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Local government and constitutional reform campaign
At the next Federal Election the Australian people will be asked via a referendum whether local government should be included in the Australian Constitution. This question has been the outcome of a High Court decision, in the recent case of Pape v Commissioner of Taxation (2009), which brought into question the Commonwealth’s legal ability to deal directly with local government because it is not included in the Constitution. This creates uncertainty about the future funding of local government.
Local government raises its own revenue through rates (local government’s only tax), fees and charges. For the past decade, local government has raised around 3 per cent of Australia’s total taxation revenue. Although local government generates around 80 per cent of its revenue, funding from the Commonwealth Government through grants is an important source of revenue, particularly for regional and remote communities.
The proposed referendum to alter the Constitution to allow payments directly to local government would remove this uncertainty. It will not change local government’s accountability or its status. The purpose of the referendum is to give the local government certainty and secure its ability to cater to the needs of local communities, as was the original intention when local councils were first established in 1840.
This is an important issue for the community to ensure that local government secures funding from the Commonwealth. The following links provide more information on Constitutional Recognition of Local Government.