Wednesday, 1 May 2024

Local Government Amendment (Governance and Integrity) Bill 2024

Statement of compatibility

Melissa HORNE (Williamstown – Minister for Casino, Gaming and Liquor Regulation, Minister for Local Government, Minister for Ports and Freight, Minister for Roads and Road Safety) (11:21): In accordance with the Charter of Human Rights and Responsibilities Act 2006, I table a statement of compatibility in relation to the Local Government Amendment (Governance and Integrity) Bill 2024:

In accordance with section 28 of the Charter of Human Rights and Responsibilities Act 2006, (the Charter), I make this Statement of Compatibility with respect to the Local Government Amendment (Governance and Integrity) Bill 2024.

In my opinion, the Local Government Amendment (Governance and Integrity) Bill 2024, as introduced to the Legislative Assembly, is compatible with human rights as set out in the Charter. I base my opinion on the reasons outlined in this statement.

Overview of the Bill

The Bill amends the Local Government Act 2020 (LGA 2020) to:

• provide for ongoing mandatory training for councillors and mayors;

• provide for the suspension and disqualification of individual councillors who have been found to have created a serious risk to health and safety at a council or are preventing the council from performing its functions;

• enhance the enforcement powers of the Chief Municipal Inspector, including through the ability to issue infringement notices for certain offences under the LGA 2020;

• make improvements to the councillor conduct framework including by creating a power to introduce a model councillor code of conduct and increasing the severity of sanctions available for councillor misconduct; and

• improve the operation of provisions relating to Ministerial oversight, appointment powers and the councillor conduct framework.

Human Rights Issues

The human rights protected by the Charter that are relevant to the Bill are:

• The right to privacy and reputation (section 13);

• The right to freedom of expression (section 15);

• The right to take part in public life (section 18);

• Property rights (section 20);

• The right to a fair hearing (section 24);

• The right to the presumption of innocence (section 25(1));

• The right to protection against self-incrimination (section 25(2)(k)); and

• The right not to be tried or punished more than once (section 26).

Eligibility, standing down, suspension and disqualification of councillors

The Bill amends the LGA 2020 to allow for the suspension and disqualification of individual councillors who have been found to have created a serious risk to health and safety at a council or are preventing the council from performing its functions (Adverse Report). Specifically:

• Clause 7 inserts new section 34A, which permits the Governor in Council, on the recommendation of the Minister, to disqualify a person from being a councillor for eight years from the date of dismissal if they were dismissed from office and were subject to an Adverse Report;

• Clause 31 inserts new section 229A, which permits the Minister to suspend a councillor for up to one year if they were subject to an Adverse Report, and inserts new section 229B, which provides that a councillor suspended under section 229A is ineligible to hold the office of Mayor or Deputy Mayor or chair a delegated committee of the council for the remainder of the council’s term.

Clause 6 further inserts a new eligibility exclusion criterion into section 34 of the LGA 2020, where a person with more than one adverse decision made against them within a period of eight years is not qualified to be a councillor for a period of four years from the making of the second adverse decision. The Bill defines an adverse decision as a finding of serious misconduct under section 167 or a suspension from office under section 229A of the LGA 2020.

These amendments may engage the right to take part in public life (s 18) which is further discussed below.

Clause 30, which substitutes section 229 of the LGA 2020, provides that if a councillor is charged with an offence that if convicted they would become ineligible to hold office, they are automatically stood down from their office of councillor until proceedings in respect of the charge are finally determined. The principal effect of this amendment is to:

• remove the need for the Chief Municipal Inspector to make an application to VCAT for an order to stand down the councillor;

• remove the requirement for VCAT to consider the nature and circumstances of the charge before a councillor is stood down.

The repeal of a statutory provision does not itself affect a person’s rights unless it effects a deprivation of property, and a councillor does not have a vested right to be suspended only in accordance with a specified procedure. Further, as new section 229 operates to automatically suspend a councillor from their office on being charged with a criminal offence, there is no ‘civil proceeding’ which would engage the fair hearing right in section 24(1). Nevertheless, the nexus between a criminal charge and the suspension of a councillor engages:

• the right not to be punished more than once for the same offence (s 26) and to have a criminal charge decided by a court (s 24);

• the right of presumption of innocence (s 25(1));

• the right to take part in public life (s 18); and

• the right to property (s 20).

The right not to be punished more than once for the same offence (s 26) and the right to have a criminal charge decided by a court (s 24(1))

Section 26 of the Charter provides that a person must not be tried or punished more than once for an offence in respect of which they have already been finally convicted or acquitted in accordance with law. Relevant to the concept of punishment, and following recent decisions of the High Court concerning the constitutional validity of schemes involving ‘legislated punishment’, it may be suggested that the section 24 right to have a criminal charge decided by a court implies a principle that a person may only be punished as a result of a charge being proven in a criminal proceeding.

