Sunday, January 29, 2006

Governor in Council working in the past

New provisions of the Local Government Act in dispute


A whole host of amendments were made to the law affecting the governance of local councils.

One of the sections that were amended was section 74 Councillor Allowances.

It is worth noting the changes to the Act, which need to be read carefully, to try and understand what was envisaged and what will and should take place. (extract of before and after below)

Prior to the changes made to the Local Government Act, in 2003, the Government was able to control and limit the amount of allowances paid to Local Councillors.

This is done by way of an Order in Council - a joint decision of the Cabinet and Governor of Victoria published in the Government Gazette.

In 2001 the Governor in Council made an order, pursuant to section 74 of the Act. It is this executive order that limits and governs Councillors' allowances based on the category allocated to each Council.

A potential problem, that has been identified, is that the Bracks Government in 2003 replaced section 74 of the Local Government Act 1989 with whole new provision dealing with the payment of Councillors' allowances - Section 74 was changed and new sections (74B and 74C) modified/added (see extract below).

Previously orders of the Governor in Council were made under Section 74. Now they fall under the provisions of the revised section 74B.

So what you might say it's just re-indexing? Well there is more to it then that.

- If you read the wording before and after the changes you begin to notice the differences and the question you need to ask why was it modified and what is the effect of the modification?

There are different mechanisms at work depending on if you use Orders of the Council made under the old regime or an Order of Council made under the new section 74B.

Under the old system the Government would just make an executive decision and the cap was in place. To make any changes to the extent of allowances paid to Councillors all that the executive required was to amend the original order made in 2001.

The new system is somewhat different.

There is now a new mechanism or process that has to be followed in determining the allowances paid to Councillors and Mayors (although not fully implemented - why we ask?).

Orders in Council are now made pursuant to section 74B not section 74.
(As we understand each section of an Act is different and section 74B can not be construed as being a sub-set of section 74)

Section 74B requires the establishment an independent Local Government Panel to consider and make recommendations related to the any amendment of any Order seeking to change the allocated category of a Council which in terms determines the extent of limits to any allowance payable to Local Councillors. (s 74C(3))

The interesting part is that the Government MUST adopt the recommendations of the panel. (s 74C(4)). It no longer can make an executive decision as to which category a Council should be allocated (responsibility for determining allowance payments has effectively been delegated).

At first this looks like a hands-off approach with the decision made by an independent and hopefully professional panel, but is it?

The Government still get to appoint the panel, but it can not be sure as to the outcome of the panel findings, the Government have limited control and may be handing a loaded gun that may just explode in their faces.

It could be that a decision of the appointed panel is not to the government's liking or worst not palatable to the broader community. Under the provisions of the current act there is nothing that the government could do, it has to adopt the recommendations of the panel. The Government's hands are tied.

So what you may say? Well it gets more interesting.

The provision of the act related to the requirement for a panel only come into effect if and when the Governor in Council makes an order under section 74B - something that the Government to date has not done.

Why? It has been over two years since the legislation was changed.

Of equal concern is that there is no longer provision under the revised Act for the Governor to make any orders under section 74 (It lapsed when the act was changed). The authority for the Governor in Council to make any order is now pursuant to section 74B not section 74.

However the Government continues to make orders amending the original substantive Order made under the old section 74 of the act (now modified) but under what authority?

We do not claim to be a constitutional lawyers but it does seam rather strange and somewhat convoluted that the Government continues to operate under the provisions of the old act and not the current Act.


Why has the Government not made any orders pursuant to revised section 74B of the Local Government Act (as currently exists), revoking all previous Orders made under the old provisions of section 74 and replaced them with a new Order all together? This would have been a simple task but (for some reason) has not been implemented.

Strangely this is not what has happened. The Governor in Council still continues making amendments to the original orders issued pursuant to section 74 not section 74B.

If the Governor in Council has no authority to make an order pursuant to section 74 and that new orders should have been made pursuant to section 74B instead, then existing orders could be considered`null-in-void. It's a technical point but never the less potentially significant one - one that requires clarification.


There are questions that we believe need answers.

1. Are the Orders of the Governor in Council made pursuant to section 74 since 2003 valid under the current law?

We acknowledge that section 74B(4) states:

Any Order in Council that was made under section 74 (as in force immediately before the commencement of section 55 of the Local Government (Democratic Reform) Act 2003) and that was in force immediately before that commencement continues in force until it is replaced by an Order in Council under this section.

2. Does Section 74B entitle the Governor in Council to continue to modify old orders as opposed to making a new order under section 74B?

3. If the Orders in Council are not valid what is the status of the payments that have been made under the orders amended since 2003?

4. Why did the Government not make a new order under section 74B and replace the existing orders made under the old Act?


The answers may be in the detail of the legislation:

It could be that the Government is not really happy with the current legislation, by not making a new order under section 74B they are delaying or avoiding the implementation of provisions in the act they really do not want implemented?

We think this is the case and reason why a new order has not been made.

If they open the gates then the horses will bolt and it is the Government that will be held responsible for not taking control.

Section 74C only comes into play pending the establishment of orders made pursuant to section 74B order which to date do not exist, there for the provisions of section 74C do not apply.

The new provisions are a recipe for disaster and will result in a significant increase in the level and amount of allowances and benefits paid out to Local Councillors with the State Government unable to control it without legislation amending the Local Government Act.

There to needs to be more checks and balances in the system. Councillor allowances and benefits need to be subjected to a formal public review.

Councillors are elected representatives they are not employees. Any determination of allowances and benefits should be determined prior to an election and not immediately after.

