor make an order to specify the method of election to be used in a local government district. This power will enable orders to be made to ensure that the most appropriate method of election is used for a district. This can guard against decisions being made by a council to hold elections by a method that does not facilitate the greatest possible engagement of voters for that district. This power is intended to address the recent highly unusual decisions made by the Town of Cambridge to hold in-person elections, without specific consultation of their ratepayers.

The bill reflects the reform theme of improved financial management and reporting through a new requirement for local governments to publish an annual mandatory rates and revenue policy, which is intended to provide ratepayers with a clearer forecast of expected rates revenue to be collected over a number of future years. The introduction of independently chaired audit, risk and improvement committees for all local governments will promote good governance and a culture of improvement throughout the sector. Smaller local governments will be able to establish one audit, risk and improvement committee, shared with other local governments to save on costs.

This bill is a landmark moment for local government in our state. These reforms—the biggest in a generation— will continue to deliver benefits for all Western Australians.

Pursuant to standing order 126(1), I advise that this bill is not a uniform legislation bill. It does not ratify or give effect to an intergovernmental or multilateral agreement to which the government of the state is a party; nor does this bill, by reason of its subject matter, introduce a uniform scheme or uniform laws throughout the commonwealth. I commend the bill to the house and I table the explanatory memorandum.

[See paper 3712.] Debate adjourned, pursuant to standing orders.