This week, the Parliament has been debating the Constitution Alteration (Local Government) Bill 2013. It is the legislation to authorise the amendment of the Constitution to recognise local government. If the referendum is successful, section 96 of the Constitution will read as follows:
During a period of ten years after the establishment of the Commonwealth and thereafter until the Parliament otherwise provides, the Parliament may grant financial assistance to any State, or to any local government body formed by a law of a State, on such terms and conditions as the Parliament thinks fit.
(the bold part is the amendment to be inserted)
So, the point of the amendment is to allow the Commonwealth to bypass state governments and provide funding to local governments “on such terms and conditions as the Parliament thinks fit”. It carries with it the obvious potential to turn local governments into clients of the Commonwealth Government, a body which, because of its superior power to raise revenue, is likely to become a much greater influence over local governments.
That is as it may be, but the purpose of this post is to examine the explanatory memorandum which comes with the bill. A bill’s explanatory memorandum is, as a matter of statutory law, a document to be taken into account in interpreting a bill.
It makes extensive commentary about the effect of the amendment.
For example, the memorandum says:
“The amendment would not prevent a State abolishing any local government body, or curtailing the activities or expenditure of a local government body.”
One wonders whether a power to destroy a local government could be exercised if the local government had just received Commonwealth funding and, if it could, what would happen to the money?
Also, if that is correct, what is to stop a State from simply legislating to preclude any local government ever from spending money it obtained from the Commonwealth. Obviously such a law would be at odds with the intention of the people in authorising such an amendment at a referendum.
State legislatures are, as an incident of recognition of state Supreme Courts in the Commonwealth Constitution, precluded from abolishing or seriously curtailing the jurisdiction of their respective Supreme Courts. If that is the effect of recognising those institutions, why would recognition of local government bodies not have a similar effect? The ability to abolish a local government yet to fulfil the terms of a Commonwealth financial grant would be an intrusion on the Commonwealth’s new power to grant that assistance. It is difficult to see how those two prerogatives can stand together.
Crucially, the explanatory memorandum cannot have its ordinary effect. An explanatory memorandum has value as an aid to interpretation because it is before the Parliament at the time that the Parliament passes the legislation; it is a window into the intention behind the legislation. There will be no explanatory memorandum before the people when they deliberate on the referendum question. There can be no statutory explanatory memorandum for the Constitution. The words which are proposed will be construed according to their ordinary meaning and without any reference to the explanatory memorandum.
For that reason, the explanatory memorandum is a fraud.
It is a matter of common experience that tensions arise between State Governments and local governments from time to time. A few years ago, the Queensland State Parliament passed laws amalgamating local governments because some of them were hopelessly insolvent. Many citizens were intractably opposed to the amalgamations.
If unpopular amalgamations were to happen in the future, one could well imagine a local government in receipt of unexpended Commonwealth monies arguing that abolition of it would intrude on the Commonwealth’s exercise of its power under section 96 to grant the money.
The proposed Constitutional amendment is dangerous and the arguments in favour of it are erroneous.