Tuesday, 28 May 2024

Local Government Amendment (Governance and Integrity) Bill 2024

Second reading

Debate resumed on motion of Melissa Horne:

That this bill be now read a second time.

Peter WALSH (Murray Plains) (13:24): I rise to speak on the Local Government Amendment (Governance and Integrity) Bill 2024. Winston Churchill said in 1947:

No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of Government except for all those other forms that have been tried from time to time …

I think that applies more so to local government probably than it does to state or federal government, if you look at the three tiers of government here in Victoria. Local government is the form of government that is closest to the people. Every time a councillor goes into the supermarket or goes into the newsagent or goes to a sporting event, they are there talking to the people that elect them and that they actually deliver services for, so local government is a difficult place to be. If you think about whether you would like to be a federal, a state or a local government representative, local government probably do the toughest gig of the three levels of government here in Victoria, because they are so close to the people and they are actually delivering services that impact on everyone’s lives. Maybe not so much in Melbourne, but we country MPs have a number of local government areas in our electorates, and you are not always in any one particular area at any one time. But for councillors – their day-to-day life is very much in the area that they represent.

One of the constant pieces of feedback that I get from local government is that particularly the Victorian government at the moment does not give the third tier of government, local government, the respect it deserves or the autonomy it deserves. If you think about over time the changes to the Local Government Act 2020, it did not live up to a lot of people’s expectations of actually giving some power back to councillors. In some ways it actually centralised power away from councillors to the CEO and to the administration there, and people were disappointed in that. Local government constantly complains about how the state government just sees it as something to be regulated rather than as a genuine third tier of government that is actually empowered to make its own decisions in partnership with the state government. They are a creature of state government under state legislation, not Commonwealth government, but they believe they are just a tool of the current government to be manipulated, to be controlled and to be regulated. And that starts right from day one. You think about the changes to wards – the shift from wards to non-wards and the changes to wards. Again, local councillors do not believe that they get heard when it comes to how a redistribution happens in their local government. It seems to be constantly always messed with, and there are rules that say, ‘Yes, you’re going to be undivided this time. Next time you’re divided. Next time you could have multimember wards. Now it’s going to be single-member wards.’ There is no consistency there, and local governments do not believe that their views are heard when it comes to those particular issues. Again, they do not believe they are in control of their own destiny because it is forced on them from above all the time.

If you think about respect and you think about the Commonwealth Games, local government were the ones that started it. The former mayor of Shepparton, who is in this place now as the member for Shepparton, was one of the leaders of that group of local governments that actually floated the idea of having a regional Commonwealth Games. The state government got behind that and then built up the expectations coming up to the November 2022 election about how it was going to be a regional games, it was going to deliver all these jobs and it was going to deliver all the extra sporting infrastructure into regional Victoria. We were going to have great tourism benefits out of it. And then what happened? We all found out it was a mirage. The government I think had no intention, even before the November 2022 election, to follow through with this. It was an election ploy to pump up the regions and to show they care about the region. Who got left carrying the can when the government pulled out? It was local government and those people that had faith in the state government to be honourable about what they said. They are there now picking up the pieces in their community – because there was an expectation, and people now are even more cynical than ever with the levels of government in Victoria, not just the state government but also local government, because their brand was attached to this. They get tarnished in some ways because of what the state government did – the fact that the state government is spending $600 million not to have a Commonwealth Games.

