The Local Government Amendment Act 2024 (Act) was assented to on 6 December 2024. This is a landmark piece of legislation because of the range of reforms it introduces. It will be interesting to see how they look once the provisions commence.
One area of reform is that of strengthening the regime for governing the performance of councillors and the CEO.
The Second Reading speech of Hon Jackie Jarvis linked the idea of good governance with that of a culture of improvement. This will hopefully move many local governments along the path away from mere compliance towards taking opportunities for continuous improvement.
The amendments create a system of an inspector and a number of monitors for the local government sector. Adjudicators, who must be qualified lawyers, replace the current Standards Panel, whose members do not need to be lawyers. There are new and increased penalties for rogue councillors and a stronger regime for penalising them.
Intervention by the inspector and their appointed monitors will be a visible indicator of emerging signs of dysfunction. It will make the concept of good governance more tangible to councillors who pay lip service to that ideal but are not able to live up to it.
Perhaps councils will raise their level of performance because they fear the embarrassment at having monitors appointed. This may encourage councillors to approach training in a meaningful way and not see it as a ‘tick box’ exercise.
Clarifying the roles of councillors and the CEO
When it comes to roles and responsibilities, the amendments make the function of the CEO clearer. They set out for the first time in legislation what the functions are (even though those functions will not be changed in substance by the amendments).
Expanding on the CEO’s functions in the legislation will strengthen the idea of the separation of powers between councils and their administrations. It will also hopefully emphasise the idea that the role of the CEO is a statutory one.
Under the amendments, a CEO can point to the Act to push back those councillors who believe they can have a say in matters that do not in fact fall within their role. For example, decisions about the appointment of an employee, or asking the CEO to consider alternative models of road graders.
Likewise, the role of councillors has been made more explicit. The broad provisions of the old section 2.10 may have given too much room for councillors to be subjective in their interpretation of it.
In the past, diligent councillors had to seek clarification from the various operational guidelines of the Department of Local Government, Sport and Cultural Industries. The role of councillor is now more helpfully and expressly spelt out in the legislation.
Let us have a look at the additional words inserted by Parliament into s 2.10 [our emphasis]:
(1) A councillor —
(a) represents the interests of the electors, ratepayers and residents of the district and takes account of the interests of other persons who work in, or visit, the district; and
(b) participates in the deliberation and decision-making of the local government at council and committee meetings; and
(c) facilitates communication with the community about council decisions; and
(d) facilitates and maintains good working relationships with other councillors, the mayor or president and the CEO; and
(e) acts consistently with section 2.7(3) to (5); and
(f) maintains and develops the requisite skills to effectively perform their role.
Technically speaking, lawyers could criticise the inconsistency between making sub-ss (a) to (c) deal with role and then making sub-ss (d), (e) and (f) deal with behaviour.
Nevertheless, this amended wording should make it much clearer to councillors as to what is expected of them.
Section 2.7 has been deleted and replaced by an expanded text.
The provision deals with the role of the council. The old s 2.7 was broad, stating that the council ‘governs’ the affairs of the local government, and ‘is responsible for the performance’ of its functions.
Also, it was to ‘oversee’ its finances and resources, and ‘determine’ its policies.
The first two subsections of the new s 2.7 restate the role of a council (though using slightly different and expanded wording).
However, what is very interesting is how sub-ss 2.7(3) to (5) introduce into the Act for the first time, principles that are to guide councils.
The text of these principles is as follows:
(3) For the purpose of ensuring proper governance of the local government’s affairs, the council must have regard to the following principles —
(a) the council’s governing role is separate from the CEO’s executive role as described in section 5.41;
(b) it is important that the council respects that separation.
(4) The council must make its decisions —
(a) on the basis of evidence, on the merits and in accordance with the law; and
(b) taking into account the local government’s finances and resources.
(5) The council must have regard to the need to support an organisational culture for the local government that promotes the respectful and fair treatment of the local government’s employees.
This ties neatly back to the new system of inspector and their appointed monitors. The inspector will be empowered to receive complaints against CEOs as well as individual council members. They also have ‘the power to order a local government to address non-compliance’.
This refers to non-compliance with the Local Government Act, Usually, compliance means acting under specific powers and observing specific duties. But now, compliance will include acting according to specific principles. Time will tell if these are game-changing amendments.
Living up to these legislated principles should not amount to doing anything significantly different from what councillors ought to have been doing all along.
However, from now on, doing the right thing will not be limited to achieving relevant statutory compliance (the ‘tick box exercise’ in colloquial terms). It will now also be about keeping the inspector satisfied as to whether a council has had ‘regard’ to things like ‘respectful and fair treatment’ of the employees of its local government. Or whether it has had ‘regard’ to the separation of the CEO’s executive role from its own governing role. In practice, it will mean doing such things as will avoid the judgment of the inspector that the appointment of monitors (and the reputational damage that would bring) is necessary.
The language of accountability is typically used when casting judgement on elected representatives. Often, faith is placed in the idea that the ballot box is where accountability is played out. Actual or perceived performance of councillors dictate whether they are re-elected.
Now, it is arguable that these reforms introduce another mode of achieving accountability. It will be the scheme of inspector and monitors who will be able to cast judgment on councillors and their councils, making them accountable for improper action.
In an ideal world, a councillor would understand their role in so authentic a way that no regulations would need to be imposed on them. Councillors would be judged on their ability to work to self-regulation. Honourable conduct would prevail.
In the real world, regulations and codes of conduct became necessary. Councillors became judged by their ability to conduct themselves to an acceptable level of statutory compliance.
The amendments signal a new era. Councillors (and their CEOs) will be subject to the judgment of the inspector and their monitors. And that will be with a vocabulary that expands beyond duties and powers, to cover these newly introduced principles.
Local governments should hope that the amendments will set the tone for better governance, and therefore, better performance, in the future.
Managing Principal
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