The Federal Government has released for community comment a proposed amendment to the Constitution which seeks to give financial recognition to Councils.

The Constitution Alteration (Local Government) 2013 (Constitution Amendment) proposes to amend the Commonwealth financial assistance power in Section 96 to create formal recognition within the Constitution that the Commonwealth can offer financial support to Councils. The amended section reads as follows (with changes tracked):

96    Financial Assistance to States and local government bodies

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 on such terms and conditions as it thinks fit, or to any local government body formed by a law of a State.

The amendment is not intended to enable the Commonwealth to interfere with the creation or regulation of local government bodies by the States. Further, all financial assistance must be optional and recipients (i.e. local government bodies) must have the ability to reject the proposed assistance and its terms and conditions.

Notwithstanding that the amendment provides constitutional power for the Commonwealth to grant direct financial assistance to local government bodies formed by a law of a State, it does not operate to prevent grants by the Commonwealth to States for local government purposes.

This constitutional amendment will empower the Commonwealth to financially assist local government bodies to deliver municipal projects and programs, such as local roads, libraries and community centres.

For your ease of reference, please see the linked proposed Exposure Draft Constitution Alteration (Local Government) Bill 2013 and Explanatory Memorandum.

To provide your comments on the Constitution Amendment, you may either contact the Constitution Alteration Bill Hotline on 1800 055 803 or complete an online comment form which will shortly be available on this website. No closing date for submissions has been announced.

Once the final form of the Constitution Amendment is resolved, it must pass both Houses of Parliament by absolute majority following which a referendum will be held. If, in response to a referendum:

  1. the majority of electors in the majority of States approve the proposed law; and
  2. the majority of all electors voting (in all states and territories) approve the proposed law,

the proposed law will be presented to the Governor-General for Royal Assent.