In my view, new section 229 does not engage these rights as the standing down of a councillor by reference to potential involvement in criminal conduct is not to be characterised as imposing a form of punishment, for the following reasons.

• The mere fact that a law operates to directly impose a detriment on a particular person does not make it punitive. Rather, what the authorities show is that the criteria by reference to which the detriment is imposed, and also the purpose for which it is imposed, are central to determining whether the imposition of a particular detriment is properly characterised as punitive. The intention of the provision serves a protective purpose, to ensure the integrity and good governance of the council and to safeguard the public trust and confidence in the council and its councillors.

• The effect of being stood down is to prevent a person from performing the functions or duties of, or exercising the powers of, a councillor. It extends to prohibiting a person’s attendance at council meetings and premises. It is ultimately aimed at preventing the functions of the council from being influenced by a person whose eligibility has come into question.

• The nature of the detriment being imposed, being ‘stood down’ from an official position and having allowance withheld, is not of a nature traditionally associated with a criminal sanction. No conviction flows from this outcome nor is a person liable for subsequent sanctions of a criminal nature, such as a fine or imprisonment. While a person’s allowance is also withheld, it does not impose any personal liability on a person.

• The suspension is temporary, and a person is restored to their role upon a relevant charge being withdrawn or being determined in a manner that does not result in a conviction.

Accordingly, as the standing down of a councillor charged with a specified offence is not a punishment, it does not amount to double punishment for the purpose of section 26, or engage the determination of a criminal charge pursuant to section 24, and these right are therefore not limited.

The right to be presumed innocent (s 25(1))

Section 25(1) of the Charter provides that a person charged with a criminal offence has the right to be presumed innocent until proven guilty according to law. The High Court has described this right as incorporating the fundamental requirement that ‘the prosecution in a criminal case has the burden of proving guilt’, that is, that a conviction can follow only where every element of an offence has been proved by the prosecution beyond reasonable doubt.

While the right has been found to only apply to criminal proceedings (and not, by contrast, to other proceedings such as disciplinary proceedings, civil liability or bail applications), it does afford an accused a right to have the benefit of the doubt, and to be treated in accordance with this principle. It is suggested that the right incorporates duties on others to refrain from prejudging the outcome of a trial – including to abstain from actions that affirm the guilt of an accused.

While Victorian case law has yet to consider in more detail the broader application of this right beyond criminal proceedings, there is a reasonable argument that new section 229 of LGA 2020, which provides for the standing down of a councillor by reference to charges laid – but not yet proven, constitutes a limit on the presumption of innocence. This is because the provision could be characterised as effecting an act of pre-judgment of an accused, or at least depriving them of their right to the benefit of the doubt.

Consequently, it is necessary to consider the proportionality or justification of the limitation on this right, by reference to its purpose. Section 7(2) of the Charter provides that Charter rights may be subject under law only to such reasonable limits as can be demonstrably justified in a free and democratic society based on human dignity, equality and freedom, taking into account all relevant factors.

It is my view that the automatic standing down of a councillor when charged with an offence in section 229(2) of the LGA 2020, is reasonably justified pursuant to the factors listed in section 7(2) of the Charter.

The nature of the right

The right of a person (charged with a criminal offence) to be presumed innocent until proved guilty is considered one of the most fundamental rights in the Charter, and accordingly, will require a sufficiently important objective to justify being limited.

The importance of the purpose of the limitation

The purpose of the limitation must relate to ‘pressing and substantial’ social concerns, and be aimed at achieving legitimate values and interests, in order to be sufficiently important to justify limiting a Charter right. The more pressing and substantial the purpose, the greater the limitation it will justify.

The purpose of the limitation on a councillor’s right to be presumed innocent until proved guilty is aimed at safeguarding the appropriate exercise of statutory powers and undertaking of public functions by councillors and maintaining public confidence in the standing and reputation of councillors. There is a strong public interest in this purpose.

The nature and extent of the limitation

I consider the nature of the limitation on the right to be limited in that the automatic standing down of a councillor pending the finalisation of the proceedings in respect of the charge, does not involve a determination or prejudgment of guilt, rather, the standing down of the councillor until the court has finalised the proceedings, is on a suspicion of guilt, rather than a finding of factual guilt.

