Thursday, 4 August 2022

Bills

Local Government Legislation Amendment (Rating and Other Matters) Bill 2022

Second reading

Debate resumed.

Mr ERDOGAN (Southern Metropolitan) (14:04): I rise to continue my contribution on this very important local government legislation amendment bill before the house. It is a very important bill because as a government we value the contribution that local government makes. It is a sector in which our government has, as I stated earlier, made record investments—in infrastructure, libraries, sporting fields. No government in the history of our state has contributed so much to the local government sector as the Andrews Labor government has. When Minister Leane was in the role of Minister for Local Government we visited a number of libraries locally where upgrades and investments had been made and community outcomes and support services provided through our state and local government partnerships. There is fantastic work being done in that field, and this bill before the house builds upon all of that and much more.

An important point of these reforms is about the way the local government sector deals with hardship. As we know, there is a social contract here where we expect our local governments to act with compassion, act fairly and provide natural justice to their residents and ratepayers. In that spirit the Ombudsman conducted an investigation, and some of their key findings included that almost all councils had a hardship policy but they varied greatly, so there was a lack of consistency across our state. Councils did offer some good relief to ratepayers affected by COVID-19 during the pandemic. An example that has already been highlighted is the work that Hume City Council did in terms of working with their community and ratepayers during that difficult period. But information about hardship relief can be difficult to find. Many councils encourage ratepayers in financial hardship to go on payment plans. Councils do not always tell ratepayers that their rates can be deferred or waived. Many councils charge high penalty interest—currently 10 per cent—on unpaid rates. Councils had an over-reliance on debt collectors. They were some of the key findings from the Ombudsman investigation.

Obviously with the findings come recommendations: capping councils’ ability to charge high penalty interest; a stronger oversight of debt collectors; new laws requiring councils to publish hardship information, making it easier for ratepayers to know their rights; issuing standards for rates hardship relief, including where it is associated with family violence; and making legal action a last resort for councils—that was a key recommendation by the Ombudsman. She found that 48 per cent of councils did not include rate waivers as part of their hardship policies and 97 per cent of councils used debt collectors. That is appalling. What we would like to see is councils in the first instance trying to resolve the matters collaboratively in house with appropriately trained staff, and I think the amendments in this bill go towards that.

The issue of financial hardship can affect different demographics in different ways. I know from my experience on local council I found it quite a common issue with older retirees. They might have significant equity in their owned and occupied homes but there was no real way for them to use that wealth for their lifestyle or to live. As we know, house prices in metropolitan Melbourne have grown exponentially, but usually by the time someone is in retirement they might be asset rich but income poor, so the rates burden is quite significant, and obviously we do not want people losing their homes to the rating issue. Our government is committed to having a rating system that ensures ratepayers facing hardship are treated fairly and consistently, and I think these law reforms that we are bringing in will make sure that we have a uniform approach across our state.

I will stick to some of the more technical elements of the bill, because I think we have had a fantastic discussion to date about the broader issues of local government, but I want to stick to these exact reforms. What we will do is set a maximum amount of interest that may be levied on unpaid rates and charges, which currently can be as high as 10 per cent, so that will not be allowed. Councils will be limited in using Magistrates Court orders for recovering unpaid rates in situations where rates or charges have not been paid for two years or more—so, again, when someone does not pay rates for a few months, which has an added burden on the justice system as well. They cannot just take their ratepayer straight to court. We do not want that approach. The bill makes a range of improvements to the ability of councils to provide rate rebates and apply special rates and charges. It also makes technical changes to a number of acts. So as to bring to fruition these changes a number of other acts have had to be amended.

In terms of consultation our government is proud of our record of listening and acting upon that consultation. The rating system review involved extensive consultation throughout the state with ratepayers, councils and industry bodies. The government response supported 36 of the review’s recommendations and committed to implementing these recommendations in two stages, prioritising the recommendations related to the greatest support for ratepayers in financial hardship. This bill is the first stage of these reforms, with the second passage of the reforms to be progressed following the passage of this bill.

I have talked about the Ombudsman’s 2021 investigation. Some of the findings I was quite shocked and horrified to read; others were not surprising. But I am pleased that we are acting on them promptly, and I know the Ombudsman will be pleased to see this bill pass this chamber.

Obviously part of the change we are making is providing greater definition and ministerial guidelines, which will require early engagement with people who are struggling to pay their rates and will get rid of debt collectors and legal action unless ratepayers refuse to engage and all other options have been explored first. The guidelines will also ensure councils are not charging interest for those who are under hardship arrangements. The bill will further strengthen this by limiting councils’ use of Magistrates Court orders for recovering unpaid rates to situations where rates that are charged have not been paid for two years or more. Councils will retain the ability to pursue those who choose not to pay their rates despite having the ability to do so to prevent the rating burden unfairly falling on other ratepayers.

There are also a range of changes to rates recommended through the rating system review that form part of this bill. The criteria for councils to provide rate rebates and concessions will be expanded to properties that provide a public benefit. Councils are currently limited to providing rate rebates and concessions for the purposes of preservation of buildings, protection of the environment and assisting in the development of the municipality. The power to declare a service rate or charge will be amended to ensure that services relevant to modern waste management activities are captured and the definition is consistent with the Circular Economy (Waste Reduction and Recycling) Act 2021. There will be time limits put on the levying of council special rates and charges to minimise delays between declaring special rates and charges schemes and billing ratepayers. We noticed from the Ombudsman’s investigation that different councils took different approaches in this regard, and these reforms will provide uniformity across the local government sector in the way councils deal with ratepayers across our state.

There are many other amendments in this bill as well. I have probably focused more of my attention on the local government sector because, as I stated at the beginning of my contribution, I am proud of our government’s record of engagement with the local government sector and our ability to deliver services and much-needed infrastructure in local communities. In Bayside, which Mr Hayes would be familiar with, there have been a number of upgrades to some of the libraries and quite a few sporting precinct and pavilion works in partnerships between state and local government, and that is what we want to see. We want to see government that invests back in our communities, and local councils play a vital role in that. Local government workers are amazing. They are the front line. When you go to a library, you always see a happy face—the service, the connectivity. A lot of our community spaces—the COVID pandemic put them into light, the amount of space. The town halls are utilised. I was a councillor at Moreland City Council many years ago, and the Moreland council buildings, whether it was the Brunswick town hall or the Coburg town hall, were fantastic places where community came together. It was only through those facilities that we had that community feeling and cohesion. So I think councils play an important role in bringing communities together. Our government values them not just in words but in practice, through actual dollars. The money we are investing is proof of the level of engagement and the value we attach to councils, and record amounts have gone into those crucial infrastructure needs across local councils in our state.

There is obviously more to be done, and I think this bill is an important part in that piece. It is about addressing the hardship issues that all Victorians face and ratepayers face but also striking the right balance. I feel that this bill before the house strikes that right balance, and that is why I am commending it to the house. On that, I might conclude my contribution.

Dr CUMMING (Western Metropolitan) (14:14): I rise to speak on the Local Government Legislation Amendment (Rating and Other Matters) Bill 2022. This bill forms the first part of reforms coming from the local government rating review in December 2020 and the Victorian Ombudsman’s report Investigation into How Local Councils Respond to Ratepayers in Financial Hardship, released in May last year. I am pleased to talk to this bill, having spent 20 years as a councillor in Maribyrnong.

Let me start by saying that the Ombudsman’s report was welcomed by the local government sector. The report also provided context for clear facts around debt collection by councils and that the context is important. It stated that in 2018–19, firstly, 28 properties were sold for debt collection. That is approximately 0.00001 per cent of all properties valued. That is one in 10 million. Seven thousand cases involved debt collectors in 2018–19, and that is approximately 0.002 per cent of all properties valued, or two in 100 000. So, put simply, the sale of properties for debt collection and the use of debt collectors are used as a last resort. The report was the first clear direction to councils about matters to consider in a hardship policy—most councils.

All councils used the Ombudsman’s report as the basis to rework the hardship policies during 2021. Not only have councils already improved their policies, but most have already been road testing during COVID and been found to be delivering for the affected residents. The president of the Municipal Association of Victoria, which is the MAV, Cr David Clark, had this to say about the bill:

By contrast we still had a blank space when it comes to guidance from the State Government.

And that was not the only blank space. When you consider that rates are the biggest source of revenue for councils, you would have thought that this government would have engaged with them—or at least the industry body—about them. However, they found out when the minister issued a press release.