The legislation as it stands is messy and fail to see what was wrong with the old version if the Government is not going to use the new provisons then why did they change it?.


- Extract of the Local Government Act as it exists today.

Part 4—Council Administration
Local Government Act 1989
Act No. 11/1989

74. Councillor and Mayoral Allowances

(1) A Council must review and determine the level of
the Councillor allowance and the Mayoral
allowance within the period of 7 months after a
general election.

(2) Subject to sub-section (3), the allowances
determined under sub-section (1) are payable
during the next 4 financial years.

(3) A Council can only vary the allowances
determined under sub-section (1) if—
(a) an Order in Council has been made under
section 74B which changes the range of
allowances that apply in respect of the
Council; and
(b) the Council has conducted a further review
of allowances.

(4) A person has a right to make a submission under
section 223 in respect of a review of allowances.

74A. General provisions relating to allowances

(1) A Mayor is not entitled to receive a Councillor
allowance if the Mayor is entitled to receive a
Mayoral allowance.

(2) A Council must pay a Councillor allowance or
Mayoral allowance as specified in the relevant
Order in Council made under section 74B.

(3) A Council does not have to pay an allowance
under section 74 to a Councillor or Mayor who
does not want to receive an allowance.

(4) A person is only entitled to receive an allowance
under section 74 while he or she holds the office
in respect of which the allowance is payable.

74B. Allowance Orders

(1) The Governor in Council may by Order in
Council—
(a) specify the amounts of allowances payable
by a Council as a Councillor allowance or a
Mayoral allowance;
(b) specify limits on the amounts of allowances
payable by a Council as a Councillor
allowance or a Mayoral allowance;
(c) vary the amount, limit or range of
allowances payable by a Council as a
Councillor allowance or a Mayoral
allowance;
(d) specify the manner in which Councillor
allowances and Mayoral allowances are
payable.

(2) An Order in Council may make the same
provision for all Councils or may make different
provision for particular Councils or for different
categories of Councils as specified in the Order in
Council.

(3) After an Order in Council has made provision for
the categories of Councils, an Order in Council
can not be made to change the category of a
Council unless a recommendation to that effect
has been made under section 74C(3).

(4) Any Order in Council that was made under
section 74 (as in force immediately before the
commencement of section 55 of the Local
Government (Democratic Reform) Act 2003)
and that was in force immediately before that
commencement continues in force until it is
replaced by an Order in Council under this
section.

74C. Advisory panel

(1) The Minister may appoint a local government
panel under Part 10A to advise the Minister on
matters relating to Councillor allowances and
Mayoral allowances.

(2) A Council may make a submission to the local
government panel requesting that an Order in
Council be made under section 74B to change the
category of that Council.

(3) If after considering a submission under subsection
(2) the local government panel considers
that the category of the Council should be
changed, the local government panel may make a
recommendation to the Minister that an Order in
Council be made to change the category of that
Council.

(4) The Minister must give effect to a
recommendation under sub-section (3).

75. Reimbursement of expenses

A Council may reimburse Councillors or members
of Council committees for necessary out-of pocket
expenses incurred while performing duties
as a Councillor or committee member.

- Extract of the Local Government Act prior to the amendments made in 2003 -

74. Allowances

(1) A Council must pay to each of its Councillors the
allowance specified in any Order in Council made
for the purposes of this section from time to time.

(2) A Council may pay to each of its Councillors a
higher allowance than that required by sub-section (1).

(3) However, the amount of the higher allowance—
(a) must not exceed any limit specified in any
Order in Council made for the purposes of
this sub-section from time to time; and
(b) must be the same for each Councillor.

(4) An Order in Council may specify that amounts
and limits higher than those specified for the
purposes of sub-sections (1) and (3) are to apply
to Mayors.

(4A) A Mayor is not entitled to receive an allowance as
a Councillor if she or he is receiving an allowance
as a Mayor.

(4B) An Order in Council may specify that different
amounts and limits are to apply in respect of
specified categories of Councils.

(4C) In paying an allowance under this section, a
Council must make the payment in the manner
specified in the Order in Council that specified the
amount of the allowance.

74B. General provisions concerning allowances

(1) A Council does not have to pay an allowance
under section 74 or 74A to a Councillor who does
not wish to receive it.

(2) A person is only entitled to receive an allowance
under section 74 or 74A while she or he holds the
office for which it is payable.

75. Reimbursement of expenses

A Council may reimburse Councillors or members
of Council committees for necessary out-of pocket
expenses incurred while performing duties
as a Councillor or committee member.


-- Governor in Council Orders published in the Government Gazette --

Gazette:G26 Summary:Local Government Act 1989 S74 - Amending the Councillor & Mayoral Allowances for Greater Dandenong, Port Phillip, Whittlesea Page
Issue Date:30 Jun 2005
Download Gazette: http://www.gazette.vic.gov.au/Gazettes2005/GG2005G026.pdf

Gazette:G26 Summary:Local Government Act 1989 S74 - Amending the Councillor & Mayoral Allowances for Greater Dandenong, Port Phillip, Whittlesea
Issue Date:30 Jun 2005
Download Gazette:
http://www.gazette.vic.gov.au/Gazettes2005/GG2005G026.pdf

Gazette:G13 Summary:Local Government Act 1989 S27 - Ministerial Order fixing Allowances for Councillors in Country Areas
Issue Date:29 Mar 2001
Download Gazette:
http://www.gazette.vic.gov.au/Gazettes2001/GG2001G013.pdf

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