Further, the automatic standing down of a councillor pending the finalisation of the proceedings in respect of the charge is not punitive in its purpose but protective, seeking to ensure the integrity and good governance of the council and to safeguard the public trust and confidence in the council and its councillors. Moreover, the automatic standing down of a councillor is limited to serious offences specified in section 229(2) of the LGA 2020, that reasonably puts into question, the councillor’s suitability (and potential eligibility) to hold the office of councillor.

The period for which a councillor is stood down is limited to the period between the charges are laid against the councillor and the finalisation (or withdrawal) of the proceedings in respect of which the charge laid.

The relationship between the limitation and its purpose

There is a clear and direct relationship between the limitation and stated purpose – the automatic standing down of a councillor until proceedings in respect of a charge are finally determined directly correlates to the stated purpose of ensuring that the councillor cannot continue to perform their functions and duties and exercise their powers as councillor where doing so may adversely affect public confidence.

Any less restrictive means reasonably available to achieve the purpose

The final factor relates to a consideration of not just the actual limitation that is sought to be justified, but other potential means by which the stated purpose of the limitation could be achieved.

In the current circumstances, it may be said that the current procedure set out in section 229 for the standing down of a councillor – involving an application to VCAT, where the member must have regard to the nature and circumstances of the charge and the fair hearing obligations attached to Tribunal proceedings – is a less restrictive means reasonably available to achieve the purpose that the limitation seeks to achieve.

However, the current procedure, involving the Chief Municipal Inspector making an application to VCAT for the standing down of a councillor, is in practice not a reasonably available means because the timeframes associated with VCAT hearings often leads to applications not being determined before the finalisation of the criminal proceedings. This renders the application for the councillor to be stood down in the interim redundant, and ultimately obstructs the legislative intention being achieved.

The right to take part in public life (s 18)

Section 18(1) of the Charter provides that every person in Victoria has the right, and is to have the opportunity, without discrimination, to participate in the conduct of public affairs, directly or through freely chosen representatives. Section 18(2)(b) further provides that every eligible person has the right, and is to have the opportunity, without discrimination, to have access, on general terms of equality, to the Victorian public service and public office.

The scope of section 18 has not yet been thoroughly examined by Victorian courts. It is not clear whether section 18(2)(b) will be engaged by the ‘stand down’ provision (new section 229), the disqualification and suspension of councillors on the basis of an Adverse Report (new sections 34A and 229A), or the amendment rendering councillors ineligible for office on the basis of past adverse decisions (clause 6).

In order for section 18(2)(b) to apply, a person must be an ‘eligible person’. The term ‘eligible person’ is not defined in the Charter. The commentary suggests two possible interpretations: either that persons are ‘eligible’ under section 18(2)(b) if they are eligible under the current law of Victoria, or alternatively that ‘eligibility’ takes on an independent meaning in the context of the Charter that is not confined to the conditions of eligibility under existing law. Under the former construction, section 18(2)(b) would not be engaged where a person has, in accordance with section 229 of the LGA 2020, become ineligible to continue to perform their functions and duties and exercise their powers as councillor until proceedings in respect of the charge are finally determined.

If ‘eligible person’ were to take on an independent meaning in the context of section 18(2) of the Charter, the commentary suggests that it would mean an adult person with the relevant connection to Victoria, such as citizenship or residency. If this interpretation is adopted, the right of a person (councillor) to have access to public office without discrimination would apply irrespective of whether that person (councillor) meets the eligibility criteria in section 34 and new section 229 of the LGA 2020, and section 18(2)(b) may be engaged.

If section 18(2)(b) is engaged, that right will nevertheless only be limited where the eligibility criteria gives rise to ‘discrimination’ on the basis of an attribute within the meaning of the Equal Opportunity Act 2010 (EO Act). Section 229 automatically standing down a councillor charged with an offence specified in section 229(2) of the LGA 2020, does not discriminate against the councillor as being charged with, or convicted of, a criminal offence, is not a protected attribute within the meaning of the EO Act. Similarly, given that the conduct that is the subject of an ‘adverse decision’ or Adverse Report is not a protected attribute within the meaning of the EO Act, new sections 34(2A), 34A and 229A, which impose a limit on the right to take part in public life on the basis, do not constitute discrimination within the meaning of the EO Act. It follows, in my view, that the right to take part in public life is not limited by the proposed new sections of the LGA 2020.

The right to property (s 20)

Section 20 of the Charter provides that a person must not be deprived of their property other than in accordance with law. While the Charter does not define ‘property’, case law indicate that the term should be interpreted ‘liberally and beneficially to encompass economic interests’. This right requires that powers which authorise the deprivation of property are conferred by legislation or common law, are confined and structured rather than unclear, are accessible to the public, and are formulated precisely. Existing authority also suggests that the laws that permit or require a deprivation of property should not operate arbitrarily. Accordingly, an assessment of compatibility will depend upon the extent to which a deprivation of property does not operate arbitrarily, and is sufficiently clear and certain to be considered ‘in accordance with the law’.

