Stephen McDonald is a barrister at Hanson Chambers and a member of the Australia Association of Constitutional Law (AACL). This blog post is an edited version of the speech Stephen gave at the AACL seminar – ‘Election Bonanza’ – hosted by the Adelaide Law School. As a guest-blogger for the Public Law & Policy Research Unit, Stephen explains some of the important aspects of the referendum to recognise local government in the Australian Constitution that never made it to the Australian people in 2013.
The Year 2013
The year 2013 was a turbulent time in Australian federal politics.
On 30 January 2013, then Prime Minister Julia Gillard announced that a federal election would be held on 14 September 2013. The intention was that the writs for the election would be issued on 12 August 2013.
On the same day, 30 January 2013, Kevin Rudd confirmed that he would not challenge Ms Gillard for the leadership and would not seek to return to the leadership of the Australian Labor Party.
Both statements would later turn out to be incorrect.
On 21 March 2013, the Minister for Regional Development and Local Government, Simon Crean, called for a leadership spill. Ms Gillard called a ballot for the leadership of the ALP for 4:30pm the same day. Shortly before the ballot, Mr Rudd announced that he would not contest the leadership and Ms Gillard was re-elected unopposed as leader.
On 9 May 2013, Prime Minister Gillard announced that a referendum would be held to “recognise local government in the constitution”. The announcement followed a recommendation by a Parliamentary Committee, and involved amending s 96 of the Constitution, which is commonly referred to as the “Grants Power”. The referendum, the Prime Minister said, would be held on the same day as the already announced federal election, 14 September 2013.
Prime Minister Gillard, launching the “Yes” case for the referendum, said:
We are asking the Australian people to support a small but important change to our constitution so that the existing practice of Federal Government support for local communities is formally recognised in our constitution.
The “existing practice” to which the Prime Minister referred was, of course, the practice of the Commonwealth government providing direct funding to local government bodies, without express statutory authorisation beyond appropriation. I shall return to this later on.
I shall also return to the requirements of s 128 of the Constitution a little later on, but for now it is sufficient to note that, before there can be a referendum for the amendment of the Constitution, there first has to be a Bill passed through both houses of Parliament. Accordingly, on 29 May 2013 the Constitutional Alteration (Local Government) Bill 2013 was introduced in the House of Representatives. The Bill was passed by the House of Representatives on 5 June 2013. The Bill was introduced into the Senate on 17 June 2013 and was passed on 24 June 2013. The Bill was passed by an absolute majority of both houses of Parliament.
It was reported that $10 million of funding had been allocated for the “Yes” case and $500,000 for the “No” case.
On 26 June 2013, a further Labor party-room ballot was held and Ms Gillard was defeated by Mr Rudd. The following day, Ms Gillard resigned as Prime Minister and Mr Rudd was sworn in.
On 4 August 2013, Prime Minister Rudd announced that the federal election would be held on 7 September 2013 and advised the then Governor-General, Quentin Bryce — later Dame Quentin Bryce — to issue the writs for the election.
Mr Rudd said that the election was about who Australians could trust. This was hotly disputed by the then Opposition Leader, Tony Abbott, who said that the election campaign was actually about “who is more fair dinkum”.
Anyway, in 2013, as is the case every year, 7 September was a week earlier than 14 September. For various reasons, which I shall explain in greater detail in a few minutes, the change in the election date meant that it was not possible to hold the local government referendum on the same day as the election. On 7 September Australia went to the polls but the electors were not asked to vote on the Bill for the alteration of s 96 of the Constitution.
In the lead up to the election, Prime Minister Rudd announced that, if re-elected, a Labor government would reconsider whether or not to hold the referendum in its next term. In October 2013, the new Deputy Prime Minister Warren Truss said that the new government had “no plans to put the issue back on the agenda”.
So that is the story of the referendum that Australia did not have.
I want to consider a few aspects of this proposal for the alteration of the Constitution. First, what was the proposed Bill and why was it thought necessary or desirable? Secondly, why could the referendum not be held together with the election on 7 September 2013? Thirdly, why do I say this was a referendum Australia had to have? I can assure you it has nothing to do with the merits of the proposed constitutional amendment. Fourthly, might it have been possible to compel the government to put this referendum to the people?
The Constitutional Alteration (Local Government) Bill 2013
Section 96 of the Constitution currently provides:
Financial assistance to States
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 the Parliament thinks fit.
The only operative provision of the Bill is cl 3, which provides:
The Constitution is altered as set out in Schedule 1.
Schedule 1 of the Bill then consisted of two clauses. The first amended the heading of s 96 of the Constitution by adding, at the end of the heading, the words “and local government bodies”.
The second clause of Schedule 1 provided:
After “any State”, insert “, or to any local government body formed by a law of a State,”
As amended by the Bill, s 96 would read as follows:
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, or local government body formed by a law of a State, on such terms and conditions as the Parliament thinks fit.
