STATUTES AMENDMENT (LOCAL GOVERNMENT REVIEW) BILL

Mr PEDERICK (Hammond) (12:39): I rise to make a contribution to the Statutes Amendment (Local Government Review) Bill 2020. I note there has been plenty of discussion at a range of levels and plenty of discussion inside the Local Government Association as to this review. I certainly understand that locally in my councils and across the state a bill that enhances the ability to manage behaviour better internally in councils will be widely welcomed.

Currently, what seems to happen is that as soon as there is a hint of an incident, everything gets legalled and you end up with councils having legal fees that can run into hundreds of thousands of dollars. For a regional council and one like my home council, at Coorong, that adds up. When you are a ratepayer, you would rather your money be going into roads, rates and rubbish. I know councils do a lot more than that—before I hear the outrage—but that is their core principle still, and they need to be kept up.

As a general overview of the Statutes Amendment (Local Government Review) Bill 2020, it does represent the most significant changes in our local government system that have been brought forward in a single bill since parliament passed the Local Government Act at the end of the last century. The bill is the culmination of 18 months' worth of discussion and consultation, and it is part of our Marshall Liberal government's comprehensive reform agenda aimed at easing the cost-of-living-pressures for South Australians and providing better services.

In regard to some of the key reform areas, the program has focused on four key areas where it was clear that improvements in the practice and the system of local government are needed. These areas are stronger council member capacity, better conduct, helping our council members to perform their roles to the best of their ability and ensuring that the right measures are in place to deal with conduct issues when they arise. I note that there is quite a large section of the bill in place to deal with these matters, including the provision of a panel to deal with codes of conduct.

Codes of conduct are one of the matters I was referring to earlier in my contribution. It does eat up a vast amount of resources—and not just money, but time, for mayors, chief executive officers and other people in the system to get things right. It does seem to eat up an inordinate amount of time. In Coorong council there was an incident at a meeting where one councillor slammed a laptop down on another councillor's hand; that is assault, and sadly I do not think the right outcome has come of that.

These are matters that do need a better system and a clearer system, a more transparent system, to make sure that people have taken the time to represent their community at the local government level—and I applaud everyone who does take the time, whether they be elected members or mayors. They are doing a great job for our local community but, as I said, they need to focus on the job and make sure they do the right things.

For instance, before the last council election, the former Coorong council completely lost their way under former Mayor Neville Jaensch and former CEO Vincent Cammell. They completely lost their way. I chaired meetings—and some of these attendees were multiple attendees—not just as the local member but as a local ratepayer from Coomandook, and 500 people attended these meetings because something as simple as our roads were not being serviced, something as simple as that.

I acknowledge councils do far more than roads, rates and rubbish, but once you start not doing your roads—especially in a rural area with rubble roads where, I can assure you, there is plenty of rubble available, and it is not as if we do not have good stone at Coomandook, Tailem Bend and surrounding districts—and you take your focus off what you need to do, that is when the citizens get outraged. Thankfully, that saw a major change in council. Paul Simmons, a lifelong friend of mine, is now the new mayor. Bridget Mather, who came from Queensland, is the new chief executive officer and she is doing a fantastic job. They are both doing a great job in getting systems back on track.

One thing that councils should also not be involved in is political campaigning. In the last election in March 2018, the former mayor and his CEO campaigned quite openly for the Nick Xenophon Team or SA-Best or whatever they are this week. It was just there in your face. I think they would have been better off sticking to the running of council instead of getting into political arguments.

The code of conduct strategy will help reform local government, help get it back on track and help people, who have taken the time to represent their community in the right way, get on with the job of government at local government level. That is exactly what they need to do.

We are also looking at lower costs, enhancing financial accountability and improving efficiency within the local government sector by delivering greater confidence in council audits, improving council decision-making, financial reporting and making information about council financial performance more accessible to both council members and communities. This is vitally serious.

There was a rumour going around my area about one of my councils—it was not Coorong. I am not going to name the council. They said that their budget was going to blow out by another $10 million by a certain date. I did my research, I went to visit the council and the story was completely unfounded. I rang the constituent who had informed me that this was happening and this was the story being spread around the local area and I told him I had met with the council and that it was just not true—it was not true.

People should not be chasing ghosts; they should look at reality and look at the financial documents that they can access or go and talk to the councils. Councils are there to help and they are doing it in tough conditions, as everyone is, especially this year with the COVID-19 requirements. We also need efficient and transparent local government representation, improvements to election processes that are fair, transparent, run independently, that provide the right information at the right time and encourages participation from potential council members and voters alike.

We are also looking at simpler regulation in the bill, improvements to rules and regulations that seek to protect the interests of the community by making sure that councils operate with transparency and accountability and that their decisions and actions are and are seen to be in the public interest.

Earlier in my contribution, I was talking about stronger council member capacity and better conduct, and a new conduct management framework for council members which separates poor behaviour from matters that can affect the integrity of council decisions and which provides clear pathways for the investigation and resolution of issues that arise. There is the introduction of a behaviour standards panel to deal with repeated or serious misbehaviour, to enable more efficient resolution of difficult issues that can arise between council members with an expanded range of sanctions, including the suspension of members. As indicated, I am aware of some poor behaviour and we do need to have better behavioural management in place. I certainly believe that the bill will do that, and it is welcomed by those in the local government sector.

There is the review of other conduct matters within the Local Government Act 1999, including the simplification of conflict of interest provisions, clarification of council employee conduct requirements and council members' obligations to complete appropriate training, and a new role for the remuneration tribunal of South Australia to set remuneration bans that will apply to all council chief executive officers.