I did approach the councils in Western Metropolitan Region for their comments, and this is the feedback that they gave me. A reduced interest rate may encourage some ratepayers to not pay and fall further behind. Even under the current 10 per cent interest rate, the effective interest rate is around 4 per cent per annum, as interest is only charged from the instalment due date. The requirement to wait 24 months from a cancelled payment plan before issuing a complaint may have the unintended consequence of disincentivising ratepayers to make regular payments, causing them to fall further behind. Ministerial guidelines around payment plans, hardship and interest wrongly assume that that council’s current practices are not in the best interests of the community.

Councils have been extremely accommodating to ratepayers, especially during COVID, as shown by not charging interest on outstanding rates, offering payment arrangements and ceasing debt collection. Even before COVID, for some councils the practice was to cease charging any interest at all if the payment arrangement was adhered to. In addition, they would also waive part of the interest owing where the ratepayer wanted to make a concerted effort to reduce their debt and offered a lump sum in good faith.

Restricting the use of debt collection agencies may be counterintuitive, as the intention of using their services is to provide gentle early intervention measures such as emails, letters and text messaging to encourage the establishment of payment plans before it even gets to court action. If this process was shifted back to councils, it would require additional resources and specialised training, which could be more efficiently handled by debt collection agencies.

Most of the recommendations outlined in the Ombudsman’s report are largely embedded within current practices. This is shown by councils’ extensive use of payment arrangements. For example, Hume City Council has approximately 6000 ratepayers on payment arrangements. It ceases to charge interest where the arrangements continue to be adhered to, so debts can be extinguished quickly, and it only take legal action as a last resort.

The only reluctance by local government to adopt all the recommendations within the Ombudsman’s report relates to the waiving of rates, as this would shift the burden onto other ratepayers. Waivers are not commonly offered by any government organisation, including the Australian Taxation Office, the State Revenue Office and Centrelink. The private sector, including banks, gas, electricity and telcos, also do not commonly give waivers to debt. This government has had 15 months since the Ombudsman’s report and even longer since the rates review, so you would have thought they would have engaged with the sector, providing some guidance in the meantime, and got it right. I think the president of the MAV summed it up very well when he said that the government has:

… once again shown itself to be big on blame and little on responsibility and leadership.

He also said:

The proposed legislation will be as useful to the sector as arriving at the football at full time, the game has been won and everyone is heading home.

In other words, local governments are already doing this within their own practices. For me, with my experience in rates and trying to actually ease the burden to ratepayers, it would seem that there is more that could be done in the way of concessions, and the concessions desperately need more beefing up by this state government within legislation. My former council, Maribyrnong, actually gave a higher—almost matching, if not more—concession rate to pensioners. The state government gave a measly amount, a set figure. It was a measly, measly amount to pensioners. Maribyrnong City Council at that time wanted pensioners to stay within the city. They did not want the gentrification. They wanted our older residents to be able to stay in their own homes for longer and not be pushed out of areas due to the increased value of properties. There was gentrification, but they wanted people to stay in the homes that they had been living in for 50-plus years. Maribyrnong council gave a very high pensioner discount and concession. Why hasn’t this state government actually raised that, if not doubled that? Why? I cannot see it here.

There needs to be a certain amount of flexibility when it comes to council rates and the percentage that they increase by. As you all know, the cost of living has gone up, and we need to keep in step with that. Like every other industry, local government has pressures in the way of the rising cost of petrol and the flow-on effects of that, so local council rates have to keep in step with that but also be very mindful of where they can actually make concessions. Also this state government has to look at that, and I think that the local government sector are very happy about spelling out special rates and charges and being very clear to their community when they could possibly apply, such as what was discussed earlier by the government around waste levies and being very clear and succinct. It is a wonderful way to go, to understand what the contract is for a municipality and then divide that up per property to give a fair and equitable service, very much a user-pays service that is transparent and everybody can see. But when you have the state government sticking their finger into the same pie and levy and actually taking the levy and putting it into a pool here at the state level and then not spending it equitably across the state, that is when the unfair burden occurs for ratepayers. Local governments then become just the tax collectors for the state government, and that has been shown time and time again.

But where the state government could actually ease the burden is within the rate rebates and within the concessions. It would be seen here that the only additional powers that you are looking at are in the way of a concession in the way of what the land is actually being used for—in the way of its public benefit, such as what I can see here as examples: charitable, religious, educational or support services. The local government sector is dubious about this state government, seeing that it was only six months ago that this government wanted to cost shift social housing and relieve themselves of paying rates to the local government for the services, for their own housing in their own area. It would be a good measure for this state government to respect the local government sector and understand that they are all about making sure that their local residents can afford and pay the local rates, and this government should look more deeply into the concessions that they could possibly be giving to our pensioners to make sure that they stay in the communities that they have been in for the majority of their lives. This government should do this—look after our senior citizens.

I think I will leave my contribution there. Again, this state government pretty much let the community know this was occurring via a media release—media first, the sector second and the people that it actually affects, the local government, last. I believe that this state government could have done better in the way of making sure that the local government sector had the guidelines and was spoken to and consulted with before this came to this Parliament.

Ms TAYLOR (Southern Metropolitan) (14:27): The crux of this bill is really about making the collection of rates fairer and really about ensuring that people struggling to pay their rates are not being driven further into debt. It really is a very positive bill. It is delivering good things for the community, and there actually has been extensive consultation with all the relevant stakeholders, including ratepayers themselves—and I would have thought that ratepayers giving insight and having input into this was highly relevant, so I think that should not be dismissed as well.

So how did this legislation come about? We know that the bill implements a range of recommendations from the rating system review and the Ombudsman’s investigation into how local councils respond to ratepayers in financial hardship. If we look at, therefore, who have been the drivers behind these changes—in the most positive sense I say that—ratepayers, so community, have been driving these changes. Financial counsellors have asked for them and so have community lawyers, really concerned about the way councils treat people who cannot afford their council rates. I think it is important to be clear about who has actually actively contributed to what are really, really positive, commonsense and practical outcomes for the community at large.

We know when you are looking at the issues around this bill and what has driven it, the report found—and I am talking about the Ombudsman’s 2021 report—that people who were struggling to pay their rates were often met with debt collectors, high-penalty interest and in some cases costly court proceedings, and we all know that minimising the risk of having to go to court is a good thing because it is not in the interests of local councils or community to have to deal with such difficult, stressful and costly circumstances. So again, this bill has a very solid and sound rationale. It is really driving positive reform for the community at large, because we know if you are facing debt collectors, if you are facing high-penalty interest and maybe even some costly court proceedings, this creates more stress. On the one hand you might have the fear of losing your home, but on the other hand it has been found that there were compounding issues often—family violence and mental health matters.

So we can see that there really is a strong impetus for bringing through these reforms, contrary to some of the commentary we have heard in the chamber, which I find frankly astounding, because on the face of it these are very practical reforms and they have a very sound basis. By bringing debt collection back in house they were often able to work with people who were behind to find a way forward. I should say in other sectors—for instance, in the water sector and with utilities—they have found that that sort of early intervention, so very proactive intervention when you see that a particular client or customer is in trouble, can save a lot of problems in the long run. I am not sure why people would have an issue with that, but anyway that is why we have debates—so we can get clarity on these issues when we debate them in the chamber. Particularly when you are looking at issues of family violence and mental health, taking positive action here to pull back that stress and to create a more fair and reasonable process for getting to the end point, which is the collection of rates, has got to be a good thing.

Really, we are looking here fundamentally at a cultural change. It is not to slight councils in any sense. It is really about saying, ‘Hey, there are other ways that we can do things in a very pragmatic way but also a compassionate way that is actually sound but also based on more recent experience’. Surely we should not just do the same old, same old. I think it is important that we be proactive and that we actually acknowledge the input of those who did put their statements on the table with the Ombudsman’s report—ratepayers themselves. I do not think we want to shy away from their contributions—the community at large—we want to actually listen and address, and that is exactly what is being done here.

The bill will support cultural change in how councils consider unpaid rates and financial hardship and work with ratepayers early and proactively as part of their core business. That seems to be a very sensible way of progressing with regard to managing something which would otherwise pose, and has otherwise posed, some significant stresses and pressures for communities when they are doing their best to get ahead. Of course I emphasise here that it is people who genuinely are struggling to pay their rates. We are not talking about people who can actually afford to pay their rates and maybe are choosing not to. This is about those who are going through perhaps a very difficult period in their lives and are needing another mechanism, a practical mechanism, to help everyone get to where they need to go.