In providing that a councillor charged with an offence in section 229(2) is to be stood down and their allowance withheld until the proceedings in respect of the charge are finally determined (including any appeal) or the charge is withdrawn, clause 30 could be said to authorise the deprivation of the councillor’s property (ie their allowance) and engages the right to property.

Similarly, sections 27B and 33B of the Bill (inserted by clauses 40 and 43 respectively) introduce provisions that respectively mandate the withholding of the allowance of a Mayor, Deputy Mayor or Acting Mayor and councillor if they do not undertake mandatory Mayoral training or professional development training and make a written declaration to this effect. These provisions could also be regarded as engaging the right to property.

That being so, the deprivation of property will be ‘in accordance with the law’ where the law providing for the legal authorisation for the deprivation is ‘publically accessible, clear and certain’. The authorisation to deprive a councillor of their allowance pending the finalisation of the proceedings is conferred by section 229 and thereby is publically accessible. The provision is also drafted in clear and precise terms, authorising the allowance to be withheld in specified circumstances and for specified time periods (either until such time that the proceedings in respect of the charge are finally determined or the charge is withdrawn). The provision further provides that where a conviction is appealed, the allowance will be withheld until the finalisation of such appeal.

As the new provision has no regard to the nature and circumstances of the criminal charge, and makes no provision for natural justice, there could be an argument that the provision may function in an arbitrary manner so as to limit the right. However, to the extent that any limitations result, I consider any limits to be justified, on the basis that it is not in the public interest for a person to continue receiving an allowance while suspended and no longer performing the duties of councillor. Further, the deprivation of property is only temporary, in that an allowance is no longer withheld upon a suspension being lifted and the person resuming their duties. In the event that a person is convicted, they are now ineligible to hold the office and have no continuing entitlement to receive the allowance.

Investigation powers

Right to protection against self-incrimination

Section 25(2)(k) of the Charter provides that a person charged with a criminal offence is entitled not to be compelled to testify against themselves or to confess guilt. This right is at least as broad as the common law privilege against self-incrimination. It applies to protect a charged person against the admission in subsequent criminal proceedings of incriminatory material obtained under compulsion, regardless of whether the information was obtained prior to or subsequent to the charge being laid.

The Bill promotes the right to protection against self-incrimination in respect of the existing powers of a Commissioner to serve a written notice to a person to appear before the Commission of Inquiry and give evidence or produce specified documents. Clause 24 provides that a person on whom written notice is served under section 206 of the LGA 2020 may make a claim to the Commission of Inquiry that they have a reasonable excuse not to comply with the notice, such as that compliance would tend to incriminate them or make them liable to a penalty in relation to an offence with which the person has been charged and for which a proceeding is on foot, or a proceeding that is on foot for the imposition or recovery of a penalty.

Information sharing and confidentiality provisions

The Bill amends the LGA 2020 to provide for and clarify information sharing powers of the Principal Councillor Conduct Registrar (Registrar), council and other integrity bodies. These amendments are intended to enable councillor conduct matters to be dealt with by the appropriate body and limit the risk of a councillor being subject to separate applications in respect of the same conduct.

Clause 58 amends section 149(3) of the LGA 2020 to enable the sharing of information related to Councillor Conduct Panel processes. Specifically, it permits:

• the Registrar to request information from a council or another person or body that is necessary for determining whether the matter would be more appropriately dealt with by another person or body; and

• the Registrar to disclose information to a Commission of Inquiry or a Municipal Monitor or other body to enable that body to deal with the application.

The Bill further includes reporting provisions to ensure that Councillor Conduct Panel processes can be communicated to the Minister to enable the Minister to determine whether a matter has been dealt with through the councillor conduct framework.

New section 220A of the LGA 2020, inserted by clause 26, permits a Commission of Inquiry to include in a report to the Minister a finding that a councillor is creating a serious risk to the health and safety of other persons or is preventing the council from performing its functions, which may have an impact upon the person’s work, their relationships and their reputation generally.

Further, new section 199AA of the LGA 2020, inserted by clause 21, permits the Chief Municipal Inspector to give each House of the Parliament a report on the examination or investigation of any matter relating to a council’s operations or elections, electoral matters, or any possible breach of the LGA 2020, which includes a comment or opinion that is adverse to any person.

