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Expert guide: Impending changes to Victoria’s Local Government Act 2020

30 June 2021

#Local Government, #Planning, Environment & Sustainability, #Property, Planning & Development

Published by:

Christopher Watt

Expert guide: Impending changes to Victoria’s Local Government Act 2020

The new Local Government Act 2020 (Vic) (LGA2020) received royal assent on 24 March 2020. After a long transition period, the final stage of provisions is commencing. This guide details the specific sections that will commence, explaining key differences between the Local Government Act 1989 (LGA1989) and LGA2020.

In summary, the remaining provisions to commence on 1 July 2021 are:

Part 2 Councils – sections 44 to 46 and 48 to 52

These sections of the LGA2020 outline how a Chief Executive Officer (CEO) is to be employed and operate.

Councils must establish a Chief Executive Officer Employment and Remuneration Policy by 1 January 2022 that outlines a recruitment and appointment process, provides for performance monitoring and ensures key contract provisions are included in the CEO’s employment contract, including an appointment limit of five years.

Under the LGA2020, the CEO is responsible for the development and maintenance of:

  • a workforce plan – describes the council’s organisational structure, establishes a consultation process with employees affected by proposed restructures, specifies projected staffing requirements over a minimum of four years and provides for strategies to ensure gender equity, diversity and inclusiveness
  • a recruitment policy – ensures that recruitment decisions are based on merit, transparent and promote inclusiveness
  • a code of conduct – applies to members of council staff and must include a gift disclosure policy and processes for disciplinary action when employees are in breach.

These sections also include provisions to mandate long service leave arrangements, protect the validity of delegated decisions if the CEO’s employment contract is void and provides indemnity for the CEO and council staff (which remains unchanged from section 76 of the LGA1989).

Part 3 Council decision making – sections 71 to 86

These sections of the LGA2020 refer to councils’ powers to make local laws. The LGA2020 reflects equivalent provisions in Part 5 of the LGA1989. Despite the repeal of Part 5 of the LGA1989, a local law made under the LGA1989 continues in force as if that Part had not been repealed and may be amended or revoked by a local law made under the LGA2020.

Councils continue to have a broad power to make any local laws “for or with respect to any act, matter or thing in respect of which the Council has a function or power”.

LGA1989 powers and guidelines regarding local laws are reflected in the LGA2020 with some variations.

Firstly, the LGA2020 is silent on ministerial guidelines to regulate local laws, which are supplanted by explicit local law requirements listed under section 72 of the LGA2020 that generally accord with those under Schedule 8 of the LGA1989. Under section 72, the LGA2020 explicitly requires consistency with the Charter of Human Rights and Responsibilities Act 2006, that local laws be expressed as clearly and unambiguously as is reasonably possible, and provides that, unless there is clear and express power to do so under an Act, local laws must not seek to apply retrospectively, impose taxes or penalties or authorise sub-delegation of powers delegated under the local law. Local laws can continue to incorporate reference documents, with the added requirement of the reference document being available on the council's website and any other prescribed forum.

In making a local law, submissions are no longer required to be sought in accordance with section 223 of the LGA1989, rather, the council’s community engagement policy must be complied with. Councils no longer need to give a notice in the Government Gazette of a ‘proposed’ local law. Instead, a copy of a proposed local law is to be available at the council’s office and on the council's website, accompanied by a notice that outlines the objectives and intended effect of the proposed local law, and the community engagement process.

Before making a new law, councils must obtain a certificate from a qualified person stating the proposed local law is consistent with the local law requirements in section 72. A qualified person is defined in section 74(2) as an Australian lawyer with five years’ experience and not a councillor. This certificate is to be tabled at the council meeting at which the proposed local law is to be made.

After a local law is made, similar to the LGA1989, the LGA2020 also requires public notice by publication in the Government Gazette. However, the notice must now include the local law’s objective, effect and a copy of the local law, and be made available on the council’s website.

The operation of delegation powers has been amended to allow broader delegation of CEO powers to a member of council staff.

