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The new Act replaces the Local Government Act 1989 (Vic) (the old Act) and seeks to simplify outdated and somewhat convoluted local government processes.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.
|Local Government Act 2020 (Vic)|
New provisions commence
|Local Government Act 1989 (Vic)|
Old provisions repealed
6 April 2020
1 May 2020
24 October 2020
1 July 2021
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.