New Local Government Act for Victoria has now commenced

14 April 2020

The new Local Government Act 2020 (Vic) (the new Act) marks the first comprehensive overhaul of local government in Victoria for over 30 years.

The first phase of reforms from the new Act took effect on 6 April 2020 with several other transitional stages occurring this year and up until 1 July 2021.

Why is the new Act being introduced?

The new Act replaces the Local Government Act 1989 (Vic) (the old Act) and seeks to simplify outdated and somewhat convoluted local government processes. The aims of the new Act are underpinned by the ambitions of improving local government democracy, accountability and council operations, including the ability of local government to respond to emergencies like the current COVID-19 crisis.

When does the new Act take affect?

The new Act will be implemented in 4 transitional stages and applies to all 79 local councils in Victoria. During these 4 stages, the new Act will co-exist with a large number of the provisions in the old Act until 1 July 2021. All remaining provisions that are not listed in the below table come into operation on 1 July 2021.

What are the key changes brought about by the first transitional stage taking effect from 6 April 2020?

The first stage of changes implemented by the new Act are largely aspirational in nature as underpinned by the principles of improved service, stronger legal democracy and building community confidence in local councils. Given that the majority of new provisions that commenced on 6 April 2020 bear striking similarities to their old counterparts, the first stage mostly sets up the framework for regulatory provisions to comfortably come into effect through the latter stages.

The new Act introduces several key concepts that underpin the future of local government. In particular, the new Act introduces ‘overarching governance principles’ that set out the expected standards that Councils should adhere to in ensuring accountability. A failure to meet these principles may result in Ministerial intervention.

In addition, the new Act establishes various principles including:

  • Community engagement;
  • Public transparency;
  • Strategic planning;
  • Good practice guidelines;
  • Service performance; and
  • Expands on financial management principles.

These principles and guidelines aim to actively support stronger accountability. Notably, a Council will be able to rely on its compliance with a good practice guideline as evidence that it has met its legislative and regulatory requirements.

In terms of pivotal procedural changes, the new Act tightens up the old provisions relating to the entitlements and allowances due to Mayors, Deputy Mayors and Councillors. The new Act creates a framework for allowances to be specified by the Victorian Independent Remuneration Tribunal (VIRT), rather than the Minister and Councils. Of significance, is the specification that prior allowance reviews and limits under the old Act will continue to apply until the first Determination made by the VIRT comes into effect.

Whilst the new Act retains the existing electoral franchise, a cap on electoral campaign donations and gifts has now been introduced. There are extensive new provisions relating to electoral systems. In light of the restructuring of these provisions, we recommend that Councils ensure they are aware of the appropriate procedures to follow for any upcoming local government elections later this year.

Moreover, the new Act establishes a clear scheme for Ministerial oversight. Although these provisions are similar to their old counterparts, this framework goes some way to improving the governance of local councils by defining standards of conduct, providing the community with mechanisms to call on the Minister to investigate poor behaviour of councillors, and allowing for the dismissal of individual councillors.

Set out at the end of this bulletin is a summary table of the staging of implementation of the changes.

