Popularity versus Good Governance So comes under detail scrutiny and review

Is the State Government up to the challenge?

The Age Kenneth Davidson takes a look at the underlying problems and legacy of the Kennet Government's Local Government Reform and the urgent need for the State Government to take the necessary step of intitiating further reform and not just ride the wave.

Davidson take a inner look at the City of Melbourne but teh real soultion lies outside its current boundaries and the need to serious consider a Greater Melbourne in association with electoral reform that restors good governance, accountability and representation.

The sooner the State Government initiates a public review the sooner we can begin to address the issues that confront our city.


Council pathways need urgent repair
Kenneth Davidson The Age June 4, 2007


THE report by Ernst & Young on the operations of the Melbourne City Council is a blistering attack on the administration of the MCC under Lord Mayor John So.

Finances are out of control. According to the report, the council has had negative cash flow of $67 million in the past two years and the cumulative draw on capital over the next 10 years is estimated at $109 million.

The report states there are three key issues that contributed to the problems the council now faces: "Administration and council decision-making processes are often inconsistent, incomplete and based on poor data, the administration has an increasingly top heavy, disaggregated organisation structure, and management of staff performance is ineffective."

Incredibly, So is refusing to take responsibility even though he played an active part behind the scenes in most of these decisions. He claims wrongly the administration of the council is the responsibility of the chief executive, David Pitchford.

Even greater responsibility lies with the State Government, which inherited an electoral gerrymander created under the Kennett government that Premier Steve Bracks has refused to reform because it wants to have both control and distance when the council becomes the victim of its own in-built incompetence.

It is the same governance principle that applies to the franchise model governing urban public transport. The Government wants to earn the gratitude of the big end of town, which wants to make money from building toll roads financed by public-private partnerships. It wants the foreign multinationals that stand behind Connex and Yarra Trams to take the heat for running an inadequate public transport system. The franchisees run the system to maximise their profit from the subsidy, which is now about twice the subsidy that applied just before the MET was taken out of public control, without an improvement in service that could justify the extra cost to the taxpayer. The Government believes it is a price worth paying in order to confuse the issue of who is responsible for the system.

As Transport Minister Lynne Kosky said recently in response to the question, why shouldn't the Government exercise its right to rescind the franchise without penalty in November, the Government didn't want to be responsible for running a transport system. Like So at the local government level, Kosky at the state level uses the same excuse of managerial issues outside her control to duck ministerial responsibility.

The Kennett legacy is still with us. The politicians run a double act. They are dictatorial when it suits them to be seen as decisive, and have the ability to deny accountability when it suits them to put distance between themselves and unpopular decisions.

As the Ernst & Young report points out, the wasteful expenditure, very often with no higher purpose than to increase the standing of So, has occurred because So's control of council numbers means that projects involving additional spending outside the budget global limits, which should be referred to full council, are stitched up by council committees.

"Decisions are routinely made by council committees on recommendations that require new funding," the report said. "This is exacerbated by the practice of not providing full costing details … (this) sets up conflict in the budgeting process as the total cost of approved initiatives exceeds the council approved budget."

The most egregious example of the impact of this approach was So decision to provide $47.5 million to the development of the Convention Centre on South bank on the suggestion of the Treasurer, John Brumby, without referring the proposal to full council until he had stitched up the numbers outside the committee and council process.

So was told by Brumby the project would not go ahead unless the council made the $47.5 million contribution, even before concept plans were drawn up and tenders called for the development, according to Kevin Chamberlin, who was chairman of the finance committee at the time and not a supporter of the proposal.

The Bracks Government may be characterised as Kennett Lite. It's public face is warm, friendly and caring but it is largely responsible to the same interests that stood more openly behind the Kennett government. Like the Kennett government, the Bracks Government hides behind a managerialism that tries to put as much distance between the Government and ordinary voters as possible.

The Bracks Government inherited gerrymandered boundaries and an undemocratic "deeming" provision for voting in MCC elections. The only reforms the Bracks Government introduced were to abolish the ward system and the introduction of direct voting for mayor separate from the election of councillors.

The Government left in place the gerrymandered boundaries introduced by Kennett, which split off parts of North Melbourne, half of Kensington and all of North Carlton.

The deeming provisions means that council officers are legally required to look up directors and owners of commercial property only, and where they are not already on the electoral roll they can be "deemed" to be on the role. Electoral material and ballots will be sent to them and they are entitled to vote, even if they live in China or Hong Kong or elsewhere and have never visited Melbourne or known anything about the candidates standing. The system is wide open to rorting. And yet it hasn't been referred to the Victorian Electoral Commission, which is undertaking a review of local government structures and voting. Why?