Chief executive officers are well remunerated. If a CEO is getting the same pay as a backbencher, they are right at the lower end of the scale. In fact, I would not think of anyone in the city council whose package would be anywhere near $200,000 a year. Good on them, as it is a very competitive industry, but many chief executive officers will be getting well north of $300,000. Some would be on the rate of a minister, which is around $350,000 per annum or more. Good on them if they are doing the job, but they are well remunerated.

This bill creates a new role for the Remuneration Tribunal and remuneration bands will apply to all council chief executive officers. Part of what we are looking at is lower costs and enhanced financial accountability. The introduction of a rate monitoring scheme will require all councils to receive, consider and publish advice on proposed changes to their general rate revenue each year from a designated authority. It looks as though the Essential Services Commission of South Australia (ESCOSA) will run that.

The local government bill 2020 includes an ability for the minister to make directions to a council on receipt of a report from the designated authority if there is a view that a council has failed to respond appropriately to this advice. There will be a requirement for all councils to include a funding plan within their long-term financial plans, which outlines expected revenue amounts and sources over the 10-year period. It is expected that this will be an important basis for the advice provided by ESCOSA within the rate monitoring system.

There will also be an expansion of the role of councils' audit committees to become audit and risk committees, to provide councils with greater assurance on the adequacy of their financial and risk management practices. There will also be a requirement for all audit and risk committees to include a majority of independent members, as opposed to a majority of council members.

There will be an expansion of the Auditor-General's powers under the Public Finance and Audit Act 1987 to include the review of councils or their operations and to include the ability of the Auditor-General to audit specific councils. There will also be the removal of councils' ability to use site unimproved property valuations as the basis of rating.

The inclusion of heads of power in the Local Government Act 1999 will require councils to provide the Minister with annual information that may be necessary to establish and maintain a council information website, as included in the government's response to the South Australian Productivity Commission's final report, Inquiry into Local Government Costs and Efficiency.

I think the rate monitoring scheme is one issue that has raised a lot of discussion within the local government sector and with constituents. Obviously, this is where the rubber hits the road. The reforms are focused on improving the quality of information and advice that is provided to councils, their administrations and their communities. This advice is critical when councils are fulfilling their responsibilities to manage their financial position, and most importantly, when they make a decision about the rates that their community will pay.

We have certainly listened to feedback from the local government sector and we have provided a scheme which creates a more nuanced approach than what we were looking at with the original rate capping scheme. Instead of a flat cap on rates across the state, each individual council will be provided with advice as to what is an acceptable increase in their area, taking growth, debt levels and major projects into account.

Councils will now be required to receive and consider advice from an independent body—again, which most likely will be ESCOSA—on their proposed revenue from general rates for each financial year. Councils will need to provide information on their proposed rate revenue to ESCOSA by February in that financial year, along with critical information on the context on which this revenue change is proposed.

This will include the council's view of the impact of the rate change on its ratepayers and whether the council has considered alternative mechanisms, such as the responsible use of debt, use of council reserves or exercising spending restraint and, most importantly, how the proposed change is consistent with the council’s long-term financial plan and infrastructure and asset management plan.

The council must also include the advice from ESCOSA in its draft business plan every three years when it is released for consultation, along with the proposed response to this advice. Councils will not be required to comply with the advice but, if they do not propose to implement it, they should clearly explain to their communities why that is the case. When the council makes its final decision in the context of adopting its annual business plan and budget, this should include advice received from the independent body, which will be ESCOSA, and the council's response.

The intention of this is to give ratepayers greater confidence that the rates they are paying, which is the biggest issue when rate time comes around from community members who come into our offices as state members, are what is necessary for their councils to provide the services they value. If ESCOSA is of the view that a council has not responded appropriately to the advice then that may be reported to the relevant minister, which is obviously the local government minister of the day.

Efficient and transparent local government elections are another vital part of the reform. This will change a lot of views. We do not have it in the Coorong at the moment. We do not have a directly elected mayor. The mayor gets elected from the body of councillors once they are elected, but it will be a requirement for all councils to have a directly elected mayor and to consist of no more than 12 members, so there will be more reform where some councils obviously have more members than that.

There will be a simpler process by which councils regularly review their internal structures and improvements to the local government election processes, including ESCOSA being responsible for receiving and managing nominations for council, requiring candidates to release more information about themselves and earlier information about the large campaign donations they receive.

Part of the bill will require all councils to take greater steps to inform property franchise holders of the need to self-enrol and require the City of Adelaide to manage a process to ensure that property franchise holders have a natural person nominated to exercise their vote to prevent a potential challenge to these elections. The bill will also narrow the circumstances in which supplementary elections must be held to reduce costs for councils and require any council member standing for state parliament to have a leave of absence from the council member role during the election campaign.

One of the final issues I will talk about is the simpler regulation that will come into place that is replacing prescriptive and detailed community engagement requirements in the Local Government Act 1999 with a simpler and far more flexible community engagement charter, which the community will enjoy I am sure, which will include streamlined requirements for the publication of notices. There will also be improvements to councils' internal review of decisions to enable councils to better manage persistent or vexatious requests, which we all see at our state government level.

There will obviously be requirements removed around informal gatherings in favour of a simpler approach to the proper management of information and briefing sessions and streamlining of the council members' register of interest processes. I welcome this bill to the house. I welcome the debate. I welcome positive amendments that come forward to make this work better.

I am certainly a strong believer in the three levels of government, whether they be local, as we are discussing now in the Statutes Amendment (Local Government Review) Bill, state government or federal government, because you need that representation close to the ground to make things work. That is why I am a strong believer in local government working alongside state government, as well as the federal government, so that we get the right result for our communities. I certainly trust and hope that this bill will give us an act that will help drive positive reform in the local government sector well into the future.