Another benefit of these particular changes is some ministerial guidelines in terms of the maximum interest rate set, because what has been found is that the current maximum interest rate set by the Penalty Interest Rates Act 1983 of 10 per cent is deemed to be disproportionate for unpaid local government rates. While councils may levy interest that is lower, this is inconsistently applied by councils. So the government considers it more appropriate that the maximum interest rate is set by the Minister for Local Government, with guidelines to ensure councils reduce the maximum amount for ratepayers experiencing financial hardship. The Essential Services Commission will provide advice to the minister prior to setting the maximum interest rate.

Yet again we see a consistent theme through this legislation, and it is really about bringing forward some fairness and uniformity, because another issue which has been raised by a number of my learned colleagues is the difficulty—and they have found this statistically—that a lot of people have not known what to do next. If they are struggling to pay their rates, they are not actually going back to council and finding a way through that necessarily, and that suggests there really needs to be greater clarity, certainty and understanding across the state so the community is empowered in this situation. But also it is giving a clear pathway for councils as well so they know what they can do and, let us say, what they should do in order to enable a better outcome in terms of helping to get rates paid that are owed but in a way that is done with compassion, is sensible and can actually be achieved.

I know there was some conjecture about ‘terrible government bringing forward this fairness and certainty and uniformity and making sure that the community are aware of their rights and what they can do to help them get through a period in their lives where they are struggling and battling to pay their rates’, but I put it to you that these are actually very sensible and sound reforms. As I have a couple of times already, I am going to reiterate that ratepayers themselves have contributed to these outcomes in terms of informing the process behind this legislation. I do not think it would be appropriate for us to snub that. I think in fact we actually are taking it on board as well as the input of financial counsellors and community lawyers. So to suggest that there has not been consultation or that there has not been an understanding or input from community or otherwise does not actually quite fly. That does not pass the pub test. That is not actually accurate when we look at it. I am sure the Ombudsman’s report has been accurate in terms of providing the community with data in terms of who had input into that particular report, so I am not sure why there is conjecture on those particular elements. But again this is the beauty of having a sound debate on these issues—so that we can provide clarity and make sure that any misconceptions are cleared up in front of us here and now.

Another important point about the ministerial guidelines is that they will define ‘financial hardship’, require early engagement with people who are struggling to pay their rates and get rid of debt collectors and legal action unless ratepayers refuse to engage and all other options have been explored. Yet again I think this is perfectly reasonable, and we can see this is a measured approach, it is a compassionate approach and it is one that is actually trying to work proactively but also collaboratively with the relevant residents who may be having difficulty in being able to fulfil their rate payments. The guidelines will also ensure that councils are not charging interest to those who are under hardship arrangements. I would hope that there is no objection to these particular elements, because again that would seem to be a fair and reasonable outcome. Of course these are underlying values of our government. Fairness is certainly inherent in the way we operate, so it makes good sense that we would deliver upon fairness with legislation and these kinds of reforms, which are really addressing community needs that have been expressed overtly.

The bill will further strengthen this—I am talking about not charging interest to those who are under hardship arrangements—by limiting the use of Magistrates Court orders for recovering unpaid rates to situations where rates or charges have not been paid for two years or more. I do not think I need to reiterate—I think everyone would be perfectly aware—that any kind of litigation is inevitably going to be stressful. It is pressured. It can be very costly. I do not think it is in the interest of any council to be having to go down that path if they can avoid that. I do not want to speak on behalf of councils—they certainly can speak very well on behalf of themselves—but I am just putting myself in that situation. I was a councillor once upon a time with Glen Eira council, and I know that it certainly would not be a desire of any council to have to have litigation in order to be able to recover rates. Therefore putting these measures in place means that everyone knows where they stand and we have got that uniformity and certainty and fairness.

The criteria for councils to provide rebates and concessions will be expanded to properties that provide a public benefit as well. I know one of my learned colleagues, I think it was Mr Erdogan, was talking about the fact that this bill has other elements which are actually very helpful in terms of delivering, again, on fairness. Councils are currently limited to providing rate rebates and concessions for the purposes of the preservation of buildings, protection of the environment and assisting with the development of the municipality. The power to declare a service rate or charge will be amended to ensure that services relevant to modern waste management activities are captured and the definition is consistent with the Circular Economy (Waste Reduction and Recycling) Act 2021. We know when we are looking at waste we all like to think that we look at it in a much broader and more contemporary manner in the sense that we can see it as something that is actually able to be recycled. In many instances we have organic waste, and I would like to think that we are developing a much healthier attitude to not simply accumulating and dumping waste but actually seeing and repurposing waste. Hence it makes good sense to be updating the definition of ‘waste charges’ so that we are really clear about what a contemporary council is having to deal with in terms of waste collection. There will also be time limits put on the levying of council special rates and charges to minimise delays between declaring special rates and charges schemes and billing ratepayers.

The bill also makes amendments relating to the implementation of the new Local Government Act 2020 to ensure it is operating as intended. And this includes—this is the other point that I wanted to get to in the minute that I have—amendments to address concerns raised by the Office of the Victorian Information Commissioner in relation to the processing and handling of freedom-of-information requests by councils. These amendments will ensure that confidentiality provisions in the Local Government Act 2020 are not contrary to the principles of transparency and accountability in the Freedom of Information Act 1982.

I will proceed to close at this point, but suffice to say this is delivering something that the community have actually requested. These reforms have been driven by the community and other professionals who have had to see the downside, the very negative side, of debt collection and otherwise to create a fairer, more compassionate system that is uniform across the state.

Mr QUILTY (Northern Victoria) (14:41): I will be brief. Last Saturday I spoke at the conference of Ratepayers Victoria. The ratepayers of Victoria should perhaps be referred to as ‘the great ignored’. They stump up the cash to pay for everything that councils do, more and more every year, but then they get pushed to the back while small but vocal interest groups advocate for how the money should be spent. As a former councillor myself, this is an area I take special interest in. When you vote for Liberal Democrat candidates in local government elections, you know you are voting for someone who will always oppose wasteful spending and rate hikes and will not participate in woke or culture war nonsense or pander to special interest groups. Our focus will always be the ratepayers and fighting to get them value for money. Lib Dems is a brand you can trust. Some other major party brands have become tainted; there is a smell, a stink, about them, like someone left prawn heads stuffed into the air vents some time ago and now they cannot get the smell out.

Local government in Victoria is a disease-infested swamp that needs to be drained, and that will only be achieved by both legislative reform and a better class of councillors being elected who are not beholden to special interest groups or funded by developers to ensure that the supply of land is kept artificially low to inflate profits. The Local Government Act introduced by this government in 2020 is seriously flawed legislation. It has stripped even more power from elected councillors and handed it to unelected staff. Councils are increasingly expected to be just a forward-facing rubber stamp for the decisions made by CEOs and senior staff. The new act also increased the tools of secrecy used to hide from ratepayers what is going on and how money is being squandered, and it fiddled with the electoral system to make it harder for minor party and independent candidates to be elected. When the bill was being introduced, the Liberal Democrats proposed amendments, sadly defeated, including ones that would have stopped councils using commercial in confidence to hide the details of pretty much every contract they enter into. Far too many decisions are hidden in commercial-in-confidence meetings. Until we can shine sunlight on the dodgy decisions councils make, bad behaviour will continue to thrive in the shadows.

Now, the thrust of this bill is to set up a standardised hardship payment plan for rates. In general the bill will make it more difficult for councils to go after people’s property when they fail to meet rate payments on time. This change feels a bit like the short-term registration payment option the government implemented a few years ago. It is a good change, but it speaks to a more worrying underlying problem: payment plans and short-term payment options are necessary because fees and charges are not affordable. The problem being addressed here is that people are going broke and cannot pay their taxes. The better solution here would be to reduce taxes, but that is an option that this government does not like to consider.

Aside from rating changes, the bill makes some small improvements around freedom of information. The changes clear up a legal ambiguity that councils were using to keep information confidential, but it is just a small tweak at the edge of a pile of bad behaviour. Councils continue to keep far too much information secret from the public. As I said, commercial in confidence is routinely used to cover up expenses and to obscure blunders. Councils are pushed aside, with decisions being made by CEOs and senior staff, and are silenced by codes of conduct that prevent them from expressing any dissent to decisions that are made. Is it really a representative government when your representative is not really making decisions and is not allowed to talk publicly about those decisions?

Local government needs an overhaul in Victoria. This bill is not the overhaul we need. We will support it, but you are just tinkering around the edges of an out-of-control problem. We need serious local government reform, and this is not it. Local government is a swamp that needs to be drained. I note the Greens proposed amendments to the act. The Greens are not usually known for wanting to drain the swamps. They are more generally into preserving the wetlands instead, and some of these amendments can be seen as an attempt to preserve their own little corner of the muck; however, we will support their move to return councils to multimember wards. We believe this is definitely needed. The Liberal Democrats will support any measure that makes councils more transparent and more responsive to the views of the ratepayers of Victoria.