Melbourne could get a better set of representatives if the pre-Kennett boundaries were restored and direct mayoral election was abolished, according to Green councillor Fraser Brindley. The present system, which gives more votes to commercial property owners than residents, suits the Government because it favours tame-cat business representatives who share the Government's "development" objectives such as channel deepening, the East-West tunnel linking Hoddle Street and the Tullamarine Freeway, the Convention Centre and special events such as the Grand Prix and the Commonwealth Games.

Population is coming back to inner Melbourne. The gerrymander should be reversed so that the council is elected by a majority of residents rather than absentee property owners. MCC electoral reform and public ownership of the urban transport system are the necessary preconditions to seriously tackling Melbourne's livability issues.

Who is John Barry Myers With Southern Metropolitan heading towards a photo finish every vote counts

History in the making with a close race heading to a photo finish

Southern Metropolitan is shaping to create another historical election event for Victoria with the contest for the last two positions being a close race. A race between the Titans. The best analogy we can come up with is a Yacht race or maybe a long distance marathon. Much depends on who can maintain the momentum as the count continues and who cross the line first.

With an election this tight every vote counts and the two biggest issues are "where does the below-the-line vote go once it leaves the group associated with their first preference vote" and "Who is John Barry Myers" the unaligned independent candidate who is currently on a total of 245 votes.

With a margin of less the 50 votes John Myers's votes (as is the case of every other vote) will play a potentially significant role in the makeup and control of Victoria's future Parliament.

Heading to the courts

All ready we see the contest for Southern Metropolitan heading to the courts, as each main party starts documenting every aspect of the election in anticipation that who ever loses the election will mount a challenge in the courts.

Questions will be asked about the roles and conduct of the Victorian VEC, the lack of information, openness and transparency in the conduct of the election.

All these issues, including our concerns about the Victorian Electoral Commission staff accessing the result of the e-voting polling booth data prior to Saturday's poll (Something Mr Steve Tully, Chief Commissioner, has emphatically denied taking place in spite evidence to the contrary) along with concern about Mr Tully's refusal to provide relevant information to candidates, campaign managers, staff, scrutineers and members of the public in a timely fashion preventing appinted scrutineers and others from monitoring and properly scrutinising the conduct of the election. All issues will be subjected to judicial review.

This could be a repeat of the 1985 Nunawading challenge where Bob Ives was denied a seat in Parliament following a court ruling that called for the election to be rerun. If this was the case then all five positions would have to face re-election leave the ALP without its leader in the upper-house. This would depend on wheather a court injuction would prevent any candiadte form taking office pending the outcome of any court challenge in 1985 Bob Ives was allowed to take up his seat but soon lost it when teh court declared the results inconclusive and callwed for fresh elections. Maybe the losing side will opt to save the public millions of dollars in the cost of a legal challenge and the cost of having to hold fresh elections in Southern Metropolitan Region but that would be asking too much when so much is at stake.

It's too early to speculate with certainty on the immediate aftermath of the election result. The vote is still continuing and there are an estimated (No one seams to know exactly) 30-50,000 votes to be brought on the table (where from who knows certainly not the public). VEC's lack of openness and transparency in the conduct of this election has little to be desired.

Brack's new team announce Ex Melbourne Lord Mayor, Richard Wynne, appointed Local Government Minister responsible for the City of Melbourne

Andrew Landeryou (The Other Cheek) has just reported on the make-up of the new Bracks Government Ministry following a historic 3rd-term win for the Labor State Government

Not a bad team and it was good to see Dick Wynne allocated the most important Local Government Ministry. Dick, a former Lord Mayor of Melbourne, knows Local Government best. He should and hopefully will put his mark on the portfolio and continue with much needed reform of this sector.

When the ALP get around to fulfilling Bronwyn Pike's election promise to residents and business of Kensington to review the City of Melbourne's external boundaries, hopefully Dick will open up the review and include all players and interested parties (including Carlton, Prahran, South Yarra, Kensington and possibly Richmond and Albert Park, South Melbourne, Port Melbourne and St. Kilda regions - By suggestion is that a Greater City of Melbourne should take in the State Seats of Melbourne, Richmond, Prahran and Albert Park based loosely around the former Melbourne Province Boundaries with the Yarra being the central uniting focus)

The ALP has a clear mandate for reform of the inner city council and with Melbourne City Council's senior Liberal party member, Peter Clark, recently supporting a call for a review of the cities boundaries, the idea of Greater Melbourne might manage to make it onto the Governments reform agenda. if its going to happen then Dick is the man to oversee the transition.

We look forward to a successful term in office as the ALP works towards a forth term in 2010.