When a referendum for the alteration of the Constitution is put to the electors, the question has historically taken the form of setting out the long title of the relevant Bill and asking, “Do you approve this proposed alteration?” In this case, the long title of the Bill is almost as long as the Bill itself. The long title is:
A Bill for an Act to alter the Constitution to recognise local government by stating that the Commonwealth can grant financial assistance to local government, including assistance for community and other services.
So why amend the Constitution to “recognise” local government in this way? There seem to be a couple of considerations that came together to provide the impetus to almost get this issue before the electorate.
First, the idea of amending the Constitution so as to recognise or entrench local government as the third tier of government in some way has been around for a long time. Local Government Organisations are powerful lobby groups. Constitutional recognition is seen as likely to result in increased respect for local government in the general community, increased funding to local government and greater independence from State governments. Constitutional recognition and enhancement of the status of local government may be seen by some as a step towards the ultimate centralisation of power in the Commonwealth and the eventual abolition of the States. This was certainly an objective of the Whitlam government in the 1970s.
As I said, the idea of constitutional recognition of local government is not new. Proposals which were described as involving the “recognition” of local government have previously been put to the electors in both 1974 and 1988.
The 1974 Bill was described in its long title as “An Act to alter the Constitution to enable the Commonwealth to borrow money for, and to grant financial assistance to, local government bodies”. In 1974 a majority of electors who voted in New South Wales — 50.79% of the votes cast in that State — approved the law but the amendment was rejected in every other State, and nationally.
In 1988, the long title of the proposed constitutional alteration was simply an Act “To alter the Constitution to recognise local government”.
The second reason advanced for the 2013 attempt to amend the Constitution was uncertainty surrounding the capacity of the federal government to provide funding directly to local government organisations, following the decisions of the High Court in Pape v Commissioner of Taxation (2009) 238 CLR 1 — the “Tax Bonus case” — and Williams v The Commonwealth (2012) 248 CLR 156 — the “School Chaplains case”.
These two cases held, first, that the mere appropriation of money by the Commonwealth Parliament was not sufficient to entitle the executive government of the Commonwealth to spend that money, and secondly, that generally speaking, positive legislative authorisation would be required for the expenditure of public moneys.
It was suggested that the effect of the Williams decision, in particular, was that Commonwealth spending programs such as the “Roads to Recovery program”, which provides about $350 million a year directly to local councils for the maintenance of local roads, were at risk of being held invalid. This development really seems to be what provided the impetus — some might less charitably say the excuse — for having another go at squeezing local government into the Constitution. It seems to have been the primary reason put forward in favour of the proposed amendment.
History of local government funding and justification of the proposed amendment
I want to just divert at this point to look at the way local councils are funded in Australia.
In 1922 and 1923, the Commonwealth Parliament made its first grants of financial assistance to the States for local government purposes, particularly roads. By the Main Roads Development Act 1923 (Cth), the Parliament authorised the grant of financial assistance to the States, on conditions which included that it be passed on to local government bodies and that the funding be matched by equal grants provided by the States from their own revenue. The amounts of the grants were calculated by reference to a formula which took into account the population and the geographical area of the State.
The States attempted to raise their contribution by taxing the use of roads, calculated by reference to the sale of petrol. That scheme was struck down as invalid by the High Court in Commonwealth v South Australia (1926) 38 CLR 408. It was held that the State tax was an excise on petrol and thus prohibited by s 90 of the Constitution. Five days later, in Victoria v Commonwealth (1926) 38 CLR 399, the Court upheld the power of the Commonwealth Parliament to impose any conditions it thought fit on the grant of financial assistance.
From the 1920s through to the end of the 20th century, funding to local government was largely provided by way of agreements and grants to the States, although there were a number of variations over the decades. In 2000 the Howard Government introduced radical changes to State funding, coinciding with the introduction of the GST. This was accompanied by a new approach to Commonwealth funding of local government. In 2000 the Roads to Recovery program commenced, with the federal government making payment of funds directly to local governments rather than through conditioned s 96 grants to the States. The Roads to Recovery Act itself places conditions upon the use that may be made of the direct grants. The Roads to Recovery program continues and accounts for approximately $350 million in annual funding of local government by the Commonwealth. (A more thorough survey of the history of local government grants appears in Professor Anne Twomey’s Report for the University of Sydney Constitutional Reform Unit at pp 8-23).
Direct funding programs operate in addition to continuing grants for local government under s 96 of the Constitution. According to Professor Anne Twomey, in the 2011/12 financial year “the Commonwealth gave $2,722,866,000 in financial assistance grants to local government, which passed through the States as s 96 grants” and “[i]t also made direct grants to local government in the sum of $623,786,000. Even today direct grants thus make up less than a fifth of the total Commonwealth funding to local government.