What form of good governance is the fact that you are going to spend $600 million not have a Commonwealth Games, and now you have got local government fighting hard to try and get the infrastructure that has been promised out of the Commonwealth Games? At this stage it does not appear to be materialising anywhere near as quickly as they wanted it to. In some instances it is not being delivered in the way that the local community want. I was in Ballarat recently, and the talk there about the stadium with more seating – if you to the locals, what they actually want is a train station at that football oval. They actually do not want more seating at this stage, they want a train station at that football oval so that if people from Melbourne come up to watch an AFL game, they do not have to get off at the station, get on a bus to go to the football ground, go to the football, then get on a bus to go back to the station to come back to Melbourne. They actually would like to have a station at the ground there rather than an extra 5000 seats, because from what they have told me, it is very rarely full. Local government is saying, ‘We want this,’ and the state government is saying, ‘No, we’re going to give you that,’ so I do not think that is a partnership at all. That is not a partnership as to how you deliver the project. We are going to find equally the issues in Shepparton, the issues in Bendigo and the issues in the Latrobe Valley are about getting that sporting infrastructure back into the community post the Commonwealth Games because of that mirage that the government created over that particular time.

We have heard in this place a lot of times that the reason we have got a housing shortage and that there is a shortage of land supply is that the local government is to blame for planning decisions. The government was supposedly going to call in the powers to solve these alleged issues with local government. Can I speak from personal experience with regard to one particular planning amendment in my electorate, C117, which was the Echuca West precinct – 5000 home lots. It was going to be the opportunity to really grow Echuca, because at the moment Echuca is losing growth to Moama across the river because their planning system is lot easier to navigate through and the subdivisions are coming to market quicker. That took something like six years to get to market.

People say local government planning is too difficult to work through. My personal experience with trying to help some of the developers navigate that system there and help the Campaspe Shire navigate that system was that it was actually the state government bureaucracy. The Victorian Planning Authority was actually involved in that process right from the start to give advice and to make sure that they did not keep hitting hurdles as they went to that particular planning amendment. What happened? It was all going to be done – it was finished, it was going to be signed off and that land was going to come to market – and then there would be another rule instigated from the department in Bendigo saying, ‘No, we want to re-examine something else. We want to reprosecute the issues around native vegetation. We want to reprosecute these other issues.’ Instead of the VPA and the government actually helping, in this case, the Campaspe Shire to get that planning amendment through, they made it harder and harder and harder.

One of the reasons that a block of land costs so much anywhere in Victoria is the time it takes to get to market. If you are developer and you bought land and you have got the holding cost of five, six, seven years compared to two or three years, that has to be built into the price of the land. I do not think the government understands that the holding cost is actually one of the things that is driving up the costs of land. If that could be turned over quicker, people could afford to sell it more reasonably, allowing people to actually go into those houses. This is another example of where local government believes the state government is actually an impediment to doing their job appropriately and shows a lack of respect for what they do.

The other example that I would like to bring is about those councils in western Victoria who now have the Barengi Gadjin Land Council traditional owners settlement over the top of their councils. As I understand it, that agreement was signed in October 2022, before we went into caretaker mode in Victoria, and it was not made public until about April or May of 2023. Those councils were never, ever consulted. In that particular land council settlement there is an expectation that the council does a whole range of things around procurement, around the management of public land and around the naming or renaming of roads, but they were never actually involved in those discussions. They never had the opportunity to be part of that particular process. So again, there was a lack of respect for and a lack of involvement from local government as a genuine third tier of government in the state.

I was recently talking to somebody from the West Wimmera council who said that they believe that the aspirations that the Allan Labor government has built into that particular land settlement for their area – for the West Wimmera shire – if implemented in full will cost the West Wimmera shire ratepayers $1 million. It will cost them $1 million to implement a traditional owners land settlement that they had no discussion in, no consultation on, no involvement in and no opportunity give feedback on. It was actually put in place, and at the time the councils were quite perturbed about the issue: ‘Does the Local Government Act 2020 actually take precedent over procurement, or do we have to follow this traditional owners settlement where we have to give special treatment on tenders to the traditional owners?’ The advice we got back was, ‘Yes, the Local Government Act takes precedence over procurement.’ But there was a push from the government bureaucrats saying, ‘No, you should be doing these things where you’re giving special treatment in the tenders for delivery of services to traditional owners versus a true competitive process.’ Ratepayers in that shire will be horrified when they find out that they are going to have to pay a million dollars to implement those aspirations there. What that particular person from the West Wimmera shire told me was that they are now expecting an appointment, or there is an appointment, from the bureaucrats from Melbourne to come up and try and pressure them.