Finally, clause 19, which inserts new section 181B, permits a Municipal Monitor to disclose information provided to them and to which client legal privilege applies if the disclosure is made to the Minister or to an integrity body. This amendment may also engage the rights to privacy and reputation under section 13 and to a fair trial under section 24(1).

To the extent that the information disclosed under the above new provisions contains adverse opinions, comments or findings in relation to a councillor, these provisions may also affect the person’s privacy, relationships and reputation. Accordingly, these provisions may engage the right to privacy and reputation in section 13 of the Charter.

Right to privacy and reputation (s 13)

Section 13(a) of the Charter provides that a person has the right not to have their privacy, family, home or correspondence unlawfully or arbitrarily interfered with. An interference will be lawful if it is permitted by a law which is precise and appropriately circumscribed, and will be arbitrary only if it is capricious, unpredictable, unjust or unreasonable, in the sense of being disproportionate to the legitimate aim sought.

Section 13(b) of the Charter relevantly provides that a person has the right not to have their reputation unlawfully attacked. An ‘attack’ on reputation will be lawful if it is permitted by a precise and appropriately circumscribed law.

While these amendments are likely to interfere with a councillor’s privacy and adversely affect their reputation, I do not consider these interferences to be unlawful or arbitrary for the following reasons.

Firstly, the new information sharing provisions in section 149(3) are necessary to determine which body should deal with a particular misconduct application and enable that body to do so. The reporting powers under sections 181B, 199AA and 220A are for the purpose of strengthening the integrity, accountability and good governance of local government and to enable the above statutory officers to exercise their powers and functions under the LGA. I consider any interference occasioned by these provisions is not arbitrary given that the scope of these powers are appropriately prescribed and proportionate to the legitimate aims of the LGA 2020. For example, section 220A only permits the reporting of a finding that a councillor is creating a serious risk to the health and safety of other persons or is preventing the council from performing its functions. These powers go no further than is necessary to enable the Commission of Inquiry to exercise their investigation functions and to enable the Minister to determine whether or not to suspend that councillor. Further, the reporting powers only authorise the disclosure of matters associated with a councillor’s performance of their public duties, rather than their personal affairs, such that a councillor would have a diminished expectation of privacy in relation to these matters.

Accordingly, I consider that these provisions strike an appropriate balance between protecting the privacy of councillors while ensuring that investigation bodies have sufficient information to perform their functions. In my view, the information sharing powers are proportionate to the purpose of the limitation and, therefore, will not be an arbitrary or unlawful interference with privacy.

Secondly, in relation to investigation findings, I consider that the procedural safeguards provided for in the Bill ensure compatibility with the rights to privacy and reputation. New section 181B of the LGA 2020, which permits the Municipal Monitor to report to the Minister investigation findings that are adverse to a person is subject to the following procedural fairness safeguards (which function as an effective mechanism at protecting against arbitrariness):

• new section 181C(1) of the LGA 2020 requires the Municipal Monitor to give a person details of, and an opportunity to respond to, the proposed adverse finding;

• new section 181C(2) of the LGA 2020 requires the Municipal Monitor to consider the person’s response before including the proposed finding in a report to the Minister; and

• new section 181C(3) of the LGA 2020 requires the Municipal Monitor to fairly set out any response provided by the person about whom adverse findings are included in a report to the Minister.

Similarly, if including an adverse opinion or comment about a person in a report to Parliament under new section 199AA, the Chief Municipal Inspector must provide the person with a reasonable opportunity to respond to the adverse comment or opinion; and fairly set out each element of the response in the report.

To the extent that new section 181B, which would permit a Municipal Monitor to disclose information to which client legal privilege applies to the Minister or to an integrity body, may interfere with the privacy of persons the subject of the disclosure, the interference will be neither unlawful nor arbitrary. The interference will be prescribed by law, and the Act otherwise prohibits the disclosure of information to which client legal privilege applies by the Municipal Monitor. Therefore, as any interference with privacy and reputation will be authorised under legislation and is subject to appropriate safeguards, I consider the Bill does not amount to an arbitrary interference with these rights.

Additionally, there are limits on the extent to which information may be disclosed to Parliament. For example, new section 199AA(3) precludes the Chief Municipal Inspector from giving including in such a report any information that would identify a person who is not the subject of an adverse comment or opinion (unless it is in the public interest to do so), or is likely to lead to the identification of a person who has made a disclosure.

Immunities relating to investigations

The Bill introduces a number of immunities from liability in relation to conduct investigations. Clause 19 inserts new sections 181A and 181E of the LGA 2020, which respectively provide:

• immunity from any criminal, civil, administrative or disciplinary proceeding to persons who have provided information to a Municipal Monitor on request; and

• immunity for the Municipal Monitor for anything done or omitted to be done in good faith in the exercise of a power or discharge of a duty under the LGA 2020 or in the reasonable belief that the act or omission was in the exercise of such a power or duty.

