The September 7 election date means that a planned referendum on financial assistance to local government has been postponed. As required by the constitution, September 14 was the earliest date the referendum could have been put to the voters following its approval by the Parliament on June 24.
That referendum would never have succeeded. Putting it off is a political blessing for Prime Minister Kevin Rudd; he is not saddled with an impossible task that was doomed to defeat, and his ministers are not distracted by it.
The new Local Government Minister, Catherine King, is just out of the blocks. It means she is barely a household name in her own household, let alone the wider Australian electorate. If the referendum had gone ahead, media would probably have turned to Anthony Albanese, who up until the change of prime minister had carriage of the issue. Albanese has more than enough to do with infrastructure, transport and communications. The last thing he needed on his plate would have been a complicated argument about grants to local government.
The Australian local government Association says it is disappointed by the delay. It ought not to be. History tells us that Australians rarely pass referendums. Only eight out of the 44 previous referendums have been carried. They only succeed if supported by all sides of politics, most or all state governments and strong community campaigns. The referendum was doomed the moment Opposition Leader Tony Abbott said if you don’t understand it don’t vote for it. The New South Wales and Victorian governments were against it, and an active “no” campaign had begun.
There is a question about what happens to the funding that the federal government had allocated to the “yes” campaign. The “no” campaigners have called for it to be returned. That will have to wait. If the current government is re-elected, the Minister has promised that the government will hold the referendum at a later date. This probably means money could be put on hold for now and used for its intended purpose when that date arrives. However, a new government could well ask that any unspent money be returned. Already a state minister has called for their local governments to give ratepayers back the money raised for the “yes” campaign.
If the referendum is abandoned, in addition to the funding for the “yes” case there will also no longer be the same requirement for expenses in the Australian Electoral Commission and in the Department of Regional Australia, Local Government, Arts and Sport. You can be sure that somebody in the Finance Department will be keeping track of this for future budget processes.
Failure to conduct the referendum won’t mean local government ceases to operate. The referendum would have amended the constitution so that it read: “The Parliament may grant financial assistance to State or to any local government body formed by State or Territory legislation on such terms and conditions as the Parliament sees fit”. The primary reason for the referendum was to provide greater certainty about the powers of the Commonwealth to provide grants to local governments. Without the referendum the Commonwealth can still fund local governments. It could risk a legal challenge and continue to provide the sort of grants it has in the past, or it could channel the money through the states. The risk of a legal challenge is in any case small. It would be likely to arise only if the Commonwealth started funding controversial activities that states opposed but local government supported.
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This was always going to be complicated to explain. In principle most of the federal parliament supported the concept, including the Coalition. However when the relevant parliamentary committee brought down its report, there was a dissenting report from its Coalition members arguing that there had not been enough time for public consideration and negotiation states.
If a referendum on a question this abstract is to succeed, it needs not months but years of spadework. The need for careful preparation was the reason why the government last year decided to postpone a much more important referendum, recognition of indigenous people in the Constitution.
It is not clear whether Labor was ever really convinced about this referendum on its merits or if it was simply the price of the Julia Gillard deal with the independents. When Gillard ceased to be prime minister, that imperative disappeared. If, however, this was really important to it, a future government will have time to put in the necessary work to convince the electorate. If it had been conducted and lost on September 14 it would have taken decades, probably another generation of voters, before it would have had any chance of being revived.