Natalie Hutchins interjected.

Peter WALSH: To pick up the interjection from the minister, why not consult when it is being developed? If you are going to expect local government to actually implement something, why not talk to them as it is designed? Why not get feedback? They are not against doing things; what they are against is being treated like mushrooms.

Natalie Hutchins: On a point of order, Deputy Speaker, this is an amendment to the Local Government Act, not the Traditional Owner Settlement Act 2010, and I ask the member to come back to the bill.

The DEPUTY SPEAKER: The lead-off speaker generally has some latitude, although I do ask the Leader of the Nationals to come towards the bill.

Peter WALSH: I am speaking on local government issues, and the feedback that I get from councillors is that the current state government does not show them the respect that they deserve and actually tries to force things on them. That was an example I used where the ratepayers of West Wimmera shire, if the aspirations are to be met, will have to pay a million dollars out of their ratepayers money to do that particular thing.

Natalie Hutchins interjected.

Peter WALSH: It is not scaremongering; it is actually the facts. This is what the council representatives told me. That is the costing that has come back from officials –

Natalie Hutchins interjected.

Peter WALSH: No, they are not National Party members. How many Labor Party members are councillors in Melbourne? It is a quid pro quo here. That whole issue comes back to respect. Local government, as I was talking about with subdivisions, have more native vegetation rules being pushed on them, have more cultural heritage rules being pushed on them, have more traffic reports to do and have more studies to do all the time that are forced on them rather than local government making some decisions for themselves and for their ratepayers into the future.

One of the other concerns which is not addressed in this bill but people would have liked to see addressed in this bill is the fact that, if anything, the 2020 rewrite of the Local Government Act actually put more power in the hands of the CEO and management than it did in the hands of councils. The concern I get expressed to me from councillors is that they cannot get to have their say. They cannot put forward a notice of motion to be dealt with by council unless the CEO agrees with it. Local government is the third tier of government, a democracy in its own right, as I said at the start. Democracy is not easy, but councillors get frustrated, and that is one of the reasons we see some conflict amongst councillors – because they do not get an opportunity to have their say. If the CEO says, ‘No, we don’t want to talk about that issue,’ it does not get talked about. Those councillors have been elected by their community to represent their community in the council chamber, and the government is stifling that particular issue – it is happening all the time. So one of the things that at some opportunity in the future we would like the government to address is this imbalance of power between the CEO and management and councillors.

If you think about state government or if you think about federal government, ultimately the minister can say to their department secretary, ‘This is what we want to happen,’ but a local councillor has no power to say anything, basically. The only powers that a local councillor has are at the start of their four-year term to do their four-year strategic plan and sign off on an annual budget. Again, I hear from councillors all the time that when they want to drill down into the budget they are actually not given the detail. They are told, ‘These are the numbers,’ and they might say, ‘Well, there’s an allocation of $500,000 for X. Can you please give us a breakdown of all that so we actually know where the money is going?’ And they are denied that information; they are told, ‘No, that’s an operational issue.’ Everything hides behind the fact that, no, that is an operational issue, and that is one of the problems where the bureaucrats, most likely at the direction of secretaries or ministers, actually control what gets on the agenda at local government meetings, because it is always considered to be an operational issue, not an issue that councillors actually particularly want to talk about. That comes back again to what I was saying: there is no respect for that third tier of government by this current government. There is no empowerment to work with them on particular issues as they go forward.

The other thing I wanted to touch on was the recent changes to the electoral roll. A 2014 report – and it was a former Liberal–National minister, Minister Powell, that started a review into council elections ‍– says that there are some issues in that the CEO of the council actually manages the electoral roll and that should be transferred to the Victorian Electoral Commission to maintain the integrity of the roll better. Where there is an issue at the moment is: nonresident ratepayers have to register to vote. Some councils are sending out letters saying to landholders, ‘You are not a resident in this local government area. If you want to have a vote in October, you need to register.’