Clause 24 similarly inserts section 206(1F), which provides immunity from criminal, civil, administrative or disciplinary proceeding to any person who has provided information to a Commission of Inquiry in response to a written notice.

Right to property (s 20)

Insofar as a cause of action may be considered ‘property’ within the meaning of section 20 of the Charter, these provisions may engage the right. However, even if these immunity provisions could be considered to deprive a person of property, any such deprivation will be ‘in accordance with law’ and will therefore not limit the Charter right to property. These provisions are drafted in clear and precise terms. In addition, any deprivation of a cause of action is reasonably necessary to achieve the important objective of ensuring that the Municipal Monitor can effectively perform their advisory, monitoring and investigation functions without the threat of significant personal repercussions. It further serves the objectives of the councillor conduct framework by enabling persons to provide information to the Municipal Monitor without fear of legal retribution or exposure to personal liability, which is similar to witness immunity in court proceedings. As such, there are no less restrictive means of achieving the Bill’s objectives of strengthening integrity and councillor conduct. Accordingly, the relevant immunity and protections are, in my view, appropriately granted. They are also limited in scope to good faith actions or omissions.

Further, section 181E does not prevent a person from bringing a claim for liability, as new subsection (2) shifts any liability resulting from an act or omission by a Municipal Monitor to the council. Accordingly, an individual could still initiate legal proceedings against the council for actions of a Municipal Monitor. As such, the right to property is not limited by this provision.

Publication of personal interests

Right to privacy (s 13(a))

Clause 48 proposes minor amendments to section 135(3)(a), requiring a summary of councillors’ personal interests to be published within 45 days of the returns being lodged. This provision requires the divulging of information that would otherwise be private in nature, thus engaging the right to privacy. However, any impacts on the right to privacy and reputation are not arbitrary or unlawful and can be balanced against the need to ensure the transparent and accountable operation of councils, the integrity of council decision-making and prevention of the misuse of public positions. The role of councillor is a role to which special duties and responsibilities attach, and in this regard, a councillor has a reduced expectation of privacy with regards to this type of information. Further, the provisions are subject to certain safeguards. Interest returns of councillors published under section 135 are only made public in summary form, ensuring more sensitive details about a councillor remain private. As such, to the extent that the publication of the above information will interfere with privacy, any such interference will be lawful and not arbitrary, and will therefore be compatible with the right to privacy.

Right to participate in public life (s 18)

The requirement for councillors to disclose their private financial affairs could be seen to have a chilling effect on the freedom to participate in public life. Although the right to take part in public life is a significant right that is fundamental to a democratic system of government, the right is not absolute, and it may be subject to reasonable limitations. In this case, the purpose of the limitation is to ensure the integrity and good governance of the sector and public trust and confidence in those elected or appointed to relevant positions. The provisions do not go any further than is necessary to achieve this purpose. Any limitation on councillors’ rights is appropriately balanced against the strong public interest in preventing corruption and conflicts of interest and maintaining public confidence in the integrity of impartial decision-making by councillors. I therefore consider that any limitation imposed by these provisions on the right to take part in public life is demonstrably justified in accordance with s 7(2) of the Charter.

Repeal of review rights

Clause 70 repeals section 170 of the LGA 2020, which enabled a person affected by the decision made by a Councillor Conduct Panel (CCP) to apply to VCAT for a review of that decision. Clause 46 inserts new section 43A, which prevents a council from indemnifying a councillor, who is a party to an internal arbitration process or CCP process for any legal or other costs connected with these proceedings except in limited circumstances. In depriving affected persons of their review rights, and indemnification, this provision may engage the right to a fair hearing.

Right to a fair hearing (s 24(1))

The fair hearing right provides an entitlement to a civil proceeding to be determined by a competent, independent and impartial tribunal established by law. Removing a right of review could be characterised as removing a person’s right of access to a tribunal. However, the whole decision-making process needs to be considered, including the conditions under which the original decisions is made, to determine if the right to fair hearing is limited. I consider the CCP model itself affords sufficient independence and fairness at first instance such that there is no need to remedy any perceived lack of independence of the CCP at the VCAT review stage.

However, to the extent that the removal of this entitlement is considered a limit, it serves a legitimate objective.