So while it is true that the decisions in Pape and Williams throw doubt upon the capacity of the Commonwealth to make grants directly to local councils, several points might be made about that. First, the substantial majority of Commonwealth local government grants would not be affected. Secondly, there is no obvious reason why the s 96 mechanism could not be used for all local government grants. Thirdly, although clearer since Pape and Williams, the doubt has always existed: one of the traditionally and widely held views of the Commonwealth’s power to spend outside of s 96 has always been that it was restricted to areas of Commonwealth legislative competence, which would exclude most grants to local government.
The further point to make about the decision in, particularly, Williams is that it throws into doubt a great variety of the Commonwealth’s direct spending programs, many of which have nothing to do with local government or local government bodies.
So, while the interest in the constitutional recognition of local government was rekindled and fuelled by reference to recent developments emanating from the High Court, the proposed constitutional alteration actually failed comprehensively to address the difficulties created by the Court’s recent decisions.
Why could the referendum not be held together with the election on 7 September 2013?
So, onto the next issue: why could the referendum not be held when the election was brought forward by a week? The answer lies in part in s 128 of the Constitution and in part in the Referendum (Machinery Provisions) Act 1984 (Cth).
First, section 128 of the Constitution provides:
This Constitution shall not be altered except in the following manner:
The proposed law for the alteration thereof must be passed by an absolute majority of each House of the Parliament, and not less than two nor more than six months after its passage through both Houses the proposed law shall be submitted in each State and Territory to the electors qualified to vote for the election of members of the House of Representatives.
For now, the focus is on the requirement that the proposed alteration of the Constitution be submitted to the electors not less than two months after its passage through both Houses of Parliament. Presumably the date of “passage through both Houses” should be understood as referring only to the date on which the proposed law passes through the second House.
You will recall that the relevant Bill passed through the Senate on 24 June 2014. Consequently, in accordance with s 128, the proposed law could not be submitted to the electors in each State and Territory until at least 24 August 2014. You’ll remember that Prime Minister Rudd had announced the election for 7 September 2014.
This is where the Referendum (Machinery Provisions) Act then comes into play. 7 September was the official polling day for the election, and it would also have been the day appointed for taking the votes of the electors under s 15 of the Machinery Provisions Act. But the Machinery Provisions Act, like the Commonwealth Electoral Act, also provides for mechanisms by which electors may cast votes in advance of the official polling day — namely by postal votes and pre-poll votes.
It is all rather complicated, and involved the issuing of determinations by the Electoral Commissioner, but the University of Sydney’s web page devoted to the local government referendum explained the essential reason why the referendum could not go ahead:
The Constitution requires that there be a minimum period of 2 months between the date the referendum bill is passed by both Houses and when it is “submitted” to electors in a referendum. The Australian Electoral Commission has received legal advice that the date a referendum is “submitted” to voters, is not just the official polling day, but also includes any earlier date upon which postal voting or pre-poll voting is permitted. The consequence is that the local government referendum cannot be held with the general election on 7 September, because the minimum period of two months will not have passed before postal voting commences.
Extraordinarily, there appears to be no media release on the Australian Electoral Commission’s own web site explaining why the referendum could not proceed.
There is no requirement that a referendum to amend the Constitution be held at the same time as a general election. Nevertheless, the usual course is to hold any referendum at the same time as an election because it produces less inconvenience for electors and saves a huge amount of cost.
Was this a referendum that Australia ‘had to have’?
Now we come to the question of why I suggest that this was a referendum that Australia “had to have”. Again this depends upon the construction of s 128 of the Constitution. I have thus far drawn attention to the minimum period of 2 months. Section 128 provides that “not less than two nor more than six months after its passage through both Houses the proposed law shall be submitted in each State and Territory to the electors”.
Just as the relevant period within which the proposed law could be submitted to the electors commenced on 24 August 2013, that period ended on 24 December 2013. I am presently aware of no reason, other than administrative convenience and expense, why the referendum could not have been held between 14 September 2013 and 24 December 2013. Section 9(2) of the Referendum (Machinery Provisions) Act provides that the day fixed for the taking of votes shall be not less than 33 days and not more than 58 days after the issue of the writ for the referendum, but in this case the writ was simply never issued, so this provision did not come into play.
Returning to the words of s 128, I would suggest that the use of the word “shall” indicates that the submission of the proposed law to the voters is an imperative requirement. Once the proposed law is passed by an absolute majority of both Houses of Parliament, it shall be submitted to the electors. The only discretion is as to the date on which it to be so submitted, the date being restricted to a date between 2 and 6 months after the passage of the proposed law through the second House of Parliament.