Dr KIEU (South Eastern Metropolitan) (14:46): I rise to speak to the Local Government Legislation Amendment (Rating and Other Matters) Bill 2022. Someone sometime in their life may experience some hardship and some difficulty and may fall into financial hardship, in particular falling into debt, including owing rates to the council. So this local government legislation amendment bill is about making rate collection fairer and ensuring people struggling to pay their rates are not further driven into debt or do not have to sell their house to repay the debt. The government is committed to having a rating system that ensures ratepayers facing financial hardship are treated fairly, equitably and with certainty, and this bill will do just that.

In 2018 the Victorian government committed to a review of the local government rating system in order to ensure rates are fair and equitable for all in the community. A ministerial panel was appointed to lead the rating system review in consultation with the community, the ratepayers, the councils and all key stakeholders. The review reaffirmed the importance of the local government rating system to fund essential infrastructure and local services, as they are tasked to do. It found that the rating system is not broken and is in line with many of the principles underpinning a good taxation system. The government in response has supported 36 of the panel’s recommendations in full, in principle or in part. As part of the response, the government committed to prioritising the reforms that will (1) support ratepayers in financial hardship, (2) improve the transparency and consistency of decision-making and (3) build greater equity and fairness into the rating system.

Following on from that, in 2020 the Ombudsman also commenced an investigation into how local councils respond to ratepayers in financial hardship. The investigation looked into each and every one of the 79 councils and whether information about council financial hardship assistance is easily and readily accessible for ratepayers, whether assistance is fair and reasonable, how council assistance schemes compare with best practice and what councils can learn from the COVID-19 relief schemes. The report from the Ombudsman found that most people who experience financial hardship do not apply for council assistance and that information about applying is often hard to find and understand.

In contrast, take the example of some of the utility companies: they have a more proactive approach to identifying customers in financial hardship. They take steps to identify customers themselves, whereas councils rely, on the other hand, on people asking for help. The report also highlights cases where the interest charged built up over time to the extent that it was 25 to 50 per cent of the total debt, creating a poverty trap for those who had already been struggling financially. So this bill is the first step in implementing a range of recommendations from the rating system review and the Ombudsman’s investigation. The second stage of reforms will be progressed following the passage of this bill in the next term.

The report, as I mentioned, found that people who were already struggling to pay their rates would often meet with debt collectors, high penalty rates, high penalty interest and, in some cases, costly court proceedings. Of course this created more stress and even fear of losing their homes for those who were already struggling and maybe dealing with a range of compounding issues, including family issues, including family violence and including mental ill health. In comparison, some of the utility companies, including water corporations, found that implementing early interventions and flexible approaches to payment collection methods reduced outstanding debts and overall legal costs.

Mr Leane: They have a business plan.

Dr KIEU: They have a business plan. Thank you, Minister Leane.

During the pandemic, which was a very challenging time for many of us, some of the councils adopted more flexible and compassionate approaches for those who were particularly experiencing financial hardship. Now the bill will further strengthen and support those measures. First of all, the awareness of ratepayers that they can approach the council and seek assistance will also be strengthened with a uniform approach to hardship. The bill will empower the Minister for Local Government, in consultation with the Essential Services Commission, to set a maximum amount of interest that may be levied on unpaid rates and charges. Currently the interest on some of those rates and charges can be as high as 10 per cent. Even though it is not uniform, that is how much it could go to.

The bill will also develop ministerial guidelines councils must follow in dealing with ratepayers who are experiencing financial hardship. What has been lacking so far is what is meant by ‘financial hardship’. The ministerial guidelines will clearly define what is meant by financial hardship and require early engagement with people who are struggling to pay their rates and get rid of debt collectors, who are very intimidating to many people. Councils will not take legal action unless ratepayers refuse to engage and all other options have been considered and still not produced a result. The ministerial guidelines will also ensure councils are not charging interest to those who are under hardship arrangements. We do not want compounding interest on compounding financial hardship, affecting the difficulties and also even the mental health of the person in question.

The bill will further strengthen this by limiting councils’ use of Magistrates Court orders so they can go through the Magistrates Court to recover unpaid rates only in situations where rates or charges have not been paid for two years or more. Of course councils will retain the ability to pursue those who choose not to pay their rates despite having the ability to do so to prevent the rating burden unfairly falling on other ratepayers.

The criteria for councils to provide rate rebates and concessions—on another matter—will be expanded to properties that provide a public benefit. Currently councils are limited to providing rate rebates and concessions only for the purposes of preservation of buildings, protection of the environment and assisting in the development of the municipality. The power to declare a service rate or charge will be amended to ensure that services relevant to modern waste management activities—namely, waste reduction and recycling—are captured and the definition is consistent with the Circular Economy (Waste Reduction and Recycling) Act 2021. Also there will be time limits put on the levying of council special rates and charges in order to minimise delays between declaring special rates and charges schemes and billing ratepayers.

This bill also has some other elements; in the time remaining I would like to quickly go through them. The bill also includes amendments to address concerns raised by the Office of the Victorian Information Commissioner in relation to the processing and handling of freedom-of-information requests by councils. These amendments will ensure the confidentiality provisions in the Local Government Act 2020 are not contrary to the principles of transparency and accountability in the Freedom of Information Act 1982. Also the bill will expand the current exemption to entitlement under the Workplace Injury Rehabilitation and Compensation Act 2013 for a mental injury caused wholly or predominantly by the reasonable management of companies. This includes an application for a finding of or proceedings in relation to serious misconduct by a councillor. Lastly, the amendments to the Domestic Animals Act 1994 create regulation-making powers to facilitate the return of lost pets and the scanning of deceased pets on council property for microchip identification and notification of pet owners.

The Andrews Labor government is committed to ensuring people struggling to pay their rates are not being driven further into debt and/or out of their homes and to creating a more fair, equitable, consistent and transparent system. The bill makes a range of improvements to the ability of councils to provide a few other things like rate rebates and apply special rates and charges. I commend the bill to the house.

Mr LEANE (Eastern Metropolitan—Minister for Commonwealth Games Legacy, Minister for Veterans) (14:59): There have been a lot of contributions on the details of this bill, and I thank everyone that has spoken in the second-reading debate. I think there is global support across everyone about this being an important bill. The intent of this bill is to replicate what is already happening, as Dr Kieu said, in water agencies—and it has been proven to be a better business model because they have actually saved money since it has been implemented—where if someone is late on a bill, they get a phone call from the water agency asking them if everything is okay.

For someone like me that sometimes forgets to pay the bill, I say, ‘Sorry, here’s my credit card—paid’. If it is someone that is in distress for certain reasons, they treat them with respect and they say to them that maybe they can make a follow-up call in a couple of months when they are in a better position. If it is someone that has been identified by the water agencies time and time again—and they have had a number of referrals of people that have been victims of family violence—they have supported those people. Under this business model they have actually saved money from not having debt collectors, from not going to the Magistrates Court and from not sending endless red pieces of paper. They actually treat people as human beings and respect them—and they have saved money.

This also comes out of the rates review, where there was a lot of consultation, and the Ombudsman’s report. I congratulate the Ombudsman for her report. She had a lot of consultation, and she had some horrifying examples of how some people had been treated by some councils—horrifying examples—where their interest rate bill debt was higher than their council rates. Then today we have people come into this chamber and say, ‘The councils are already doing all this’. Well, that is not true, and the Ombudsman proved that.

The glaring bit of evidence for this chamber today is where councils are saying they are charging 10 per cent interest on late rate payments because they can—under another act. Only a couple weeks ago in a local paper a council in the south-east of Melbourne said, ‘We’re going to continue charging 10 per cent because we can’. Well, I will give them a tip. After everyone has indicated they are going to support this bill today, they are not going to keep doing it. They blatantly came out and said they should be able to. So spare me everyone in here saying that all the councils are already doing it and they are all fantastic citizens. There are some fantastic citizens among the councils—the same councils that urged me to bring this bill to the chamber, councils that have already been doing this and are concerned about the bad name their fellow councils are getting because of the horror stories that the Ombudsman had written into her report and more.

I think on principle, too, every time a bill comes that might have the words ‘local government’ in it or anything else, for a member of this chamber to get a reasoned amendment to be able to talk past the scope is a really bad way for this chamber to act. Every time someone can come in and say, ‘I want to talk about something outside the scope of the bill in committee stage’, it is a bad precedent and also a way of putting a bad light on a good bill. This is a good bill—and even, Mr Davis, you said you kind of support it.