The reports I get back from various parts of the state are that at this stage not all councils have sent letters out to do that to make sure that everyone has an opportunity to vote. I hope they do – but the reason I raise it here in this debate is that I would like the minister to actually maybe investigate to make sure that everyone in all those councils – and there are three that are exempted, but all those in the 76 councils around Victoria – actually make sure they send a letter out to nonresident ratepayers in their particular shire so that they actually have the opportunity to register to vote. If you do not do that, you are actually not going to have a fair election process in Victoria, because quite a few of the people that are paying rates that actually do not live in that municipality will not get a vote at that particular election.

If you go to some of the issues in the bill, the councils – and the Municipal Association of Victoria (MAV) – that I have spoken to have taken exception to having a single code of conduct for all the councils in Victoria. They believe that there should be the opportunity –

Melissa Horne: No, they don’t. The MAV welcomes it.

Peter WALSH: No. That is not what they told me. They have said to me that they do not want a unified code forced on them. They want to be part of a discussion that actually writes that code and have meaningful involvement in actually writing that code rather than having it forced on them and not necessarily having it written in plain English. I can only report on the feedback I get as the Shadow Minister for Local Government. The feedback I have had as the shadow minister is that they are concerned about a standard code of conduct right across the state, and they would also like the capacity for councils to put additional things in that they want to put into those things –

Melissa Horne: You probably need to have a broader conversation with David Clark.

Peter WALSH: Perhaps you should too, Minister. But they do want to make sure that that code of conduct is written in plain English, that it is not legalistic in the way that it is actually required, because everyone wants the guidelines to be able to know how to run a council. It is important that they actually make sure that code is applicable to everyone right across the state, because issues change from place to place.

I have got a reasoned amendment in my name. I move:

That all the words after ‘That’ be omitted and replaced with the words ‘this bill be withdrawn and redrafted to provide procedural fairness by way of an appropriate appeal mechanism for councillors subject to suspension.’

The reason I move that is if you go to the current rules at the moment, if a council is being subjected to a potential suspension by the minister – and there have been cases where the minister has needed to use that power, and it is the whole of council at the moment – there is a process here in the Parliament where the minister introduces legislation to do that, and there are rights of appeal to VCAT around particular disciplinary issues.

The feedback I have gotten from the MAV and from others is that they believe there still should be an appeal mechanism. It says in the bill that, yes, there should be procedural fairness. Procedural fairness, I suppose as a statement, is in the eye of the beholder. So the Local Government Inspectorate going through their particular processes could say, ‘Yes, we have delivered procedural fairness.’ The councillor in question that has been investigated may not think he or she has had procedural fairness. The reason that amendment is there is that those councillors deserve the respect of having an appeal mechanism to make sure that if they do not believe they have had procedural fairness, they actually have an opportunity to appeal that. Part of that process should be a mediation process first, before they actually end up in a court or in VCAT. There should be processes there that show respect to those councillors as a genuine third tier of government so that they can actually appeal those particular penalties or sanctions before they are put in place.

As I said before at the start of this, Winston Churchill said that our form of democracy is not perfect and not everyone knows everything. I think that would equally apply to the integrity agencies – that there needs to be checks and balances. If someone goes to court for an offence and they do not believe the legal issues have been dealt with properly, they have a right to appeal to a higher court. With the way this bill is written at the moment, councillors could be suspended without having a right of appeal. I think that is something that we would like to see inserted in the bill, and we are happy to have a discussion with the Minister for Local Government between houses about how that procedural fairness might be better defined so that people do have a right of appeal. That is something that the MAV have been very strong on; they actually want to see procedural fairness in that particular process there.

