Labor's bid for local control

Bookmark and Share Deregulation Unit | Tim Wilson
The Australian 14th May, 2013

Last week Julia Gillard announced a referendum to amend the Constitution allowing the federal government to fund local government directly.

The Prime Minister argued: "This is about saying yes to retaining important community benefits. This is about saying yes to our communities."

Gillard is wrong. It will say no to local communities, and yes to a Canberra takeover.

Different levels of government are given, rightly, different responsibilities.

Federal government is responsible for foreign affairs and those responsibilities that require national consistency, and has little service delivery capacity because it is so distant from Australians.

States are responsible for matters that marry local responsiveness with scale.

Local government delivers services that require direct relationships because of their closeness to Australians.

Constitutional recognition will turn our democracy on its head and perpetuate centralisation.

Canberra freely will be able to direct local government by attaching policy strings to funding.

History has shown with federal-state tied grants that strings from Canberra have become more numerous and tighter with each funding agreement.

If successful, the referendum will lead to regulations over bin collections in Broome, Buderim and Burnie being influenced from the PM's Canberra office.

Part of the reason Labor and some Coalition MPs support the referendum is because it enables them to become kingmakers in their communities by tying federal government largesse to their preferred local outcomes.

If the referendum is successful the worst, sleazy NSW Labor Party behaviour will go national.

And there'll be almost no restrictions on the breadth of areas. The dubious Financial Framework Legislation Amendment Act 2012 gives the commonwealth the power to spend in 415 areas of public policy, well beyond constitutional restraints.

The federal government is claiming that it needs constitutional recognition following restrictions imposed by the High Court.

It's wrong. Canberra still can fund local government through the states. It just doesn't want state scrutiny.

At present local government is a creature of state government.

Constitutional recognition will give it legitimacy in its own right.

Should oversight from the states corrode, councils will be free from rate-caps to increase costs for families and businesses. Sacking bad or corrupt councils, and amalgamating inefficient ones, will also become harder.

It always has been a Labor dream to undermine the federation, bypass the states and control local government from Canberra.

In 1974 Gough Whitlam's constitutional amendment failed, as did Bob Hawke's in 1988 without a single state voting for it.

Liberals should be opposed, but this time Tony Abbott appears to be pushing for bipartisan support.

Liberals should support federalism because laws and services are best designed and delivered closest to the people they serve.

Former Howard government minister Peter Reith warned on these pages in April that any effort from the Opposition Leader to impose support "will split Coalition premiers, rank-and-file supporters and a swag of his MPs".

Abbott should think carefully. He may not appreciate how deep opposition is within his own ranks to local government becoming a patronage-doling plaything of Canberra.