It looks as if the Gillard government is serious about pushing ahead with a referendum alongside the federal election, to change the constitution in relation to local government. Local Government Minister Anthony Albanese released the proposed draft of the amendment last week.

There have been two previous referendum questions on local government, both defeated: one in 1974 that was broadly similar to this one, and one in 1988 that was completely different, in that it just “recognised” local government but didn’t alter anyone’s financial powers.

Yesterday The Australian Financial Review reported a Nielsen poll showing 65% in favour — but not actually in favour of the government’s proposal, just in favour of “recognising local government in the Constitution”.

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That would have been an accurate description of the Hawke government’s proposal, back in 1988 (which was heavily defeated). It proposed to recognise local government, but not to give the Commonwealth additional powers. The current question is completely different: there’s no explicit recognition, but there is a new power, for Canberra to fund local government directly, on such conditions as it thinks fit.

So the support that Nielsen found shouldn’t be taken too seriously. The usual pattern in referendum campaigns is that support plummets once debate gets properly underway and people realise (or, depending on your point of view, are fooled into believing) that there’s more to the question than the government is letting on.

It’s not coincidental that the few referendum questions that have been approved (the last ones were in 1977) have generally been those that can’t be represented as increasing federal power. Albanese’s draft is clearly not in that category.

It’s not only the supporters of the local government change who have been misrepresenting things. One of its opponents, the Institute of Public Affairs, argues that it “is at odds with the will of the Australian community, expressed in two previous referendums”. But only the Whitlam government’s 1974 proposal was at all comparable to this one.

Many people dislike local government, so it’s an understandable temptation for opponents of the referendum to try to latch onto that. But the real problem isn’t giving local government a status that it doesn’t deserve; the problem is messing up the lines of financial responsibility in the way that the federal government has already done to the states. As I blogged recently:

“Now the government wants to extend this mess to cover local government as well … Sensible constitutional revision would start by restricting the scope of section 96, not by expanding it … If federalism is going to work properly, then those that spend the money should as far as possible be responsible for raising it.”

Which brings us to the remarkable disingenuousness of the government’s argument. Albanese says (correctly) that the amendment would only add 17 words to the constitution. He recites the text of section 96, up to and including the proposed change — and then inserts a full stop. Constitutional law professor Anne Twomey takes up the story:

“Yes, there was a full stop at the end and the phrase ‘on such terms and conditions as the Parliament thinks fit’ had magically disappeared. Was it a bit of spin by a media adviser who thought it might be clever not to mention that the funding to local government would be tied up by burdensome and intrusive conditions? Or was it simply ignorance?”

No doubt tongue in cheek, Twomey raises the possibility that:

“Perhaps they meant it. Perhaps the lasting gift of the Gillard government will be terminating the Commonwealth’s ability to place terms and conditions on its grants.”

As the draft bill makes clear, the government has no intention of giving up its power to hamstring the states; the whole purpose of the amendment is to extend that power to local government. But nor does the omission of the crucial words seem to be just a casual error (it’s repeated here).

The fact that the government feels the need to so clumsily disguise the actual effect of the amendment suggests that it also doesn’t take seriously the claims of overwhelming support. The referendum’s only hope for success is to be slipped past as a bit of uncontroversial housekeeping. Its chances don’t look good.

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Peter Fray
Peter Fray
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