The purpose of this amendment is to remedy identified abuses of the current framework where persons affected by a decision of a CCP hearing have exercised their right of review and relied on indemnification for legal costs to unduly prolong proceedings. This practice has had the unintended effect of undermining the purpose of the councillor conduct framework, which is to ensure that councillor conduct issues are dealt with quickly and fairly. Therefore, the need to remedy these abuses and provide for an efficient and less litigious councillor conduct resolution process is a reasonable justification for reducing the scope of the fair hearing right.

Finally, despite this amendment, parties affected by a decision of a CCP hearing remain able to seek judicial review of a decision to the Supreme Court, including in relation to grounds that a decision was unlawful, unreasonable or did not afford procedural fairness. Given this, I consider any limitations on the right to fair hearing to be demonstrably justified in accordance with section 7(2) of the Charter.

The Hon. Melissa Horne

Minister for Local Government

Second reading

Melissa HORNE (Williamstown – Minister for Casino, Gaming and Liquor Regulation, Minister for Local Government, Minister for Ports and Freight, Minister for Roads and Road Safety) (11:21): I move:

That this bill be now read a second time.

I ask that my second-reading speech be incorporated into Hansard.

Incorporated speech as follows:

It is with great pleasure that I rise to speak in support of this Bill, a Bill which will improve accountability, councillor conduct and governance across the local government sector.

Good governance is critical to ensure councils make sound decisions and deliver the services their communities need.

Since the last council elections in October 2020, there has been an increase in councils that have required governance interventions, including the appointment of municipal monitors to eleven councils (compared to four councils in the previous council term) to guide good governance. One council has also been dismissed following a Commission of Inquiry and one council suspended.

In the same period, the Independent Broad-based Anti-Corruption Commission’s (IBAC) Operation Sandon Special Report has been released. Also, several examinations of councils have been caried out by the Local Government Inspectorate and the Department of Government Services highlighting areas for improvement in relation to council governance.

If left unaddressed, recurring governance and conduct issues can undermine public trust in the sector, hinder effective decision-making, and impede the delivery of essential services to local communities.

We must set a high standard for the sector. In so doing, councillors must be afforded suitable training that ensures they understand their role and responsibilities and enables them to confidently deliver on their statutory obligations.

For those councillors that choose to engage in misconduct of any kind, intervention should be timely and proportionate, observe procedural fairness, and deliver and enforce an appropriate penalty.

As we head towards the 2024 elections in October, I am committed to delivering reforms that will continue to improve the sector. These reforms will provide confidence and assurance to local communities that their elected representatives are capable and focussed on addressing local priorities.

It is also timely, as we look to the forthcoming local elections, that we ensure our system of local government supports newly elected councillors and provides clarity about their roles and responsibilities.

This Bill will deliver three broad outcomes: strengthened council leadership, capability and councillor conduct; an effective dispute resolution process that provides for early intervention in conduct issues; and additional oversight mechanisms to enable targeted and effective resolutions that support good governance.

The Independent Broad-based Anti-corruption Commission’s (IBAC) Operation Sandon Special Report made a number of recommendations to improve council governance which the government has accepted in principle. Seven of these recommendations will be implemented through this Bill.

In early 2024 the local government sector had the opportunity to provide feedback on the proposed reforms via the Local Government Reforms Consultation Paper. I am pleased by the many contributions received, the majority of which are supportive of these reforms.

The Bill also provides an extension of the local government electoral process timelines to account for the increased scale and complexity of local government elections. This will support their effective delivery and ensure continued confidence in our local elections.

Strengthened council leadership, training and councillor conduct

Councillors play an important role in their communities, making local decisions that collectively impact on the day-to-day lives of all Victorians. All councillors must understand their role on council and have regular opportunities during their term to develop their knowledge and understanding.

The Bill will require all councillors to complete mandatory annual professional development training and mayors and deputy mayors will be required to undertake additional training within one month of being elected to these roles, to support effective council leadership.

Poor conduct by a minority of councillors is an ongoing challenge for the local government sector. This Bill will introduce a Model Councillor Code of Conduct that all councillors must observe.

A breach of the Code will be classed as misconduct, and grounds for an application to an internal arbitration process.

A Model Councillor Code of Conduct will provide a consistent approach across all councils and ensure that the expectations of councillors are clear as well as the required responsibilities and obligations of their role.

There is strong support for this reform from the local government sector. During sector consultation on the report, 71 per cent of responses were supportive of this reform. The sector supports a consistent and uniform standard of behaviour, through the establishment of the Model Councillor Code of Conduct, that will increase accountability and raise the professional standards across all councils.

The Model Councillor Code of Conduct will be designed and developed in consultation with the local government sector. Councils will be able to supplement the Model Councillor Code of Conduct by adopting supporting policies that reflect their local circumstances.