Melbourne City Games Bank City Council embraces creative accounting to fund Commonwealth Games deficit

Melbourne City Council has been asked to fun an extra 6Muillion Dollars to help bail out the State Government for ever increasing costs associated with the holding of the Melbourne 2006 Commonwealth Games.

The Age March 4, 2006

A deal between the Melbourne City Council and the State Government reported in the Age indicates that the State Government would provide ongoing funding for Moomba in return for the City of Melbourne raiding the Council's bank account an chipping in an extra 6 Million dollars. Although ten full details of the offer are unknown what is clear is that this proposal is creative accounting where the the State Government's cost games are reduced making the squares on the book look more acceptable. (If that is a all possible).

The costs to the Council should be the same on paper 6 Million (less the loss of investment interest) with the State Government paying the Council back in yearly subsidies of Moomba - The State gets reduced games coast and the City of Melbourne books show a decreased costs for Moomba.

The City of Melbourne regally embarks on such creative accounting exercises and this is one reason why the City of Melbourne is prepared to go to such lengths to avoid accountability and disclose of its costs.

By agreeing to help bail out the State Government the City Council hope to win favour and support from Spring Street. If one turns a bling eye to the other. You scratch my back and I'll scratch yours as both entities conspire to mislead the public.

The article published in the Age is well worth reading as the costs published are just the tip of the ice-berg with much more costs hidden away under different budget items or attributed to current costs.

Any serious analysis and review can only raise questions and doubts as to the overall benefits

All in the name of the games.

Melbourne City Bank State Government raids City fo Melbourne Capital reserves to fund speculative private development

The Victorian State Government seeks to acquire 43 Million Dollars of Melbourne City Council's capital reserves to fund speculative private/commercial development, further reducing the Council's working capital ratio.

The Age - $1 Billion Mini-City Along the Yarra

Whilst the city needs investment one has to seriously question if Council's priority should be on underwriting State Government - private investment speculative projects.

If the project is viable then why is the City of Melbourne is being asked to make a contribution and what are the overall benefits?

Melbourne City Council is still paying for Federation Square which has been a financial disaster and a project that was ill-conceived and poorly managed.

More questions then answers

Ratepayers of the City of Melbourne need to know if they are to committee 43 Million Dollars what is the return rate for their investment and will the City be equal partners/shareholders and will the City Council see real dividends from any commercial activity/profit? Or is the City Council expected to just chip in and meet the costs of external infrastructure and forgo and real profits in effect providing the State G0vernment and private developers with a free access to Council's reserves?

43 Million dollars wisely invested elsewhere can return significant dividends.

It is incumbent n the State Government and the City of Melbourne to publish a prospectus providing full details of the costs and economic viability of the project, and not hide behind commercial confidentiality, before committing to any joint partnership development project.

Anything short of full disclosure should be met by the City Council with stiff resistance and refusal to fund the project.

Governor in Council working in the past New provisions of the Local Government Act in dispute

The Victorian Local Government Act 1989 was amended with the passing of the Local Government (Democratic Reform) Act 2003.

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

Government criticises but fails to act

The same criticism applies to the City of Melbourne and the cost of the Lord Mayor and Deputy Lord Mayor's council funded joy rides along with the extravagant number of staff and councillors' overseas trips. Its time the Government governed.

Don't expect the MAV or VLGA to address this issue after all it is their members that are at work here. They represent councillors' interests first and foremost not ratepayers.


Bracks warns of car perk anger
(mccblog: Whilst Candy fires a broadside shot across the bow)

Tanya Giles and Peter Mickelburough - Herald-sun 20 dec 05

PREMIER Steve Bracks yesterday warned Casey councillors they would face a voter backlash if they awarded themselves ratepayer-funded cars.

"I don't think the public which they serve will be supportive of those arrangements," he said.

"Ultimately the test of that is going to be within councils, within their municipalities, to see whether they are supported."

Mr Bracks recommended the council, in Melbourne's southeast, get the opinions of ratepayers before they went ahead with the move.

Local Government Minister Candy Broad also questioned the idea.

"The Victorian Government expects all elected representatives to act with integrity," she said.

The proposal could cost $440,000 and has outraged resident groups and some councillors.

Councillors -- many of whom last year tried to give themselves a $70,000 pay rise -- are expected to vote on the car plan today.

A draft proposal sent to councillors by Deputy Mayor Rob Wilson recommends all 10 "councillors be offered to be provided with a council vehicle by July 1, 2006, in lieu of travel payment per kilometre".

Casey Mayor Kevin Bradford, who traded in his $85,000 Holden Statesman for a $35,000 Commodore, said he would oppose the move.