Implementation Stages

Local Government Act 2020 (Vic)
New provisions commence
Local Government Act 1989 (Vic)
Old provisions repealed
STAGE 1
6 April 2020   
  • Part 1 Preliminary – Sections 1 to 7;
  • Part 2 Councils – Sections 8 to 17, 39;
  • Part 3 Council decision making – Sections 56, 58, 87;
  • Part 4 Planning and financial management – Section 89, 101;
  • Part 5 Council operations – Section 106;
  • Part 7 Ministerial oversight – Sections 224 to 229, 234 to 239;
  • Part 8 Electoral provisions – Sections 240 to 312;
  • Part 9 General provisions – Sections 325 to 327;
  • Part 10 Savings and transitional – Sections 328, 329(1) to (6); and
  • Part 11 Amendments and repeals – Sections 331 to 359, 363 to 391.
  • Part 1 Preliminary – Sections 3AA and 3AB;
  • Part 1A Local government charter – Sections 3A to 3H;
  • Part 2 The Council – Sections 4 to 5B;
  • Part 3 Elections – Sections 11 to 20, 22 to 27, 31, 37 to62B;
  • Part 4 Council administration – Sections 73A to 74C, 103 to 110;
  • Part 10 Inquiries, reviews and suspension of Councils – Sections 219A to 219P;
  • Part 10C Restructuring Orders – Sections 220P to 220T;
  • Schedule 2 – Provisions with respect to the holding of an election;
  • Schedule 3 – Provisions with respect to voting and the counting of votes and polls of voters;
  • Schedule 3A – Provisions with respect to filling extraordinary vacancies; and
  • Schedule 4 – Provisions relating to municipal electoral tribunals.
STAGE 2
1 May 2020
  • Part 2 Councils – Sections 11, 40 to 43, 47 to 54;
  • Part 3 Council decision making – Sections 55 to 70;
  • Part 9 General provisions – Clauses 313 to 324; and
  • Part 11 Amendments and repeals – Section 360.
  • Part 4 Council Administration – Sections 75 to 76A, 98;
  • Part 7 Financial Management – Section 139;
  • Part 4 Council Administration – Sections 82 to 93B; and
  • Part 11 General – Sections 222, 228, 232 to 242.
STAGE 3
24 October 2020
  • Part 2 Councils – Sections 18 to 38;
  • Part 4 Planning and financial management – Sections 88, 90 to 100;
  • Part 6 Council Integrity – Sections 123 to 174;
  • Part 7 Ministerial oversight – Sections 175 to 223, 230 to 233;
  • Part 10 Savings and transitional – Section 329(7) to (9); and
  • Part 11 Amendments and repeals – Section 361.
  • Part 2 The Council – Section 9;
  • Part 3 Elections – Sections 28 to 30;
  • Part 4 Council administration – Sections 63 to 73AA, 76AA to 81ZA;
  • Part 6 Planning and accountability reports – Sections 125 to 135;
  • Part 7 Financial management – Sections 137 to 138;
  • Part 10 Inquiries, reviews and suspensions of Councils – Sections 209 to 219, 223A to 223CC
  • Part 10A Local government panels – Sections 220A to 220E; and
  • Part 10B Local government restructuring reviews – Sections 220F to 220I.
STAGE 4
1 July 2021
  • Part 2 Councils – Sections 44 to 46, 48 to 52;
  • Part 3 Council decision making – Sections 71 to 86;
  • Part 4 Planning and financial management – Sections 102 to 105;
  • Part 5 Council operations – Section 107 to 122;
  • Part 10 Savings and transitional – Section 330; and
  • Part 11 Amendments and repeals – Section 362.
  • Part 4 Council administration – Sections 94 to 97B, 101 to 102;
  • Part 5 Local laws – Sections 111 to 124;
  • Part 7 Financial management – Sections 136, 140 to 150;
  • Part 9 Specific functions, powers and restrictions – Sections 186 to 193, 196 to 197G, 208A to 208J;
  • Part 11 General – Sections 225 to 227A, 229 to 231;
  • Schedule 6 Provisions with respect to equal employment;
  • Schedule 8 Provisions with respect to local laws; and
  • Schedule 9 Provisions relating to securities. 

Further Advice

HWL Ebsworth has advised extensively on administrative procedures, compliance and governance matters for councils.  If you have any questions or would like to discuss how the new Act may affect your usual operations, please do not hesitate to contact us.

This article was written by David Vorchheimer, Partner and Mark Bartley, Partner.

Subscribe to HWL Ebsworth Publications

HWL Ebsworth regularly publishes articles and newsletters to keep our clients up to date on the latest legal developments and what this means for your business.

To receive these updates via email, please complete the subscription form and indicate which areas of law you would like to receive information on.

Contact us