The last issue, to finish off, would be the issue of training. This bill sets out very clearly that new councillors have to do training, effectively before they get paid their allowances, to be a councillor. Mayors or deputy mayors have to do that training also before they get their allowances. If there is the case of an acting mayor coming in and they are going to be an acting mayor for more than 30 days, they have to have training, otherwise they cannot be an acting mayor. I suppose that is very, very prescriptive, and even for those that have been a councillor for one term, two terms or three terms, they have to redo all that training at the start of the next term of council. No-one is saying that councillors should not do training, but I think there has to be some flexibility there – that if you are going for a cert III or a cert IV in a workplace, you actually get some credit for prior learning. If you have been a councillor for a number of terms or if you have been a mayor, why should you have to go through all that training again? It will end up driving people away from what we want. It is difficult as it is, in particular in regional Victoria –

Members interjecting.

Peter WALSH: It is difficult enough to get councillors of the calibre that we want, particularly in regional Victoria, to give up their work time or to give up the cost it has on their business to get involved. Local government is very important, and I think the interjections from the other side of the table show the disrespect that the Allan government holds for local government here. We want to actually have the best possible people doing the councillor role. We want them to have the opportunity to have genuine input into how a council is actually operated rather than having a CEO dictate to them as to what can get on the agenda and what cannot get on the agenda, rather than having them tied up doing training when they may have already done it in the past and they do not get any credit for what they do. If you have had someone that has had business experience or had management experience in business, they should be listened to by council.

I have a recent example. One of the towns in my electorate is at very great risk of stormwater flooding in a major rain event. One of the councillors is actually an earthmoving contractor – owns all the machinery, has done this role for something like 30 years, actually understands how to read a map with heights and falls on it and understands what needs to be done – but he actually cannot comment on it in the council room because that is an administrative issue, not an issue for the councillor. He has seen time and time again where council has wasted money because projects have not been done properly. He can see it as a contractor in his day job, but as a councillor he is not allowed to comment; he is not allowed to talk to the staff to say, ‘Actually, if you look at the levels, the water’s not going to run that way, the water’s going to run the other way.’ He is not allowed to talk about those particular issues; they have been told that is management. He cannot make a comment on those issues. He cannot talk to the staff. The minister might like to go and talk to some councillors about the challenges they find in how the rules between management and council work in the council chamber. If a CEO does not want councillors to comment on anything, they can stop them commenting on those particular issues.

We would like the government to give due consideration to the reasoned amendment I put forward and how that might be able to be implemented in a textual amendment in the upper house. That is the reason I have flagged that reasoned amendment, so that discussion can take place between houses. The minister made comments about what the MAV may or may not have said, but if the minister talks to the MAV, I think she will find that they are very strong on this particular issue and that they actually want an appeal mechanism for councillors. They do not want an unelected body making decisions on whether they continue as a councillor or whether they are suspended or giving advice to the minister to suspend them. I understand the issue of going to a single councillor versus having to dismiss or suspend a whole council, but I think the process that has worked in the past, where that comes to this chamber and the other place, provides the checks and balances around it rather than having unelected officials just making a carte blanche rule that ‘You’ve done something wrong. This is how we’ve proved it. You’ve got no right of appeal, and you’re stood down for 12 months,’ which will tarnish their reputation forever. They need that opportunity for some procedural fairness and a right-of-appeal mechanism into the future so that they actually are not having their reputation trashed unfairly.

Natalie HUTCHINS (Sydenham – Minister for Jobs and Industry, Minister for Treaty and First Peoples, Minister for Women) (13:52): I rise to speak on the Local Government Amendment (Governance and Integrity) Bill 2024. It is my pleasure to be able to speak on this, because this legislation is crucial for ensuring ongoing integrity, accountability and governance across our councils. But most importantly it is about respect. I agree with the previous speaker when he said it is all about respect, and that is exactly what this bill goes to, because unfortunately there are a small few councillors out there that are extremely disrespectful to their colleagues and to officers and even to the ratepayers that they represent. What we want to do is make sure that there is integrity, accountability and governance that is built in through this legislation across all of our councils. What this bill will do is mandate ongoing training for mayors and councillors. It will improve early intervention in regard to conduct issues and effective dispute resolution, which I know is something that many councillors and CEOs have been asking for across the state, because this sort of unacceptable behaviour, where it happens, disrupts the normal business that councils need to undertake. And of course this bill strengthens the oversight mechanisms to support good governance.