The power for the Governor in Council to revoke a local law on recommendation from the Minister has been amended. In deciding whether to recommend that a local law be revoked, the Minister must consider two new factors:

  • whether the local law is consistent with the local law requirements in section 72
  • any other matter the Minister considers to be appropriate.

The following sections have been reproduced in the LGA2020 and will operate in the same way as under LGA1989: Permits, licences, fees and charges; Penalties; Application of local law; Infringement notices; Commencement of local laws; Sunset provision and Validity of local law.

Part 4 Planning and financial management – sections 102 to 105

According to section 102 of the LGA2020, councils are now required to prepare and adopt financial policies that give effect to financial management principles.

The power to borrow has been simplified, with the only prerequisite being that the proposed borrowings be included in the budget.

Council investments remain the same, except the Minister can now approve an investment without consultation with the Treasurer.

Explicitly listed duties relating to accounts and records in the LGA1989 have been replaced by a broad requirement for the Principal Accounting Officer of a council to ensure there are “proper accounts and records of the transactions and financial affairs of the Council”. Further, according to the LGA2020, any failure to comply with keeping proper accounts and records must be noted and explained in the annual report.

Part 5 Council operations – sections 107 to 122

These sections outline various elements of council operations, namely: Service performance; Procurement; Beneficial enterprises; Powers in relation to land; Carrying out works on land; Unpaid money; and Land Information.

Councils must now develop and maintain:

  • a complaints policy – provides prescribed processes for dealing with complaints and reviewing complaints. Section 107 of the LGA2020 outlines what is required of the policy and that the policy must be adopted by 1 January 2022
  • a procurement policy – specifies the principles, processes and procedures applying in respect of the purchase of goods and services by the council. A procurement policy approved by the council under the LGA1989 which is in effect before 1 July 2021 applies as if the procurement policy had been adopted under the LGA2020, however, a new policy must be adopted by 1 January 2022.

“Entrepreneurial powers” have been relabelled as “Beneficial enterprises” in the LGA2020. The provisions are essentially equivalent, although simplified under the LGA2020. Instead of monetary values triggering different processes and approvals, the LGA2020 applies a broad assessment of investment total and risk exposure to be undertaken before a council participates in a beneficial enterprise. This removes a role for the Minister and internalises the decision for a council to be involved in any of the listed enterprises under section 110. There is a requirement for a council to report on the operations and performance of each beneficial enterprise in its annual report.

Powers related to the acquisition of land and compensation are essentially unchanged, although the exercise of this power under the LGA2020 must now be undertaken in accordance with a council's community engagement policy. The LGA2020 replicates the restrictions on council power to sell or exchange land, which apply to all transactions that involve consideration for land. The only additional requirements are that a council undertake a community engagement process in accordance with its community engagement policy and must publish notice of intention on the council’s website before selling or exchanging the land. Lease of land is subject to the same requirements in both Acts, however, proposed leases valued at $100,000 or more must be in the budget, rather than $50,000 in the LGA1989.

Notice in relation to acquisition of land operates similarly, however, the LGA2020 explicitly states that the acquisition notice is to be given to the council CEO. Another variation is that any unpaid money owed to the council cannot be recovered under the LGA2020 if the amount is omitted from an issued land information certificate.

The following sections have been reproduced in the LGA2020 and will operate in the same way as under the LGA1989: Creation of easements; When Council or other person can carry out required work; Right of owner to carry out required work on occupied land; Council may charge interest on unpaid money and Land information certificates.

Part 10 Savings and transitional – section 330

Section 330 relates to existing regional libraries. LGA1989 and the provisions of any other Act that apply to an existing regional library continue to apply to an existing regional library as if all of those sections had not been repealed. Under the LGA2020, no new regional library can be formed.

Part 11 Amendments and repeals – section 362

This section lists all the provisions of the LGA1989 to be repealed on 1 July 2021, being the sections that correspond to the LGA2020 provisions commencing on that date.

Authors: Joseph Monaghan, Rachel Foo & Christopher Watt

The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity, nor be relied upon as legal advice. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

Christopher Watt

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