On 19 June 2024, the Victorian Parliament passed the Local Government Amendment (Governance and Integrity) Bill 2024 (now Act). The Act amends the Local Government Act 2020 (LG Act 2020) to support better council integrity, accountability and governance across the local government sector ahead of the 2024 council general elections.
The reform package follows the Independent Broad-based Anti-Corruption Commission's Operation Sandon Special Report, which investigated allegations of corrupt conduct involving councils and property developers in the City of Casey, located in Melbourne's south-east.
Among the proposed amendments, we focus on two key changes that local councils should note.
Section 34A – disqualification by the governor in council
The provision that caught the attention of the Parliament, section 34A, allows the governor in council, on the minister's recommendation, to disqualify a person from being a councillor for a specified period.
Matthew Guy MP, the Member for Bulleen, noted "that is a power that needs to be treated with great caution". The Greens spokesperson for Local Government, Sarah Mansfield MLC, noted that "giving the Minister the authority to suspend or disqualify a councillor is fundamentally undemocratic".
New Model Councillor Code of Conduct
During the debate of the Bill, Division 2 of Part 2 of the Bill, which comes into effect on 26 October 2024, has been somewhat overlooked. This Division provides, among other things:
- mandatory mayoral training (new Division 4A of the LG Act 2020)
- regular professional development training of councillors (new sections 33A and 33B of the LG Act 2020)
- a new prescribed Model Councillor Code of Conduct (new Division 9 of the LG Act 2020).
Councils would have already developed codes of conduct under the now repealed section 139 of the LG Act 2020. However, a consultation paper on Engage Victoria suggests that Local Government Victoria plans to introduce a prescribed Model Councillor Code of Conduct within a statutory rule under the LG Act 2020 that will apply to all 79 councils across Victoria.
A draft Model Councillor Code of Conduct and training outline will be released in August 2024 for a further round of feedback. Submissions will be accepted during this time.
The question remains whether this new Model Councillor Code of Conduct will be effective in reducing misconduct.
The Victorian Government may take into account the observations of the NSW ICAC in Operation Eclipse, which examined factors that could either allow, encourage or cause corrupt conduct or detract from the integrity and good repute of public administration. As noted, "there is an inherent problem in trying to make a fundamentally dishonest person, or a person who is in the process of engaging in misconduct, keep good records".
The proof may lie in the detail as to whether the Victorian Government's local government reforms will be effective in addressing misconduct. Further, any usage of the ultimate section 34A power to disqualify a councillor will likely be subject to significant media scrutiny and litigation risk.
For other amendments under the Bill (now Act), view the legislation here.
As a starting point, councils may wish to consider the current effectiveness of their codes of conduct and other fraud and integrity policies. If you or someone you know has any questions about the Victorian Government's local government reforms, please contact our experienced team of local government lawyers below.
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.