The opposition have put up what they call a reasoned amendment – I would say it is pretty unreasoned ‍– and that is an amendment that goes to show that they have no confidence in the integrity of the agency. We know that this is a really, really important step as we move forward. Both when I was a former minister for local government but also as a local MP, I witnessed the spectrum of council operations, from delivering for local residents and ratepayers and communities to sometimes failing their obligations primarily due to lack of discipline and unruly behaviour by individual councillors.

Following our 2014 election commitment to reviewing the Local Government Act 2010, we embarked on the first in-depth review of the act since its inception. This responded to the loud calls for reform from the local government sector and the community. Through that process councils were given greater authority to deal with local misconduct internally, including new powers to address alleged code of conduct breaches. I want to thank the minister at the table, the Minister for Local Government, for her work and her department’s work on this, because I know there has been ongoing work and a load of consultation.

What this bill will introduce is a uniform code of conduct. That uniform code of conduct will be subject to further consultation with the sector, and that is a good thing. The poor conduct that is an ongoing challenge for many councils and is caused by just a small minority of councillors’ behaviours will be dealt with through this uniform code of conduct. The minister is bringing a solution to the Parliament for many issues that have been raised with her by the sector. The bill requires all 79 councils to adopt the model councillor code of conduct, and a breach of the code will be considered misconduct and will be grounds for internal arbitration processes. The bill also requires councils to implement any regulations made in relation to the code, which may include processes for resolving disputes internally.

Councillors are expected to work together for the benefit of their local area. Good governance requires hard work and cooperation between councillors, between the mayor and their councillors and between officers. It is unfortunate when one bad apple abuses their privilege and brings the entire council into disrepute. I have seen shocking misconduct by some councillors, including bullying, including racism, including sexism and including the leaking of confidential information and the spreading of fake information about other councillors. This legislation aims to address such issues and support councils across our state in successfully performing their functions.

One thing I have heard clearly over the years is the need for candidate training, and that is something that this goes to. We have already introduced compulsory training for all Victorians who wish to nominate as a candidate in any council elections, and now this bill provides for ongoing training for councillors and mayors once elected, clarifying their responsibilities, because, believe it or not, there are councillors that claim that they did not know their behaviour was unacceptable. This is very good work and will make sure that councils are delivering on their responsibilities. We are reinforcing the foundations of good governance in local councils, and we are embedding integrity and accountability. This bill will require councillor induction training to be completed within four months of taking the oath, professional development training and mayoral training to be completed by all mayors, deputy mayors and acting mayors within one month of appointment. Beyond this, the bill inserts new provisions to require every councillor to complete professional development training annually and to ensure councillors understand their roles and responsibilities.

I highly recommend this bill to the house. I encourage women to stand for council later this year. At the last elections we saw 272 women elected, representing 43 per cent of councillors. We have a target now of 50 per cent at the next election, but we know cultural issues in some councils discourage quality women candidates from nominating or continuing their local government careers. We strongly encourage women to stand. This bill will help you, and these reforms are crucial to addressing structural and cultural issues that deter women from standing for or from staying in public office, such as gendered stereotypes, discrimination, sexual harassment and online trolling. By strengthening council capabilities, addressing inappropriate behaviour and elevating governance and integrity we will create more inclusive environments and foster better diversity. Finally, I would encourage everyone to support this bill and encourage MPs in this chamber to support women to stand for council later this year. I commend the bill to the house.

Business interrupted under sessional orders.