Although the constitutional language appears to me to be imperative, I accept that s 128 is not entirely clear as to who, if anyone, is under a duty to submit the proposed law to the electors. However, s 7 of the Machinery Provisions Act makes good the deficiency. It provides that:
Whenever a proposed law for the alteration of the Constitution is to be submitted to the electors, the Governor-General may issue a writ for the submission of the proposed law to the electors.
Obviously this provision is cast in discretionary terms, using the word “may”. But it is expressed in the conditional mood, and the relevant condition is that a proposed law is to be submitted. That is, s 7 appears to assume the existence of an imperative requirement that the law be submitted to the electors, which can only be the requirement imposed by s 128 itself. The discretion imported by “may” is confined within the scope of that anterior requirement.
So for those reasons, I suggest that, at least theoretically, once the proposed law for the alteration of the Constitution was passed by an absolute majority of both Houses, there arose a constitutional imperative that it be submitted to the electors. It appears that both major political parties, without any apparent dissent from either the Governor-General or the Electoral Commission, or any real outcry of any kind, chose to ignore that constitutional requirement.
Might it have been possible to compel the Governor-General to issue the writ for a referendum to put this proposed alteration of the Constitution to the electors?
The view seems to have been taken that the decision whether to submit the law to the electors is itself discretionary, and that, if the referendum could not be held on the same day as the federal election, it need not be held at all.
Moreover, the view seems to have been taken that, once six months had passed from the passage of the proposed law through the second House of Parliament, the referendum either could no longer or need no longer be held. That is, it seems to have been assumed that once the window of 2 to 6 months, fixed by s 128, expired, the opportunity to put the proposal to the electors was gone. I wish to challenge that view.
A statutory provision requiring an officer to exercise a power or perform a function is ordinarily construed as imposing a duty which continues until it is validly performed. Where a time period is specified, within which a power is to be exercised or a function performed, that should not ordinarily be understood to mean that the duty ceases to exist upon the expiration of that period. Rather, it is suggested that such a provision should ordinarily be construed as imposing a secondary duty to perform the primary duty (the duty to exercise the power or perform the function) within the specified period. If, after the expiration of the specified period, the duty remains unperformed, performance of the duty forthwith will become compellable by mandamus. That approach is consistent with what was said by six members of the High Court in Re Media, Entertainment and Arts Alliance; Ex parte Hoyts Corporation Pty Ltd (1993) 178 CLR 379 at 394.
It would be surprising if a duty to act, particularly one which is sufficiently important as to warrant the fixing of a time limit in the Constitution itself, simply ceased to exist because the time within which to perform the duty had expired.
A similar, though not identical, issue arose in Bodrudduza v Minister for Immigration and Multicultural Affairs (2007) 228 CLR 651. In that case the High Court considered s 486A of the Migration Act, which fixed a short limitation period in which any application for judicial review of certain kinds of migration decisions had to be brought. The Commonwealth Solicitor-General advanced a submission that the effect of s 486A was to “validate” a decision and to make it “effective for all purposes” at the expiry of the time limit, even if affected by jurisdictional error or fraud. Five members of the High Court said of that submission:
It would be a bold exercise of legislative choice for the Parliament to enact that Ministers and their delegates were authorised to exercise fraudulently any of the powers of decision conferred upon them by statute. A legislative purpose of that kind would not be imputed in the absence of “unmistakable and unambiguous language”.
Likewise, it is suggested that a Court should be slow to construe s 128 as contemplating that, if there is a failure to comply with its command that a proposed law be submitted to the electors within 6 months, then that requirement simply disappears. It is respectfully suggested that the better view is that, if the duty is not complied with within the period fixed by the Constitution then the effect is not that it dissipates but rather that it becomes compellable.
The final question, then, is: “compellable by whom?” Who would have standing to require observance of the constitutional duty?
I suggest that the better view is that any elector would have sufficient standing to seek a writ of mandamus to compel the Governor-General to issue the writ. Other, less broad, alternatives would be:
- A member of either House of Parliament who had voted in favour of the proposed constitutional alteration.
- An organisation with a particular interest in the constitutional amendment in question. In the case of the local government referendum, for example, a local council or the Local Government Association might have standing to sue. I have joked that the AACL might have standing, since we had planned a seminar concerning the proposed constitutional amendment which could no longer go ahead once the election date was changed.
- Perhaps, the Electoral Commissioner, given the particular role of that officer in relation to the conduct of referendums.
- A State of the Commonwealth.
All of this is, of course, rather academic. While I maintain that the better view is that mandamus could go to the Governor-General to compel her or him to issue the writs for the referendum, it is well recognised that mandamus is a discretionary remedy, and I suspect that the elapse of time since the expiry of the four month constitutional window might well result in any such application now being refused on discretionary grounds.
Stephen McDonald is a guest-blogger for the Public Law and Policy Research Unit and is a graduate of the Adelaide Law School.