Mr Davis interjected.

Mr LEANE: Well, I think you do. You know you have got some concerns. You can ask questions. That would be great.

We are not going to support the reasoned amendment. We are not going to support the other amendments that have been proposed by Dr Ratnam. It is very disappointing that we cannot get a consensus without grandstanding on a really, really important bill. All the welfare agencies have come out in support of this bill because their clients are still suffering now. So spare me anyone who said, ‘Oh, they’re all doing it now’, because they are not. There are some councils that have done a fantastic job in this area, but there are still examples where ratepayers who have found themselves in hardship are getting treated very, very poorly.

As far as consultation goes, someone is on the record saying there was not consultation. Well, I can give the dates that the Municipal Association of Victoria had consultations, and I can say who was actually at those consultations. I know that MAV have a role and a few of their members get upset and then they feel that they have to act in a certain way, and I respect that. I also respect Cr Clark. I think he is a very good man. I have a great working relationship with Cr Clark, 100 per cent, probably better than you would, Mr Davis. But anyway—

Mr Davis: No, I have a reasonable relationship with him too.

Mr LEANE: I do not know. That is not what he told me, but anyway. I understand their responses on behalf of some of their members and I respect that. My ego can take that. But as far as the consultation goes, if anyone wants to know, I have got it all documented there. The Essential Services Commission met with the 79 CEOs, and we actually gave them consultation before that. If I seem a bit underwhelmed by some of the contributions on this particular bill, forgive me, because this is a very good piece of legislation that takes up the recommendations of the Ombudsman. The Ombudsman actually put out a media release after we put out the legislation to congratulate us on picking up all her recommendations, and we thank her for that.

Motion agreed to.

Read second time.

Instruction to committee

The ACTING PRESIDENT (Mr Gepp) (15:06): I have considered the amendments proposed by Dr Ratnam: sets SR111C and SR112C. In my view, these amendments are not within the scope of the bill. They therefore require an instruction motion pursuant to standing order 15.07.

Dr RATNAM (Northern Metropolitan) (15:07): I move:

That it be an instruction to the committee that they have power to consider amendments and new clauses to:

(a) amend the Local Government Act 2020 to prohibit donations from property developers and gambling industry business entities to candidates and councillors; and

(b) amend the Local Government Act 2020 and the City of Melbourne Act 2001 to enable a person who has attained 16 years of age to enrol on the voter’s roll and the Electoral Act 2002 to enable a person who has attained 16 years of age to provisionally enrol on the register of electors.

If I may speak briefly to my instruction motion, I understand that the government is unwilling to support instruction motions anymore despite a long-held convention for a number of years that allowed these to be passed and for individual amendments to be debated and voted upon their merits following debate. The government always had the opportunity if they disagreed with the amendments, as did every other person in this chamber, to vote against the amendments should they not support them.

I appreciate that out-of-scope amendments need to be raised judiciously. However, they do remain an important opportunity, especially for we crossbenchers here who have so little opportunity otherwise to put matters before the Parliament. Denying the ability to even debate amendments is really regressive and limits what are already limited opportunities for a number of us. Denying this on procedural grounds must be seen for what it is: an attempt to shut down debate on issues that in this case the government does not even want to debate or declare its position on. My amendments today are a case in point.

The government has been promising reform on local government donations for years. I have asked repeatedly about it and they kept saying that it had to wait for the IBAC report. But we only have three weeks left to go of this Parliament and we have no indication of when the IBAC report will be tabled nor when the government will introduce its long-promised reform. But we know everything we need to know already, particularly as all the hearings have been completed for IBAC, about why we have to get on with this reform urgently. We cannot hide behind excuses when it comes to improving integrity, which is what—

Members interjecting.

The ACTING PRESIDENT (Mr Gepp): Order! Sorry, Dr Ratnam. There is a lot of chatter in the chamber. Can Dr Ratnam be heard in silence, please.

Dr RATNAM: We cannot hide behind excuses when it comes to improving integrity, which is what part of my amendments seek to achieve. Not a week goes by in Victorian politics without another scandal about the integrity of this Parliament and the conduct of politicians.

My amendments will ban political donations from property developers and the gambling industry to candidates in local council government elections and elected councillors. This is an extremely straightforward anti-corruption and integrity measure such as already exists in New South Wales and Queensland. While we have reformed political donations at the state level to cap donation amounts and improve disclosure, local government elections have no such rules. At the local government level the only requirement is for a post-election disclosure 40 days after the election, which I noted in this chamber earlier this year many candidates in the 2020 election simply did not comply with, yet they faced no consequences for breaching it—the only transparency measure in place.

We also know that local government is at risk of corruption, with property developers seeing the potential profits to be made from influencing council planning decisions. We only have to look at Casey council and John Woodman and the evidence that has emerged from IBAC’s Operation Sandon to see how property developer money can be used to distort planning decisions and influence outcomes. The simplest way to get dodgy money out of local government is to ban property developer and gambling industry donations, and given the stories we have heard in the media this week about attempts to subvert the donation rules, now is the right time for the government to show that it is serious about integrity in politics and to support this move to improve our donation system.

This excuse from the government about needing the Independent Broad-based Anti-corruption Commission or a royal commission before it can act is wearing thin. We saw with Crown that, after decades of Crown running rings around the government, it took a New South Wales inquiry to push the government to hold a Victorian inquiry before the government would act, despite knowing for years that the regulator was not doing its job properly. Similarly, the government did not need an IBAC report to know that Victoria needs an independent parliamentary integrity commissioner. It was apparently proposed by Gavin Jennings back in 2016. Similarly, today we do not need an IBAC to tell us that there needs to be political donation reform for local government. It is plain as day that this needs to happen. So I just do not buy this excuse.

I urge everyone to support this instruction motion. Do not make this instruction motion a proxy for the government to avoid debating and declaring its position on matters that go to the heart of the integrity of our Parliament and that Victorians want urgent reform on.

Mr LEANE (Eastern Metropolitan—Minister for Commonwealth Games Legacy, Minister for Veterans) (15:12): I just want to thank Dr Ratnam for admitting that her amendments are outside the scope of the bill. Like I said in my second-reading summary, just because there is one word in the title of the bill it does not invite someone in the chamber to suggest we should talk about many, many things outside the scope of the bill. That is not the intent of these sorts of instruction motions. So for that and a number of other reasons, we will not be supporting it.

House divided on motion:

Motion agreed to.

Committed.

Committee

Clause 1 (15:20)

Mr DAVIS: I have only got a very small number of questions, which I kindly flagged for the minister. Minister, this bill provides the capacity for councils to allow certain groups to not pay rates, and I wonder if you would indicate to me whether the government has done any analysis of what that might mean in different municipalities or whether you have proceeded on this in the abstract without such analysis.

Mr LEANE: Mr Davis, if a council chooses to apply different rebates, that will be up to the council. We have not done any sort of analysis council by council, but I will say that if a council decides to apply a new rebate, which I think your concern is about, the cost of that will come out of the council’s consolidated revenue. It does not allow for rates to be redistributed, so there will be no cost shifting. There will be no shifting of the rate burden to other ratepayers, and I understand that was your concern in your second-reading address.

Mr DAVIS: I thank the minister for his answer, but I would put it to him that what he said is not quite right. I know that might be the government’s intent, but if the council was to strike just a slightly higher rate and then to exempt one particular group from the rate it would have the practical effect of increasing the rates paid by others within the municipality.

Mr LEANE: Mr Davis, the rate-capping policy—and I assume the coalition have assumed the same policy going forward—will be in place, so no council can go above a certain rate cap anyway, and as I said, any rebates will have to come out of the council’s consolidated revenue. It does not allow for rates to be redistributed, and no shifting of the rate burden will be applied.

Mr DAVIS: Again I thank the minister for his answer, but I would put it to him that it is not quite the full story. Whilst the rate cap is there, that relates to the aggregate take of rates across the municipality, and if the aggregate take has only gone up by the CPI or a small amount near the CPI but the rates to particular ratepayers have gone up higher, with another group exempted, I put it to him that actually there will be a redistribution of rate burden.

Mr LEANE: I stand by my previous answer.

Mr DAVIS: I do not intend to press the point, and I thank the minister for his answer. But I think he has answered enough and it is clear that a de facto redistribution of rates can occur and that rates may well rise in some municipalities to, in effect, even if it is not the government’s intent, cover the rebate arrangements.

Mr LEANE: I will take that as a comment and disagree.

