Final Adjustments Made — the Boundary Adjustment Bill

15 August 2017

Readers will recall that we first wrote about the proposed boundary adjustment legislation in our October LG Alert and again in a December LG Leader article. That prospect is now set to become a reality.

On Tuesday 8 August 2017 the Local Government (Boundary Adjustment) Amendment Bill 2017 (“the Bill”) passed through the Legislative Council. The Bill, amongst other things, provides for the Minister to initiate a boundary adjustment proposal, in addition to councils and ratepayers.

Only minor amendments have been made to the Bill since our last update, and by way of overview we can now confirm as follows:

•  The Bill establishes the South Australian Local Government Grants Commission (“the Commission”), as an independent body to oversee the assessment and investigation of proposed boundary changes. The Commission is answerable to the Minister for Local Government (“the Minister”), who remains the final decision maker in these matters.
• The Commission must prepare and publish “proposal guidelines” which set out:
  • the procedures for inquiries;
  • the requirements relating to consultation that must be undertaken for the purposes of inquiries;
  • the procedures relating to the determination by the Commission of the reasonable costs of an inquiry (a provision that was included in response to concerns from the local government sector that councils may be reluctant to put forward proposals, in the absence of understanding the potential cost exposure); and
  • any other matter the Commission thinks appropriate.
• The Commission may receive a proposal for the making of a proclamation in the following manner:
  • by resolution of either House of Parliament;
  • the Minister;
  • a council (or councils); or
  • the prescribed percentage or number of eligible electors (Hansard debate on the Bill foreshadows 10% as being the prescribed percentage).
• The Bill establishes two (2) categories of proposal, which do not differentiate between public and council proposals (as is currently the case) but rather, categorises proposals as “administrative”, which are considered to be of a minor administrative nature (such as correcting boundary anomalies or adjusting a common boundary) and “general”, which will include significant boundary changes or structural reform or amalgamations.
• An “administrative” proposal will be considered by the Commission in accordance with the procedures determined by the Commission. While a “reasonable” amount of community consultation on the proposal is required in accordance with the guidelines, the Commission retains discretion to determine not to conduct consultation if it considers it unnecessary to do so. After conducting an inquiry into an administrative proposal, the Commission must then consult the Minister, after which it must prepare and publish a report including its recommendations (including any variations it thinks fit), a copy of which is provided to the Minister. The Minister will then ultimately determine whether the proposal proceeds, or that it not proceed.
• A “general” proposal that is referred to the Commission by resolution of either House of Parliament, by the Minister, or as prescribed by regulation must be inquired into by one (1) or more investigators. All other general proposals may, at the discretion of the Commission, be inquired into by either the Commission or by one (1) or more investigators. At the conclusion of an inquiry (whether conducted by an investigator or the Commission), the Commission must publish a report which includes its recommendation, a copy is then provided to the Minister. The Minister has the power to request that the Commission make amendments to the report (including to the recommendations made). On receipt of such a request, the Commission may make the amendments it considers appropriate (in an earlier iteration of the Bill this was a requirement). Any amended report is then published and provided to the Minister. Again, the Minister has the power to ultimately determine whether the proposal proceeds or not.
• The Commission has the power to refuse to inquire into a proposal (administrative or general in nature) if it considers that the proposal is vexatious, frivolous or trivial; not in the public interest; the same or substantially similar to a previous proposal; or if there is some other good reason to so refuse.
• The Commission may recover “reasonable costs” incurred in respect of an inquiry into a general proposal referred to the Commission by a council (or councils), such costs being recoverable as a debt. To this end, the guidelines required to be published by the Commission will detail the inquiry process to ensure that councils understand any anticipated cost of the investigation before the proposal proceeds. Of note, there is no associated debt recovery process from a general inquiry referred to the Commissioner by either House of Parliament or the Minister.
• The Bill also confers powers on the Commission (or an investigator) relating to inquiries, which include; issuing a summons requiring attendance; requiring a person to provide written or oral answers; requiring a person to verify answers by declaration; requiring a council or person to produce relevant documents or records; and to call for, or receive, submissions or representations.

Of importance, while the Bill does not go so far as to “require” councils to proactively seek out an amalgamation, the Bill will insert an additional principle to be observed by councils into section 8 of the Local Government Act 1999 (“the LG Act”), namely, a requirement that councils “seek to collaborate and form partnerships with other councils and regional bodies for the purposes of delivering cost-effective services (while avoiding cost-shifting among councils), integrated planning, maintaining local representation of communities and facilitating community benefit”.

The legislative landscape with regards to boundary adjustments is set to change “on a date to be fixed by proclamation”. However, we can advise that during debates on the Bill, the Minister advised the House of Assembly that the proposed commencement date is likely to be 1 January 2019, to ensure the Commission is given ample opportunity to develop the guidelines required by the Bill.

If you have any questions regarding the above please contact Tracy Riddle at triddle@kelledyjones.com.au or on 08 8113 7106.