Early intervention and effective dispute resolution

Where intervention into the inappropriate conduct of a councillor is necessary, it is in the best interests of all parties that this is undertaken quickly, procedural fairness is maintained, and an appropriate resolution is achieved.

To address increasing concerns that councillor conduct processes are being unnecessarily drawn out and sanctions delayed due to the multiple appeal avenues, the Bill will remove the process of seeking a review at VCAT for councillors that have had a finding of serious misconduct made against them by a Councillor Conduct Panel. This process has been used to re-litigate the same matters – protracting proceedings and placing an additional burden on all parties.

The removal of the VCAT review process for serious misconduct findings, was supported during consultations and aligns with the internal arbitration process under the Local Government Act 2020, where no VCAT review exists. Procedural fairness is maintained as affected parties retain the ability to seek judicial review of a decision at the Victorian Supreme Court.

The majority of sector responses provided through consultation were supportive of this reform, as it will streamline existing dispute resolution processes and ensure that review processes are not politicised.

It is appropriate that those councillors who engage in misconduct and disrupt the business of council are held accountable for their actions.

The Bill will prevent councils from indemnifying a councillor for legal costs relating to internal arbitration processes and Councillor Conduct Panel hearings unless an order has been made granting leave to have legal representation. Importantly, this reform will allow councillors to be indemnified by Council resolution or where an arbiter or councillor conduct panel considers that legal representation is necessary to ensure that a hearing can be conducted fairly. This will address concerns from the sector about the system becoming too legalistic, reduce the resultant delays and minimise costs to councils, and ultimately rate payers.

The sanctions for misconduct have been reviewed and the powers of an arbiter will be enhanced. The Bill will increase the length of time that an arbiter can suspend a councillor for misconduct, from one month to three months.

Two new additional sanctions will also be introduced enabling an arbiter to direct a councillor not to attend or participate in a council meeting, and direct that a councillor is ineligible for the office of Mayor or Deputy Mayor, for a period up to 12 months.

The Bill will make several administrative improvements to the councillor conduct framework to provide procedural clarity and ensure the framework operates effectively.

Oversight mechanisms

In circumstances where an individual councillor is creating a serious risk to the health and safety of others, or is preventing the council from performing its functions, it is appropriate that their suspension or disqualification be considered.

The Bill will enable the Minister for Local Government to suspend a councillor for up to 12 months. This would apply only when a report from a municipal monitor or Commission of Inquiry make such findings against a councillor.

Further, in instances where a councillor has also been dismissed by an Act of Parliament, the Minister can recommend to the Governor in Council the disqualification of that person from being a councillor for eight years.

Before the suspension or disqualification proceeds, the individual must be notified of the Minister’s intention and given an opportunity to respond.

The Chief Municipal Inspecter (CMI) reports to the Attorney General in respect to powers derived from the Local Government Act 2020 (the Act). The Bill will enable the CMI to provide advice, in relation to a council, to any Minister administrating a provision of the Act and to table a report in Parliament. This will ensure that, as Minister for Local Government, I can be advised of any governance concerns that the CMI identifies in the course of their investigatory work.

In addition to the CMI’s existing investigative and prosecutorial powers, the Bill will provide the CMI with the power to issue infringements to anyone who has committed an offence against the Act.

Currently the CMI can apply to VCAT to stand down a councillor, if charged with an offence that, if convicted, would disqualify them from being a councillor. The Bill will ensure that councillors are now automatically stood down in these instances. This will provide administrative efficiencies and is appropriate given the serious nature of these offences.

Municipal monitors play a fundamental role in supporting good governance in local government. The Bill will strengthen the ability of municipal monitors to perform the functions of their role, including the new functions I have outlined.

Extending the timelines for the local government election process

Local Government elections will be held on 26 October 2024. In anticipation of this, and in consideration of the increased scale and complexity of local government elections, the Bill will extend the date for the close of the electoral role to ensure the Victorian Electoral Commission (VEC) can effectively carry out its duties.

This change will enable the timelines for the local government elections to be amended through the regulations to support the administration of the election process and ensure that elections are conducted fairly.

Conclusion

These reforms will ensure councillors are equipped with the necessary training and skills to effectively perform their roles, and provide assurance to communities that local decision making is being undertaken by competent councillors, who understand their role and responsibilities.

In cases where councillors engage in misconduct, these reforms deliver expedited resolutions and more robust sanctions, ensuring community accountability.

I commend the Bill to the house.

James NEWBURY (Brighton) (11:21): I move:

That the debate be adjourned.

Motion agreed to and debate adjourned.

Ordered that debate be adjourned for two weeks. Debate adjourned until Wednesday 15 May.