Dr RATNAM: I move:

1. Clause 1, page 2, line 13, omit “owners.” and insert “owners; and”.

2. Clause 1, page 2, after line 13 insert—

“(e) to amend the Local Government Act 2020 and the City of Melbourne Act 2001 to enable a person who has attained 16 years of age to enrol on the voter’s roll; and

(f) to amend the Electoral Act 2002 to enable a person who has attained 16 years of age to provisionally enrol on the register of electors.”.

These amendments will lower the voting age in local council elections to 16. Voting will be voluntary for 16- and 17-year-olds, but I know that many will take the opportunity to have their voices heard. Our young people are our future. The consequences of decisions we make here as elected representatives will be borne by the young, and yet while they are actively fighting for their futures, marching in the streets and demanding better from their governments, they have no say in who their governments are until they turn 18. The Greens want to give the vote to all 16- and 17-year-olds, and we think local government elections are the perfect place to start.

Mr LEANE: I have got no questions. If I was going to try and be flippant, I would say that this may be a punishment for people that are 16 and 17, making them vote in a council election. We do not support the amendments. And I think that there has got to be a lot more consultation with the community before a step like this is taken.

Mr DAVIS: The Liberals and Nationals will oppose this for many of the same reasons as the government. I note that the government, I think, has brought in a 16-year-old voting threshold for the Indigenous assembly. I am not sure how they arrived at that. I think it is quite inconsistent to bring in these different ones. I always thought that we had settled these things at about 18, when people could get their drivers licence, join the military and do all of the long list of other things. They are treated as adults from that point forward. So that is the reason we support the 18-year-old threshold. But I would, by way of a question perhaps, ask Dr Ratnam how she arrived at 16. Why not 15 or 12 or 10? What is magical about the number 16? I know it divides by four, four times. I am just trying to work out the other qualifications.

Dr RATNAM: Thank you, Mr Davis, for that question. It is a very good question. Similar to the process at which you arrive, for example, at the age of 18, a question could be raised: why isn’t it 19 or 17 or 21? Different countries do have different age thresholds for a range of things. Some of the most complicated systems are where there are really inconsistent thresholds. The response to ‘Why 16?’ is similar to how 18 is arrived at on the balance of a number of considerations. We see more and more young people who are expressing to us as parliamentarians—they are certainly out on the streets more—and saying, ‘We want to have a say in the decisions that affect our lives’. They are getting really disenchanted with the types of people who are elected to represent their positions and who are trashing their futures on so many fronts. So we are hearing more and more from younger people, particularly 16- and 17-year-olds, who are saying, ‘Please give us the vote so we can shape our governments and we can see the type of action that we want to see happen to guarantee our futures’—and so that they can get elected and they too can represent their constituencies. So it is based on a balance of considerations, similar to how other age thresholds are arrived at, and is in response to community feedback to us from when we have talked to the community. I welcome this debate. I think it is really important we think about how we make decisions for other people and how all groups of people are represented in that decision-making. And sometimes it is about enfranchisement, of which this is taking the next step.

Mr DAVIS: I thank Dr Ratnam for the response, and I understand the point she has made. We will not support it. I am not persuaded.

Mr LIMBRICK: The Liberal Democrats also will not be supporting this amendment, for many reasons similar to the government and the opposition. It may be a fair enough debate to say, ‘Is 18 the right age or not for someone to become an adult?’. But arbitrary or not, our laws basically for most things have it so that we can drive a car, we can purchase alcohol, we can join the military and we can do all of these things at 18. We can stand as a member of Parliament once we are 18, and we can vote. I think also that being unable to stand as a candidate when you are 16 is problematic as well. And it is unlikely that someone at 16 would be a taxpayer, whereas once they are 18 they become a taxpayer and they become engaged.

Dr Ratnam interjected.

Mr LIMBRICK: Yes, they can work younger, but they are unlikely to be a ratepayer. I think the main argument here is that we have a line, whether it is arbitrary or not, at 18 for most of these functions where we declare that, ‘You’re an adult and you have all the rights and responsibilities of becoming an adult’. I think that moving that for one particular function, which is voting in local council elections, is problematic without more widespread consultation.

Dr CUMMING: I support Dr Ratnam’s amendment. I do believe that it would be great for us to bring down the age for people to be able to enrol to vote. I think it is something that has been lost, this opportunity. What I hear from my community is that younger people are screaming out to have lifelong skills within their high school. They would like to be taught how to vote. So allowing 16- and 17-year-olds to enrol to vote would be a way to get them to be part of our democratic process. There is younger and younger representation on local councils. We have younger and younger mayors and local council representatives. You do not have to be a ratepayer to run for council; you only need to be a resident. Our younger teens are able to learn how to drive. They are able to have a learners permit. They are able to work. They are able to actually become apprentices. So why can’t they start the process of being involved in voting and understanding our democratic process? I think it would be great. I cannot believe the Labor Party is not supporting this, seeing that they use local councils as a kindergarten for politics. They could start using high schools as their kindergarten—looking forward to the Labor branch of each high school. So they could start putting little seedlings in our high schools. I am looking forward to that.

Ms PATTEN: I found myself nodding with Dr Cumming. It has not happened for quite some time, Dr Cumming. But when she started talking about partisan politics, she lost me. However, I do support the notion of young people having their say at local government levels. As Dr Cumming mentioned, these young people are paying taxes. As Mr Limbrick forgot to mention, they own guns. They can have licences for guns. They have learners permits. I think also when you look at things like Youth Parliament, which I know many of us have been engaged in, you see the sophistication of the arguments that those young people are presenting to this Parliament and the urgency of young people when they are marching in the streets, whether it is on climate change or even on reproductive rights—we saw a whole bunch of young women marching. This is not compulsory voting, it is about enabling them to have a say in their local community and start engaging with this. I cannot think of anything more that we would want from our young people than to be engaged with our processes. So I support this amendment.

Mr ATKINSON: I would have more sympathy with this particular amendment if in fact there was also a commitment to introducing it at state and federal level. The fact is I do not see that local government ought to be an experiment in whether or not young people are interested in politics, the political process and voting. In fact I am engaged in the arguments that have been put by Dr Ratnam. But the interesting thing is that the issues that are likely to most interest young people are not local government issues. The issues that young people are most interested in are far more likely to be state issues and, more importantly, federal and international issues than they are the service delivery that is so much a fundamental part of local government. Climate change is obviously a crucial one and no doubt is paramount in some of Dr Ratnam’s presentation to the Parliament today.

As I said, I am engaged with that issue, and I think that it is true that it is probably a strong motivator for many young people in terms of having their say and casting a vote. But climate change is really an issue that is for state and national governments in particular rather than for local government. It is true to say that many local governments have taken up that issue and many other issues such as homelessness, social services and so forth—programs that are important in terms of supporting people’s lives. That is true, but the reality is that we ought to be having a conversation, if this is where we want to go, about all levels of government and not simply introduce a differential voting age for local government compared to state and national governments. It needs to be across the board, it needs to be a longer conversation and it needs to be a conversation that involves a lot more people, including a lot more young people. I, no doubt like Dr Ratnam, have spoken to a number of youth justice organisations who are keen to pursue this particular initiative. In the conversations that I have had with them, they see that that initiative ought to be explored at all opportunities to vote, not simply at local government. I do not want to create a differential.

Mr MEDDICK: I will be supporting Dr Ratnam’s amendments, and I just want to explain why. Young people for many, many years—and it is intergenerational, between certain age groups—have viewed politics with disdain. They are disengaged with the system, and the number one comment when you ask them why is that we do not listen. We do not do what they want us to do. They view very much even today that politics at the state and federal level is still the domain of, to coin a phrase, the pale, stale male. Very much so they view it in that way. Now, I do not disagree with Mr Atkinson’s comments that they should be engaged at both the state and federal level as well—I completely agree with that. But I disagree that not involving them at local government level is the way to go. I do not see them as mutually exclusive, I see them as complementary. Young people today—and it is very evident in terms of what young people have been engaged with, with marching in the streets on climate change et cetera—are very much engaged at a grassroots level. They are engaged with their communities. They want to see change locally at that level in their communities, and engaging them in the political process at grassroots level, which is councils—local councils are the service delivery at grassroots level; we make the laws up in this house, but it is usually up to councils to deliver a lot of those programs—is the ideal entry point in my opinion for younger people to be engaged and elected into the system and then progress and make their way up through the state and federal levels. I see the whole thing as complementary, and that is why I will be supporting Dr Ratnam’s amendments.

Dr RATNAM: I will just respond briefly to the contributions, firstly, to thank everyone for their really considered contributions to this debate, which extended beyond what I thought it was going to be. I really, really welcome it. We do not talk enough about these issues in this chamber, so I really welcome everyone’s contributions, whether you agree with my amendments or not.

Just in response to a couple of contributions: Mr Atkinson, I absolutely agree this needs to be considered carefully in terms of consistency, in terms of which level of government we are asking to reform, in terms of the issues that we canvass at different levels. Yes, perhaps some of those issues that young people have expressed their concern about are more in state and federal jurisdictions. I think my colleagues would be pretty upset and really think it was out of scope if I tried to bring amendments to federal and state legislation—I would if I could, but I cannot in this case—but I would also argue that progress starts somewhere. You have to start progress somewhere. You do not always have the ideal position to start that progress consistently across every area that you need to achieve the final outcome of that progress, but that progress starts somewhere. It starts in conversations like this, in canvassing debates even if it is not going to get supported. It starts with socialising the idea, priming the idea, bringing those different thoughts into people’s consciousness so that they talk about it with young people the next time they are in their electorates as well—and I hope that is what happens and what is generated from this discussion.

Local government does do a lot of work on climate action. Certainly my council did. It has pushed a lot of state and federal action because it has started at a grassroots level. Our state and federal governments have often lagged behind a lot of the work that local governments have done in this domain—and hats off to their work spearheading pilot initiatives, working with the community and building momentum and support for really significant reform that has then been easier for state and federal governments to push through at that level because of the work of local governments. I would argue that if younger people had the vote at different levels of government, I think the decisions we would see on some of the issues that are really worrying young people would be vastly different. I think we would have well advanced our action on climate change if politicians knew they would have to answer to the 16-year-olds in their electorate who are saying to them, ‘Do not screw up our future’, because that is what they are telling me they are feeling—they feel totally dismayed that action is not happening fast enough. Within their lifetimes they are going to see the ecosystem degrade to a point that is going to mean drastic climate events and really significant disruption to their lives.

So I really welcome this debate. I thank everyone for their contributions. Minister Leane, with all due respect, I understand and heard your exasperation and frustration about the concept of out-of-scope amendments, but if this had been ruled out of scope by the chamber, we would not have been able to have what is a debate we do not have enough of in this chamber. I really welcome the opportunity that this Parliament, through democracy and through democratic levers, allows us to canvass issues that the public care about and want us to talk about. We do not have enough opportunity often to talk about these issues, but this procedure allowed us to do so. So thank you, everyone, for your support for that.

Committee divided on amendments:

Amendments negatived.

Clause agreed to; clauses 2 to 18 agreed to.

Heading preceding new clauses (15:49)

The DEPUTY PRESIDENT: I now invite Dr Ratnam to move amendment 1 only, please, from her amendment sheet SR113C. We have to do them separately. This first one will test your second one.

Dr RATNAM: I move:

1. Page 15, after line 2 insert the following heading—

“Division 1AA—Constitution of a Council—multi-member wards”.

This amendment, which connects to a series of other amendments, reverses the changes made in the Local Government Act 2020 that require almost all councils to shift to single-member wards. Our amendments would allow councils to select the ward structure most appropriate for them, including multimember wards, single-member wards and single wards covering the whole council.

I have spoken at length in this chamber previously about the undemocratic and unrepresentative nature of single-member wards. The 2020 reforms were clearly designed to rig local council elections to keep out minor parties and independents. It is a terrible model for our local government sector which has been rejected multiple times before, including by the Victorian Electoral Commission (VEC), yet it was brought back at the behest of the then Minister for Local Government, Mr Somyurek. With a new minister on board, I urge all members of this chamber, itself a multimember electorate chamber, to get rid of the mandated single-member wards and restore choice in council structure.

In conclusion, I really urge all members of this chamber to consider this very seriously. We had a very robust and lengthy debate when these reforms were brought before us in 2020, and there were a number of us who argued so strongly out of deep concern about what this would do and how regressive this was for local government given years and years of reform and VEC expert advice provided to councils that suggested time and time again after each and every review that multimember wards were a more democratic and appropriate ward structure that led to much greater diversity of representation across the board in local governments.

We know now that the previous minister, Mr Somyurek, had a number of agendas, and I knew then during that debate that something sinister was occurring. We did not know then what we know now, but with the information that we have now about the actions of that minister, I think it is really incumbent on all of us to think deeply about the decisions that were made during that time, the motives that ran through those decisions and what we need to do to reverse a number of those decisions that did undermine the health of our democracy, and in this case the health of our democracy at a local government level. So I urge all members to give this serious thought, because it was a really regressive reform that was made in 2020 that we argued very, very strongly against. The local government sector argued so strongly against it and were ignored at that time. This is a chance to reverse that really devastating decision and restore democracy at a local government level once again.

Mr LEANE: The government will not be supporting this amendment. As Dr Ratnam has said, there was a lot of debate on the Local Government Bill 2019 at the time, and the position I think from many in this chamber was that with the single-member wards ratepayers, constituents, knew that there was one person that they could be represented by. They knew who that person was. Dr Ratnam, you have kind of disappointed me, because I was all ready for an argument. A mayor who aligns themselves with the Greens party said that the multimember wards promote diversity more as far as women and LGBTIQ+ people go, which has been proven wrong in the election. So it is the wrong argument; it is just false. Also there is the work that we have endeavoured to do with groups like the Australian Local Government Women’s Association, supporting them with funding, and with the Victorian Pride Lobby as far as LGBTIQ+ councillors go. There are more women councillors and LGBTIQ+ councillors since the last election, a record number of mayors that identify that way, and a record number of First Nations people. So you have disappointed me because I thought you were going to run the other argument. But I thought I would take the chance to put that on the record anyway and just say we do not support the amendment.

Mr DAVIS: The coalition also does not support the amendment. We understand the arguments in many directions on different electoral systems. The decision was made in 2020, and we supported some of the changes then—not all of the changes in the bill, but some of them at the time. There are many councils that much prefer the single-member ward system, and there are cogent arguments in favour of it. I note the points made by the minister, which we actually concur with, in terms of the fact that diversity is not necessarily advantaged by any one model.

Mr LIMBRICK: I do feel like we have had this debate before. The Liberal Democrats also opposed the removal of multimember wards in the 2019 bill; therefore we will be supporting Dr Ratnam’s amendment to reinstate them as a matter of consistency. But I would just also like to reiterate our belief that it does increase diversity, although I may be thinking differently in terms of diversity—diversity of views and representation. I understand some of the arguments that have been made about having a single member making it easier for accountability, but I also think that there should have been more thought put into the removal of the multimember wards. We support reinstating them.

Ms PATTEN: Likewise, as did Mr Limbrick, I supported multimember wards and I supported Dr Ratnam’s amendment to maintain them in the last debate, so my view has not changed on this.

Dr RATNAM: If I could just respond briefly, thanks everyone once again for your contributions on this proposed amendment. Just in response to Minister Leane in terms of the argument around diversity—and Mr Limbrick has also alluded to this point—diversity is measured on a number of fronts. It can be diversity of demographics; it can be diversity of political representation. We know proportional representation increases the diversity particularly, one, demographically but also of political views and independents and minor parties. That allows and gives voters a choice beyond the duopoly that are joined together to keep those parties out, which is no surprise when you really think about who stands to benefit from disproportionate and not proportionate representation, which is what single-member wards do.

In terms of the argument about what the 2020 election result meant in terms of diversity, we have not yet implemented the single-member ward reform across all local government areas. That is to come. There is a partial implementation. So it is false to measure the impact on diversity of a system which has not implemented the full reform. In the upcoming elections we will see the full impact on diversity.

I am not saying this just from my own viewpoint and my experience as a councillor in a multimember ward electorate where it worked just fine when you could work collaboratively with your councillors, compared to the competition set up between single-member ward councillors. This is based on VEC advice after years and years of electoral reviews they have conducted—the VEC, who maintain the expertise on looking at election systems. We canvassed this in depth during the original debate, so I will not canvass it in depth once again, but this is based on the people we charge with providing advice to governments about how to conduct elections to make sure that they are most democratic. To go against that advice speaks to the real agendas driving this really regressive, once again, reform.

Committee divided on amendment:

Amendment negatived.

Clauses 19 to 41 agreed to.

Sitting suspended 4.06 pm until 4.22 pm.

Heading preceding part 4 (16:22)

Dr RATNAM: I move:

1. Page 22, after line 16 insert the following heading—

“Division 4—Gifts from prohibited donors”.

These amendments speak to donations reforms to ban political donations from property developers and the gambling industry. I have spoken at length twice before in this debate: (1) during my second-reading contribution and (2) during the procedural debate about the instruction motion, given that I was not sure whether I would have the chance to do so again. So I will take those comments as read and will not repeat them. But just to reiterate, this integrity reform is long overdue. We understand the government has been promising this reform but also wanting to wait for IBAC to report on its outcomes. But what we have seen is unfortunately IBAC, despite completing its hearings and being well advanced in its report, is not able to table its report because of action that is being taken by people who are part of that inquiry. That opens up all sorts of questions as well about who gets to hold up these really important investigations that go to the heart of corruption and integrity—in this case in local government, but we know it goes right across the board, because it also involved state political donations.

As I have referred to previously in this debate, we are hearing week after week stories of impropriety, dodgy donations and corruption. We saw at the federal level that voters are really sick and tired of it. They want change. They want our parliamentarians to take this reform seriously, and that means backing in legislation. The Greens introduced an integrity bill earlier this week which would introduce a number of integrity reforms that the Victorian Parliament has not even considered yet despite other jurisdictions—neighbouring jurisdictions in states north and east of us—having implemented them. The sky has not fallen in. In fact they have improved their integrity as a result of those really important reforms.

So there is precedent. We are able to do this. We know it will clean up politics. It will mean that we have much better decision-making. We will have removed that grey cloud on decision-making where we are unsure about whether impropriety has occurred because we will have strengthened our laws and we will have strengthened the transparency. It is really important that we take every opportunity that we have to improve integrity in our Parliament, and here is one such opportunity. ‘Sorry, it’s not the right time’, ‘Sorry, it’s not exactly perfect’ or ‘Sorry, it doesn’t do this and that’ are really excuses. If you want to improve it, if you think there is room for improvement, move amendments and improve things. We should all be working on these things together, because I think that is what the people of Victoria want us to do.

They want us to work together to improve the health and strength of our institutions—the institutions that they rely on for their essential services and so much of their lives and livelihoods. They want us to work well together, and they want to know that we are acting in good faith, above board and not corrupted by self-interest and vested interest, and that is essentially what these amendments do, which is take this corrupting money out of local government. We have seen thousands, if not millions, poured into elections at local and state level for years in Victoria, and we know what that means—it means more favourable decision-making towards those interests. We have had politicians say, ‘I’ve never done a quid pro quo’, but we know what has happened: it has opened up access to ministerial offices, to meetings, to discussions, to things being put on the table that would have otherwise not have seen the light of day. And in the worst case it has intrinsically and fundamentally impacted the outcome, where people have changed their decision-making because they have something to lose, like a donation to lose, or something to gain, which is promised donations from particularly wealthy vested interests and corporations. So it is really important that we take on this reform very seriously. This is a way to restore faith and trust back to parliaments and elections across the board. I urge everyone to support these really overdue reforms.

Mr LEANE: The government has committed to donation law reform in the local government sector. There has been work done in this particular area, and my colleague the Minister for Government Services has been progressing that work. We will not be supporting this amendment, given that it is probably not aligned with a lot of the work we are doing currently that we hope to produce in the near future. I accept Dr Ratnam’s argument, and I am on the record as hopeful that the IBAC report would be out. I actually expected it a year ago. Obviously I was wrong—and I accept that—but I was hoping that those recommendations could be in line with further forming a piece of legislation.

The local government elections are at the end of 2024, so we feel that there is a period of time before then. Issues that we have with this proposal from Dr Ratnam are that we are not sure if there are any avoidance measures as part of what has been proposed, and we are also looking further than the two areas of property developers and the gambling sector. Talking to Mr Tarlamis, who did a lot of good work in the donation law reform that we have at state level, there are a number of other areas of influence that could be taken into consideration. I am not an ex-councillor, but I appreciate there are some ex-councillors here. There are IT contracts that could be huge contracts, as could waste contracts. There could be a number of areas of influence for people who donate to a councillor that could be seen as problematic down the track—even if it is perceived, not actually enacted.

I think, Dr Ratnam, you mentioned about doors being opened and certain other things. I take that quite personally. I have never met anyone who thought they had something due to them because of whatever relationship I have or whatever party I am in. I am pretty conscious that there are certain types of people that I just will not meet if I think they may be looking for some sort of advantage for themselves, personally or financially. I accept, Dr Ratnam, that it is fair enough to have some level of cynicism, but I reject personally that belief about what drives us in the positions that we are in.

Mr DAVIS: We have very similar views to the government on this matter. We think there is scope for reform. We are not persuaded by the exact mechanisms that are put forward here by Dr Ratnam. There may well be broader areas for reform. We do seek to see that Sandon report, and I note in the chamber recently we had a bill to give the IBAC greater capacity to table reports and to avoid excessive and unconscionable delays that may be occurring, and we have reason to believe they are occurring, at the Supreme Court. We tried to strike a balance in that bill. It fell very narrowly short—18 to 17 here—and for the record the government did oppose that.

Leaving that aside, I also think the Greens like to lecture other parties, but I think it is still a fact that the biggest donation in Australian political history that was a non-related party donation—so, yes, Malcolm Turnbull gave $2 million of his own money to a party he was associated with, but the largest donation, and I still believe this is true, in Australian political history—was by the Wotif group to the Greens, the largest non-related party donation in Australian political history. So let us just not be casting aspersions elsewhere. I mean, what if a group that ran hotels was to give a massive multimillion-dollar donation to a political party and then start pulling strings? What if that were to happen? What if? I am not going to say more, but I just do not think that the Greens political party is in any position to lecture anyone on any of this. I hope there is further reform in this area, and we have incrementally put in a series of bills to improve matters. We put a bill in the chamber today about the Victorian Multicultural Commission. These are all important steps. None of these in and of themselves deal with every matter—of course they do not—but we are probably closer to the government on this particular point today.

Mr LIMBRICK: The Liberal Democrats will also be opposing this motion, for slightly different reasons. We see these sorts of things as tinkering around the edges, and the real issue here is the sugar that is on the table. The sugar needs to be taken off the table here. The things that are the honey pot of corruption are massive government spending, planning controls, at a state level drug prohibition, grants—all of these sorts of things that create massive government and create massive incentives for people who are corrupt to get involved. We think these things need to be taken off the table. It would remove a lot of the corruption. Indeed much of the corruption that we have seen in the last few decades in Victoria has been due to our drug laws, but I think that if there is reform to our planning controls, drug laws and many of these other things, the opportunities for corruption will disappear and that will make a lot of these sorts of things redundant. So we will not be supporting this amendment.

Mr HAYES: I thank the minister for what he said about change coming and that they are looking at other entities that might be donating. I am very glad to hear that. I would really like to see the end of all corporate donations to parties. Only individuals should be allowed to make donations, and those donations should be capped and the obscene amounts of money that are spent on election campaigns be cut right back, but that is not what we are talking about today. I support Dr Ratnam’s amendment today.

I did raise this whole issue back at the beginning of 2020 when I moved that political donations from property developers be banned, but I also think that should apply to the gambling industry too and all other industries really—they should not be donating to political parties. There is a huge amount of distrust in the public about the political process, and in Victoria, as we see in the news, both sides are copping it now and people are very concerned about undue influence in government decision-making where government licence is required to carry out business. Of course it looks suspect that big donations are going into government hands and people do not know what is going on behind closed doors. So I think any step in this direction would be a positive move for a major party to support.

This whole thing about waiting for IBAC is ridiculous; we could be waiting forever. These property developers have got deep pockets and they can keep going to court for as long as they like. We have got to wait for that to resolve itself before we have a report from IBAC about a matter of public importance—like what happened in the Casey council and with the politicians, both state and local, that were involved in that matter or have been mentioned as being involved in it. So we cannot sit around waiting for that; we have got to make a move. I challenge the major parties to support this and do something in this area. It would be a win for them. It would be a positive to show the public that they do care about corruption, because everybody knows it is happening.

Committee divided on amendment:

Amendment negatived.

Clauses 42 to 48 agreed to.

Reported to house without amendment.

Mr LEANE (Eastern Metropolitan—Minister for Commonwealth Games Legacy, Minister for Veterans) (16:44): I move:

That the report be now adopted.

In doing that, can I thank the Deputy President, Mr Davis, Dr Ratnam, Mr Limbrick, Mr Meddick, Dr Cumming, Ms Patten, Mr Atkinson and Mr Hayes for a robust but very respectful committee stage.

Motion agreed to.

Report adopted.

Third reading

Mr LEANE (Eastern Metropolitan—Minister for Commonwealth Games Legacy, Minister for Veterans) (16:45): I move:

That the bill be now read a third time.

Motion agreed to.

Read third time.

The PRESIDENT: Pursuant to standing order 14.27, the bill will be returned to the Assembly with a message informing them that the Council have gone through the bill and agreed to the same without amendment.